Understanding Termination of Employment in Ontario
What are the Reasons Employers Can Fire Employees?
In Ontario, employers can generally dismiss an employee in the following ways:
(a) Termination for Cause – in this case, an employer can terminate the employment of a non-unionized employee for any reason (or even no reason at all), as long as the employer provides the employee with appropriate prior notice of termination (or pay in lieu of notice of termination), benefit continuation, and in some circumstances, severance pay. The key exception: the employer must always comply with human rights legislation, such that the reason for termination cannot be discriminatory or treats the employee negatively based on a prohibited ground of discrimination (e.g., age, disability, race, ethnicity, etc.).
For example, an employer cannot fire an employee based on their age. This is because rights legislation across Canada (including for both federally and provincially regulated employers) prohibits workplace policies or practices that enforce mandatory retirement age. The main exception is where age is a bona fide occupational requirement, which allows an employer to justify an otherwise prohibited ground to differentiate between employees in ascertaining whether the duties or responsibilities of a job can be performed in a safe, efficient and reliable manner.
(b) Termination Without Cause – Under the Ontario Employment Standards Act, 2000 (“ESA“), the standard of a termination without notice or a severance package is very high (and rarely proven by employers). In fact, it requires an employer proving that an employee was guilty wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer. If the employer is successful in proving wilful misconduct, it need not provide the employee with prior notice of termination (or pay in lieu of notice, benefit continuation or severance pay, if applicable).
Alternatively, in cases where an employer cannot prove the employee was guilty of wilful misconduct, it may be able to prove the employee has committed serious misconduct that qualifies as just cause under common law. The threshold for just cause under common law differs from (that is, is much lower than) the standard of wilful misconduct under the ESA. Some examples of just cause under common law can include dishonesty, fraud, theft, breach of trust, insubordination, insolence, absenteeism and repeated poor performance despite opportunities to improve.
This means that because the standards for cause differ between the ESA and common law, it is technically possible for an employer to terminate an employee for misconduct that qualifies as just cause at common law but which fall short of the higher standard of wilful misconduct. Therefore, in cases where an employer is able to prove just cause under common law but not wilful misconduct under the ESA, it must provide the employee with their minimum statutory entitlements of notice of termination (or pay in lieu of notice, benefit continuation or severance pay, if applicable), but not a severance package under common law. In other words, the employer will not owe the employee a common law reasonable notice of termination, they will still owe a statutory notice of termination.
What is a Wrongful Dismissal?
As U.S. Supreme Court Justice Antonin Scalia was said regarding constitutional law: “Dare to think this: It is entirely possible for a law to be really, really stupid and yet be constitutional.” In a similar fashion, from a lay point of view in employment law, an employer’s decision to terminate an employee’s employment may be unfair, undeserved or even unwise, but it does not necessarily make it wrongful (i.e., illegal or unlawful). For example, a manager can terminate an employee simply because they do not like them very much. In such cases, so long as the employer provides the employee with prior notice of termination (or severance package compensating them with pay in lieu of notice of termination), and the decision is not discriminatory or a reprisal, the employment termination will generally not be considered a wrongful dismissal under Ontario employment law.
How Can an Employer Provide Notice of Termination?
An employer’s requirement to provide notice of termination prior to dismissal can be met in one of several ways, including working notice (i.e., the employee works until their official last day of employment); pay in lieu of notice (i.e., financial severance package); or a combination of the working notice and pay in lieu of notice.
Contact Employment Lawyer Today
If you are an employer who would like to know your options before terminating one of your employees, or an employee who has recently lost your job and would like to know if you have the right to sue your employer for wrongful dismissal or negotiate your severance package, our experienced employment lawyer at Bune Law can help. Contact us by phone 647-822-5492 or fill out the contact form to the side. We would be happy to assist in your employment law matter as quickly as possible.
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