Grounds for Being Fired for Just Cause

The potential grounds for summary dismissal are many. Common grounds that may justify an employer’s decision to terminate the employment of an employee for cause includes the following:

Incompetence

An employer may fire an employee for cause if the employee’s performance is incompetent.  Incompetence can refer either to an employee’s lack of capacity to meet a required standard or to an employee’s lack of attentiveness or negligence. 

An employer has a very high standard to meet if it intends to rely upon an employee’s incompetence as justification to terminate an employee’s employment for cause, in the absence of prior warnings, the employer will have to prove gross incompetence. Even if prior warnings have been given to the employee, the employer will still be required to prove that the employee’s performance deficiencies were serious enough that it prejudiced the employer’s business. The employer is going to need something more than evidence that the employee’s productivity was simply lower than that of other employees.

The performance of the employee, particularly, whose position is of a management nature, must be gauged as against an objective standard.1

If the employer provides the employee with a number of warnings prior to dismissal it will reduce the degree of incompetence required to prove just cause.2

Where the conduct of the employee is grossly deficient and the likelihood of discharge should be obvious to the employee, warnings and reasonable notice are not required.3

An employer will also be required to establish that the employee’s substandard performance was the fault of the employee and not the result of factors outside the employee’s control such as the employer’s strategy and operating procedures, changing market conditions or the performance of other employees.

In addition, an employer will not have cause to dismiss an employee for incompetence if the employer knew that the employee did not have the requisite skill at the time the employee was hired for, or transferred into, the role.

It is difficult to imagine a case whereby an employer could summarily dismiss an employee for incompetence on the basis of a single incident unless the employee had also engaged in another type of willful misconduct that had the effect of significantly magnifying the impact of the employee’s act of incompetence.

In Boulet v. Federated Co-operatives Ltd.4 the Court of Queen’s Bench of Manitoba summarized the law relating to summary dismissal for poor performance at para. 3:

  1. Each case must be decided on its facts. 
  2. An employer’s displeasure at an employee’s performance is not enough to warrant dismissal. There must be some serious misconduct or substantial incompetence.
  3. The onus of proving just cause rests with the employer and the standard of proof is beyond a balance of probabilities. 
  4. The performance of an employee, especially one in a management position, must be gauged against an objective standard. 
  5. The employer must establish:
      1. the level of the job performance required,
      2. that the standard was communicated to the employee,
      3. that suitable instruction and/or supervision was given to enable the employee to meet the standard,
      4. the employee was incapable of meeting the standard, and
      5. the employee was warned that failure to meet the standard would result in dismissal. 
  6. Where the employee’s performance is grossly deficient and the likelihood of discharge should be obvious to the employee, warnings and reasonable notice are not required.
  7. While the standard of incompetence to warrant discharge for cause is severe, the threshold of incompetence necessary to warrant dismissal for cause is significantly lower where dismissal is preceded by many warnings indicating unsatisfactory performance. 
  8. In considering whether an employer has provided adequate warning to an employee, where the dismissal is for repeated instances of inadequate work performance, the employer must show:
      1. an employer who has condoned an inadequate level of performance by his employee may not later rely on any condoned behaviour as a ground for dismissal. 
      2. it has established a reasonable objective standard of performance,
      3. the employee has failed to meet those standards,
      4. the employee has had warnings that he or she has failed to meet those standards and the employee’s position will be in jeopardy if he or she continues to fail to meet them; and
      5. the employee has been given reasonable time to correct the situation. 
  9. An employer who has condoned an inadequate level of performance by his employee may not later rely on any condoned behaviour as a ground for dismissal
  10. Condoned behaviour is relevant if the employee fails to respond after appropriate warnings. Condonation is always subject to the implied condition that the employee will be of good behaviour and will attempt to improve.

As noted be the Court in Vernon v. British Columbia (Liquor Distribution Branch)5 the standard of proof set out in point 3 of Boulet must be restated a result of the decision of the Supreme Court of Canada in F.H. v. McDougall6 The onus is on the employer to prove just cause on the balance of probabilities, not on a higher standard.

