In Ontario, as in the rest of Canada, an employer has the right to terminate an employee’s employment. However, if the termination or dismissal is based on “just cause,” the legal landscape becomes more complicated. Just cause terminations occur when an employer has a valid reason to dismiss an employee without providing notice or severance pay. While it may sound straightforward, this type of termination is fraught with potential pitfalls for employers. Failure to properly navigate these pitfalls can result in costly legal challenges and damages awards.

This blog outlines the common mistakes employers make when attempting just cause terminations in Ontario and how to avoid them.

What Is Just Cause Termination?

Before delving into the common pitfalls, it is essential first to understand what constitutes a just cause termination. In Ontario, just cause means that an employee’s behaviour or actions are so severe that they justify the dismissal without notice or pay in lieu of notice. The Ontario courts generally hold that just cause is a high standard to meet and will often favour employees if the employer cannot clearly demonstrate that the misconduct was serious enough to warrant termination without compensation.

Common reasons for just cause terminations include:

• Serious misconduct (e.g., theft, violence, dishonesty);
• Insubordination or willful disobedience;
• Persistent poor performance despite warnings;
• Frequent absenteeism or lateness, especially without valid reasons; or
• Breach of the employer’s policies or contractual obligations.

Common Pitfalls for Ontario Employers

While employers are entitled to dismiss employees for just cause in appropriate circumstances, several common mistakes can undermine a just cause termination and expose employers to liability. Below are some of the most frequent pitfalls employers must carefully avoid.

1. Failing to Provide Clear Documentation of Misconduct or Performance Issues

One of the most critical aspects of just cause termination is documentation. Employers must clearly demonstrate that an employee’s conduct or performance was unacceptable and that the employee was aware of these issues. Courts will not accept vague claims of poor performance or misconduct; there must be specific evidence of the employee’s behaviour and a record of any warnings or attempts to address the issue.

For instance, if an employee has been frequently late to work, it is essential to maintain a log of these occurrences, provide verbal and written warnings, and follow up with clear documentation of any corrective actions. Employers risk losing a just cause claim in court without adequate documentation, as the employer’s version of events may appear unsubstantiated.

2. Not Providing Adequate Warnings and Opportunities for Improvement

In Ontario, the general rule is that employers must give employees reasonable notice of issues related to their performance or conduct and opportunities to correct their behaviour before resorting to termination. In cases of misconduct, such as insubordination or workplace violence, the response may need to be immediate, but even then, employers must still act reasonably.

However, in cases of poor performance, employers should typically issue progressive discipline measures, such as verbal warnings, written warnings, and performance improvement plans (PIPs). Employers can demonstrate that employees acted fairly and in good faith by giving employees a chance to improve.

Without offering these opportunities for improvement, an employer may be seen as having acted precipitously or unfairly, and as a result, the termination may be deemed wrongful.

3. Inconsistently Applying Workplace Policies

Employers often have workplace policies addressing issues like attendance, harassment, performance, and behaviour. A common pitfall occurs when employers fail to enforce these policies consistently or apply them arbitrarily. For example, if an employer dismisses an employee for violating the attendance policy but has allowed other employees to get away with similar violations without consequence, the employer may be accused of inconsistent or unfair treatment.

Consistency is key when applying workplace policies. If an employer takes disciplinary action against one employee for a certain behaviour, they should be prepared to do the same for other employees who engage in similar conduct. Inconsistent enforcement of policies can weaken the employer’s argument for just cause.

4. Ignoring the Importance of Mitigating Factors

When assessing whether just cause exists, courts consider any mitigating factors that may have contributed to the employee’s behaviour. These may include personal issues, health problems, or stress that could have impacted the employee’s performance or conduct. Employers who fail to consider such factors may face challenges in justifying their decision to terminate an employee without notice or severance.

For instance, if an employee is struggling with personal health issues that affect their performance, the employer may have a duty to accommodate the employee under the Ontario Human Rights Code. Ignoring this duty and terminating the employee without considering the mitigating circumstances could result in legal action for wrongful dismissal.

5. Failing to Conduct a Fair Investigation

Before deciding to terminate an employee for just cause, employers must conduct a fair and thorough investigation into the alleged misconduct. Jumping to conclusions without gathering all the facts creates the risk of making an unlawful decision. The investigation should include interviewing the employee, obtaining statements from witnesses, and reviewing any relevant documents or evidence.

If an employer fails to provide the employee with an opportunity to explain their actions or defend themselves, they may be found to have acted unfairly, even if just cause existed. In addition, any disciplinary measures or terminations based on incomplete or biased investigations may lead to legal complications.

6. Relying on a Single Incident of Misconduct

While a serious single incident of misconduct (e.g., theft or violence) can constitute just cause for termination, employers should be cautious when relying solely on one isolated incident to justify dismissal. Courts may be more inclined to find in favour of the employee if there is no clear pattern of misconduct or prior warnings.

For example, if an employee with a long history of good performance commits one serious mistake, the employer may be expected to consider whether the incident warrants immediate dismissal or if a less severe disciplinary measure would be more appropriate. An employer who acts too hastily in such cases risks being found to have terminated the employee without just cause.

7. Not Seeking Legal Guidance Before Terminating an Employee

Employers often overlook the importance of seeking legal advice before proceeding with a just cause termination. Consulting with an employment lawyer can help employers avoid missteps and follow the proper procedures. Employment lawyers can review the evidence, assess the strength of the employer’s case for just cause, and help craft a strategy that minimizes legal risks.

Failing to seek legal advice can leave employers vulnerable to wrongful dismissal claims or other legal challenges that may result in significant financial and reputational damage.

Willis Business Law: Providing Windsor-Essex Employers With Innovative Employment Law Solutions

Just cause termination and wrongful dismissals are complex areas of employment law. While employers are entitled to dismiss employees without notice or severance in cases of severe misconduct or poor performance, the legal bar for just cause is high. At Willis Business Law, our knowledgeable employment lawyers provide comprehensive advice to employers considering dismissing a worker for just cause. We help address all related issues, including workplace policies, performance improvement plans, and workplace investigations.

From our convenient location in the heart of downtown Windsor, we proudly serve clients throughout Windsor-Essex County and the surrounding areas. To discuss your employment law matter with our team, please call us at 519-945-5470 or reach out online.