Workers in Ontario, and across Canada, can be terminated from their employment for cause. Just cause dismissal, often referred to as the ‘capital punishment’ of employment law, is the most severe form of dismissal. If cause has been established, workers can face significant disentitlements. Consequently, it is important to be aware of what protections workers have when faced with allegations of dismissal for cause. As outlined in R v Arthurs, if an employer terminates a worker for cause, they must demonstrate that the worker was:
- Guilty of serious misconduct;
- Habitually neglectful of their duty;
- Incompetent;
- Disobedient of the employer’s reasonable orders;
- Engaged in conduct incompatible with the workers’ duties; or,
- Engaged in conduct prejudicial to the employer’s business.
However, even if a worker has proven to meet any of the above criteria, dismissal itself may be too severe a response to the worker’s impugned misconduct. As outlined by the Supreme Court of Canada in McKinley v. BC Tel, 2001 SCC 38, dismissal is only warranted for just cause in the most severe cases. Instead, the norm is to take a proportional and contextual approach to discipline in the workplace. In other words, rather than dismissing an employee for something like incompetence or dishonesty, employers are typically required to utilize progressive discipline to temper and mitigate worker misconduct. It is only in circumstances of severe misconduct that a worker can be terminated for just cause without the employer using progressive discipline. Otherwise, if progressive discipline has been applied and the worker does not correct their behaviour, the worker might be subject to just cause dismissal.
What if Your Employer Fires you for “Just Cause”?
In Canada, the employer has the responsibility to prove there was cause to fire you. In the event you are terminated for “just cause”, your severance entitlements may be significantly limited. If you challenge the termination, the employer will have to show that your actions rose to this level. Being terminated for just cause may also lead to a denial of Employment Insurance (EI) benefits by Service Canada, emphasizing the severity of the implications.
Further, the employer either has to show just cause for the summary dismissal or else the employee will likely be considered “wrongfully dismissed”. There isn’t really a middle ground. If the court finds that you were wrongfully dismissed, then the employer will have to pay the damages to the wrongfully terminated worker that stem from that. This could be viewed as risky by most employers.
What Employee’s Conduct Can Count as “Just Cause”?
Every situation has to be analyzed on its own merits, but there are some red flags which could prompt an employer to fire someone for cause. These include an employee engaged in deliberate misconduct, such as fraud or theft, serious incompetence, insolence, and insubordination, to name a few. Let’s review several of these in a bit more detail.
Incompetence
A worker may be terminated for cause if they have shown “gross incompetence”. Again, this is a high bar for the employer to show. To be successful, they would have to show they gave the employee a chance to prove they could perform in their job and a reasonable opportunity to remedy the alleged incompetence. Basically, an employer has to tell the worker that their job is at risk and give them a chance to fix the problem. Additionally, the employer must demonstrate that the employee’s conduct was deliberate and intentional to establish just cause for dismissal due to incompetence.
Insolence
Insolence typically means derisive, contemptuous or abusive language, generally directed at a superior. It needs to be quite serious to warrant dismissal. The courts will use a contextual approach to determine whether the employment relationship has been damaged, such that it would be inconsistent to continue the relationship.
If the behaviour is so extreme that it interferes with and prejudices the safe and proper conduct of the employer’s business, courts have found that summary dismissal is justified. Insolence must rise to the level of wilful misconduct to justify summary dismissal for just cause.
Insubordination
Insubordination is an employee’s intentional refusal to obey an employer’s lawful and reasonable orders. The courts will view the entire situation to see if the order was clear, and if the employee was reasonably expected to obey it.
The employer must show that the employee willfully disobeyed an order. The order must be reasonable and unambiguous. If you didn’t follow instructions because they were unclear and vague, that may not count as insubordination.
Insubordination can lead to termination for cause if the employee willfully disobeys a clear and reasonable order. The courts may also be interested in the reason why someone obeyed an order that the employer thought was clear. Context matters and there are many factors which can play a role in determining whether acts of insubordination rise to the level of gross misconduct.
Is One Act Enough to Warrant Dismissal for Just Cause?
Generally, the answer is no. A single act of misconduct would have to be quite extreme to warrant summary dismissal. The courts are not very keen to allow this, in part because of the important role that employment has in a person’s identity. Only in the event of significant wrongdoing will courts hold that just one act of misconduct is enough to justify terminating the employment relationship with cause. For example, sexual harassment is a type of severe misconduct that can justify immediate dismissal for just cause due to its severity and intentional nature.
Progressive discipline is much more likely, where the employee receives clear warnings explaining their infraction. The Supreme Court of Canada has held that progressive discipline is necessary when dealing with employee misconduct unless the misconduct is sufficiently serious to warrant summary dismissal. The thinking is that employee misconduct can be more reasonably addressed through progressive discipline instead of immediately terminating the employment relationship. With progressive discipline, employees are given the opportunity to fix their behaviour, and if they do not change their ways, their employer may escalate to terminating them.
Condonation
While workers can be terminated for just cause, it is also possible that the alleged just cause that an employer is relying upon was actually condoned. If an employer condones certain behaviour that would otherwise warrant just cause termination, they cannot later rely upon that conduct to establish just cause. Condonation can prevent a former employer from relying on previously condoned conduct to establish just cause for termination. In Sleep Country Canada LP v. Marier, the Ontario Labour Relations Board provided a robust explanation of condonation. Citing an earlier case, the Board reinforced that condonation takes two distinct forms:
- The first form occurs when a worker engages in misconduct with the employer’s awareness and the employer, either expressly or through inaction, indicates that it will not respond to the misconduct; and
- The second form occurs when an employer expressly or by implication indicates in advance of the impugned conduct that it is or would be acceptable.
In both circumstances, the employer is prohibited from relying upon that misconduct to establish just cause for termination. The Board noted it would be “grossly unfair to allow the company to suddenly and without any prior warning or admonition” rely on the conduct of the worker that the employer itself had permitted and led the worker to believe was completely acceptable.
An employer’s condonation of conduct can cause various kinds of prejudices for the worker. As outlined by the Ontario Public Service Grievance Board in Stanley v. Ontario (Solicitor General), workers can be prejudiced when behaviour has been condoned by lulling the worker into a false sense of security about their employment and their behaviour. Furthermore, relying on previously condoned conduct to justify discipline or termination would be unfair. Additionally, the delay resulting from condonation prejudices the worker’s ability to defend themselves against allegations of new and previous misconduct. The Board held that to rely upon condoned behaviour would be significantly unfair and prejudicial to the worker, and consequently refused to accept condoned behaviour as warranting dismissal.
A recent case at the Ontario Superior Court also dealt with issues of condonation. In Goruk v. Greater Barrie Chamber of Commerce, the Court found that some alleged misconduct had been condoned by the employer year after year. In this case, the testimony of four previous presidents of the Chamber was considered by the Court. In so doing, the Court held that they had been sufficiently aware of the impugned misconduct and had not raised issues about it in the past. Consequently, the alleged misconduct could not now be used to establish just cause. It is clear that condonation of alleged misconduct can undermine the establishment of just cause. While just cause was ultimately established in Goruk, it was through completely separate grounds, rather than the impugned misconduct which the Court ruled was condoned by the employer. Condoned behaviour that prejudices workers cannot be used to establish just cause.