This week we are talking all about Just Cause dismissals – not to be confused with being terminated “just cuz”. In reality, it is pretty rare to be terminated for cause, i.e a clear reason, in the workplace. But in cases when an employees behaviour is problematic enough, the employer actually has the duty to end their employment as soon as possible. Jill and Dana discuss examples of Just Cause dismissals, and what the consequences of this category of termination have on severance entitlements.

Full transcript below:

Dana DuPerron: Welcome to All Worked Up, the podcast where two employment lawyers break down real-life workplace issues that affect real people.

Jill Lewis: And we’re super excited to bring you this podcast aimed at making employment issues interesting, accessible for employees and employers.

Dana DuPerron: Welcome to All Worked Up. I’m Dana –

Jill Lewis: I’m Jill.

Dana DuPerron: Jill, what’s got you All Worked Up today?

Jill Lewis: We are worked up today about just cause dismissals. And I’m going to put this one on you, Dana, because you just happened to have written a very informative paper, presentation on this topic when and can you actually dismiss anybody for just cause. It almost seems like never.

Dana DuPerron: Yes. No “well I was fired just cause,” that’s not what we’re talking about. We’ve talked about it before and actually as I was going through our past episodes trying to think about OK, what do we want to talk about this week, I can’t believe that we hadn’t yet done a podcast on just cause terminations.

Jill Lewis: It’s a pretty big one.

Dana DuPerron: So we’ve talked about it, we’ve touched on it. Like when we talk about your entitlements it’s always like “if you’re not fired for just cause.” And like so there is an entitlement on an employer if an employee’s behaviour is very, very bad to terminate them right away without any notice.

Jill Lewis: Right, right.

Dana DuPerron: And again, it goes back to that whole like master and servant in England and like how if someone didn’t do anything wrong, you have to kind of give them notice to allow them the chance to find another job.

Jill Lewis: Yes.

Dana DuPerron: But if they like ransacked your castle or whatever no, you don’t have to keep them on, you could be like, “Get out.”

Jill Lewis: I don’t know, was that willful though, is there wilful –

Dana DuPerron: I mean it wasn’t preplanned, but –

Jill Lewis: We’ll get into that –

Dana DuPerron: Yes, that’s –

Jill Lewis: – that discussion.

Dana DuPerron: – a whole kettle of fish. But so yes, it’s –

Jill Lewis: And we skim past it a lot because we don’t see it a lot. And even if an employer comes and says, “Can I terminate for just cause” because OK, when you’re terminating for just cause it means you’re not giving notice, so you don’t have to pay the employee anything.

Dana DuPerron: Yes, you pay them up to the last day they worked and that is it. And like any entitle – if they had accrued vacation up to that date –

Jill Lewis: That’s it.

Dana DuPerron: – that’s it, benefits end that date. That’s why they call it the – we should’ve talked about this in our Halloween episode – da-da-da, the capital punishment of employment law. But it’s really serious. You think people have mortgages, people have daycare expenses, people have bills to pay and groceries to buy and vehicle loans and stuff, like to just be like you have no job and you have no anything now.

Jill Lewis: And you cannot get EI.

Dana DuPerron: That’s right.

Jill Lewis: And that’s a huge part of it –

Dana DuPerron: Yes, yes.

Jill Lewis: – you can’t get EI if you’re fired for cause.

Dana DuPerron: Yes if it’s actually cause. So again –

Jill Lewis: Yes if it’s actually cause.

Dana DuPerron: – a lot of the time when we see employees it’s not cause, like most of the time.

Jill Lewis: Exactly.

Dana DuPerron: I remember early on in my career sitting in a training session and one of the presenters said – like it was a virtual thing. We were watching something in Toronto and one of the presenters said, you know, “If you’re a long-service employee with a clean disciplinary record, like for it to be cause you’re basically going to have to burn the place down,” and Chris was like, “That’s not cause.” Like so, you know –

Jill Lewis: [Laughs] “I’d take that fight.”

Dana DuPerron: Yes, yes. And we seem to be joking but like –

Jill Lewis: Yes, we’ve seen employees –

Dana DuPerron: – it has to be bad.

Jill Lewis: – employees punching other employees, not cause.

Dana DuPerron: Were you sorry –

Jill Lewis: Did you apologize?

Dana DuPerron: – you know, if you did.

