Termination for Cause – An Overview
If your employment is terminated for cause, the reason for termination may be stated in a termination letter. An employer is entitled to terminate for cause, however should the employee file a claim disputing the dismissal, the employer will need to show that the employee engaged in misconduct that went to the root of the employment agreement. This is fact-specific, and can differ in any case, but misconduct supporting a for-cause dismissal may include:
- Violation of the business’s code of conduct or their ethics policy
- A failure to follow the company’s policies
- Falsifying records
- Engaging in or threatening violence
- Extreme insubordination
- Misuse of computers, such as viewing inappropriate online content
- Conviction for some crimes
When Can an Employer Terminate “For Cause” In Ontario?
Courts in Ontario recognize that termination for cause is a serious step, and that employees are vulnerable to the sudden loss of their employment, and need to be protected from termination on insufficient grounds. That said, typically employers may be able to terminate your employment “for cause” if you are found guilty of a pattern of one or more of the following:
- Habitual neglect of duty
- Serious misconduct
- Conduct incompatible with your duties
- If you have been prejudicial to the employer’s business
- If you have been found guilty of willful disobedience
Employers must be able to justify a for-cause termination, and are well-advised to ensure that they have significant evidence to support such a step.
The employee’s misconduct has to be incompatible with their duties or significantly prejudicial to the employer’s interests. It is up to an employer who seeks to justify a termination for cause to prove that the misconduct did indeed take place and that the misconduct was significant enough to disrupt the working relationship to a point where the employment relationship could not continue.
What Happens in Court?
When a termination case goes to court, the courts apply a contextual analysis in order to determine whether or not the employer had just cause to fire the employee without notice. By applying such an approach, the court first analyzes the extent and nature of the misconduct alleged by the employer. The review typically includes determining whether or not the employer can prove that the alleged misconduct was committed. If it is proven, the court then considers any surrounding circumstances and determines if a dismissal is proportional to the misconduct.
When courts consider the surrounding circumstances, they consider the circumstances of both the employee and the employer. They will take the following elements into account:
- Employment history
- An employee’s age
- Nature of the employer’s business
- Relevant company policies
- Degree of trust placed in employees
Once the court has completed the contextual analysis, it can then decide whether the employer did have “just cause” to terminate the employee’s contract.
If the employer fails to establish that there was just cause to fire the employee, the court usually orders the employer to pay the employee monetary damages for the employer’s failure to provide their employee with the correct notice of dismissal – i.e. wrongful dismissal.
What About Progressive Discipline?
Should an employer rely on several incidents of misconduct to justify their decision to terminate an employee’s contract, they will be required to demonstrate that they took the employee through a particular progressive disciplinary process preceding the termination of the employee’s contract. A progressive disciplinary plan aims to ensure that the employee has an understanding of the significance of their misconduct and the result that may follow, should the misconduct continue. The plan should include:
- A written warning, including a warning that if the conduct does not improve, termination of employment may follow
- Other disciplinary steps short of termination
It is worth noting that a suspension may give the employee the chance to take the position that he or she was constructively dismissed from their employment unless their employment agreement allows for suspension.
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