Toronto Employment and Labour Law Blog: Fired? Negotiating Severance: 10 Keys to Success

#4 TERMINATION FOR JUSTIFIABLE CAUSE

It is called the "capital punishment of employment law." You are fired without notice, without severance and, of course, without a reference. Termination for cause could result in a career ending decision made by an employer out of frustration or as a result of a personality conflict. That is why courts are reluctant to support such Draconian action unless it is clearly justified. The onus of proof is on the employer alleging justifiable cause to establish that the employee engaged in serious misconduct which justifies the decision to fire for cause.

 When employment is terminated without cause there is no need for the employer to provide a reason for doing so. As long as the employer lives up to its legislative, contractual or common law obligations to the employee no reason is required.

Not so when the termination is for just cause and as a result, no notice or severance is provided. When terminating employment on the basis of cause the employer is obligated to provide the reason for the termination. That reason or reasons must live up to the strict legal standards required by the courts. Too many employers believe that poor work-related performance will justify termination for cause. They are wrong. It is true that if an employee has been warned on two or more occasions to "pull up his socks" and ignores the specific warnings a court may support the employer's decision to fire for cause. Those warnings should be in writing to avoid the " you said, he said," dispute.Termination for cause is based on legal criteria and not a manager's opinion or reaction to a work-related situation. Serious misconduct is required something akin to fraud, proven sexual harassment, conflict of interest, actions which amount to a fundamental breach of the employer/employee relationship.

Employers who allege cause when firing and ultimately cannot prove that the employees' actions amounted to a justifiable cause are subject to a court assessing punitive damages against that employer for firing for cause when the employer knew or ought to have known that there was insufficient evidence to support a termination for cause. Employers must obtain the advice of experienced employment counsel before firing for cause. The advice of in house corporate counsel may not be adequate unless that counsel is experienced in terminations for cause and has successfully argued "cause" cases before the courts. Employers who fire for cause without a solid legal base for doing so will find the settlement negotiations include a claim for damages beyond payment of notice and severance.

Terminations for cause are too often begun because of an emotional reaction by the employer to an affront or conflict with an employee that should result in a written warning or a warning with consequences, not a termination for cause with its severe economic and career consequences.

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