They make a million mistakes, steal products, lie about being sick to skip work—and yet, you may still be unable to fire them for just cause. That’s how high the bar is for employers seeking to dismiss an employee for cause without termination entitlements. Two recent court decisions illustrate just how challenging it can be—one where the employer succeeded, and another where the employer fell short.
As a quick review, when an employee is dismissed, generally the employee will be entitled to their reasonable notice at common law (judge-based law) and their minimum statutory termination entitlements. There are a few exceptions to this, including if there is a limiting enforceable employment agreement (which we covered last month), or if there is just cause and wilful misconduct.
Just cause refers to serious misconduct such as dishonesty or insubordination that irreparably damages the employment relationship. If an employer establishes just cause, the employee loses their common law termination entitlements. However, there is an even higher bar for the employee to lose their statutory termination entitlements in Ontario and other jurisdictions. That requires the employer to establish wilful misconduct, defined as intentional and unacceptable acts by the employee.
So when does just cause and wilful misconduct exist? It can arise from a single incident or from multiple incidents of misconduct addressed through progressive discipline. Key factors include: 1) the misconduct was clearly unacceptable, 2) the employer did not condone the conduct, 3) progressive discipline was implemented (if one incident alone is insufficient), 4) the employer conducted a thorough investigation to confirm the misconduct, and 5) the employee was given an opportunity to respond and express remorse. Courts consistently penalize employers who allege just cause without sufficient grounds or proper process.
Two recent decisions from last month demonstrate this clearly.
In the decision of Abbasbayli v. Fiera Foods Company, the employee was dismissed for just cause following a time-theft scheme. The employee and a colleague punched each other’s timecards to falsely report working hours. When confronted, the employee denied wrongdoing without providing a credible explanation. The employer conducted a thorough investigation using surveillance footage and time records. The Ontario Superior Court concluded that the deliberate time theft, combined with the employee’s dishonesty, satisfied the high threshold for just cause and wilful misconduct. Consequently, the employee’s claim for termination entitlements was dismissed.
That case starkly contrasts with another decision also released last month, where things went wrong for the employer. In the decision of Williamson v. Brandt Tractor, a long-term employee was dismissed after a customer complained. The employee had allegedly tried to pressure the customer to sign a sales agreement without reading it and to purchase equipment that the company did not have. The employer was upset upon learning of the customer’s complaint and dismissed the employee. Instead of conducting a proper review into the matter, the employer felt it was sufficient to have an email summarizing the customer’s complaint. The Court concluded the employer failed to meet its burden and awarded the employee 17 months’ pay.
These cases highlight the importance of a cautious and detailed approach when dismissing employees for cause. Employers bear the burden of proving misconduct and justifying the dismissal. Failing to handle a with cause dismissal properly can result in the employer being responsible for termination obligations, additional damages, and legal costs.
For guidance on navigating potential with cause dismissals, please contact our firm.
