We recently examined the application of discipline for just cause in the context of unionized employees. So how does the situation differ for non-unionized employees? This article looks at termination with cause in the context of standard employment relationships. Employers may have grounds to terminate an employee’s employment if they engage in sufficiently serious misconduct.

This blog also looks at a recent decision of the Ontario Superior Court of Justice that demonstrates this. In the case, an employee challenged his termination for just cause, which occurred after he had deleted a website he made for the employer and ignored the employer’s instructions not to do so.

When can an employer terminate an employee for cause?

The most common termination situation is a termination without cause, where an employer does not claim that it has a legal justification for terminating the employee without paying entitlements like reasonable notice or compensation in lieu.

On the other hand, “just cause” refers to certain types of employee misconduct that justify termination without such a severance package. In contrast to labour law, where a union can challenge employee discipline through the grievance procedure, an employee who is terminated for cause can claim damages for wrongful dismissal in the courts, arguing that the employer was not justified in terminating them for cause.

It is important to note that a finding of just cause does not necessarily rob the employee of all of their entitlements. Specifically, an employee terminated for just cause may still be entitled to the statutory minimum notice period. Under Ontario’s Termination and Severance of Employment Regulation, an employee is not entitled to statutory notice in only limited circumstances, such as where they are guilty of wilful misconduct, disobedience or wilful neglect of duty.

What type of acts may justify termination for cause?

The employee’s misconduct must be sufficiently serious to justify a termination for cause. As demonstrated below, this will depend on all of the circumstances.

Similar types of conduct might justify a termination for cause in the employment context as warrants discipline or discharge of a unionized employee. For example, just cause might be found if the employee:

• fails to follow instructions provided by the employer;
• engages in workplace harassment;
• breaches trust, for example by violating confidentiality or soliciting clients;
• engages in dishonest conduct, such as fraud or theft; or
• destroys property belonging to the employer.

When is an employer justified in terminating an employee for cause?

An employee can only be terminated for cause if they engage in misconduct that is incompatible with the fundamental terms of the employment relationship.

As the Court said in Dowling v Ontario (Workplace Safety and Insurance Board):

“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. This is a factual inquiry to be determined by a contextual examination of the nature and circumstances of the misconduct.”

In order to decide whether the employer has sufficient grounds to terminate an employee for cause, the Court:

• determines the magnitude of the employee’s misconduct;
• considers the relevant surrounding circumstances, such as the employer’s type of business and policies, and the employee’s seniority and responsibilities; and
• finally decides whether termination was a proportional response to the misconduct because it gave rise to a breakdown in the employment relationship.

Employee was terminated for cause after he twice deleted a company website

In Park v Costco Wholesale Canada Ltd., the plaintiff was an assistant buyer with the seasonal and toys department at Costco. During his time in this position, he made an internal website for the department. He was then transferred to a different department following disagreements with his manager.

After the transfer, the manager emailed him to request that he be given access to the website. The plaintiff then deleted the website and responded by saying that he had deleted it because the manager had not got back to him regarding whether the department wanted the website. A more senior Costco employee emailed the plaintiff telling him to request permission before deleting things from the system. The plaintiff fired back an angry response.

Costco then restored the website, which the plaintiff deleted again, this time permanently. This action prompted the employer to terminate him for cause, relying on a term of his agreement that envisaged termination for cause, including the destruction of company property and any act of insubordination.

Employee’s misconduct justified termination for cause

The plaintiff sued Costco, arguing that his conduct did not justify termination for cause. Justice Ryan Bell disagreed.

Her Honour identified four acts of misconduct committed by the plaintiff, which started with destroying the employer’s property by deleting the website and continued by trying to mislead the manager by suggesting he had previously deleted it. His disrespectful email to the senior employee and decision to ignore their instructions by deleting the website again without permission constituted further acts of misconduct.

Justice Ryan Bell decided that these deliberate acts amounted to wilful misconduct, which was incompatible with the fundamental terms of the employment relationship. As a result, the employer was justified in terminating the employee for cause and the court dismissed the plaintiff’s claim.

Contact Grosman Gale Fletcher Hopkins LLP in Toronto for Advice on Termination for Cause

The experienced employment lawyers at Grosman Gale Fletcher Hopkins LLP advises clients on a variety of issues relating to termination. In addition to helping employers mitigate legal risks associated with employee misconduct, we also advise employees on their rights when they are facing allegations of misconduct.

With more than 30 years of experience advising clients on termination issues, we can help you through the process. For assistance, please contact our employment law team at Grosman Gale Fletcher Hopkins LLP online or at 416.364.9599 to schedule a consultation.