If an employee has committed wrongdoing or misconduct that amounts to just cause, absent a contractual term to the contrary, the employer can fire that employee. The employee will not be entitled to severance pay of any kind. This type of dismissal is referred to as just cause termination. Just cause, however, is very difficult for employers to prove. The employer has a high onus to discharge. To discharge this onus, each case must be viewed in its own unique set of circumstances and in the context of its own unique facts. If the employer pleads just cause, a court will assess whether the evidence establishes serious misconduct on a balance of probabilities and whether the misconduct is serious enough to warrant a summary dismissal.
There is no fixed rule as to the degree of misconduct required to justify a dismissal for just cause. The degree of misconduct required varies from case to case. In other words, misconduct arising in one employment context might justify termination, while it will not in a different employment context.
A just cause termination may be based on various grounds of misconduct, such as dishonesty, insubordination, insolence, culpable absenteeism, sexual harassment, conflict of interest, breach of fiduciary duty or criminal conduct.
To justify a termination for cause, the misconduct must be to such a degree that it either violates an essential condition of the employment contract, breaches the trust/faith that is inherent in the working relationship and is fundamentally or directly inconsistent with the employee’s obligations to the employer. In other words, the core question will be “whether or not the employee’s misconduct was sufficiently serious that it strikes at the heart the employment relationship. Again, it’s very important that you speak to a Hamilton Employment Lawyer if you’ve been terminated for cause.
A Court will decide whether dismissal is warranted as a proportional response to the employee’s actions. A balance must be struck between the severity of an employee’s misconduct and the sanction imposed – in other words – the termination for cause must be proportional. When determining the nature and extent of the employee’s misconduct and consider the surrounding circumstances of both the employee and the employer, a Court will examine factors which include:
In relation to the employee: the employee’s age, employment discipline history, seniority, role and responsibilities, and personal circumstances.
In relation to the employer: the nature of the business activity, any relevant employer policies or practices, the employee’s position within the organization, the degree of trust reposed in the employee and the severity of potential or actual harm to the employer as a result of the employee’s misconduct
In most circumstances, no. Unless that single act of misconduct by the employee is sufficiently serious to warrant immediate termination (which is rare), the employer has a duty to warn the employee that their misconduct could result in dismissal for just cause should further misconduct occur. Typically, a pattern of misconduct is required before an employer can terminated an employee for cause, but a single incident may justify termination for cause if the misconduct is serious enough to cause an irreparable break down of the employment relationship such as:
Our Courts have stated for years that it is seldom that any one incident or misconduct will constitute termination for cause. For example, as far back as 1955 Judges have stated:
It is only in exceptional circumstances that an employer is justified in summarily dismissing an employee upon his making a single mistake or misconducting himself once. The test in these cases is whether the alleged misconduct of the employee was such as to interfere with and to prejudice the safe and proper conduct of the business of the company and, therefore, to justify immediate dismissal.
However, even if no single incident amounts to cause in itself, a number of cumulative incidents or types of misconduct could amount to cause for dismissal.
When misconduct occurs that is not enough to justify termination for cause, the employer should impose warnings or penalties for the misconduct or in other words, progressive discipline should be used. Before an employee is terminated for cause, he or she should be advised that the misconduct is a matter of serious significance and its continuation could place his or her employment in jeopardy.
Past incidents of misconduct (whether or not each incident alone would justify summary dismissal) can be combined with subsequent misconduct to determine whether the accumulation of employee misconduct amounts to just cause. The past and subsequent misconduct do not need to be similar in nature to amount to just cause.
In a wrongful dismissal action, the employee bears the onus of proving that they were dismissed. Where the employer seeks to rely on the defence of just cause, the onus then shifts to the employer to prove just cause for dismissal to prove cause on the balance of probabilities, based on a finding of real incompetence or misconduct, rather than simple dissatisfaction with performance or concern as to potential misconduct. The proof required must be considered having regard to the gravity of the offence.
We always caution employers that they should seriously consider whether or not they have credible and sufficient evidence to allege just cause in its defence of a wrongful dismissal action. Alleging just cause as a negotiating ploy or pleading just cause without factual foundation can open the door to substantial liability in the form of moral damages or punitive damages. Proving cause is no easy feat – and the onus is high.
Cases are mixed as to whether the employee is entitled to the procedural fairness or an investigation before a just cause dismissal. We would suggest that where serious allegations of just cause are raised (such as theft, fraud or sexual harassment), the employer runs the risk that it will not discharge its burden of proof if the employer has not properly investigated the allegation or provided the employee with an opportunity to respond to the allegations prior to their dismissal. A failure to investigate may breach the employer’s duty of good faith in the manner of dismissal, entitling the employee to aggravated or moral damages or punitive damages.
Generally, if an employer fails to act promptly to dismiss an employee for serious misconduct of which the employer is aware, it can be held to “condone” the employee’s behaviour, and hence unable to rely later upon that behavior to terminate that employee for cause. An employer is allowed a reasonable period of time in order to decide how to proceed, but if it retains the employee beyond this period, it will more likely than not be deemed to have condoned and forgiven the employee. For an employer to condone something, it must have full knowledge of the impugned conduct – and that must be proven by the employee.
The following are some examples, taken from real cases involving employers and their reasons for terminating employees for cause – or – for serious misconduct which they believed was so severe as to warrant termination for cause.
