Recent Ontario case sets new, high-water mark for such claims

Dismissing an employee for just cause carries profound legal and practical consequences. Legally, a successful "for cause" dismissal strips an employee of their right to reasonable notice at common law and, in most Canadian jurisdictions, statutory termination pay.

Practically, the professional damage is often more severe; terminated employees may struggle to secure new roles because they cannot provide a positive reference or explain their departure.

Recognizing these impacts, a court will subject a for cause dismissal to intense scrutiny.

Review, evaluation of just cause dismissal

A court will not reflexively accept an employer’s justification for termination. Instead, it conducts a rigorous review of the employer’s position, weighing the alleged misconduct against the employee’s entire work history.

The court evaluates whether the employer can substantiate the underlying facts and whether the proportionality of the punishment (just cause is often called the "capital punishment of employment law") is truly warranted by the conduct.

Typically, when a court finds that a dismissal for cause was unsubstantiated, the remedy is limited to an award of reasonable notice. However, if the employer’s decision to allege cause was not only unfounded but also made in bad faith, the court may award additional damages for the breach of the duty of good faith.

Ontario case: Damage to career trajectory

Occasionally, the...

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