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Wrongful Dismissal or Termination for Cause?

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The majority of litigation in employment law involves termination. There are two different types of termination: termination in the normal course and termination for cause. When dealing with a termination in the normal course, the analysis centers solely on the employer's obligations to the employee upon termination i.e. appropriate notice, what the pay in lieu of notice should consist of etc. Where there has been a termination for alleged cause, there is another analysis that occurs first:  a determination as to whether or not the termination for cause is valid.

When terminating an employee for cause, the termination must be reasonable and it can't just be for trifling misconduct of the employee. According to the Superior Court of Ontario in Thompson v. Boise Cascade Canada Ltd., "just cause" must be conduct that goes to the root of the employment relationship such that the underlying relationship and confidence is ruptured and cannot be restored. This can be a difficult threshold to meet. Read our blog entry on the benefits of hiring an employment lawyer to review, write or negotiate an employment contract for more information on how our Ottawa employment lawyers can assist your business.

When Cause for Termination Is Reasonable

Types of misconduct that may be grounds for dismissal for cause include:

  • dishonesty (e.g., fraud, theft, breach of trust, deception etc.);
  • workplace harassment and violence;
  • insubordination and insolence;
  • certain off-duty conduct either related to the employee's employment or the employer's reputation or standing in the community;
  • absenteeism and lateness.

Incompetence or negligence is another possible ground for cause, though it is very difficult to prove as 'just cause.' In such circumstances, if an employee is simply not meeting expectations a court is likely to take the position that the employer should have dismissed the employee without cause.

When Cause for Termination is Unreasonable

While it can be difficult to determine what does and does not amount to "just cause," there are situations that clearly don't justify a decision to terminate employment for "just" cause. These include:
  • poor financial performance of the company;
  • a corporate restructuring;
  • enforcing a right granted by the Ontario Employment Standards Act, 2000;
  • the employee refuses to work because of a good faith concern about safety. In this situation, an employer would be in breach of s. 50 the Ontario Occupational Health and Safety Act;
  • the employee acts or omissions that are caused, at least in part, by a ground protected by the Ontario Human Rights Code such as the employee's disability, religion or gender;
  • the employer learns that the employee is actively seeking new employment or the employee informs the employer that he or she intends to look for a new job;
  • the employee seeks legal advice from an employment lawyer about a dispute with his or her employer; and
  • a personality conflict with another employee or manager that does not involve an act of insubordination.

When is a Notice Period or Pay in Lieu of Notice Required?

An employee's entitlements on termination without cause arise from the Employment Standards Act 2000 (the "ESA") or the Canada Labour Code 1985 (which protects employees of federally regulated employers), the termination provision in an enforceable written employment contract, and/or common law.

If there is no just cause for dismissal, an employer must generally provide the employee with reasonable notice of termination of employment while the employee continues to work, or pay in lieu of notice.  If an employer has "just cause" for termination, then the employee is not entitled to a notice period. The employer has an obligation to prove, however, on the balance of probabilities, that there is sufficient reason to terminate the employment for cause.

Case Example #1

In Bellehumeur v. Windsor Factory Supply Ltd., an employee, Mr. Bellehumeur, brought an action seeking damages for wrongful dismissal, claiming he should not have been terminated for cause due to his mental disability and the employer's termination was an act of discrimination. Mr. Bellehumeur had disclosed some of his disabilities to his employer, including alcoholism, a thyroid condition and heart issues, but he did not disclose his mental health disability until after his termination. The employer accommodated him for the disclosed disabilities as required by the Ontario Human Rights Code but, in his course of work, Mr. Bellehumeur made violent threats to his co-workers and was terminated for cause.

The Court of Appeal reviewed the facts and ultimately dismissed Mr. Bellehumeur's appeal on the basis that his employer was not aware of the mental disability until after termination and his conduct of violent threats resulted in a breakdown of the employment relationship, justifying the termination for cause. The court noted that the employer "fired him as they would any employee who engaged in such workplace misconduct." Accordingly, the employer's conduct in termination was not an act of discrimination and there was no violation of Mr. Bellehumeur's human rights or the Human Rights Code. The employer could only accommodate for what it knew about it.

Case Example #2

In Dowling v. Ontario (Workplace Safety and Insurance Board), Mr. Dowling, a manager with the Workplace Safety and Insurance Board sued the Board, alleging that his employment was wrongfully terminated for cause without notice.

The Board argued that Mr. Dowling was fired because he used his position to obtain financial benefits when the Board's Code of Conduct expressly forbade the acceptance of gifts or monetary reward by an employee for a business decision. Mr. Dowling had lowered insurance rates for certain clients in exchange for the purchase of computers for personal use at their wholesale price. He also entered into secret arrangements with select clients, whereby he lowered the cost of insurance and split any amounts made as profit over and above the regular price with them. The court found just cause for the termination as Mr. Dowling's conduct went to the root of the employment relationship. It is a prime example where an employee violates the trust placed in him by the employer.

Contact Merovitz Potechin LLP, Your Employment Lawyer in Ottawa

If you are an employee that was terminated and you believe the dismissal was unfair, contact a wrongful dismissal lawyer in Ottawa for a consultation. At Merovitz Potechin LLP, we can advise you on your employment matter based on your unique situation and help you to rectify it where possible. Our business law office in Ottawa provides legal advice for both employees who have been dismissed and for employers who are contemplating a termination. Contact us in Ottawa for your employment law needs at 613-563-7544.

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