Employment Lawyer for Employees Fired / Terminated Allegedly With Cause

What is "Just Cause" under the Canada Labour Code

Digging deeper into the employment law issues of employees terminated allegedly with just cause.

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Contact Neufeld Legal PC at 403-400-4092 / 905-616-8864 or Chris@NeufeldLegal.com

Unlike provincial employment standards legislation, which allows an employer to terminate an employee without cause or with cause, the Canada Labour Code only provides its employers with the ability to terminate/fire employees for "just cause." With this singular standard for employee firings, Canada Labour Code employers have become overly aggressive in attempting to justify what constitutes termination for "just cause." Yet, such a determination is not at the unilateral discretion of the employer, but is established by Court precedent, which is exceedingly difficult to achieve. And because this is actually a very high legal standard, it is important to understand what the Court's position has been on "just cause" for purposes of terminating an employee whose employment is subject to the Canada Labour Code.

The High Bar of "Just Cause"

"Just cause" is considered the "capital punishment of employment law" because it allows an employer to terminate employment immediately, without any severance pay or notice period, and often impacts an employee's ability to claim Employment Insurance (EI) benefits. Because the consequences for the employee are so severe, the legal threshold for establishing just cause is very high. The burden of proof lies entirely with the employer to demonstrate that just cause exists.

Key Characteristics and Examples of "Just Cause"

For an employer to successfully argue just cause, the employee's misconduct must be so serious that it fundamentally breaches the employment contract and destroys the trust and faith inherent in the employment relationship. This means the misconduct is so egregious that the employment relationship cannot reasonably continue.

Recognized examples of conduct that may constitute just cause include:

  • Serious Misconduct: Theft or dishonesty: Misappropriation of company property, falsifying records, significant misrepresentation.

    • Violence or harassment: Physical assault, threats, severe bullying, or discriminatory harassment.

    • Insubordination: Deliberate and persistent refusal to follow reasonable and lawful directions from the employer.

    • Breach of trust: Actions that demonstrate a complete breakdown of trust, such as sharing confidential company information, working for a competitor (conflict of interest), or misusing company resources for personal gain.

    • Serious breaches of company policy: Especially if the policy is well-communicated and the breach causes significant harm or risk.

  • Habitual Neglect of Duty/Incompetence (often requiring progressive discipline):

    • For less severe issues like poor performance, chronic lateness, or minor absenteeism, a single incident is rarely enough for just cause.

      • In these cases, the employer must typically demonstrate:

      • Clear communication of performance expectations: The employee was aware of what was required.

      • Adequate training and resources: The employee was given the tools and support to meet expectations.

      • Progressive discipline: The employer provided clear warnings, opportunities for improvement, and communicated the consequences of continued failure to meet standards.

      • Inability to meet standards: Despite these efforts, the employee consistently failed to meet reasonable expectations.

Contextual Approach

Courts and arbitrators in Canada take a contextual approach when assessing just cause. They consider all the surrounding circumstances, including:

  • Nature and severity of the misconduct: How serious was the act?

  • Employee's disciplinary record: Is this an isolated incident or part of a pattern?

  • Length of service: Longer-serving employees generally have a higher standard for just cause dismissal.

  • Employee's position and responsibilities: The impact of the misconduct may vary depending on the employee's role.

  • Employer's policies and practices: Were policies clear? Were they consistently applied?

  • Mitigating factors: Such as remorse, an explanation for the conduct, personal circumstances, etc.

  • Proportionality: Was dismissal the appropriate and proportionate response to the misconduct?

In summary, "just cause" under the Canada Labour Code (and Canadian common law generally) is a very high standard for employers to meet. It requires serious misconduct that fundamentally breaks the employment relationship, and employers must be prepared to demonstrate this with clear evidence and often a record of progressive discipline for less severe issues.

To schedule a confidential initial consultation to discuss our tactical approach to your employment termination, contact our law firm at Chris@NeufeldLegal.com or 403-400-4092 / 905-618-8864, such that we might properly explore the particulars of your former employer's allegations and what legal rights you are actually entitled to, as the Canada Labour Code was designed to protect you the employee (and not your former employer).

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