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Termination with cause is one of the forms of termination available to employers in Ontario. This means that employers can terminate an employee without notice or payment in cases of serious misconduct or poor performance. However, it is important to note that termination for cause is difficult to prove and often involves various legal complexities. 

In this blog, we discuss termination with cause and its consequences for both employees and employers. 

What Constitutes Termination for Cause?

If an employee is terminated for cause an employer may not be required to provide any notice or pay in lieu of notice. To dismiss an employee “for cause”, the employer must prove that the employee has significantly damaged the entire employment relationship to the extent that the employment agreement is deemed to have been fundamentally violated.  

The following examples may warrant a termination for cause:   

  • If the terminated employee is guilty of theft or fraud in the workplace, or was persistently dishonest; 
  • If the employee is using harassing or abusive towards other employees, clients or customers; 
  • If the employee engages in particularly offensive and damaging off-duty misconduct; or 
  • If the employee demonstrates habitual incompetence or insubordination. 

Courts examine cause behavior case-by-case and consider different aspects of employment relations, such as: 

  • The tenure of the employee,  
  • The frequency of the misconduct and  
  • The impact the conduct had on the employer, if any. 

The High Threshold of Proving Termination for Cause

Termination for cause is often referred to as the “capital punishment” of employment law. Employers must meet a high standard of proof, demonstrating that the misconduct caused irreparable harm to the employment relationship. 

For example, in cases of poor performance or insubordination, employers are expected to provide clear warnings and opportunities for improvement before considering termination for cause. 

The employer would have to demonstrate that the employee was put on a notice and was given an opportunity to correct their performance. This ensures that the employee has a fair chance to rectify their behavior. 

Furthermore, there are occasions where an employer will terminate an employee for what they believe ought to be cause. However, following a legal analysis the conduct may not meet the legal qualification required to substantiate cause. Should an employee face dismissal for a valid reason, it’s crucial to seek counsel regarding the conditions associated with the termination.  

With Cause Terminations and Employee Rights

Employees facing termination for cause have specific rights under Ontario law. These include:

  • The right to a fair assessment of their conduct, and 
  • In many cases, the opportunity to respond to allegations before a final decision is made. 

Employees should also be aware of their right to seek legal counsel to challenge an unjust termination.

Recent Case Law Developments in Termination for Cause

Mechalchuk v. Galaxy Motors (1990) Ltd.

One noteworthy case emerged from the Supreme Court of British Columbia ruling in “Mechalchuk v. Galaxy Motors (1990) Ltd.” This case involved an employee who was terminated for just cause due to submitting fraudulent business expenses. Although the amount was relatively small (C$250), the court still determined that this action justified a violation of trust and dishonesty resulting in the termination for just cause.

 

Dowling v. Ontario (Workplace Safety and Insurance Board)

In another decision, the Ontario Superior Court addressed a case where an employee’s intentional act of deleting a company’s website was deemed sufficient grounds for termination for cause. The court’s decision was based on a thorough analysis of the nature and circumstances of the misconduct, following the three-step analytical framework set out in “Dowling v. Ontario (Workplace Safety and Insurance Board).”

The above noted cases demonstrate that although termination for cause remains an option in Ontario, the threshold for proving such a termination should be carefully examined and it’s advisable to consult with an employment expert in advance of any decision making. 

Additionally, employers should provide substantial evidence of serious misconduct or breach of trust. The specific context of each case is essential, and as mentioned above long-term service or positive performance history can raise the threshold for proving just cause.

Further, these instances act as a cautionary reminder for employees in relation to the significant repercussions associated with violating trust or participating in misconduct in the workplace.

Takeaway

Employment termination with cause (or dismissal for cause) is a complex aspect of the employer-employee relationship. Understanding the legal implications is important for both parties. By clearly defining expectations, following due process, and seeking legal advice, when necessary, employers and employees can navigate the challenges of termination with cause in a fair manner. 

Whether you are an employer or an employee who needs assistance with workplace matters, including any questions you may have about just cause termination, we encourage you to reach out to us. Please contact Toronto employment lawyers, Sultan Lawyers, online or by telephone today at (416) 214-5111. 


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