What is “JUST CAUSE” for Termination?

Oct 30, 2011

Just Cause: a Definition

Just cause is a legal term that means an employer is justified in terminating an employee and not providing the employee with any notice of termination at common law. An employee can agree that certain misconduct is deemed to be just cause in an employment contract; otherwise, the courts generally decide what constitutes just cause.

The Core Question

When deciding whether “just cause” exists, the Ontario Court of Appeal has stated:

the core question for determination is whether an employee has engaged in misconduct that is incompatible with the fundamental terms of the employment relationship. The rationale for the standard is that the sanction imposed for misconduct is to be proportional – dismissal is warranted when the misconduct is sufficiently serious that it strikes at the heart of the
employment relationship.

The Three Step Approach

The Court of Appeal has outlined a three step approach for determining  whether misconduct strikes at the heart of the employment relationship.

The first step is determining the nature and extent of the misconduct.

The second step involves considering the surrounding circumstances for both
the employer and the employee.

The third step is determining whether dismissal is warranted as a proportional response; this involves determining whether the misconduct is sufficiently serious so as to give rise to a breakdown in the employment relationship.

Applying the Law to Actual Misconduct: An Example

In a 2010 decision, Ontario’s Superior Court reviewed the termination of a senior executive after eight and a half years service. His annual salary on termination was $142,000 plus some entitlement to stock options. Nine people reported directly to this executive. He was terminated because on three occasions he improperly claimed expenses totaling less than $ 500. In particular: he falsified/misrepresented the reason and/or persons present to support expense claims; he knowingly misrepresented the wrong date in expense claims; and, he submitted personal receipts for the purpose of obtaining reimbursement.

The judge found that this misconduct did not constitute just cause for termination and concluded that the employer should have provided him with 10 months compensation in lieu of notice of termination.

For more information about wrongful dismissal, see our other blogs here.

If you have been terminated for just cause and want to find out how a court would view your conduct, please contact us at  [email protected] or 1-888-640-1728 (toll free) or 647-633-9894 (within the GTA).

The material and information in this blog and this website are for general information only. They should not be relied on as legal advice or opinion. The authors make no claims, promises, or guarantees about the accuracy, completeness, or adequacy of any information referred to in this blog or its links. No person should act or refrain from acting in reliance on any information found on this website or blog. Readers should obtain appropriate professional advice from a lawyer duly licensed in the relevant jurisdiction. These materials do not create a lawyer-client relationship between you and any of the authors or the MacLeod Law Firm.

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