Jill Lewis: Yes, yes.

Dana DuPerron: You know, it was a momentary lapse in judgement, does that sort of negate years of good behaviour?

Jill Lewis: Right.

Dana DuPerron: So things that like courts will look at in assessing if they’re cause is first of all the actual act or behaviour or pattern of action. They’re going to look at how long you’ve been employed somewhere and what your disciplinary record is. Has this been steadily building towards OK; this relationship is done.

Jill Lewis: Right.

Dana DuPerron: It can be that a single act is bad enough and really what the test is does it go to the heart of the relationship, does it defeat the trust required, right. Like can you continue – can you trust this employee to remain in your employ and, if not, then there might be cause but it has to be pretty bad. Like a lot of cases, you know, even like theft isn’t always going to be cause. It depends on the circumstances and how serious it is.

You know, one of the cases when you talk about that paper, one of the recent cases that where theft did amount to cause for termination was an employee who was involved in a kickback scheme that I think they got like $500,000. Like yes …

Jill Lewis: That’s maybe cause.

Dana DuPerron: Yes, like it was pretty significant. It wasn’t like they stole a pen from, you know, the supply room. You know, haven’t we all –

Jill Lewis: Yes, it’s like, “Oh, everybody else is doing it.” Yes, exactly, stealing highlighters and stuff like that, no.

Dana DuPerron: Yes. I mean that’s not even stealing because you’re using it for work. But still, right, like it’s just –

Jill Lewis: Or I’m giving it to my toddler [laughs].

Dana DuPerron: – so that you can work.

Jill Lewis: Exactly. Yes, exactly, exactly.

Dana DuPerron: Yes, yes. But so yes, it has to be pretty bad. Now beyond just that just cause for termination, the Employment Standards Act or as we call it the ESA – we can’t get out of using those acronyms that everybody loves – has an even higher standard to not pay people their minimums under the ESA.

Jill Lewis: Yes.

Dana DuPerron: So if you’ll recall – you recall but, listeners –

Jill Lewis: Remind me, please.

Dana DuPerron: – yes, if you’ll recall, under the ESA – so that’s what governs your minimum entitlements in Ontario – you get essentially a week of notice per completed year of service up to a maximum of eight weeks.

Jill Lewis: Yes.

Dana DuPerron: In the first few years it’s not quite that, but maximum eight weeks’ notice and if there’s a $2.5 million payroll or more and you’ve been there five years, a week of severance pay per completed year of service or part thereof up to a maximum of 26 weeks. To not be entitled to those minimums you have to have engaged in wilful misconduct or disobedience that is not condoned and is serious. I have to pull it up every time –

Jill Lewis: Yes. Yes, serious willful –

Dana DuPerron: – serious willful misconduct or disobedience or neglect of duty that’s not condoned. Like it’s really, really bad, it’s really high.

Jill Lewis: It’s really, really bad.

Dana DuPerron: And we recently had this case from the Court of Appeal, it weighed in on this and it was an individual – a manager at they said it was a workplace where there was lots of joking around and there was a lot of like culture of –

Jill Lewis: Yes, a lot of like tapping on the butts, “Good game, good game.”

Dana DuPerron: Yes, they would touch male employee’s bums and stuff and say, “Good game, good game,” which like how do you write that, “They tapped them on the buttocks,” like –

Jill Lewis: The buttocks, yes [laughs].

Dana DuPerron: A buttocks hit. But so this guy was talking to a female employee, she made some comment about him being short. He got down on his knees in front of her and was like, “Oh yeah, I’m this tall,” which like I think she alleged at that point he was like at chest height –

Jill Lewis: Yes.

Dana DuPerron: – for her. And then he stood up and like said he was like trying to hit her on the hip but like got her butt as she was walking away and was like – was it good game that he said or was he like, “Now get out of here” or something like that.

Jill Lewis: Yes. I don’t think he actually said good game but – yes.

Dana DuPerron: Something along – and he said, “Oh, it was like I was trying to hit her hip, but she turned and I got her bum” and –

Jill Lewis: Yes.

Dana DuPerron: – and then there was this whole like other. So she was not pleased. She was like, “That’s inappropriate. I can’t believe you did that,” she wasn’t happy. Then she saw him describing it to someone outside and thought he was making fun of her. He says that at that point he was just being like, “No, it was” –

Jill Lewis: “This is what happened,” yes.

