Employers have the right to terminate employees without cause during a probationary period; and they have the right to terminate employees by providing reasonable notice of the termination, or pay in lieu of reasonable notice, often referred to as “severance pay”. Employers and employees can always terminate an employment relationship at the end of a fixed term contract. However, if the employer has “just cause”, they can fire you without notice. Similarly, you can quite with just cause. So, what is just cause? Well, “it depends!”
Just cause – employer
An employer can fire an employee for serious misconduct, which is called “just cause.” The misconduct must be serious enough to be considered a fundamental breach of the employment agreement. Acts of theft, potentially including time theft, and dishonesty will justify an immediate dismissal, as may acts of insolence or insubordination. A failure to comply with work orders or work rules may justify immediate dismissal if the rules were known to the employee, consistently enforced, within the scope of the employment contract, and lawful and reasonable; and further, the employee must have been aware that dismissal was the consequence for a failure to comply. Engaging in criminal conduct may justify immediate dismissal, depending on the nature of the job, the nature of the criminal activity, the severity of the criminal activity, and whether the criminal activity affects the ability of the employee to do their job or the employer’s reputation. Assault and harassment in the workforce can be grounds for immediate dismissal.
For less serious misconduct to be considered just cause, typically there must be both clear warnings and progressive discipline before an employee can be summarily dismissed. Amongst other things, chronic volitional absences and chronic tardiness can be considered misconduct, especially if they aren’t condoned by the employer. Other examples include failure to follow reasonable policies of the employer. Often employers are more likely to dismiss without cause over less serious misconduct.
Similarly, it is difficult for an employer to justify a dismissal based on unsatisfactory work performance. The courts require proof of substantively serious incompetence to accept unsatisfactory work performance as immediate just cause. If it can be said the employee has some redeeming attributes, then likely they’re not incompetent. Without that level of gross incompetence, the employer must identify the areas of dissatisfaction by providing objective standards of performance, provide opportunities for improvement (and arguably training, coaching, or mentoring), and provide clear warnings that a failure to improve will result in dismissal.
The issue of “just cause” is complicated; there are other scenarios not covered in this article, and judging the seriousness of misconduct is difficult. If you’ve been fired and your employer is alleging just cause, you should seek legal advice. Our lawyers are here to help!
Frustration
Returning to chronic absences, the law surrounding dismissal for chronic illness is difficult. Generally, it’s not an issue of misconduct but whether the chronic illness “frustrates” the employment contract, basically making the contract void. Generally, any contract is considered “frustrated” if one party cannot complete the contract for reasons beyond their control. A prolonged illness or injury would only frustrate an employment contract if the illness made it impossible for the employee to fulfill the employment agreement. The incapacity must fundamentally alter the employment relationship. I would argue the nature of the job also matters: if the incapacitated employee is a key employee, then a temporary prolonged incapacity may be more likely to frustrate the contract than if the employee is one of many employees performing the same role.
Although common law employment law may permit an employer to terminate an employment contract relying on frustration, there may remain legal consequences under human rights legislation and employment standards legislation. As an easy example, terminating an employee during or at the conclusion of a maternity leave will likely breach both human rights legislation and employment standards legislation. Any alleged frustration of contract would not eliminate employment standards legislation obligations for notice of termination or pay in lieu of notice of termination.
The loss of a necessary license or professional certification or designation may also frustrate the employment contract.
Just cause - employee
Employees have the right to quit their job for just cause, and claim damages for severance pay, in certain limited circumstances. The question is whether the employer has fundamentally breached their obligations under the employment contract. A breach of a key term of the employment agreement is a fundamental breach of the employment contract and gives the employee just cause to quit, which is called constructive dismissal.
If the employer unilaterally and without notice reduces the employee’s pay, substantially changes their job duties or job title, or increases the employee’s hours, then the employer has forced a fundamental change to the employment agreement on the employee and the employee would have just cause to quit. Additionally, a significant change in work hours or job relocation can be considered just cause to quit if either creates undue hardship for the employee, as can temporary unpaid lay offs.
Harassment, bullying, or any other form of toxic workforce can be considered just cause to quit too as they create an untenable situation for the employee. One of the fundamental duties of an employer is to provide a safe workspace. Allowing a toxic or hostile work environment to exist is a fundamental breach of the employment contract and hence just cause to quit. Of course, some forms of harassment and bullying are also prohibited under human rights legislation.
The remedy for a constructive dismissal is to quit and seek severance pay, which would be assessed as if you had been dismissed without just cause. Because your remedy for a unilateral change in your contract is pay in lieu of reasonable notice of the change, employers can give you reasonable notice of a substantial change in your employment contract, similar to giving reasonable notice of termination, in which case you would have no remedy.
Further, employees have a duty to mitigate their losses, i.e. reduce their damages, which may require employees to accept some kinds of just cause to quit, such as a change in job duties for the same pay, so long as continuing to work doesn’t result in hostility, embarrassment, or humiliation.
If you think you may have been constructively dismissed, you should seek legal advice immediately and before making critical decisions (i.e. don’t quit your job first and ask questions second).
