Dismissal of Employees

Some Considerations Surrounding Just Cause Dismissal of Employees

Just Cause, General Principles

Typically, there is a requirement for reasonable notice for termination under the Employment Standards Act, 2000^[1]. However, this requirement can be alleviated in situations where there is just cause for the dismissal.

The Supreme Court in McKinley v BC Tel^[2] discussed the requirements for just cause. Iacobucci J for the Court emphasized the importance of contextual analysis in determining whether employee dishonesty can be considered just cause for dismissal. Although McKinley specifically referred to dishonest conduct, this contextual analysis has been applied by the courts, both in Ontario and in other jurisdictions, in various other contexts regarding just cause for termination.^[3][4]

In Dowling v Ontario (Workplace Safety and Insurance Board)^[5], the Ontario Court of Appeal clarified this contextual analysis, stating that it breaks down into a 3 step process:

1. “determining the nature and extent of the misconduct;
2. considering the surrounding circumstances; and,
3. deciding whether dismissal is warranted (i.e. whether dismissal is a proportional response).”

Misconduct

Below is a non-exhaustive list concerning certain types of employee misconduct.

1. 1. Misconduct – Absenteeism and LatenessTypically, if an absence can be explained, then just cause will be denied. In Smith v Ramara (Township)^[6], an employee who was experiencing serious stress from his personal life took a vacation without clearing it with his superior; although Justice Eberhard found that the employee had erred in doing so, he found that the termination was without cause, in part because of the stress the employee had been experiencing^[7].  
   2. Misconduct – License SuspensionIn Lewis v Ontario Plymouth Chrysler Ltd.^[8],  the plaintiff was a car salesman who had his sales license revoked due to purported misconduct. Although he informed his employers that the revocation would merely be temporary while he dealt with the issue, he was dismissed from his position. Subsequently, his license was restored and he was successful in obtaining a judgment for wrongful dismissal.
   3. Cumulative EffectThere are situations wherein even if each type of misconduct is insufficient on its own, the cumulative effect will allow for just cause for dismissal. This can even occur when the types of misconduct are not similar^[9].
      

      Warnings

      In Fonceca v McDonnell Douglas^[10], a warning was found to not necessarily be a requirement for dismissal for cause.  That case, though, turned significantly on the facts, as the complainant there had already been the subject of several union complaints, and should have been aware he was under investigation^[11]. Justice Steele in Fonceca also laid out a test for warnings:

      “Where the incidents complained of are trivial, but annoying, then warnings are necessary before termination for cause is justified. However, where incidents, each in themselves, are serious, even though not sufficient to justify dismissal at the time, then a warning is not essential.”^[12]

      Condonation

      In Nossal, the Ontario Court of Appeal stated that condoning of similar past conduct has little relevance to whether conduct can entail just cause for termination^[13]. There are cases from other jurisdictions that suggest that condoning may be considered relevant in practice, however^[14].

   Fair Investigation Hearing

   Many cases have found it necessary for companies to independently investigate and provide a fair hearing for their employees prior to termination, particularly when an allegation comes from a third party. In Bhasin v Best Buy Canada Ltd.^[15], part of the reason for a finding that the employee was wrongfully dismissed was that the employer’s investigation was flawed, and the employee was never given a chance to explain his actions.

   Mitigating Factors

   1. Possibility of Lesser PunishmentIn McKinley, Iacobucci J noted the importance of proportionality in determining punishments for employees.  He explicitly mentioned that “an employer may be justified in docking an employee’s pay” and that there are “several disciplinary measures” available to employers^[16]. However, in spite of this statement, the courts have yet to imply the right to suspend or other progressive disciplinary measures into the employment contract of a non-union employee^[17]. Although the court in Reininger v Unique Personnel Canada Inc.^[18] read in an implied right of suspension regarding a non-union employee, this was based heavily on language in the contract itself; although it did not specify the sorts of punishment available, the contract stated that violations of the drug policy could subject the employee to “corrective disciplinary action, as appropriate, up to and including dismissal.”^[19]
   2. Other Factors Potentially Concerning ProportionalityAn employee’s past good conduct and the length of their employment can be relevant to the court’s considerations of proportionate response; in Bravo v Etobicoke Ironworks Ltd.^[20],  six years of discipline-free employment was considered long enough to require that an employee’s misconduct reach a higher level before dismissal without notice would be justified.The article was prepared by Employment Lawyers at Hummingbird Lawyers LLP.

   Additional Resources

   Workplace Investigation & Training

   List of Secondary Sources Consulted

   • Halsbury’s Laws of Canada – Employment
   • Canadian Encyclopedic Digest: Employment Law (Ontario)
   • Law Society of Upper Canada, Law Society of Upper Canada Special Lectures 2007: Employment Law (Toronto: Irwin Law, 2007)
   • John R Sproat, Employment Law Manual: Wrongful Dismissal, Human Rights and Employment Standards, Volume 1 (Toronto: Carswell 1990)