In Shalagin v Mercer Celgar Limited Partnership, 2023 BCCA 373, the British Columbia Court of Appeal upheld a finding of just cause for an employee’s dismissal due to surreptitiously recording conversations in the workplace. The decision highlights key employment law principles, including the contextual approach to just cause, the importance of trust and privacy in the employment relationship, and the doctrine of after-acquired cause.
Contextual Approach to Just Cause
The Court of Appeal reaffirmed that determining just cause for dismissal requires a contextual analysis of the misconduct. This approach, originally set out by the Supreme Court of Canada in McKinley v BC Tel, means that the nature and circumstances of the employee’s misbehaviour must be examined to decide if dismissal is warranted. In other words, there is no absolute rule that any particular misconduct (even dishonesty) automatically amounts to just cause – the severity of the misconduct must be weighed against the sanction of termination in light of all the facts.
In Shalagin, the trial judge framed the key question as whether Mr. Shalagin’s secret recordings were “something a reasonable employer could not be expected to overlook, having regard to the nature and circumstances of his employment,” and whether the recordings “go to the root of the contract and fundamentally struck at the … employment relationship”, effectively “rupturing the relationship, such that the mutual trust between the parties is broken”. The Court of Appeal endorsed these formulations of the test and found that the trial judge correctly considered the specific context – including Mr. Shalagin’s role as a senior financial analyst and the extent of his misconduct – to determine that the nature and degree of his actions justified summary dismissal. In short, the Court applied the McKinley contextual approach by carefully balancing the employee’s misconduct against the employment context and the proportionality of the dismissal.
Trust and Privacy in the Workplace
Shalagin underscores that trust is the bedrock of the employment relationship, and that employees and colleagues enjoy expectations of privacy in their interactions. The Court of Appeal noted that fundamental trust is “the hallmark of every employment relationship,” and Mr. Shalagin’s secret recordings struck at that foundation. By clandestinely recording over a hundred meetings and conversations, the employee breached the trust and confidence that his employer and co-workers placed in him. The Court found that his conduct “had violated the privacy interests of both the persons recorded and those discussed on the recordings,” which was highly relevant in assessing just cause. In an era of heightened privacy concerns, the judges recognized that workplace conversations carry a reasonable expectation of privacy; covertly taping colleagues without their consent is a serious intrusion on that privacy and erodes the mutual trust required between employer and employee.
The Court of Appeal also approved the trial judge’s consideration of broader policy implications related to trust and privacy. It was noted that if Mr. Shalagin’s conduct were excused, it could encourage other employees who feel aggrieved to “routinely start secretly recording co-workers,” an outcome the Court deemed undesirable from a privacy and workplace culture perspective. Thus, maintaining trust and respecting co-workers’ privacy were central to the Court’s reasoning – the surreptitious recording was viewed as incompatible with the trust and privacy expectations inherent in the employment relationship.
Surreptitious Recordings as Just Cause for Dismissal
Secretly recording colleagues was characterized by the Court as dishonest, underhanded behavior that can amount to just cause for dismissal. The Court of Appeal emphatically stated that Mr. Shalagin’s surreptitious recording activity was “underhanded and would be regarded by most employers as misconduct undermining the trust relationship between employers and employees.” In practical terms, the decade-long pattern of clandestine recordings fundamentally ruptured the employment relationship, destroying the mutual trust necessary for the employment to continue. Even though Mr. Shalagin did not lie outright to his employer, the secret nature of his actions was a serious form of misconduct. The Court agreed with the lower court that there was no legitimate justification for the recordings in this case – Mr. Shalagin was not acting to protect himself from imminent harm or discrimination, but rather attempting to “catch” someone saying something useful for a potential claim.
Notably, the Court of Appeal left open the possibility that in different circumstances an employee’s covert recording might be justified (for example, if an employee reasonably believed they were facing discrimination and needed to document it). However, in this case no credible evidence of such discrimination or other overriding justification was found. Therefore, the Court had little difficulty concluding that the surreptitious recordings amounted to just cause, given their extensive scope and the corrosive effect on trust and workplace integrity. This case confirms that, absent extraordinary justification, secretly recording co-workers is serious misconduct that can warrant summary dismissal.
Overall, Shalagin reinforces that just cause for dismissal is determined by a contextual evaluation of the misconduct, with trust and privacy being crucial considerations in an employment setting. Secretly recording co-workers was found to be a profound breach of trust and privacy, amounting to just cause.
*Always seek legal advice. The above is for information purposes only.
Stephen Dugandzic received his Juris Doctor degree from the University of Alberta in 2013 and is Calgary-based. He previously practised with Bennett Jones LLP and Taylor Janis LLP before founding YYC Employment Law Group in 2018 and Evolution Legal in 2026.