Many employees are surprised to learn that most employers outside of the unionized context are free to end an employment relationship without having to prove “just cause” for termination. The rules are different in the unionized context and for employees in certain federally regulated industries such as banking and telecommunications. In some cases, a termination may be tainted by human rights related discrimination or a reprisal for an employee’s exercise of rights under the law. In these cases, there may be avenues for challenging a termination decision. However, for the majority of employees in Ontario facing termination, their main recourse is through the law of wrongful dismissal.
Wrongful dismissal is a term that describes the termination of employment by an employer without providing sufficient notice of termination. Where a termination is without “just cause”, an employer may still terminate an employee by giving reasonable notice of termination or pay in lieu of notice of termination. The payment in lieu of notice is what is commonly referred to as a severance or separation package. It is not always easy to assess how much notice an employee is entitled to. Employees are entitled to their minimum entitlements under the Employment Standards Act or Canada Labour Code, but they are also frequently entitled to a longer notice period based on the common law (law developed through the decisions of judges). There are often questions regarding whether benefits, bonuses, pension contributions and other forms of compensation are included within the separation package. There are also special circumstances that may give rise to additional rights and obligations. There are a wide range of factors to consider when determining how much employee should receive. We carefully consider and assess each case in order to help both employers and employees understand the legal rights and obligations that arise at the end of the employment relationship.
An employer who has “just cause” to terminate the employment relationship is not obligated to provide common law notice of termination. Just cause is generally very serious employee misconduct. In some circumstances, “just cause” may exist if the employee has failed to perform his or her job duties, or has done something seriously wrong, such as stealing from the employer. Given the wide range of behaviour that may constitute just cause, the evidence required to prove cause, and the costs involved in wrongly asserting cause, an employer is wise to obtain legal advice before terminating an employee for cause and an employee should consider whether there may be basis for challenging an employer’s allegation of cause.