Dana DuPerron: But he did say like, “I’ll give – who wants $10” – or, $10 to shake this hand that like, you know, touched that butt.

Jill Lewis: That for me, we’ve talked about this, as you’ve mentioned – I think we’ve even talked about this on the podcast – not sure if the smack on the butt triggers that for cause.

Dana DuPerron: If you could accept what he says …

Jill Lewis: But for me it’s that comment afterward.

Dana DuPerron: After the fact, yes.

Jill Lewis: It’s that comment, it’s the joke after the fact.

Dana DuPerron: Yes.

Jill Lewis: Yes. Yes, that’s where I see the break –

Dana DuPerron: So the employer –

Jill Lewis: – but either way, yes.

Dana DuPerron: – does an investigation, find it happened, it’s sexual harassment, they terminate his employment for cause. The Court of Appeal said – there was like a whole lot going on in this case, it’s actually a really interesting case.

Jill Lewis: This is a juicy one.

Dana DuPerron: Because then there’s all this stuff and the back and forth with like the employer like gets a media company involved and like the female employee was like giving interviews on the courthouse steps and like stuff that was like the court didn’t like, but he was fired for cause. The court said, “Yes, there was cause. We could not” – like they couldn’t be seen to have been accepting this behaviour, especially to other female employees.

Jill Lewis: Yes, and he didn’t apologize. That was another big piece of it too, right.

Dana DuPerron: Yes, and he got defensive, and he said, “Well” – then he made a harassment complaint against her –

Jill Lewis: That’s right.

Dana DuPerron: – saying she’d made anti-Semitic remarks against him.

Jill Lewis: Which definitely did not help.

Dana DuPerron: Yes, exactly. Like there was no sort of acceptance of, “I’m sorry I’ve done anything wrong.” I don’t know if that would’ve – it was definitely important to the decision, but I don’t know if it would’ve changed it unless it was apologies right away.

Jill Lewis: Yes, yes.

Dana DuPerron: Like if he had been intending to kind of tap her on the hip, she moved and he got her butt and he was like, “Oh my god, I’m so sorry,” and then didn’t – she didn’t see him –

Jill Lewis: Or “I’m mortified, oh my god,” yes.

Dana DuPerron: Yes, yes. Then I think we have a different case. But anyway, so Court of Appeal says no cause – or cause.

Jill Lewis: Cause, cause.

Dana DuPerron: Cause, cause, cause, there is cause but it doesn’t rise to that level required to – under the ESA to disentitle him to those minimum amounts.

Jill Lewis: So cause under the common law, check. We’ve hit that. He is not entitled to a common law notice period –

Dana DuPerron: Yes.

Jill Lewis: – but we’re governed by that Employment Standards Act which has a slightly different and higher standard of the definition of cause or it’s not really called cause, it’s –

Dana DuPerron: Yes, willful like – yes.

Jill Lewis: – willful. And they say because it was not –

Dana DuPerron: Preplanned –

Jill Lewis: – preplanned, this whole idea around willful –

Dana DuPerron: It wasn’t deliberate and preplanned, so it wasn’t willful, it doesn’t satisfy that threshold.

Jill Lewis: Somehow they inputted – I find that was such a strange decision they’ve –

Dana DuPerron: I think a lot of people do.

Jill Lewis: Yes.

Dana DuPerron: That’s the commentary [laughs] across the board.

Jill Lewis: They’ve inputted this new standard, this new requirement that it be preplanned. How on earth are you going to be able to prove that something was preplanned unless it’s –

Dana DuPerron: Yes, a heist.

Jill Lewis: Yes [laughs].

Dana DuPerron: If they ransacked the castle with others [laughs], when I dig my hole through the ground and the safe falls through.

Jill Lewis: Yes. I’m just thinking it’s like Ocean’s Eleven and –

Dana DuPerron: Yes, 100 percent.

Jill Lewis: – you’ve got like their whole plan and stuff and you’re, “Gotcha, I found it, preplanned” –

Dana DuPerron: You get nothing.

Jill Lewis: – for cause. But other than that like what – you know, if there was an assault in the workplace or how could you – anyways. That was so bizarre to me that whole preplanned.

