Experiencing termination with cause in Ontario can be overwhelming and confusing. When an employer claims “just cause” for dismissal, it typically means serious misconduct is alleged, potentially impacting your rights to severance, termination, and other entitlements. This guide to Termination With Cause Ontario will help you understand your rights and options.
Let’s dive in!
What is termination with cause in Ontario?
Termination with cause, also called termination “for cause” or “just cause,” occurs when an employer dismisses an employee without notice or severance due to serious misconduct or wrongdoing. This can include actions like fraud, theft, insubordination, chronic absenteeism, workplace harassment, or violations of company policy.
Often called the “capital punishment” of employment law in Canada, termination for cause requires that the employer demonstrates:
- The employee knowingly engaged in misconduct
- The misconduct was severe enough to justify immediate dismissal
- Dismissal was the only reasonable response
Examples of termination for cause in Ontario
Here are some examples of misconduct that may justify termination for cause:
- Theft or Fraud: An employee caught stealing from the company or falsifying financial records may be dismissed immediately for cause.
- Workplace Harassment: Engaging in harassment or bullying towards colleagues or clients may warrant termination if it creates a hostile work environment.
- Serious Insubordination: Refusing direct orders from a supervisor, especially if it disrupts business operations, can lead to termination.
- Chronic Absenteeism or Lateness: Frequently being absent without valid reasons—and persisting despite warnings—may justify termination for cause.
- Safety Protocol Violations: If an employee repeatedly ignores safety rules, endangering themselves and others, they may face dismissal for cause
Termination for cause vs. termination without cause
Termination without cause means an employee is let go for reasons unrelated to their actions at work, such as downsizing or restructuring. In contrast, termination for cause occurs when an employee is dismissed due to serious misconduct, poor performance, or failing to meet essential job requirements.
If you are terminated for cause, your employer isn’t required to provide notice or pay in lieu of notice. However, proving cause is challenging, and employers need substantial evidence to support it. With termination without cause in Ontario, you are entitled to either termination pay or reasonable notice, depending on the terms of your employment.
Related reading:
The legal framework for terminations with cause in Ontario
Under the Ontario Employment Standards Act (ESA), employers are generally not required to provide notice or termination pay for employees dismissed with cause. Ontario Regulation 288/01, Section 2(1), states that an employer is not obligated to give notice if the employee is guilty of “willful misconduct, disobedience, or willful neglect of duty.”
Employers must demonstrate the misconduct with substantial evidence. This can be challenging because the ESA and common law set different thresholds for what constitutes termination for cause.
Distinction between termination “for cause” at common law and “willful misconduct” under the ESA
When it comes to employment termination, the standards vary between common law and the Employment Standards Act (ESA). Under common law, employees are generally entitled to “reasonable notice” of termination or pay in lieu unless they are dismissed for “just cause.” In contrast, the ESA specifies that for an employee to lose their entitlements under its provisions, they must be guilty of “willful misconduct.”
This creates a situation where an employer may have “just cause” to terminate an employee without providing reasonable notice or pay, yet the employee may not meet the criteria for “wilful misconduct.” As a result, they could still be entitled to termination and severance pay under the ESA.
Based on case law, to prove “willful misconduct,” courts often require evidence that the employee’s behaviour was “preplanned” rather than simply occurring in the heat of the moment, a stringent standard that can be challenging for employers to meet.
Example
A striking example is found in Render v. ThyssenKrupp Elevator (Canada) Limited., where a 30-year manager was terminated after a single incident in which he slapped a female co-worker on the buttocks. This action was triggered by a joke about his height, occurring in a workplace culture characterized by “regular joking and bantering.” Following a workplace sexual harassment investigation, the employer decided to terminate the manager’s employment without a severance package, leading the employee to sue for wrongful dismissal.
At trial, the judge dismissed the employee’s claim that the slap was “accidental,” especially given his comment to male co-workers afterward: “for 10 bucks, you can shake my hand.” The court stated that regardless of whether the slap constituted sexual harassment, sexual assault, or a common assault, it was “very serious and unacceptable conduct.” The court found that the slap was intended to assert dominance, demean, and embarrass the female co-worker, thereby violating her dignity and self-respect. Thus, the employer was justified in terminating the employee for just cause, particularly given his managerial position, lack of remorse, and prior training on the company’s anti-harassment policy, even considering his long service and clean record.
The employee appealed the decision to the Ontario Court of Appeal, arguing that there was no just cause for dismissal based on the incident. Even if the termination was justified under common law, he contended that he was entitled to minimum termination entitlements under the ESA. He asserted that the isolated incident of misconduct was not severe enough to forfeit his entitlement to eight weeks of termination pay and severance benefits.
According to ESA regulations, an employee may be denied notice of termination or severance if they have engaged in “wilful misconduct, disobedience, or wilful neglect of duty that is not trivial and has not been condoned by the employer”—a standard that is significantly higher than just cause for dismissal under common law. The employee claimed he was owed eight weeks of termination pay and 26 weeks of severance pay.
Court of appeal
On appeal, the court upheld the trial judge’s decision that the employer had just cause for dismissal under common law. It rejected the employee’s argument that alternative disciplinary measures could have been applied instead of termination and that there was no breakdown in the employment relationship. The court emphasized that termination for just cause was a “proportional response” to the misconduct, noting that the key question is whether the employee engaged in conduct incompatible with the fundamental terms of the employment relationship (citing Dowling v. Ontario (Workplace Safety & Insurance Board) (2004), 246 D.L.R. (4th) 65 (Ont. C.A.)). As the court stated, “when things go too far, as they did in this case, the legal consequences can be severe.”
