Just Cause Dismissal and Litigation Lessons From a British Columbia Court of Appeal Opinion

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Quick Hits

• In Chao v. Hallmark Poultry Processors Ltd., the British Columbia Court of Appeal unanimously upheld the termination for cause of a long-tenured employee who continued working for several hours after learning his roommate had tested positive for COVID-19, in violation of a known workplace safety policy.
• The decision reinforces that a single serious breach of a clearly communicated safety policy can constitute just cause for dismissal without notice, particularly where the conduct poses real risks in a safety-sensitive industry.
• The case also illustrates that well-documented workplace policies, thorough early-stage investigations that record the employee’s own account, and consistent enforcement create a termination record capable of surviving successive layers of administrative and judicial scrutiny.

The decision offers a useful reminder that well-documented safety policies, consistently enforced, can withstand scrutiny at every level of administrative and judicial review.

The Facts

Ken Kua Yung Chao worked as a packer for Hallmark Poultry Processors Ltd.for more than six years. During the pandemic, British Columbia’s poultry processing industry experienced several COVID-19 outbreaks and shutdowns. In response, the company implemented a policy requiring employees to stay away from the workplace if they had been in contact with a symptomatic individual or a household member who had tested positive.

On September 28, 2021, Mr. Chao learned during his morning coffee break that his roommate (a fellow Hallmark Poultry Processors employee) had tested positive for COVID-19. Rather than leave the workplace, Mr. Chao continued working for another 3.75 hours, later explaining that he felt fine, was not symptomatic, and ultimately tested negative.

When he returned to work on October 4, Hallmark Poultry Processors dismissed him for cause.

A Long Road Through the Tribunals and Courts

Mr. Chao challenged his dismissal at every available stage. At each one, the result was the same.

The Employment Standards Branch found that Hallmark Poultry Processors had just cause, concluding that Mr. Chao had breached his duty to the employer and committed serious misconduct by violating a known policy during a pandemic that posed real risks to the industry.

The Employment Standards Tribunal’s Appeal Panel dismissed the appeal, finding no procedural fairness issues and no error on just cause.

At the reconsideration stage, Mr. Chao raised a new argument for the first time: that his supervisor had actually directed him to continue working after he disclosed his roommate’s positive test. The Reconsideration Panel rejected the evidence on two grounds. First, it was inadmissible under the Tribunal’s criteria for new evidence because it could have been raised earlier with reasonable diligence. Second, the claim was simply not credible: throughout the investigation and prior proceedings, Mr. Chao had consistently said he returned to work because he felt healthy, never mentioning any supervisor’s direction. His explanation that he “just forgot” to raise this critical fact was unpersuasive.

The Supreme Court of British Columbia on judicial review, and ultimately the Court of Appeal, agreed. The Court of Appeal confirmed that the applicable standard of review was patent unreasonableness—an exceptionally high bar requiring a decision to be “clearly irrational” or “evidently not in accordance with reason” or “so flawed that no amount of curial deference can justify letting it stand.” The Reconsideration Panel’s decision cleared that bar comfortably.

What This Means for Employers

Clear, written policies are a strong foundation. The outcome in Chao turned in significant part on the fact that Hallmark Poultry Processing had a defined COVID-19 policy and that Mr. Chao was demonstrably aware of it. Employers may want to ensure that any safety, conduct, or operational policy they intend to enforce “up to and including termination” are clearly articulated in writing and communicated to employees.

Documenting acknowledgment and awareness. A policy on paper is not enough. Employers may want to be able to prove the employee knew about the policy, through signed acknowledgments, training records, posted notices, or email communications.

Investigating thoroughly and recording the employee’s account early. One of the most compelling aspects of this case was Mr. Chao’s own consistent statements during the investigation that he returned to work because he felt fine were devastating to his credibility when he later tried to change his story. Employers may want to ensure the employee’s version of events is documented in detail at the earliest opportunity; a well-conducted investigation is not just a procedural formality—it builds the evidentiary record that may be tested through multiple layers of review.

Context matters—articulating the “why.” The Tribunal and courts considered the broader context of COVID-19 outbreaks in the poultry industry, which made the violation more serious than it might appear in isolation. When terminating for cause, employers may want to ensure they can explain not only what the employee did, but why it mattered—what risks the conduct created and what interests the policy was designed to protect.

Proportionality is always in play, but serious misconduct is serious misconduct. Just cause is a high standard, and employers bear the burden of proving it, but Chao reaffirms that a single serious act can justify dismissal without notice—even for a long-tenured employee—where the conduct strikes at the heart of workplace safety and the employer’s legitimate operational needs.

Late-raised evidence faces steep headwinds. Employees who fail to raise relevant facts during an investigation may find those facts excluded or discredited later. For employers, this reinforces the importance of giving employees a genuine, documented opportunity to tell their side of the story. This guards against procedural fairness challenges and locks in the evidentiary record.

The Bottom Line

Chao v. Hallmark Poultry Processors Ltd. is a straightforward case on its facts, but a powerful one in its implications. When employers invest in clear policies, consistent communication, and thorough investigations, termination decisions can withstand multiple rounds of administrative and judicial review. For employers in safety-sensitive industries, or any workplace where policy compliance is essential, the decision is a welcome affirmation that the system works when the groundwork is properly laid.

Ogletree Deakins’ Canada offices will continue to monitor developments and will post updates on the Canada, Cross-Border, and Workplace Safety and Health blogs as additional information becomes available.

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