Terminating an employee for “just cause” is a difficult scenario for employers to navigate. While it offers the potential to avoid paying termination notice or severance, the bar is incredibly high. Misunderstanding the legal standard can lead to costly wrongful dismissal cases. Employers must also demonstrate that they followed a fair and reasonable process, providing warnings and opportunities for improvement before resorting to termination. A failure to do so can undermine their defence.
This blog focuses on the nuances of just cause terminations and discusses the criteria and evidence employers need to support their decision in a just cause termination.
What Constitutes “Just Cause”?
In Ontario’s employment context, “just cause” refers to an employee who has been guilty of wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer.
It’s not enough for an employee to make mistakes or be underperforming. In essence, the misconduct must be serious and go to the root of the employment agreement. Simply put, it’s not a ‘you’re fired’ situation over a couple of bad days at work.
Ontario courts have generally held that just cause is justified in the following cases:
- Serious Misconduct: This includes theft, fraud, violence, or extreme insubordination.
- Incompetence: A pattern of incompetence despite warnings and opportunities for improvement; however, isolated incidents or minor performance issues do not qualify.
- Absenteeism: Being consistently late or absent without an explanation is considered absenteeism.
The Responsibility of Employers
Employers are required to show reasons and provide evidence when terminating an employee for just cause. It is crucial for the employer to present credible proof of the employee’s wrongdoing rather than relying on mere suspicion or intuition.
Employers should consider the following factors:
- Conduct a Thorough Investigation: This includes gathering evidence, interviewing witnesses, and documenting all findings.
- Provide Clear Warnings and Opportunities for Improvement: Provide clear warnings regarding performance or conduct and reasonable opportunities to improve.
- Maintain Detailed Records: Document everything, including performance reviews, disciplinary actions, warnings, and investigation results.
- Act Promptly and Consistently: Delaying disciplinary action or treating similar instances of misconduct differently can undermine a just cause defence.
If employers do not meet the burden of proof, they can face significant financial liabilities in a wrongful dismissal claim.
What Happens When an Employee Disagrees with the “For Cause” Termination?
When an employer terminates an employee for just cause, the employee has the right to challenge the termination and file a wrongful dismissal claim. In such a case, the employee argues that the employer did not have sufficient grounds for termination without notice or compensation.
The employee can:
- File a Claim with the Ministry of Labour: The claim can be for unpaid wages, vacation pay, or severance pay.
- Initiate a Wrongful Dismissal Case: The employee can file a lawsuit in court, seeking damages for wrongful dismissal, including pay in lieu of notice, severance pay, and potentially punitive or aggravated damages if the employer acted in bad faith.
- Negotiate a Settlement: The employee can attempt to negotiate a settlement with the employer, often with the assistance of legal counsel.
During litigation, the employer will need to present evidence to support their claim of just cause. The employee can challenge this evidence and present their own version of events.
Takeaway
Terminating an employee for just cause is a critical decision for employers in Ontario. The burden of proof is crucial, and compliance with regulations is demanding. Employers should conduct thorough investigations and provide clear warnings and opportunities for improvement. If an employee challenges the termination, the employer should be prepared to defend its decision in court and maintain detailed records of all terminations.
Given the complexities of just cause terminations, employers should seek legal advice from experienced employment lawyers before taking action. A lawyer can review and assess the situation, advise on the best course of action, and minimize the risk of a costly wrongful dismissal case. We encourage you to contact employment lawyer Toronto at Sultan Lawyers PC online or by telephone at 416-214-5111 today.
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At Sultan Lawyers PC, we are the only firm specializing exclusively in employment and immigration law. Whether your case is straightforward or complex, we have the experience and commitment to achieve the best possible outcome. Trust us to navigate the toughest challenges with you.
