If an employer terminates an employee for “just cause”, the employee is not entitled to notice of termination or pay in lieu of notice. In other words, where there is just cause for dismissal, the employee is entitled to nothing upon termination.
Because of the severe consequences for an employee, the courts view just cause terminations as the “capital punishment” of employment law. This has led to a high legal hurdle for an employer to surmount to prove that an employee’s misconduct is serious enough to meet the “just cause” threshold.
Proving Just Cause
An employer will only be able to prove just cause where it can show the employee’s misconduct strikes at the very root of the employment relationship, leaving the relationship irreparable. One such indication would be, for example, if the behaviour interferes with the safe and proper conduct of the employer’s business.
The courts take a “contextual approach” when judging whether the misconduct is sufficiently serious to meet the standard, and will consider various factors, including:
the nature of the employee’s job or position;
exceptional personal issues facing the employee;
the nature of the employer’s business;
employer policies and practices; and
whether similar past misconduct by the employee or other employees has been permitted or ignored.
Although a single instance of severe employee misconduct may justify immediate termination for just cause, instances of misconduct rising to this level of severity are rare. Examples include theft, assault, sexual assault or other serious crimes.
More commonly, employers considering just cause termination are struggling with a series of incidents of less serious misconduct, such as insubordination, willful refusal to follow direction from management, displaying a consistent ‘bad attitude’ or incompetence. In such circumstances, just cause termination is seldomly justifiable without providing a written warning (or warnings) that contain certain legally required elements.
Content of Written Warnings
In order for a written warning to be useful in establishing just cause, it must be carefully worded in accordance with established legal requirements and the particular factual circumstances.
Written warnings should include a summary of the misconduct, expectations for improved future conduct with reasonable performance goals, and warning that if the misconduct reoccurs the result may be discipline, up to and including termination of employment.
Post-warning, the employee must be provided with sufficient time and support to improve. As well, it is important to underscore that multiple warnings may be required prior to termination, depending on the nature of the misconduct.
Consequences to Employers Who Fail to Prove Just Cause
It is critical for an employer to seriously consider whether it has sufficient evidence to establish just cause when using it as a defence to an employee action for wrongful dismissal. Employers who allege just cause as a negotiating ploy, or who plead just cause without factual foundation, risk substantial liability in the form of aggravated, moral or punitive damages. In fact, such awards have reached values above $100,000 where the employee has suffered exceptional reputational damage or where the employer’s particular unfounded allegations and bad faith warranted reproach.
Due to the high-stakes of unfounded allegations of cause, and the efforts and resources needed to performance manage and warn employees, employers are best to get legal advice with respect to the wording of written warning and just cause terminations. Also, well-drafted employment contracts can limit an employer’s liability for without cause terminations and provide employers with a palatable alternative to just cause terminations.