In the 2013 decision Chawrun v. Bell Mobility Inc.7 the employer fired an account executive for cause for poor performance alleging that the employee had failed to meet his sales targets and had failed to improve his “sales performance” after he was provided with warnings, coaching, and training. The Court found that the employee had been wrongfully dismissed. There was no evidence that other employees consistently met their quotas. Moreover, the employer failed to lead any objective evidence that the sales quota was reasonable or attainable. The Court also took judicial notice of the fact that there had been an economic downturn that may have impacted the dismissed employee’s performance.

In Chawrun, Justice Baker relied upon Schulman v. Xerox Canada Ltd.8 where the Court concluded that the failure of a sales executive to meet sales quotas was not cause for dismissal even where proper warnings had been given by the employer if the drop in sales was beyond the control of the sales executive. The Court found that the real concern was the company’s “bottom line” and that the defendant did not prove that the dismissed employee had put in less effort or displayed less commitment than in previous years when the employee’s efforts and performance had been considered commendable.

Recent decisions in which a court has upheld a dismissal for cause for incompetence are few. One example that should hearten employers is the 2009 decision Radio CJVR Ltd. v. Schutte.9 The Saskatchewan Court of Appeal overturned the decision of the trial judge and found that the employer had cause to fire the employee for incompetence.

In 2002, CJVR reformatted its radio station. It hired Schutte to be it program director, music director, and on-air morning show co-host. A consulting firm helping with the transition delivered several reports critical of Schutte. The criticisms included failing to meet with his morning co-host to plan his show; not regularly meeting with staff to provide leadership and direction; not paying sufficient attention to programming details; and failing to implement specific suggestions for improvement.

Schutte did not improve his performance. He was fired and provided with a $3,600 termination package. Schutte sued and was awarded wrongful dismissal damages.

On appeal, the Court found that CJVR had cause to summarily dismiss Schutte for incompetence. The Court distinguished where an employee is unable to adequately perform and cases where the employee is able to, but does not adequately perform. The Court found that Schutte’s performance issues were the result of negligence and lack of diligence.

The Court of Appeal wrote at para. 20:

…it is clear that the standard of deficiency necessary to constitute grounds for summary dismissal is stringent where there is no misconduct such as dishonesty or gross insubordination, it is also true, in my view, that the standard is less stringent where, as in this case, the employee has been given repeated notice that his performance is deficient, considerable assistance to help him improve, and clear warning that failure to do so will result in the termination of his employment.

In conclusion, firing an employee for just cause for incompetence is very difficult. Given the time, effort and expense required for an employer to build a case to successfully summarily dismiss an employee for incompetence, the employer should first decide whether the effort will be worthwhile. Depending on the circumstances and the specific goals of the employer, the most cost effective strategy to deal with an incompetent employee might be to immediately dismiss the employee without cause and provide the employee with a severance package.

Insubordination and Insolence

In Just Cause: The Law of Summary Dismissal in Canada10 the authors note that the terms insubordination and insolence are often used interchangeably. The term insubordination refers to “an employee’s intentional refusal to obey an employer’s lawful and reasonable order” whereas the term insolence refers to “an employee’s derisive, contemptuous and abusive language (and sometimes conduct) generally directed at a superior.”

Insubordination       

It is a fundamental term of employment that an employee will obey his or her employer’s lawful instructions. Failure to do so may be cause for dismissal, particularly if the insubordination is repeated.

Southin J. A. in Stein v. British Columbia (Housing Management Commission)11 stated that an employer has a right to determine how his business shall be conducted so long as the procedures are “neither contrary to law nor dishonest nor dangerous to the health of the employees and are within the ambit of the job for which any particular employee was hired.”