However, the court agreed with the employee that his behaviour did not meet the “wilful misconduct” standard, particularly since the buttocks slap was not “preplanned” and occurred “in the heat of the moment.” Consequently, the employee’s misconduct did not rise to the level required under the ESA, which meant he could not be deprived of his termination entitlements. The Court of Appeal noted that “it was not the type of conduct […] that was intended by the legislature to deprive an employee of his statutory benefits.”
This case serves as a reminder to employees that a termination for just cause does not automatically relieve the employer of their obligation to provide minimum ESA entitlements. An employee may only be denied these benefits when their misconduct is deliberate, premeditated, and understood as wrong.
How courts determine if termination for cause was justified
An employee dismissed for cause may challenge their termination through a wrongful dismissal claim, requiring the employer to prove that termination for cause was appropriate. In making this assessment, courts will consider:
- Severity of the Misconduct: Whether the behavior significantly harmed the employment relationship.
- Context of Employment: The employee’s role, responsibilities, and employment history.
- Proportionality of Response: If dismissal was an appropriate and proportionate response to the misconduct.
Employee rights in termination with cause Ontario
If you’ve been terminated for cause, it may feel like your employer has all the power in the decision. However, even in cases of dismissal with cause, employees still hold important rights that can help protect their interests and, if needed, challenge the termination. Here’s what you need to know:
1. The right to a fair assessment of your conduct
In cases of termination for cause, your employer is required to prove that your conduct was serious enough to justify ending the employment relationship. Generally, minor mistakes or one-off incidents won’t meet the high standard needed for a “just cause” dismissal. The employer needs to provide clear evidence of both the misconduct and why it warranted such an extreme step. This means you’re entitled to a fair and thorough assessment of the situation.
2. The right to challenge the termination
If you believe your termination was unfair, you have the right to challenge it by filing a wrongful dismissal claim. In this case, the burden of proof falls on the employer to demonstrate that termination with cause was justified. If the court decides the termination didn’t meet the required standard, you could be entitled to severance or other compensation.
See wrongful termination in Canada to learn more.
3. The right to review your employment terms
Your employment contract may contain specific terms on what counts as just cause for termination. You have the right to carefully review these terms and, if necessary, seek legal advice to understand them fully. If your employer’s reason for termination doesn’t match the standards set in your contract, it could give you a strong basis for a wrongful dismissal claim.
4. The right to appeal Employment Insurance (EI) ineligibility
If you’re terminated for cause, your eligibility for Employment Insurance (EI) benefits can be affected, as the employer will usually indicate a “Code M” (misconduct) on your Record of Employment. However, you can appeal this EI ineligibility if you believe the reason given was inaccurate. If the EI review finds the termination was unjustified, you may regain eligibility for benefits.
5. The right to respectful treatment
Even if you’ve been terminated with cause, you still have the right to fair and respectful treatment during the process. If the dismissal involved any form of harassment, discrimination, or retaliation, you might have grounds to file a complaint under employment standards or human rights laws. Respect and dignity are essential, regardless of the reasons for termination.
Five steps to take if you’ve been terminated for cause
1. Remain calm
Receiving the news of termination without severance can be incredibly distressing—mentally and financially. Many of our clients have felt overwhelmed, leading to impulsive reactions during their termination meetings.
While it may be tempting to express anger or frustration, staying calm is crucial. An emotional outburst or negative action could jeopardize your legal right to seek compensation. Taking a breath and composing yourself can go a long way in protecting your interests.
2. Be professional
After your employer informs you of your termination for cause, it’s important to uphold professionalism in your interactions. Avoid sending lengthy, emotional emails or threats, as these can exacerbate the situation.
Instead, reach out to an employment lawyer at Resolute Legal. We can assess whether your termination meets the criteria for a dismissal with cause and guide you in securing the compensation you deserve.
3. Seek comparable employment
If you’re a non-unionized worker in Ontario, you are obligated to make a reasonable effort to find similar employment after being terminated. This is known as your duty to mitigate.
Failure to actively seek comparable work could influence the amount of severance pay you may be entitled to. Keep a detailed record of your job search, including the companies you applied to, the dates, positions, and the outcomes. This documentation can be invaluable should you need to demonstrate your efforts.
4. Review your record of employment
In Ontario, your employer is required to provide a Record of Employment (ROE) within five days of termination. If you were let go for cause, you might see a “Code M” on your ROE, which often results in ineligibility for Employment Insurance (EI).
It’s common for individuals who believe they were wrongfully terminated to feel defeated upon receiving their ROE. However, if your termination does not meet the necessary conditions, Resolute Legal can assist you in obtaining a corrected ROE that enables you to access EI benefits.
5. Know your rights
Understanding your rights following a termination can significantly impact your next steps. If you believe you’ve been wrongfully terminated, don’t hesitate to consult with legal experts who can help clarify your situation and outline your options.
6. Contact Resolute Legal
Regardless of the circumstances surrounding your termination, it’s crucial to consult with the experienced employment law team at Resolute Legal. We have successfully assisted employees in Ontario in asserting their rights and securing the compensation they are entitled to.
Final Thoughts on Termination With Cause Ontario
Termination with cause is one of the most serious actions an employer can take, often leaving employees without critical entitlements like notice or severance pay. In Ontario, termination for cause is reserved for significant and deliberate misconduct, requiring the employer to meet a high standard of proof. If you’ve been terminated for cause, understanding the distinctions between just cause and willful misconduct, as well as your rights under the ESA, can make a substantial difference. Courts tend to scrutinize terminations for cause carefully, which means employees often have options to challenge the decision and potentially regain entitlements.
Take the first step towards protecting your rights
If you believe your termination for cause may have been unjustified, reach out to Resolute Legal’s employment lawyers.
Schedule a free consultation with our experienced team to get the answers you need and explore your options. We’re here to help you understand your rights and navigate the next steps confidently. Click below to book your consultation today.
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