Termination for ‘just cause’ (and without notice) is often described as the capital punishment of employment law. Consequently, employers face a significant burden when trying to prove just cause at law. Arguing just cause for dismissal may be difficult, but not impossible, especially in circumstances involving dishonesty or lack of trust. Nevertheless, employers should always exercise caution when making just cause allegations, because a legally unsubstantiated just cause termination can be costly. If an arbitrator overturns an employer’s termination decision in a unionized environment, this can result in a decision that reinstates that grievor and provides him or her with significant back pay. Non-unionized employees will generally not be entitled to reinstatement, although, unsubstantiated just cause allegations can be equally expensive. Canadian courts have often awarded significant additional bad faith and/or punitive damages in cases where employers create economic hardship by erroneously asserting just cause and failing to pay an employee’s notice entitlements.
Considering the difficulty in proving just cause, along with the potential monetary consequences for improperly alleging just cause, employers should engage in sufficient procedural steps prior to asserting just cause for termination. Such steps would likely include engaging in a thorough and fair investigative process and/or providing employees with warnings in relation to misconduct.
Progressive discipline is one factor adjudicators consider when reviewing a just cause termination, and case-law provides that even a minor offence may justify just cause for dismissal if an employee’s disciplinary record is sufficient. Although certain types of conduct (such as theft or violence) may be more likely to warrant discharge on first offence, employers must always take a contextual approach and view mitigating factors, which may include: lengthy seniority, clean record, condonation, admission of wrongdoing and/or remorse. Further, employers should always consider whether or not there are any potential human rights considerations linked to the misconduct. For instance, does the employee have a disability that has contributed to the conduct (such as a health condition, addiction or other mental illness)?
Employees facing allegations of misconduct should seek appropriate professional advice to understand what factors may assist in potentially saving their employment relationship (such as candour, honesty and recognition of wrongdoing during the investigation process).
This article will review various decisions upholding a just cause termination, while also canvassing the factors and considerations that impact the determination of whether or not a just cause allegation may be substantiated at law.