In the 2015 decision Karmel v Calgary Jewish Academy12 the court set out the ten elements required for insubordination to constitute just cause for dismissal:

  1. the order must be either clear and specific or must be a breach of policies and procedures well known by the employee; 
  2. the order must be within the scope of the employee’s job duties; 
  3. the order must be reasonable and lawful; 
  4. the disobedience must be both deliberate and intentional rather than resulting from an honest mistake as to whether the order was still in effect or under the reasonable belief that he was not contravening orders; 
  5. the order must involve some matter of importance; 
  6. unless the act of disobedience is particularly serious it has to be repeated, rather than be an isolated act of disobedience, in order to constitute cause; 
  7. it must be shown that as a result of the disobedience the relationship was so damaged that it could not be carried on; 
  8. it must be shown that the employee understood or should have understood that he ran the risk of being terminated for disregarding the order; 
  9. if there is a reasonable explanation for the disobedience it will not be cause for discharge; and 
  10. there will be more latitude shown to long-service employees.

In Adams v. Fairmont Hotels & Resorts Inc.13 Madam Justice Wedge found that the employer did not have cause to summarily dismiss its general manager after she refused to follow direct instructions regarding the preparation of a budget. The employer’s directive to the general manager and her controller to prepare and sign off the budget was contrary to the employer’s accounting policy which emphasized mutuality, cooperation, and agreement. The employer was not entitled to insist that the general manager direct her controller to make the changes to the budget and submit them as the hotel’s budget if the general manager did not believe the budget was achievable.

In setting out the applicable legal principles, Justice Wedge stated at paras. 276-79:

In general, just cause is employee behaviour that, viewed in all the circumstances, is seriously incompatible with the employee’s duties; it is conduct which goes to the root of the contract and fundamentally strikes at the employment relationship: Panton v. Everywoman’s Health Centre Society (1988), 2000 BCCA 621 at para. 28, 82 B.C.L.R. (3d) 364.

Conduct amounting to insubordination sufficient to establish cause for dismissal was described half a century ago by Lord Evershed in the oft-cited decision of Laws v. London Chronicle (Indicator Newspapers), Ltd., [1959] 2 All E.R. 285 at 287 (Eng. C.A.):

[S]ince a contract of service is but an example of contracts in general, so that the general law of contract will be applicable, it follows that, if summary dismissal is claimed to be justifiable, the question must be whether the conduct complained of is such as to show the servant to have disregarded the essential conditions of the contract of service. It is, no doubt, therefore, generally true that wilful disobedience of an order will justify summary dismissal, since wilful disobedience of a lawful and reasonable order shows a disregard – a complete disregard – of a condition essential to the contract of service, namely, the condition that the servant must obey the proper orders of the master and that, unless he does so, the relationship is, so to speak, struck at fundamentally [emphasis added]

As noted in Laws, insubordination will not constitute cause unless the employer establishes that the employee breached an “essential condition of the contract of service”. That may occur, said the Court in of Appeal in Panton at para. 33, where the employee has wilfully defied a “clear and unequivocal” instruction or refused “to carry out a policy or procedure well known by the employee to be central to the fulfilment of the employer’s objectives”.

The Court in Panton also cited its earlier decision in Stein v. British Columbia (Housing Management Commission) (1992), 65 B.C.L.R. (2d) 181, 41 C.C.E.L. 213 (C.A.) where, after citing Laws, Southin J.A. said the following at 4:

I begin with the proposition that an employer has a right to determine how his business shall be conducted. He may lay down any procedures he thinks advisable so long as they are neither contrary to law nor dishonest nor dangerous to the health of the employees and are within the ambit of the job for which any particular employee was hired. It is not for the employee nor for the court to consider the wisdom of the procedures. The employer is the boss and it is an essential implied term of every employment contract that, subject to the limitations I have expressed, the employee must obey the orders given to him. [emphasis added]

Insolence

Insolence refers to the employee’s use of derisive, abusive or contemptuous language and can involve either verbal or non-verbal forms. It may justify the decision to summary dismissal without the need for the employee to also be insubordinate or neglectful in his or her duty. Nevertheless, in practice, employees dismissed from their employment for insolence often have also been either insubordinate or habitually neglectful in their duty.

Bennett v Cunningham14 is a recent, and rare, decision in which a single act of insolence was held to be cause for summary dismissal.  Bennett was a junior lawyer who joined Cunningham, a sole practitioner.  After several months of employment Bennett had a number of issues with the way Cunningham managed the office, including instances where time Bennett had docketed had instead been credited to Cunningham. As a result, the day before Cunningham left for vacation, Bennett handed Cunningham a four-page letter in which Bennett made a number of statements that Cunningham claimed were untrue.

