[Note: this is a transcript of a video that originally appeared on our website in June 2013]
A question we are often asked by clients is: I’ve just been terminated for cause, what does that mean for me?
Bottom line, if the employer can back that position legally, then they are free to terminate you without the severance or termination pay that it would otherwise be obligated to provide. So the consequences for you are stark if you’re in that situation.
So what does terminated for cause mean in practice? Most terminations are actually without cause. In the majority of situations, these employees are then entitled to reasonable notice or termination pay in lieu.
To terminate someone for cause has been described as workplace capital punishment. It is the harshest way an employer may terminate an employee. In this situation, the employer has decided that you, the employee, are guilty of serious workplace misconduct or some offence that destroys the relationship of trust between the employer and the employee. Trust is at the foundation of the employer/employee relationship.
So the question is: should I challenge the employer’s decision? In our experience, the courts carefully review all of the surrounding facts and conduct, and do a searching review of the employer’s allegations, and how they arrived at their conclusion. Many employers who claim just cause cannot support it at the end of the day in court. It is up to the employer to prove its allegations of just cause, and that they made the correct decision. This is a very difficult task for employers and many do not succeed in court.
What is the process and how is the decision made? The court will review the evidence to answer two questions:
- Can the employer actually prove the misconduct that it has alleged?
- Even if it can prove it, do the nature and degree of misconduct justify the most drastic consequences to the employee – that is, termination for cause?
The court must be satisfied that the employer can answer both of these questions with a “Yes” answer. If not, then the employer has wrongfully dismissed an employee and they are entitled to compensation.
In the next phase, the court will determine if the misconduct is serious enough to terminate you without notice. There are a host of factors that a court will consider – here are the four most important ones:
- Did the employee’s act cause a breakdown in the relationship, thereby destroying the bond of trust or breaching an essential term of the contract between the employer and the employee?
- How senior are you as an employee? The court will consider the level of the employee. The higher level managers are held to a higher degree, or a higher standard of conduct.
- Did this situation require a prior warning?
- Has the misconduct occurred in the past? Has this type of practice previously been tolerated by the employer and is only now being used against the employee?
In considering these general principals, it is important to point out that each is very fact-specific, which is why you should have your situation reviewed by an experienced employment lawyer. For example, in the past it was thought that dishonesty in an employment relationship always amounted to just cause. That proposition was reviewed by the Supreme Court of Canada, and it determined that even in the case of dishonesty, it must be viewed in context. It may not be sufficient to justify termination without notice.
Some closing thoughts: work life is critically important to you as a working person. It is right up there with family and health. If your employer has terminated you in the harshest of possible ways, then this must be one of the most challenging periods in your career. This is the time for you to seek experienced employment counsel. You have a lot of questions. What you do next is critical, not just for the job you have lost, but for the balance of your career, potentially. You need experienced employment counsel to advise and assist you in working through these complex issues. The employment lawyers at Nelligan O’Brien Payne are ready and here to help.