Being terminated from your job is stressful, and receiving a letter that you have been fired “for cause” can add additional anxiety and depression. While these emotions are understandable, it is essential not to let them prevent you from taking proactive steps to understand your rights.

Was it really a “for cause” termination?

In Ontario, there are two types of situations commonly called a “for cause” termination:

1. “Wilful misconduct” under the Employment Standards Act, 2000 (“ESA”)
2. Just Cause under the common law

The employer needs to be able to justify either of these types of termination.  If not, then you might be entitled to reasonable notice of termination, or pay in lieu, under the common law.

If you have been fired for cause, it’s important that you do not sign anything without getting legal advice as these claims are often without merit and can be reversed. You could walk away with a much higher severance payout.

“Wilful misconduct” under the Employment Standards Act, 2000 (“ESA”)

Under the ESA, if you have been employed for 3 months or more, an employer can terminate you without notice or pay in lieu if  “wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer.”

This is a very high threshold.  However, if the employer can make a case for wilful misconduct as described, then you would not be entitled to any termination or severance entitlements under the ESA or under the common law.

“Just Cause” or “For Cause” under common law

Although the employer might not have been able to show that you engaged in wilful misconduct meeting the requirements of the ESA, a case for just cause under the common law might still be made out.  If so, you would still be entitled to your termination and severance pay under the ESA, although not reasonable notice under the common law.

What is the difference?

The distinction between “wilful misconduct” and “just cause” was discussed in Render v. ThyssenKrupp Elevator (Canada) Limited.  The Ontario Court of Appeal held that a single incident of slapping a colleague’s buttocks did not meet the criteria for wilful misconduct under the ESA, but it did meet the threshold for common law just cause.  The employee was given no notice or pay in lieu on termination, but the court awarded him his ESA termination and severance entitlements.

In order not pay anything at all, the employer must prove wilful misconduct under the ESA.  That means not only showing that the conduct was serious but there must also be “an assessment of subjective intent, almost akin to a special intent in criminal law” to engage in the misconduct.

For common law just cause, the core question is “whether an employee has engaged in misconduct that is incompatible with the fundamental terms of the employment relationship” (Dowling v. Ontario (Workplace Safety and Insurance Board), “Dowling”). This generally means that your employer must be able to show severe or repeated misconduct or deficiencies on your part that fundamentally break the employment relationship.

Dowling set out a three-step test for common law just cause, which was affirmed by Ontario’s Court of Appeal in  Hucsko v. A.O. Smith Enterprises Limited:

1. Determine the nature and extent of the misconduct;
2. Consider the surrounding circumstances; and
3. Decide whether the termination for cause was warranted (i.e. whether termination is a proportional response to the misconduct alleged).

Grounds such as incompetence, insubordination, theft or misappropriation, dishonesty, harassment, or workplace violence may potentially constitute wilful misconduct or just cause for termination.   However, courts have also considered the context of the alleged conduct. For instance, in Shakur v. Mitchell Plastics, a single isolated act of violence in the workplace was not enough to justify a just cause termination since the employee otherwise had a clean disciplinary record and the incident was relatively minor in nature.

Next Steps

If your employer has terminated your employment allegedly for “cause,” do not accept this decision at face value without seeking legal advice.

If your employer fails to substantiate either wilful misconduct under the ESA or common law cause, your termination should be treated on a “without cause” basis. In this situation, you would be entitled to your contractual termination entitlements, provided you have an employment contract with an enforceable termination clause. If there is  no written contract with an enforceable termination clause, you are likely entitled to common law reasonable notice. How much you are owed would be based on various factors, including age, how long you have been employed, your position.   Depending on the factors, and where there are special circumstances, this could be up to 30 months’ compensation!

In our experience, firings for cause often do not withstand legal scrutiny, and in many cases, we have successfully challenged such dismissals and removed the “for cause” designation. If you are terminated “for cause”, don’t wait – seek legal advice as soon as possible to protect your rights and secure the fair compensation you deserve.