The trial judge found the overall tone of Bennett’s letter to be critical, accusatory and disrespectful. The letter suggested that Cunningham was disorganized, incompetent, dishonest and negligent. Bennett did not offer any reasonable explanation for writing the letter, nor did she seek to apologize.

Justice Valin, reviewing the law when insolence will justify a summary dismissal, wrote at paragraph 34 wrote:

In an employment relationship context, insolence has been described as derisive, contemptuous or abusive language or conduct directed by an employee at his/her employer. Generally, two or more instances of insolence are required to justify summary dismissal. However, a single incident of insolence will justify summary dismissal if the employer and employee are no longer capable of maintaining a working relationship.

Valin J. found the contents and tone of Bennett’s letter was insolent and constituted serious misconduct. The insolence was not reconcilable with maintaining the employment relationship and, therefore, Cunningham had cause to terminate Bennett without notice.

Valin J.’s decision was subsequently overturned by the Divisional Court because the Court found that a contextual analysis had not been applied by Valin J. before reaching judgment. However, the Divisional Court’s decision was subsequently overturned by the Court of Appeal on the basis that the trial judge had, in fact, applied a contextual analysis even if he did not use those words. In effect, the Court of Appeal held that the Divisional Court had erred by simply substituted its view of the facts for that of the trial judge – which is not the role of an appellate court.

In Grewal v. Khalsa Credit Union15 the British Columbia Court of Appeal upheld the decision of a trial judge’s that the employer had cause to terminate the employment of the employee (a branch manager).

The branch manager had been reassigned to another branch (effectively demoted) after an employee brought certain issues regarding her work to the attention of the credit union. A new CEO was appointed to run the credit union. The relationship between the CEO and branch manager was acrimonious. For example, the CEO criticized the branch manager for insubordination and for behaving in an unprofessional manner. In turn, the employee complained that the CEO invaded her privacy by reviewing phone bills and by asking employees to monitor her and to collect information on her to build a case to justify her dismissal.

An issue arose concerning a home mortgage obtained by the branch manager from the Credit Union. The CEO used the word “scandal” in a memo brought it to the attention of his Board of Directors. The judge found that the word “scandal” was inappropriate at that stage, but it was a matter that required investigation. The branch manager was instructed to attend a meeting in which the impugned mortgage was reviewed and question.

The day after the meeting, the branch manager’s lawyer sent a letter to the credit union alleging serious unwarranted invasions of the branch manager’s privacy, complained of statements in relation to the mortgage matter and demanded a wide-ranging retraction and apology. The letter also threatened legal action in the event an apology was not provided. The lawyer sent a second similarly worded letter several weeks later. The credit union responded by terminating the branch manager for cause.

The trial judge found that the branch manager’s conduct prior to sending the letter had not yet reached the point that would justify a dismissal for cause.  However, the insolent letter tipped the balance. The letter was disrespectful and inflammatory. The accusations were serious and covered most aspects of her working relationship and, significantly, were not substantiated by the facts.

Workplace Dishonesty (including Theft, Fraud, Deception and Breach of Trust)

Employees who have been fired for just cause based on allegations that they engaged in some type of dishonest conduct represent the most common type of justification for summary dismissal. Dishonest conduct includes theft, fraud, breach of trust, and various types of deceptions and misrepresentations. It also includes misrepresentations made to the employer during the interview process or during workplace investigations.