Fraudulent Misrepresentation of Qualifications – generally, the misconduct of an employee prior to his or her employment cannot be utilized as the basis for termination for cause. The only exception to this rule is when an employee, in an attempt to obtain a job, misrepresents his or her background, skills or qualifications at the hiring stage. If such occurs, the company has a right to terminate the employee without notice or severance pay. For example, in one case, an employee advised the employer during his employment that he had computer skills when the employee did not. The employer was successful in termination for cause. In another case, the court held that an employee’s misrepresentation of past remuneration was not cause for termination.
Sexual Harassment – may justify summary dismissal of the offending employee since it interferes with the proper operation of the employer’s business. If it is not very serious, it requires a warning before it justifies termination. Extreme forms of sexual harassment, such as criminal assault, may warrant dismissal without warning in order for sexual harassment to constitute cause for dismissal, it must be made known to the plaintiff by the employer that it is unwelcome.
Willful Disobedience – willful disobedience by an employee to a lawful and reasonable order is cause for dismissal since it repudiates the essential condition of the employment relationship that employees must obey their employer’s instructions.
Theft – This is one area where the employee has few defences to a judicial ruling that just cause exists. So seriously is it regarded by jurists that a single and isolated act of theft has been considered cause for summary dismissal. The traditional view has been that dishonesty amounting to crime is always a ground for dismissal, even one isolated act committed by a long-term employee.
Fraud – As with theft, an employee can be summarily terminated if his or her company establishes on the balance of probabilities that the employee committed a fraudulent act. The general rule is that any fraudulent activity by a senior employee, even if done in good faith, is sufficient to justify the employee’s dismissal. Even if the employer is not prejudiced, once the untrustworthy nature of an employee who holds a position requiring trust becomes apparent, cause for termination exists.
Absenteeism or Lateness – The courts expect that employers will tolerate absenteeism in some circumstances, to an extent. What the employer will be expected to tolerate will depend on the circumstances of each case. While chronic lateness can be grounds for dismissal for cause, the employer must normally demonstrate that the lateness was prejudicial to its operations, or that it has warned the employee sufficiently to allow the employee to correct his or her behavior.
Intoxication or Substance Abuse – if you show up to work drunk or high, or you let your substance abuse become an issue that interferes with your work, that at some point, after you have been accommodated, you can be terminated for cause.
Insolence and insubordination – insolence, disobedience and insubordination can certainly result in termination for just cause. Although the gravy of the offense must be examined, if an employee destroys the harmonious relations between that employee and the employer, he or she can certainly be terminated for cause.
Outside activities – if an employee’s conduct outside of work is prejudicial to the best interests of his or her employer, that employee can be terminated for cause. The misconduct must be serious. For example in one case, a court found that it was incompatible for a professor to teach in a university finance program which emphasized the ethics of business, after she had been convicted of fraud. In another case, the Ontario Superior Court of Justice found that an employer had cause to dismiss an employee who had been charged with, but not yet convicted of, possession of child pornography at the termination date. The employer had a good reputation in the community, which involved promotion of activities involving youth. The termination was a reasonable step in the preservation of such reputation.
Remember, it is not always easy for employers to prove cause. The employer has a high onus to discharge which is why each case must be viewed in its own set of circumstances. Cause must be determined objectively, and since dismissal without notice is such a brutal punishment, a can be justified only by misconduct of the most serious kind. What constitutes cause is very difficult to enumerate because it depends not only on the category and possible consequences of misconduct, but also on the nature of the employment and the status of the employee.
If you been terminated for cause, contact us by filling in a contact form today. It’s important that you do not accept your termination for cause without having the particulars reviewed by an experienced employment lawyer.
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In Canada, there are two types of dismissal: with cause or without cause. Just cause for dismissal may be found if the employee is guilty of serious misconduct (such as dishonesty, harassment, or insubordination) or poor performance. The employer has the burden of proving that it had just cause to dismiss, and the standard is high: the employer must prove not only that the alleged misconduct (or poor performance) took place, but also that the misconduct was sufficiently serious to damage the employment relationship to the point where it could no longer continue, bearing all relevant circumstances in mind.
Where an employer? dismisses an employee with just cause, the employee is not entitled to notice, Termination Pay,? or any compensation.
The onus is on the employer to establish that cause exists for the employee?s discharge.
The employer must prove cause on a balance of probabilities, based on a finding of real incompetence or misconduct, rather than simple dissatisfaction with performance or concern as to potential misconduct.
Proportionality is a fundamental principle in this analysis, though it would be misleading to simply say that ?the punishment must fit the crime?. That is because it is not only the ?crime? that has to be considered; courts will apply a contextual analysis in order to determine whether the employer had just cause to dismiss the employee. First, the court will determine the nature and? extent of the employee?s misconduct (if any). Second, if the alleged misconduct is established,? the court will consider all relevant circumstances and factors, including:
? the employee?s length of service;
? the employee?s prior disciplinary history;
? the degree of trust required in the context of the individual?s position;
? the employee?s response when confronted;
? any mitigating circumstances; and
? any other relevant factors (such as the nature of the employer?s business and any
relevant policies in place).
All factors must be considered. Ultimately, the court must determine whether the employment relationship has been damaged beyond repair. In many cases, seemingly egregious misconduct has been found not to be just cause for dismissal due to other factors.
. . . absent a flagrant dereliction of duty, it must be shown that something was done clearly inconsistent with the proper discharge of the employee?s duties that reasonably indicates a risk of injury to the employer?s interest through continued employment.
The employer has a high onus to discharge. To discharge this onus, each case must be viewed in its own unique set of circumstances.
If an employee has a reasonable excuse for the misconduct, cause for discharge will not be found. However, such an excuse will be scrutinized very carefully by the court in order to determine whether it adequately explains the misconduct.