Remedies & ‘Just Cause’ Termination

The Remedies on Termination

There are two basic remedies on termination. One is the common law remedy of wrongful dismissal based on the implied term of fair notice. The second is the statutory claim for the Employment Standards minimum payments of notice and severance pay. The notice claim under this statute is capped at 8 weeks while the severance pay claim is maximized at 26 weeks. These two sums are always deducted from the common law wrongful dismissal claim.

The Basics of ‘Just Cause’ Termination

An employer always has the right to terminate an employee for just cause. If just cause is found, then the employee has no right to common law notice. What conduct may or may not be considered cause for termination under the common law is not precisely defined. Often courts will insist that when it comes to more minor wrongdoings, a warning be provided in advance or some form of discipline less than termination be imposed for the first offence. Generally speaking, the more modest the offence, the more likely such advance warning or another form of discipline will be required. Conversely, the more serious the wrongdoing, the more probable that cause for dismissal can be established and no such prior employer actions are required. This would be the case for behaviours such as theft, sexual harassment, stealing trade secrets and similar conduct.

The Employment Standards Act Standard

While the above section relates to the common law, establishing just cause under Ontario employment legislation is more challenging. The Employment Standards Act has a different, more severe standard for the employer to meet in order to prove “just cause” and avoid the payments that would normally be required upon termination under the Act. Under the Act, “just cause” is defined as “willful misconduct, disobedience or wilful neglect of duty”. The statutory wording requires that the employee’s actions be intentional or deliberate. Carelessness or inadvertent conduct will not be enough to avoid the statutory payments. In addition, the wrongdoing must not be trivial and also must not be condoned or accepted by the company.

This is a very difficult standard for an employer to meet.

The Two Standards Integrated

Due to the severe disparity in the two standards used to assess whether there is just cause for termination, it is very possible in theory for the employer to win an action for wrongful dismissal case by proving just cause and yet lose with respect to Employment Standards minimum payments. Similarly, it is possible for the employee to first win the claim for the statutory payments and still lose the common law case.

Withholding Payments Under the Act

On termination of employment in most cases, the employer takes a noticeable risk if it refuses to immediately pay the statutory sum. Unless it has a believable good faith case in asserting just cause under the Act, it could face a claim for aggravated damages for bad faith conduct which will increase its liability in the common law claim.

Arguing Serious Just Cause

If the employer does assert serious wrongdoing on an employee’s behalf such as theft, it should first arrange for a thorough investigation of the claim, preferably conducted by a neutral third party. Should it fail to properly investigate suspicions of egregious behaviour, an employer may be liable for aggravated damages in addition to the termination claim.

Employers are cautioned to seek the advice of an employment lawyer before potentially opening themselves up to liability in this regard. A lawyer can advise on the entire process when just cause is suspected, from initial warnings and disciplinary action to eventual termination, if necessary.

Employees’ Take Away

Any employee accused of behaviour warranting disciplinary action or termination who believes that the accusations are unfounded or overblown should seek the advice of an experienced employment lawyer immediately. A lawyer will carefully assess the circumstances with you and advise whether you may have a claim against your employer, as well as next steps.

Let Legal Advice Guide Your Actions

Understand the law on just cause. Contact the offices of Guelph employment lawyer Peter McSherry. We can guide you through the issues and defend your position. Contact us online or by phone at 519-821-5465 to schedule a consultation.