Wrongful dismissal cases can be complicated and for that reason representation is suggested.An employer in Ontario can terminate the employment of an employee in two different ways: (i) without cause; or (ii) for cause. An employee who has been terminated without cause is presumed to be entitled to reasonable notice of dismissal or pay in lieu of notice of dismissal . In contrast, an employee who has been terminated for cause because of a serious act of misconduct is not entitled to notice of dismissal or a severance package.
The vast majority of dismissals in Ontario are terminations without cause. The employer does not need a good reason to end the employment relationship and, therefore, is not required to prove that the employee did something wrong in order to justify its decision to dismiss the employee. Instead, the employer simply exercises its right to end the employment relationship by providing the employee with reasonable notice of the dismissal.
If the employee’s employment contract contains an enforceable termination clause the termination clause will rebut the presumption that the employee is entitled to reasonable notice of dismissal and the employee will only be entitled to the notice or payments specified by the termination clause. Significantly, approximately 30% of termination clauses in Ontario employment contracts have not been properly drafted and will not be enforced by a court because they breach the minimum standards of the Employment Standards Act 2000 (“ESA”). If the termination clause is void the dismissed employee will be entitled to reasonable notice of dismissal.
Being terminated for cause has been described as the capital punishment crime of employment law.Sometimes referred to as termination for just cause, the employee is not provided with notice of dismissal or a severance package.
The dismissed employee may also be ineligible to collect employment insurance benefits and is likely to find it more difficult to find new employment. Being terminated for cause is often a humiliating experience that may result in the dismissed employee suffering from depression and other forms of mental distress. Nevertheless it is an appropriate response by the employer if the employee has engaged in serous acts of wrongdoing and has not responded appropriately to attempts at progressive discipline.
The Ontario Court of Appeal has held that an employer many terminate an employee’s employment for cause if the employee is “guilty of serious misconduct, habitual neglect of duty, incompetence, or conduct incompatible with his duties, or prejudicial to the employer’s business, or if he has been guilty of wilful disobedience to the employer’s orders in a matter of substance.”
The employer bears the evidentiary burden of proving on the balance of probabilities (i.e. that it is more likely than not) that it had just cause to terminate the employee for cause. The employer bears this burden because it is the employer who has alleged cause.