Dana DuPerron: Yes, it makes it difficult for employers. Interesting to see what flows from that. I mean there was a whole whack of lessons for lawyers that comes out of these cases –

Jill Lewis: Yes.

Dana DuPerron: – not really the point of this conversation. But cause is difficult to prove.

Jill Lewis: Yes.

Dana DuPerron: That ESA standard of, you know, serious willful misconduct, disobedience, neglect of duty that’s not been condoned, even higher. So employers talk to someone before you take any of those steps.

Jill Lewis: You have to talk to someone.

Dana DuPerron: Yes.

Jill Lewis: Because also it’s so hard to go back. If you allege cause, that employee is going to go see a lawyer.

Dana DuPerron: Yes.

Jill Lewis: That’s what I always think, right, like as soon –

Dana DuPerron: Why wouldn’t you, what –

Jill Lewis: Why wouldn’t you because you’ve got like nothing to lose now, “I’ve got nothing” so of course you’re going to go see a lawyer and they’re going to fight that. That’s –

Dana DuPerron: Yes. You can do things too where you say, “While we think we have cause, on a without prejudice basis we’re prepared to offer you this much” and you’re better off doing that at the front end than not doing that, the employee sends a letter and then you say, “Actually we had cause.”

Jill Lewis: Right. So do you want to talk about after-acquired cause and so –

Dana DuPerron: Yes.

Jill Lewis: OK. So let’s say –

Dana DuPerron: So what I was just talking about was a situation where they knew and didn’t reference it.

Jill Lewis: They knew, yes, yes.

Dana DuPerron: So something bad happens, you fire them, you make an offer to settle, “We’ll give you this much,” you don’t say anything about cause, they get sent a lawyer’s letter and they say, “Actually we had cause.” Like if you think it’s bad enough to be cause, you’re better off saying, “This is what you did. We think we have cause but on a without prejudice basis, we’ll give you this.”

Jill Lewis: Yes, and that’s just a really important point. Like when you knew if something, what you did in that moment –

Dana DuPerron: Yes, yes.

Jill Lewis: – I would say like any sort of major harassment complaint. So sexual harassment we are – certainly there’s another case too, right, where the employee was found to have been terminated for cause because of a sexual harassment. I think if you have that case, go talk to a lawyer right away –

Dana DuPerron: Absolutely, yes.

Jill Lewis: – just to figure out, you know, if you let that employee continue working –

Dana DuPerron: Yes, are you going to lose your cause case –

Jill Lewis: – while you’re figuring it out, you could lose your cause case, right.

Dana DuPerron: Yes. Now they didn’t in – like there are some takeaways there. Like the court seems to be moving away from that if you don’t fire them immediately –

Jill Lewis: Like really strict.

Dana DuPerron: If you don’t put them out of the workplace immediately you can’t then rely on cause. We’ll see. But talk to someone because timing and everything matters and –

Jill Lewis: Really important.

Dana DuPerron: – in these cases, it can be important to take action.

Jill Lewis: Yes.

Dana DuPerron: And yes, it looks bad if you don’t say anything about cause and then someone’s like, “Actually I’m entitled to more,” and they’re like, “Actually we had cause.” Like that doesn’t look great.

Jill Lewis: No.

Dana DuPerron: But after-acquired cause …

Jill Lewis: After-acquired cause. OK, so you fire somebody without cause for, I don’t know, whatever reason, restructuring, whatever.

Dana DuPerron: Yes. Whatever, yes.

Jill Lewis: And then maybe they come back and you’re negotiating a settlement and you – I’m trying to think of a scenario. You are notified that this individual was like defrauding the company or, yes –

Dana DuPerron: Planned a heist [laughs].

Jill Lewis: Planned a heist. You go through the employee – sometimes this happens, right. You go through the employee’s computer because maybe you’re going through to like pull up some documents or work projects or whatever and you see their heist plans –

Dana DuPerron: Yes [laughs], the blueprints.

Jill Lewis: – and they’ve been Cc’ing George Clooney and Brad Pitt and it’s all there and you’re like, “Oh my gosh” –

Dana DuPerron: Don’t forget Don Cheadle [laughs].

Jill Lewis: Yes, yes. And OK, what can you do? What can you do in this situation? You haven’t paid them their settlement or maybe you have …

Dana DuPerron: If you have it’s going to be hard to unwind that.

