An employment relationship can end for a variety of reasons. These reasons can be separated and defined as being terminated “without cause” or for “just cause.” The legal difference is significant; without cause, termination entitles the employee to notice of termination or payment in lieu, whereas just cause termination is based on specific employee misconduct and requires no notice or severance. 

This blog will explore the level of an employee’s misconduct required for an employer to terminate for just cause. A recent decision before the Ontario Superior Court of Justice will be used as context, where the Court dismissed a wrongful dismissal claim and agreed that an employer was entitled to dismiss the employee due to their conduct. 

Legal Definition and Test for Just Cause

The Employment Standards Act (ESA) establishes minimum labour standards, covering aspects like wages, working hours, and leave entitlements, ensuring basic protections for employees in various jurisdictions. It also includes a standard for just cause, defined as “wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer.” This high standard prevents employers from terminating employees for just cause where they did not demonstrate some intention in their actions. Employees not meeting this standard are entitled to bring a wrongful dismissal lawsuit. 

The common law also provides a framework for judges to determine whether the conduct meets this standard in McKinley v. B.C. Tel, the Supreme Court of Canada made it clear that the entire context of the dispute is relevant. The Ontario Court of Appeal expanded on this principle in Dowling v. Ontario (Workplace Safety and Insurance Board), noting that the process consists of “1. determining the nature and extent of the misconduct; 2. considering the surrounding circumstances; and 3. deciding whether dismissal is warranted (i.e. whether dismissal is a proportional response).” The three-step analysis is highly contextual and includes considerations of the employee’s role, responsibilities, and the degree of trust reposed in the employee. 

In Lagala v. Patene Building Supplies Ltd, an employee was terminated for cause after her employer discovered she failed to report her own workplace injury. The Judge was highly influenced by the circumstances of the employee’s role and conduct surrounding the injury. 

Employee’s Injury and WSIB Claim

The plaintiff, Shari Lagala, was the Defendant’s Health, Safety and Training Manager at Pantene Building Supplies Ltd (Pantene). She was a longtime and respected employee of Pantene, and her responsibilities included ensuring Pantene: a) met health and safety requirements per the legislation, b) had an effective system for investigating accidents and incidents, c) established appropriate policies and procedures to minimize accident costs, including WSIB claims. 

On March 28, 2019, she allegedly fell in the parking lot of Pantene’s facility and was injured. She testified that at the time, she did not view the injury as serious, so she did not report the incident to a manager despite being required to do so by Pantene’s policies. However, she allegedly complained of the injury to several employees. The reason she relied on for not reporting the incident was embarrassment based on her position. 

Several months later, the injury worsened, so she filed a claim with the WSIB without notifying Pantene’s management. She also omitted the accident from the monthly incident reports she was required to provide to Pantene’s management. 

The WSIB subsequently allowed her claim. Once the claim came to management’s attention, she was terminated for cause on December 18, 2019. She commenced a wrongful dismissal lawsuit shortly after. 

Employee’s Role and Responsibilities Important Contextual Factors

The Judge examined the entire context of the dispute in line with the process required by the case law. The Judge found multiple unexplained inconsistencies in the employee’s testimony, so when examining the entire context, the Judge often rejected the employee’s explanation or version of events and found concerns with the employee’s credibility and reliability. 

Even so, the Judge was also influenced by the employee’s failures to abide by Pantene’s policies (which she had helped develop and implement), given the employee’s position as Health, Safety and Training Manager. She failed to report her incident until many months after it occurred, a breach of Pantene’s accident reporting policies and a violation of the Workplace Safety and Insurance Act 1997. The Judge found that by failing to report this accident to the WSIB in a timely manner, the employee had put Pantene at risk of non-compliance with the applicable legislation, which could have resulted in an offence. Protecting the company from such proceedings was part of the employee’s job. 

The Judge subsequently ruled that she failed to protect the employer’s interests because she was directly responsible for administering Pantene’s health and safety policies, which entitled Pantene to terminate her for just cause. 

Consult the Toronto Employment Lawyers at Haynes Law Firm for Your Wrongful Dismissal Dispute

The trusted employment lawyers at Haynes Law Firm help demystify employment and human rights in the workplace for employees and employers. Our team helps simplify the law to help clients understand their options and make informed decisions. Our lawyers regularly advise clients on discrimination, accommodation of disability and illness, harassmentwrongful dismissaltermination packages, and more. Call us at 416-593-2731 or contact us online to schedule a consultation with our experienced employment law team member.