What is Just Cause for Termination?

Jun 17, 2012

Just Cause For Termination

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. Generally, the courts decide what constitutes just cause.

The Core Question

When deciding whether Just Cause exists, the courts in Ontario have 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 Ontario courts have 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.

Lessons to be learned:

  1. It is generally difficult to prove “just cause”. You can limit your organization’s termination pay obligations by including a termination clause in your employment contract.
  2. In some cases you can prove “just cause” but your organization may still owe the person notice of termination, and severance pay under the Employment Standards Act.
  3.  You can stipulate in your employment contract that specific misconduct (i.e theft) is deemed to be just cause. This is called a specific penalty clause.If you are thinking about terminating an employee and want to discuss your organization’s potential legal liability, or you want to amend your employment contract to enhance your management rights, please email us at [email protected] or call us at 1-888-640-1728.

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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