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Employers reserve the right to terminate an employee’s employment at any time on a without cause basis.  This applies provided that the reasons for the dismissal are not related to a protected ground under applicable human rights legislation or as an act of reprisal against an employee who has exercised their right under applicable employment standards legislation.

While there is no specific obligation for an employer to provide a justification for a “without cause” termination, employers may be required to explain the nature of the dismissal when an employee is on a leave of absence, such as a sick leave or parental leave, when they are terminated. Failure to do so may give rise to wrongful dismissal and/or claims of discrimination.

Protections for Employees

Employees who commence a leave are generally entitled to considerable protections as prescribed under applicable employment standards legislation, such as the Ontario Employment Standards Act, 2000 (“ESA”).

These protections generally provide employees with the right to remain in the same or similar position they would have been in if the leave had not been commenced. The purpose of these protections is to ensure that an employee on a leave does not suffer any consequences by virtue of exercising their right to a statutory leave of absence.

Specifically, in Ontario, employees are entitled to the following rights under the ESA:

  • The right to reinstatement;
  • The right to retain benefits;
  • The right to accrue seniority;
  • The right to vacation entitlement; and
  • The right to be free from reprisal.

Legitimate Reasons for Dismissal

Generally, there are three (3) circumstances in which an employee be may terminated while on a leave, as described below.

1. The Dismissal is Unrelated to the Employee’s Leave Of Absence

An employee on leave may be dismissed on a without cause basis provided that the reasons for termination are not related to the employee’s leave of absence. For example, an employee may be fired as a result of a business restructuring or the elimination of a department.

Where an employee is dismissed on a without cause basis, the employee will be entitled to notice or pay in lieu of notice. Failure to provide sufficient notice may entitle an employee to additional damages as a result of the employee’s wrongful dismissal.

2. The Dismissal is For Cause

An employee on leave may also be dismissed on a for-cause basis if the employee has engaged in serious misconduct. To justify a for-cause termination, the actions of the employee would need to be willful or intentional, which is often a high threshold for employers to satisfy.

Where an employee is dismissed for cause, and this can be sufficiently justified, the employee will not be entitled to any notice or pay in lieu of notice of their dismissal.

3. The Dismissal is a Result of Frustration of Contract

An employee who is on leave for an extended period of time with no reasonable prospect of returning to the workplace may be dismissed as a result of frustration of contract.  In this scenario, an employee would not be entitled to any compensation.

To justify a termination due to frustration of contract, an employer would need to demonstrate that it is reasonably unlikely that an employee would be able to return to the workplace in the foreseeable future. For example, where an employee is permanently disabled and is no longer able to work in any capacity, this may give rise to frustration of contract and may permit the employer to dismiss the employee.

By contrast, it may be difficult to demonstrate frustration of contract where an employee’s disability is deemed temporary, as the employee may be able to fully recover and/or return to work in some capacity.

Dismissing an Employee on Leave Must be Justified

If an employer is unable to justify an employee’s termination based on one of the above grounds, the reasons may be deemed to be related to the leave and/or otherwise discriminatory. This may allow an employee to pursue their employer for a claim of wrongful dismissal and/or discrimination based on a protected human rights ground.

If your employment has been terminated while you were on a leave of absence, we strongly recommend reaching out to us to discuss the legality of your termination as well as your rights, entitlements and possible recourse. Please contact Toronto employment lawyers, Sultan Lawyers, at (416) 214-5111 or via email to khayward@sultanlawyers.com.


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