What is Just Cause for Dismissal
The courts in Canada have described just cause for dismissal as “capital punishment of employment law.” Why? Because it is supposed to be an employer’s last resort when disciplining an employee for misconduct. As a result, proving a termination for just cause is extremely difficult and burden some for employers.
In the leading case of McKinley v BC Tel, the Supreme Court of Canada required employers to consider the context (surrounding circumstances) when determining whether an employee’s misconduct justifies dismissal without notice or severance pay. In particular, the Court stated that:
“an employee’s misconduct does not inherently justify dismissal without notice unless it is ‘so grievous’ that it intimates the employee’s abandonment of the intention to remain part of the employment relationship.”
In other words, employers must consider the particular facts of the employee’s misconduct, as well as employee’s years of service, performance, and prior history, progressive discipline and its prior responses to similar previous acts. Lastly, when deciding on a disciplinary measure (e.g., warning, suspension, demotion, termination, etc.), employers must follow the principle of proportionality to strike the right balance between: (a) the severity of an employee’s misconduct, and (b) the sanction imposed.
The following excerpts from a few court decisions provide a helpful overall summary on termination of employment for just cause:
Belsito v. 2220742 Ontario Ltd., 2017 ONSC 7207
If an employee has been 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, the law recognizes the employer’s right to summarily dismiss the delinquent employee.
The important factors emerging from these expressions of the principle of law include that the misconduct must be “serious”; that the misconduct must amount to “a repudiation of the contract”; that the acts “evince of intention to no longer be bound by the contract”[sic]; that dismissal is an “extreme measure”; and must not be resorted to in trifling cases. As previously observed, just cause is truly is the “capital punishment of employment law”.
Dowling v. Ontario (Workplace Safety and Insurance Board), 2004 CanLII 43692 (ON CA)
Following McKinley, it can be seen that the core question for determination is whether an employee has engaged in misconduct that is incompatible with the fundamental terms of the employment relationship. The rationale for the standard is that the sanction imposed for misconduct is to be proportional — dismissal is warranted when the misconduct is sufficiently serious that it strikes at the heart of the employment relationship. This is a factual inquiry to be determined by a contextual examination of the nature and circumstances of the misconduct.
Application of the standard consists of:
-
- determining the nature and extent of the misconduct;
- considering the surrounding circumstances; and,
- deciding whether dismissal is warranted (i.e., whether dismissal is a proportional response).
Types of Reasons for Just Cause for Termination
In order for an employer to justify a termination for cause, it must prove that an employee’s misconduct undermined the root (or essence) of the employment relationship, such that its underlying confidence is broken and cannot be repaired. Examples of such misconduct include:
- Dishonesty
- Theft or fraud
- Workplace Harassment or Violence
- Neglect of duties or chronic absenteeism (without legitimate excuse)
- Insubordination and insolence
- Poor performance/Incompetence
Consequences of Just Cause for Termination
Given the strict requirements under Ontario employment law, an employer should only terminate employment for just cause when it truly believes the employee committed a wrongful act (misconduct) that was so serious that it was no longer compatible with continued employment. If this high standard is met, the employee is not entitled to receive prior notice of termination of employment, or pay in lieu of notice. Rather, the employee’s employment ends immediately without a “severance package” or “termination package“.
An employer’s decision to terminate employment for just cause is very serious and has significant legal consequences for the employee. Beyond depriving an employee of a severance package, Service Canada may deny the employee’s application for Employment Insurance (“EI”) benefits.
If you are an employee dismissed for cause, it is critical that you consult with an experienced employment lawyer as soon as possible to review your individual employment termination and severance rights.
Not all Employee Misconduct Justifies a Dismissal Without Notice or Severance Pay
The recent case of Czerniawski v. Corma Inc., 2021 ONSC 1514 highlights the important role that context plays in determining whether an employer has just cause for termination, and serves as a reminder of how hard a just cause termination is to establish.
Facts
After 19 years of service working for the company as an assembler, a 54-year-old employee was terminated from his employment, allegedly for just cause. This was the result of a non-physical workplace dispute with a co-worker over work distribution. The employee was asked to leave the workplace several times, but he refused. After asking what he was accused of, the employee was only that there would be an investigation. The police were called and escorted the employee from the workplace. The employer and the police advised the employee not to return until advised to do so. However, a few days later, the employee returned to the workplace as the employer failed to provide any update, and left a letter telling his side of the story to be used in the investigation. Although the employer eventually conducted an investigation, it failed to interview the employee for his version events. Following its investigation, the employer fired the employee for cause based on two grounds: (i) he acted in a threatening manner to co-workers in an attempt to intimidate them, causing them fear he would become violent; and (ii) he was insubordinate by refusing to leave the workplace, and then returned a few days letter to deliver his letter.
What the Court Decided
The court found that considering all of the surrounding circumstances, the employee’s misconduct did not justify dismissal for just cause (without notice or severance pay). In making its decisions, the court followed the McKinley v BC Tel decision discussed above, especially the importance of ensuring the employer’s response to the employee’s misconduct is proportional.
In particular, the court focused on the employee’s 19 years of service with no performance issues, and no prior history of discipline, threats or violence. The court emphasized that although he instigated the verbal altercation, the incident was isolated and did not give rise to a legitimate fear of violence, and that there were other alternatives to the employer apart from immediate termination for cause. Further, the court agreed that while the employee’s failure to go home when asked was insubordination, his refusal was understandable given the employer itself refused to provide an explanation for why he was being sent and confirmation that it conduct a fair investigation with his involvement (which ultimately did not happen).
As a result, the court concluded that the employee’s misconduct was not so egregious that it can be said that he abandoned the intention to remain part of the employment relationship, despite his lack of an apology to the employer for his behaviour. In fact, the employer should have followed a progressive, proportional disciplinary approach, such as by issuing a warning letter or suspension to send home the message that his behaviour was unacceptable and that, if it continued, could result in his dismissal. plaintiff should have been advised that his misconduct was serious and that a repetition would result in termination of this employment.
Taking into account that the employee was 54 years of age, and held a technical position for 19 years, the court awarded him 19 months’ common law reasonable notice, plus 10% of base salary to compensate for his lost health benefits.
Takeaways
As an employee, you should be aware that serious misconduct can result in a proper termination for just cause. However, employers typically have a difficult time proving just cause is difficult. So, if you receive a termination letter stating you were dismissed for cause, it makes sense to challenge it as a wrongful dismissal, as you generally more to gain. If the employer cannot show that its decision to terminate for just cause was the proper response, you may be eligible to receive a severance package and preserve your ability to receive EI benefits.
As an employer, it is important to note that while just cause dismissal is a high threshold to meet, it is not impossible. In fact, there are certain circumstances where it is the appropriate response (especially with documentation and guidance of an employment lawyer).
If you need help with an employment termination, call today – (647) 822-5492 – we have employment lawyer standing by. You can also fill out the “Contact Us” box below – and a severance lawyer will receive your request right away.
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