Termination of Employment While on a Maternity Leave or other Leave of Absence?
In Ontario, employers have the right to terminate an employee’s employment at any time in one of two ways:
- on a without cause basis
- on a for cause basis
Termination of Employment “Without Cause”
The vast majority of situations where employees are terminated from their employment fall in this category. In a termination without cause, an employer can generally rely on any reason (or no reason at all) – although most employers simply use the colloquial language of the employee no longer being a “good fit” in the organization. The key exceptions in a termination without cause is that the reasons cannot be:
- related to a protected ground under applicable human rights legislation (e.g., disability, age, race, sex, etc.), or
- an act of unlawful retaliation (reprisal) against an employee who has exercised their basic legal rights, such asking about their employment standards entitlements, human rights or health and safety protections.
In many cases, it is prudent for employers not to provide any explanation for the termination without cause (such as in the termination letter or severance package). However, if the circumstances underlying the termination of employment suggest discrimination may be at play, an employer may be required to provide an explanation, such as if the employee is on a leave of absence (e.g., maternity leave or medical leave of absence). As discussed below, if the employer has no valid justification, a termination of employment may entitle the employee to claim wrongful dismissal and discrimination.
Termination of Employment “For Cause“
In a termination for (just) cause, an employer must essentially prove the employee engaged in serious wrongdoing that justifies imposing what the courts have called “capital punishment crime of employment law.” In these rare cases, an employer must basically establish that the only acceptable form of discipline is termination for cause and that the “punishment fits the crime.”
Where an employee is dismissed for cause, and this can be justified, the employer may be able to get away with not having to provide the employee with notice of dismissal or a severance package (although this may negatively impact an employee’s ability to receive employment insurance (EI) benefits).
In the majority of circumstances, the actions of the employee would need to be wilful or intentional, which is often a very high standard for employers to satisfy. In fact, to avoid paying an employee even their minimum statutory entitlements to termination pay, an employer must prove the employee is “guilty of serious misconduct, habitual neglect of duty, incompetence, or conduct incompatible with his duties, or prejudicial to the employer’s business, or if he has been guilty of wilful disobedience to the employer’s orders in a matter of substance.”
Some examples of a termination for cause includes (this list is not exhaustive):
- an employee’s work performance is unsatisfactory, despite being provided with reasonable opportunities to improve
- dishonesty (e.g., fraud, theft, deception, etc.)
- significant workplace harassment and violence
- chronic absenteeism and lateness (unless due to protected human rights grounds, like disability or family care-giving obligations)
- a series of incidents of wrongdoing despite providing the employee multiple opportunities to correct their behaviour, such as by using progressive disciplinary process prior to dismissal
Legal Protections for Employees on a Leave of Absence
Employees who go on an authorized leave of absence are generally entitled to significant legal protections, including
- Ontario Employment Standards Act, 2000 (provincially-regulated workplaces) and Canada Labour Code (federally-regulated workplaces)
- Ontario Human Rights Code (provincially-regulated workplaces) and Canadian Human Rights Act (federally-regulated workplaces)
These legal protections generally require an employer to maintain the employee’s job-related compensation and benefits during the leave. For instance, the Ontario Employment Standards Act, 2000 states:
Rights during leave
51 (1) During any leave under this Part, an employee continues to participate in each type of benefit plan described in subsection (2) that is related to his or her employment unless he or she elects in writing not to do so.
Benefit plans
(2) Subsection (1) applies with respect to pension plans, life insurance plans, accidental death plans, extended health plans, dental plans and any prescribed type of benefit plan
Employer contributions
(3) During an employee’s leave under this Part, the employer shall continue to make the employer’s contributions for any plan described in subsection (2) unless the employee gives the employer a written notice that the employee does not intend to pay the employee’s contributions, if any.
Similarly, and most importantly, the Employment Standards Act, 2000 states that an employee is entitled to “reinstatement” – that is, the employee has the right to remain in the same or similar position they held before going on their leave of absence.
Reinstatement
53 (1) Upon the conclusion of an employee’s leave under this Part, the employer shall reinstate the employee to the position the employee most recently held with the employer, if it still exists, or to a comparable position, if it does not.
Wage rate
(3) The employer shall pay a reinstated employee at a rate that is equal to the greater of,
(a) the rate that the employee most recently earned with the employer; and
(b) the rate that the employee would be earning had he or she worked throughout the leave
The policy reason for these legal protections is to ensure that an employee on a leave does not suffer any negative consequences simply because they choose to exercise their right to a statutory leave of absence, such as maternity leave, parental leave or sick (medical) leave. Among other things, the employee should be allowed to keep their job, including title, duties and responsibilities, work location and compensation (e.g., base salary, vacation accrual, seniority accrual, benefits plans, bonus pay, employee pension plan, etc.).
If an employer reacts negatively to an employee who chooses to exercise a legal right to commence a statutory leave of absence, it could constitute a claim of reprisal. For instance, under the Employment Standards Act, 2000, the law provides as follows:
Reprisal prohibited
74 (1) No employer or person acting on behalf of an employer shall intimidate, dismiss or otherwise penalize an employee or threaten to do so,
(a) because the employee,
(i) asks the employer to comply with this Act and the regulations,…
(iv) exercises or attempts to exercise a right under this Act
When Can an Employer Fire an Employee on a Leave of Absence?
There are generally a few typical circumstances where an employer may be able to prove that an employee terminated while on a maternity leave or medical leave is justified:
- the termination is completely unrelated to the employee’s leave of absence, particularly where a company is downsizing, business restructuring or closing operations (here, the employee will be entitled to notice or pay in lieu of notice in a severance package)
- the termination is for just cause (see above), such as where the reason for the dismissal is serious acts of wrongdoing or poor performance that is well-documented
- the termination of employment is the result of an expiry of a fixed-term employment contract (and the reason for non-renewal is not related to the leave of absence, such as the employee planning to go on a maternity leave or medical leave)
- the employment is “frustrated” due to no one’s fault (in most cases, this affects employees with permanent disabilities on an extended medical leave of absence with reasonable prospect of returning to the workplace).
Conclusion
In many cases, an employer is permitted to terminate an employee without cause, even if they plan to go on, are currently on, or are returning from a maternity leave or medical leave of absence – as long as these two reasons are not connected. For instance, if an employer is unable to justify an employee’s termination was completely unrelated to a maternity leave, a court or the human rights tribunal may find it was a wrongful dismissal and discriminatory. As such, the employee may be awarded the equivalent of a severance package for the wrongful dismissal, reinstatement and/or damages for discrimination and violation of the employee’s human rights.
Call Today for Help
If you are an employer or employee facing a potential wrongful dismissal and discrimination claim, please contact Bune Law at 647-822-5492 arrange a consultation with an employment lawyer in the Toronto area, so that we can discuss your specific employment issue in detail, explain employment law as it applies to your situation, and then determine whether you need our assistance and how we can help.
If your employment has been terminated while you were on a maternity leave of absence, it is critical for you to contact an experienced employment lawyer to discuss the legality of your termination, as well as your rights, legal options and possible recourse. When you call, you will speak with n employment lawyer who will discuss if you have a valid discrimination claim, as well as options to obtain or enhance your severance package. Call today to learn about your legal rights.
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