An employer does not need a good reason, or any reason at all, to terminate an employment relationship. However, the obligations of the employer and what is owed to the employee after termination depends on whether an employee was terminated “with cause” or “without cause.” There is important information for both employers and employees to know about both terminations with and without cause. Stacey Reginald Ball – Employment Lawyer in Toronto where you can get professional help.
Termination with Cause
This is also known as termination for “just cause.” If an employer terminates an employee for “just cause,” than they do not have to give notice of the termination or payment in lieu of notice (i.e., severance). “Just cause” means that there has been a breach of the terms of employment through serious misconduct, disobedience, or incompetence. However, in Canadian employment law, it is important that the “punishment fits the crime.” In other words, a court will consider it a wrongful dismissal if the behaviour that an employer asserts is “just cause” for termination falls short of what the court considers grounds for a “just cause” termination.
Grounds for “just cause” termination could include, but are not limited to: neglecting to perform the duties of employment; dishonesty and lying to the employer; theft and fraud; serious misconduct (such as sexual harassment); and incompetence. If asserting incompetence as the “just cause,” the employer will have to prove that the employee was warned that they were failing to meet performance standards and that even after clear warnings and reasonably opportunity to improve, the employee continued to not meet performance standards.
Termination without Cause
When an employee is terminated without cause, the employer must provide them with proper notice of termination, or payment in lieu of notice. The proper amount of notice, or the amount of pay in lieu of notice, depends on the terms of the employment contract, the position held, the years of service, the applicable legislation, common law principles, and more. If an employee is terminated and not provided with a sufficient notice period or with adequate pay in lieu of notice, than there is a wrongful dismissal.
When an employer fires someone without cause and provides either the proper notice period or sufficient pay in lieu of notice, they do not need to provide a reason for the firing. It is safer for the employer not to give reasons for the termination in this situation. This is because the employer cannot fire someone for discriminatory reasons (i.e., anything to do with an employee’s sex, race, sexual orientation, age, disability, or anything else related to human rights legislation). They also cannot fire someone for raising a health or safety issue at work. Not providing a reason for termination prevents the employer from saying something that could imply that an employee was fired for a reason contrary to the law.
An employer can terminate an employee without cause and provide notice, or pay in lieu of notice. An employer can terminate an employee with just cause and not provide notice or pay in lieu of notice, however only certain things are considered “just cause” by the legal system.
Stacey Reginald Ball is an experienced Toronto employment lawyer with the Ball Professional Corporation. Our office handles various employment law matters, including wrongful dismissal. If you have questions regarding wrongful dismissal or any sort of termination, please consult a lawyer for advice.