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Termination for Cause – High Threshold

We are often contacted by employees that have been terminated from their employment for cause.  Employers give any number of reasons to form the basis for a just cause dismissal; however, a Court will only uphold a decision to terminate an employer for just cause in the most extreme situations.

In many cases, where an employees performance is below average, if they have been subjected to limited discipline in the past, or if an employer policy indicates that they will be terminated for cause if you engage in “X, Y, or Z” behavior, the employer attempts to rely on these factors to justify a dismissal for cause.  Courts will assess the facts of each particular case and are not overly concerned with the specific employer policy.  Court precedent and its application to the particular case at bar determine whether there is just cause for termination; not the employer’s arbitrary policy.

It is critical that you consult an employment lawyer following a termination for cause to ensure your right are protected. At Goldstein Law, we offer a free consultation to assess your severance package and termination letter to determine whether the employer has provided for your full legal rights on the termination of employment.  Please contact us today for an employment law consultation.

Just Cause Terminations – An Update

The vast majority of terminations are on a without cause basis, in some circumstances employers are permitted to terminated employees for just cause without the requirement to provide advanced notice of termination or payment in lieu thereof.  The burden of proof rests with the employer to demonstrate the basis for the just cause termination.

The seminal case on just cause terminations is McKinley v. BC Tel, 2001 SCC where the court indicated, among other things, that “just cause for dismissal exists where dishonesty violates the essential condition of the employment contract, breaches the faith inherent to the work relationship, or is fundamentally or directly inconsistent with the employee’s obligations to his or her employer.”

The case of Dowling v. Ontario provides guidance on the examination that should be undertaken to ascertain whether such misconduct has occurred to demonstrate just cause:

  1. determine the nature and extent of the misconduct
  2. consider the surrounding circumstances
  3. decide whether the dismissal was warranted

Where Just Cause Has Been Found: 

Dunsmuir v. Royal Group, Inc., 2018 ONCA 773
Just cause termination of a senior executive upheld by the Court for breach of fiduciary duty.  In this case, a senior officer and shareholder of the company bought property from a third party and then sold it back to the company for a personal profit of $6.5 million.  The individual never disclosed this information to anyone in the company with authority. The executive engaged in other activities of this nature that was found as a breach of his duty of loyalty, fidelity and candour, requiring him to disclose to the corporation conflicts of interest and the misappropriation of corporate opportunities and assets.

McNabb v. Clouatre et al., 2018 ONSC 1058
The Plaintiff was an employee of a construction company and was involved with behavioral issues over a prolonged period of time, including insubordination, absenteeism, consuming alcohol on the job and using equipment under the influence of alcohol. He was verbally abusive to employees and constantly engaged in behavior detrimental to the company. The extensive list of misbehaviors was deemed to sufficient to constitute just cause.

If you are an employee in Ontario that has been terminated for just cause, it is imperative that you seek out counsel to determine whether the alleged misconduct sufficiently satisfies the test for just cause termination. If not, you could be entitled to a substantial severance package.

Termination for Cause

Just cause terminations have been considered the ‘capital punishment’ of employment law.  The employer bears the evidentiary burden to prove that the alleged misconduct satisfies the high threshold of just cause dismissal. The employer must prove that the act(s) or omission(s) of the employee are so significant that the effect was that the employee repudiated the contract of employment; failure to establish such an effect will preclude a Court from finding that the employment has been terminated for cause.

There are several types of misconduct that may be grounds for dismissal for cause. Examples of common grounds for dismissal, discussed in detail below, include the following:

  • dishonesty (e.g. fraud, theft, breach of trust, deception etc.);
  • workplace harassment and violence;
  • insubordination and insolence; and
  • absenteeism and lateness.

A Court will provide a contextual analysis to determine whether, in the totality of circumstances, the misconduct amounts to just cause. In order to satisfy the Court, employers should institute progressive disciplinary and performance improvement plans to provide a guidepost for improvement for the employee.  If the employee continues to perform incompetently or engage in ongoing misconduct, the employers paper-trial and diligence will assist in reaching the just cause threshold.

If you have been terminated for cause by your employer, please contact Goldstein Employment Law to discuss your potential rights and entitlements.

Does Your Misconduct Amount to Just Cause?

Many employees call our employment law firm indicating that they have been terminated from their long-standing employment for just cause; and therefore, after several years of dedicated service to an employer, they are abruptly dismissed without notice or without pay in lieu thereof.

Courts in Ontario have referred to a just cause dismissal at the “capital punishment” of employment law. In other words, the employer has to demonstrate such egregious misconduct to satisfy the test for a dismissal for cause.

Call Goldstein Employment Law to review your termination letter and the circumstances around the dismissal to determine whether we believe that your employer has made a mistake in terminating you for cause, and, instead, that you are entitled to a severance package.