Labour & Employment Law Blog

Employees Terminated “For Cause” May Still Be Entitled to Statutory Benefits

Employees Terminated “For Cause” May Still Be Entitled to Statutory Entitlements

The Ontario Court of Appeal case of Render v. ThyssenKrupp Elevator (Canada) Limited, 2022 ONCA 310 (“Render”) is an important recent decision relating to what statutory entitlements an employee who is dismissed “for cause” may still receive.

To remind our readers, if an employee is terminated without cause then the employee is allowed to obtain certain statutory benefits under Ontario’s Employment Standards Act, 2000, S.O. 2000, c. 41 (“ESA”) and potentially at common law. These ESA benefits include statutory notice and severance pay, etc. However, if an employee is terminated “for cause” or “just cause,” that usually means in the colloquial sense being “fired” for some sort of misconduct on the part of the employee, then the terminated employee will not be entitled to any ESA benefits. There is a distinction between what can be considered “for cause” in the ESA and what is “for cause” under the common law. The ESA uses the language of “willful misconduct” or disobedience, commonly referred to as “being bad on purpose.” The common law does not use language that connotes some sort of deliberate or intentional misconduct. Under the common law, for instance, a person may be fired for cause for incompetence. As such, under the common law, an employee may be justified in being fired “for cause” on a lower threshold than what would be “willful misconduct” under the ESA.

So, let’s get back to Render. In Render, the appellant employee appealed the judgement that upheld his dismissal for cause by the respondent employer. The appellant employee was employed by the employer for 30 years as a manager. He was fired for cause over a single incident that had occurred at the workplace where the employee had slapped a female co-worker on the buttocks with his hand. It was accepted that the atmosphere of the workplace of the respondent employer was inappropriately social to the extreme. It included regular jokes and banter that often included overtly sexual tones and outright sexualized statements. In any event, the trial judge held that the appellant employee’s firing by the respondent employer for cause was justified.

The appellant employee sought an appeal of the trial judge’s ruling. He also sought a finding by the court of appeal that he was entitled to statutory benefits under the ESA. The issue of the ESA benefits was not brought before the trial judge and, as such, the trial judge had not made any finding with respect to the issue. The appellant employee had failed to ask for ESA benefits either at trial or in his pleadings.

The Ontario Court of Appeal dismissed the appeal with respect to the finding by the trial judge that the appellant employee’s firing for cause was justified. In other words, the employer was able to fire the employee for cause because of the single incident of misconduct and regardless of the established fact that it was common and accepted as part of the milieu of the workplace to include inappropriate sexualized statements, gestures, jokes, etc. However, the Court of Appeal did allow the appeal with respect to ESA benefits as a result of the different standards discussed above.

Employee Allowed Statutory Benefits

So, to repeat, the Ontario Court of Appeal allowed the appeal with respect to ESA benefits of the terminated employee. As such, the appellant employee, despite being terminated for cause, was able to obtain statutory benefits under the ESA. The Ontario Court of Appeal set out that since this issue was raised indirectly at the trial through the opening statement and evidence that was on the record. As such, this was sufficient to allow the appellant employee to assert the claim for ESA statutory benefits on appeal.

The Ontario Court of Appeal went on to set out the law on the prescribed sections of the ESA that would disentitle a terminated employee to statutory benefits. Namely, that an employee is not entitled to notice, or termination pay under the ESA when an employee has been “guilty of willful misconduct, disobedience or willful neglect of duty that is not trivial and has not been condoned by the employer.” And that under the ESA “willful misconduct” means that the employee must do something deliberately, knowing they are doing something wrong.

And in the eyes of Ontario’s Court of Appeal, the appellant employee’s conduct “does not rise to the level of willful misconduct under the Regulation.” The Court agreed with the trial judge that the employee’s conduct warranted dismissal for cause. However, the employee’s conduct was done spontaneously in reaction to the already present inappropriate workplace atmosphere. The Court set out that there was no evidence presented that the action on the part of the appellant employee was “preplanned.” As such, it was not the Court’s place to deprive the employee of his statutory benefits upon termination for cause.

Our Thoughts

We would say that this is a solid win for employees. If you are an employee who was fired for “for cause,” even if substantiated at common law, it does not necessarily mean that you will not be entitled to receive anything under the ESA.

Render makes it clear that the employer who chooses to terminate an employee “for cause” must consider whether the employee’s actions were deliberate and purposeful to further determine whether or not that employee may still be entitled to statutory benefits under the ESA. Further, the more there is evidence of some sort of “preplanning” or malice, the more likely it will be determined that the employee has engaged in “willful misconduct” and therefore would be disentitled to statutory benefits. Failure to do so means that the employer may still be liable to the employee for at least the statutory minimum benefits under the ESA.

The above article is for general information purposes only, does not constitute legal advice or create a solicitor-client relationship. Because each case is unique and factually driven, if you have concerns with regard to the foregoing issues, please make an appointment with one of our lawyers or a qualified legal practitioner elsewhere. We represent clients in the Greater Toronto Area including Toronto, North York, Markham, Vaughan, Thornhill, Newmarket, Aurora, Brampton, Mississauga, Barrie, Ajax, Whitby, Pickering and Oshawa.