Termination With Cause in Ontario: What Employees Need to Know

Termination with cause is the most severe form of employment termination in Ontario. It allows an employer to dismiss an employee without providing notice or severance pay. However, the threshold for just cause under Ontario law is exceptionally high, and employees should understand their rights in these situations.

Under the Employment Standards Act, 2000 (ESA), just cause dismissal relieves employers of their obligation to provide notice or pay in lieu of notice. However, determining whether just cause exists is not straightforward. It requires the employer to prove serious misconduct, such as theft, fraud, or workplace violence. Lesser issues like poor performance or minor infractions typically do not meet the legal standard for just cause.

In addition to ESA standards, common law imposes its own requirements. Common law generally holds employers to an even higher standard when alleging just cause. The courts will examine the specific circumstances, including the employee’s role, the nature of the misconduct, and whether progressive discipline was attempted. If the employer fails to meet this high threshold, the dismissal may be deemed wrongful, entitling the employee to notice or severance pay.

The enforceability of termination clauses in employment contracts also plays a crucial role in determining employee rights. Many employment agreements include clauses that attempt to limit notice or severance entitlements. However, if these clauses are ambiguous or provide less than the ESA minimums, they may be invalid. When a termination clause is unenforceable, employees may be entitled to common law reasonable notice, which often provides significantly greater compensation than the ESA. Legal analysis is essential to evaluate the validity of these clauses.

For employees, the implications of a termination with cause are significant. Without notice or severance pay, the financial and emotional impact can be severe. Employers sometimes misuse allegations of just cause to avoid paying severance, leaving employees vulnerable and uncertain about their options. 

If you believe your termination was unjust, consulting an Ontario employment lawyer is crucial. A lawyer can assess whether the employer’s claim of just cause is valid and help you pursue appropriate compensation if it isn’t.

Executive employees face particular challenges in with-cause terminations, as their contracts often include restrictive clauses or substantial financial incentives tied to continued employment. 

Termination with cause is rare and legally complex. If your employment has ended under these circumstances, you don’t have to navigate the process alone. Understanding your rights and seeking professional advice can make a significant difference in the outcome. 

Contact Veromi Arsiradam Law today to discuss your situation and ensure your rights are protected.