Serious forms of dishonest conduct such as theft and fraud will normally justify dismissal for cause, although the contextual approach will still be applied. This was recognized by the Supreme Court of Canada in McKinley v. BC Tel16 where, at para. 51, Justice Iacobucci wrote:

This being the case, I conclude that a contextual approach to assessing whether an employee’s dishonesty provides just cause for dismissal emerges from the case law on point. In certain contexts, applying this approach might lead to a strict outcome. Where theft, misappropriation or serious fraud is found, the decisions considered here establish that cause for termination exists. This is consistent with this Court’s reasoning in Lake Ontario Portland Cement Co. v. Groner, 1961 CanLII 1 (SCC), [1961] S.C.R. 553, where this Court found that cause for dismissal on the basis of dishonesty exists where an employee acts fraudulently with respect to his employer. This principle necessarily rests on an examination of the nature and circumstances of the misconduct. Absent such an analysis, it would be impossible for a court to conclude that the dishonesty was severely fraudulent in nature and thus, that it sufficed to justify dismissal without notice. [emphasis added]

Given the prevalence of dismissals for dishonesty, it is not surprising that it is the subject matter for many of the leading decisions on just cause. In McKinley the Supreme Court of Canada considered the case of a 47-year-old employee with 17 years of service who had been absent from work because he suffered from high blood pressure. The employee wanted to return to a less stressful position when he returned to work. To achieve his goal he lied to his employer saying that his doctor had told him that he could only return to work if he was returned to a less stressful position. His doctor had actually informed him that he could return to his former position if he used drugs to control his condition. The employee was terminated without cause and initiated a wrongful dismissal claim because he believed the severance package offered was insufficient. When, during the course of the litigation, the employer discovered the doctor’s medical recommendation and that the employee had lied, it took the position that it could fire the employee for cause. The British Columbia Court of Appeal agreed with the employer finding that dishonest conduct, irrespective of its degree, is always cause for dismissal. The Supreme Court of Canada overturned the decision and, after considering the surrounding circumstances, concluded that the employee’s single act of dishonesty was not sufficient to justify the employer’s decision to terminate for cause.  It awarded the dismissed employee damages for the employer’s failure to provide him with reasonable notice of dismissal.Corporate criminal stealing business documents

In contrast in Dowling v. Ontario (Workplace Safety and Insurance Board)17 the Ontario Court of Appeal overturned the decision of the trial judge and found that the employer did have cause to dismiss the employee. The employee had been dismissed for a serious of incidents that including purchasing two computers for his personal use at a discount from a company registered with the employer who he supervised. He did not disclose the purchase to the employer. He later accepted payment of $1,000 from an employer representative. When initially questioned about the money, he lied.  He also interfered with the subsequent investigate by keeping in contact with the employer representative who had paid him the $1,000. Finally, during a second interview he continued to lie about receiving the money as well as his ongoing communication with the employer representative. Dowling is an excellent decision to review in its entirety for anyone interested in understanding how the court applies the contextual approach.

Dishonest or deceitful conduct during a workplace investigation can also trigger a summary dismissal.  In Carias v. Canadian Imperial Bank of Commerce18 the dismissed employee had worked as a personal banking representative. He accessed other employees’ accounts to learn how much they were being paid. When his employer questioned him about the unauthorized inquiries, he lied. The judge, in finding that his deceit warranted dismissal, concluded that the dismissed employee’s conduct revealed a character flaw. The dismissed employee had breached the fundamental requirements of a banker, which were integrity and high moral character.

 

Absenteeism and Lateness

Persistent absenteeism and lateness can lead to an employee being fired for cause if the absenteeism and/or lateness is the result of repeated culpable misconduct. In other words, the employee can be dismissed for cause if the employee is blameworthy for missing work (i.e. slept in, too nice a day to work, went to the theatre instead etc…). Prior to dismissing the employee for cause the employer will have to take the employee through a progressive disciplinary process. This would include warning the employee that his or her employment is in jeopardy if the absences continue and giving the employee an opportunity to improve. The employer will also have to establish that the employee’s absenteeism and/or lateness record is materially worse than other employees and was not condoned by the employer.

A single act of culpable absenteeism or lateness will not be grounds to be fired for just cause except in circumstances where the employee was not only absent but also insubordinate or refused to follow the employer’s instructions thereby prejudicing the employer’s operations. For example, in Giancola v. Jo-Del Investments Ltd.19 the Ontario Court of Appeal upheld the decision of the trial judge finding the employer had cause to dismiss the employee. The employee had taking a 5-week vacation after only providing the employer with one hour’s notice and without arranging a replacement in the face of a clear warning not to do so.