Jill Lewis: That’s going to be a little hard to rewind it, all right. So let’s just say you haven’t paid out, that’s easier, what could you do?

Dana DuPerron: You can allege that you have after-acquired cause. It’s going to be a business decision whether or not you want to do – like when you see this happen, it’s usually when the employer finds something and is angry.

Jill Lewis: Pissed [laughs].

Dana DuPerron: Yes. Like when they see it like yes, they’re like, “I can’t believe that this was happening.”

Jill Lewis: Yes.

Dana DuPerron: It’s not usual – like probably not best as just like a tactic if you don’t really intend it because it’s going to blow –

Jill Lewis: That could be real bad faith too if you just start throwing that allegation out there.

Dana DuPerron: Yes. And imagine you’re like, “OK yes, you know what, we’ll give you 10 months,” and then they’re like, “Actually make it 12,” and they’re like, “Actually make it nothing.” Like that doesn’t go over great, right.

Jill Lewis: Yes.

Dana DuPerron: But, you know, if it’s – again, if you learned something that causes you a lot of concern, is really troubling as an employer, again speak to some – if you’re doing these negotiations on your own, which I hope you’re not but if you are, you know, talk to someone at that point because there could be after-acquired cause.

Jill Lewis: Yes.

Dana DuPerron: After-acquired cause is not, “We knew all this before –

Jill Lewis: Exactly.

Dana DuPerron: – and now we’re mad about it because he won’t accept our offer.”

Jill Lewis: Yes.

Dana DuPerron: That’s not after-acquired cause. It has to be something that you learn about after the fact.

Jill Lewis: Yes, yes. And so you could use it as leverage to maybe settle a without cause termination, but you want to talk to somebody and be really clear about you knew, who knew, when you knew.

Dana DuPerron: Yes, yes.

Jill Lewis: So I mean just anything to do with cause, anything to do with work cause, talk to a lawyer. I just want to say too a lot of employers often think that they have to build a case against an employee before they can fire them. That is just when we’re doing for cause, like that’s – do you know what I mean, like –

Dana DuPerron: Yes, yes. You’re free to terminate someone’s employment without – but like by paying them what’s in their contract or their common law amounts or whatever without cause unless it’s discriminatory or unless it’s because, “Man, they keep saying their workplace is unsafe and I don’t feel like dealing with that.” Well, you know, that’s a problem.

Jill Lewis: But yes, if you’re going to fire for cause you may – you’re going to have to build that case, absolutely. There’s going to have to be warning letters if it’s –

Dana DuPerron: Unless it’s a horrible, bad incident, yes.

Jill Lewis: But if it’s performance related, those are tough.

Dana DuPerron: Really tough.

Jill Lewis: Really tough to make out. You’ve got to have warning letters; you’ve got to have performance reviews. You have to have, you know, offered support, coaching. You know, it’s –

Dana DuPerron: And why bother if you’re really trying to build the case. Like if it’s not that you’re doing those things to actually help the employee improve and hope that they can get there, why bother.

Jill Lewis: Yes, exactly.

Dana DuPerron: Like it’s such a headache for everyone. Like to be doing this for like years sometimes like, you know, to show that there’s been no improvement despite this, it might not be worth it because if you’re also doing it just to get out of paying them what’s in their contract –

Jill Lewis: That’s also not great –

Dana DuPerron: Yes. Like if you’re just like, “Oh, they have a big contractual entitlement and I don’t want to pay that, let’s build a cause case” –

Jill Lewis: “I don’t want to pay that,” [laughs].

Dana DuPerron: Yes.

Jill Lewis: It makes us uncomfortable.

Dana DuPerron: Not fantastic. So if you’re trying to fire someone for just cause and not just because, then speak to someone. And if your employment is terminated allegedly for cause, absolutely speak to someone because it’s probably not cause [laughs].

Jill Lewis: Yes, it’s probably – and we’re going to tell you it’s not cause, give their [money? 00:16:59]. All right, that’s it that’s got us worked up. Thanks for listening and don’t forget to like, comment and subscribe.

Dana DuPerron: Tune in next week.

Jill Lewis: Bye.

[End of recorded material 00:17:19]


This content is not intended to provide legal advice or opinion as neither can be given without reference to specific events and situations. © 2021 Nelligan O’Brien Payne LLP.

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