In Vaassilakaki v. Vassilaki & Sons Investments Ltd (Last Call Liquor Mart), 2026 BCSC 474 the British Columbia Supreme Court considered whether an employer had condoned serious employee misconduct by waiting several months before terminating the employee for just cause.
Background
The case arose out of a family-owned business operating as “Last Call Liquor Mart” in Penticton, British Columbia. The plaintiff, John Vassilakaki, was a director, president, and store manager of the company. The employer alleged that he had:
- paid excessive compensation to himself and close family members,
- improperly used corporate funds for personal expenses,
- breached his fiduciary obligations, and
- concealed financial misconduct from the other director/shareholders.
An independent review determined that more than $630,000 in excessive compensation had been paid to family members. The evidence also showed personal expenses were charged to the company, including vacations, personal tax obligations, and other non-business expenditures.
Key Legal Issue
By the time of trial, the employee effectively conceded that just cause existed. The central issue became whether the employer had condoned the misconduct by delaying termination.
The employer first became suspicious in April 2023, retained an outside investigator in May 2023, received the report in July 2023, and terminated the employee in October 2023. The plaintiff argued that this delay amounted to affirmation or condonation of the misconduct, thereby disentitling the employer from relying on cause.
Court’s Reasoning
The condonation argument was rejected.
The Court emphasized several principles:
- An employer is entitled to conduct a reasonable investigation before terminating for just cause.
- Delay alone does not establish condonation.
- The employee bears the burden of proving condonation.
- Concealed or complex misconduct may justify a longer investigation period.
The Court found the employer’s actions were reasonable because:
- the allegations involved significant financial impropriety,
- the misconduct had been concealed,
- an external forensic investigation was necessary, and
- the employer needed time to assess the findings and arrange operational continuity before dismissal.
Importantly, the Court distinguished between a delay caused by indecision or forgiveness, and a delay caused by a legitimate investigation into the scope of misconduct. The Court concluded there was no evidence that the employer intended to forgive or overlook the misconduct.
The Court upheld the dismissal for just cause and dismissed the wrongful dismissal claim. It further awarded the employer approximately $814,681 in damages relating to the improper payments and expenditures.
Employment Law Significance
The decision is notable for several employment-law principles:
- Condonation requires more than delay
Employers do not automatically lose just cause because termination does not occur immediately after misconduct is discovered.
- Reasonable investigations are permitted
Courts recognize that employers may need time to investigate serious financial misconduct, especially where fiduciary duties are involved.
- Fiduciary dishonesty strongly supports just cause
Misappropriation of funds, self-dealing, and concealed compensation arrangements were fundamentally incompatible with continued employment.
- Complex misconduct may justify extended timelines
Particularly where forensic accounting or operational transition is required.
The case reinforces that courts will examine why an employer delayed termination, not simply how long the delay lasted. A 6-month delay in terminating for just cause is not fatal in certain circumstances.
*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.