The next in our “has my employee…?” series looks at whether an employee has engaged in wilful misconduct. If an employee engages in wilful misconduct or neglect of duty that was grave, it is possible to terminate them “for cause,” whereas termination without cause requires the payment of reasonable notice.
However, the recent decision of the Court of Appeal for Ontario in Render v ThyssenKrupp Elevator (Canada) Limited shows that it might not be this simple. The Court recognized that employee conduct that does not rise to the level of wilful misconduct may still warrant dismissal for cause, but the employee will be entitled to the minimum termination and severance entitlements under the Employment Standards Act 2000 (ESA).
Termination without cause vs. termination for cause
It is widely known that employers are permitted to terminate an employee. However, when terminating an employee without cause, the employer must provide reasonable notice or payment in lieu of notice. We have previously reported on the length of such notice. Employees may also be entitled to severance pay, depending on the circumstances.
On the other hand, employers are not obligated to provide notice of termination to an employee who is terminated for cause. This can only occur in serious situations – incompetence or poor performance typically does not warrant termination for cause (at least outside the context of an implemented progressive discipline policy.
According to the Termination and Severance of Employment Regulation 2001, if an employee “has been guilty of wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer”, they are not entitled to reasonable notice, payment in lieu of notice or severance pay under the ESA.
Employee slaps female co-worker on the buttocks
The plaintiff had worked at his father’s elevator company since 1984. In 2002, it was sold to the defendant’s employer and the plaintiff was made the operations manager of the Mississauga office. Justice of Appeal Feldman described the office environment in the following terms:
There was a very social atmosphere in the Mississauga office, including lunches and other events and regular joking and bantering… This atmosphere included inappropriate jokes. One of the men… made sexist and offensive comments to or about Ms. Vieira [the slapped co-worker]. The male workers would occasionally tap each other on the buttocks and say “good game” as if they were football players on the field or in the locker room… The [plaintiff] and Ms. Vieira would engage in jokes and banter, including Ms. Vieira making jokes or teasing the [plaintiff] that he was short and not as good-looking as his brother… she gave him a holiday party gift of an apron with a muscular man in underwear on it.
The trial judge found that Ms. Vieira made a joke about the plaintiff’s height. He crouched down with his face close to her breasts, then slapped her buttocks. The trial judge found that it was not accidental. Three days after the incident, the plaintiff was handed a termination letter with no severance, termination or vacation pay.
The plaintiff claimed he was wrongfully dismissed, or in the alternative that he should nevertheless be granted his ESA entitlements.
Trial judge finds that the employer had grounds to terminate the employee for cause
The trial judge explained that the governing rule in termination for cause cases is proportionality. In other words, an employee’s job can only be terminated for cause if that is a proportionate response to the misconduct. The core question for determination is whether an employee has engaged in misconduct that is incompatible with the fundamental terms of the employment relationship.
The judge decided that termination for cause was warranted in the circumstances. Given the seriousness of the conduct involving non-consensual touching of a private part of the body, the employer determined that it could not condone it or be seen to condone it.
The judge looked at all the circumstances, including that the plaintiff was a manager responsible for implementing the company’s anti-harassment and anti-discrimination policy, and decided that the employer was entitled to terminate the plaintiff’s employment for cause.
Court of Appeal awards the employee eight weeks of statutory termination pay
However, the Court of Appeal decided that the trial judge erred by failing to award the plaintiff his entitlements under the ESA.
Justice of Appeal Feldman held that the standard to be disentitled from the ESA entitlements is different from that required for dismissal for cause under the common law. According to the Regulation, “wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer” is required. The test is higher than the test for “just cause”:
Careless, thoughtless, heedless, or inadvertent conduct, no matter how serious, does not meet the standard. Rather, the employer must show that the misconduct was intentional or deliberate. The employer must show that the employee purposefully engaged in conduct that he or she knew to be serious misconduct.
Her Honour decided that the plaintiff’s conduct did not rise to the level of wilful misconduct required under the Regulation. Although the conduct warranted dismissal for cause, it was not pre-planned. It was done in the heat of the moment in reaction to a slight.
As a result, because the plaintiff had been employed for eight years or more, he was entitled to eight weeks of termination pay under the ESA.
Contact Haynes Law Firm in Toronto for Guidance on Employee Termination
The team at Haynes Law Firm in Toronto helps employers in multiple industries to manage employer risk and reduce liability concerning employee terminations. We work with employers across the country to limit their exposure to legal claims stemming from poorly executed terminations. We also assist employees that have been terminated to ensure they receive maximum compensation and all eligible benefits from their employers.
Haynes Law Firm helps employers and employees throughout Ontario achieve effective solutions to legal issues and conflict management in employment law and civil litigation. To discuss how our employment law team can assist you, please contact us online or call us at 416.593.2731.