If the employee’s absenteeism and/or lateness is non-culpable (i.e. non-blameworthy) because it is related to the employee’s medical condition, religion or family responsibilities or another protected ground, the employee will likely be protected by the Ontario Human Rights Code. In these circumstances, the employer will only be able to dismiss the employee if it cannot accommodate the employee to the point of undue hardship.

Employers should be particularly alert to employees who have high absenteeism rates that may be linked to an addiction to drugs or alcohol. If the employer disciplines the employee it may be in breach of the Human Rights Code if it is found that it should have reasonable known or suspected that the employee was an alcoholic or drug addict. The employer may not be able to rely on the fact that the employee never formally requested accommodation or notified the employer of his or her addiction to protect itself from liability.

If an employer is going to dismiss an employee for cause based on the employee’s attendance, it must ensure that it took steps to enforce its attendance policy or it will be found to have condoned the employee’s absences. For example, in Emery v. National Capital Commission20 the Court found that the employer did not cause to dismiss an employee for absenteeism. At trial the employer had emphasized two reports which outlined the employee’s absences from work. However, the Court found, at para. 14, that “the system under which employees called in to report when they were going to be absent from work for whatever reason functioned with tolerance and informality and without strict adherence to rules as to prior approval being obtained.” Moreover, the employer never gave the employee adequate warning that his conduct was likely to lead to his dismissal.

As with all grounds for dismissal for cause, the court will apply a contextual approach when considering whether an employee’s absence from work will justify a dismissal for cause. This was reinforced in 2012 by the Ontario Court of Appeal in Canadian Office and Professional Employees v. Yellow Pages Group Co.21 In Yellow Pages the Court overturned a decision of the Divisional Court which had upheld a dismissal for just cause for absenteeism.

Ferreira, a unionized employee, had been terminated for just cause for failing to return to work by a specified date after being denied short-term disability insurance. Yellow Pages had warned Ferreira that he would be dismissed if he did not return. Ferriera had 20 years of service when, in January 2009, he began a medical leave. On January 20, 2009, he attended a medical assessment with his doctor, who filled out a medical form and faxed the form to Yellow Pages. Yellow Pages then provided the form to an insurance provider, Medisys.

Medisys, requiring more information, sent Mr. Ferriera’s doctor a follow-up questionnaire on February 4, 2009. However, the doctor did not complete it.  As a result, Medisys wrote to Ferreira on February 16, 2009, advising him that as of January 23, 2009, his disability benefits had been terminated on the basis of insufficient medical evidence. The letter also stated if the additional information was not received by March 3, 2009, Medisys would close Ferreira’s file.

On February 18, 2009, Yellow Pages sent a letter to Mr. Ferreira advising him that since his disability claim had been denied, he was obligated to return to work by February 20, 2009. Yellow Pages also advised Ferreira that his employment would be terminated unless, by March 3, 2009, he returned to work or provided the required medical evidence to support his absence.

Ferreira promptly made an appointment with his doctor on February 25, 2009. The doctor wrote a letter, dated March 2, 2009, to Medisys in which he expressed his view that Ferreira was unable to return to work. He sent this letter by regular mail on March 2 or 3. As the letter was not received by the deadline, on March 5, 2009, Yellow Pages terminated Ferreira’s employment.  Although Ferreira immediately faxed a copy of his doctor’s letter to Yellow Pages when he was advised of the termination, this had no impact on Yellow Pages’ decision.

Ferreira grieved his dismissal through his union. The arbitrator upheld the dismissal finding that Ferreira failed to meet a clearly articulated expectation with clearly articulated consequences. As a result, Yellow Pages was able to conclude that he had accepted the consequences – his dismissal for just cause.

Considering the question as to whether there were any mitigating factors, the arbitrator found that Ferreira had attempted to mislead Medisys when he had misrepresented his blood pressure. The arbitrator also found that lack of candour during the arbitration process pointed to Ferreira not being a good candidate for reintegration back into the workplace.

The union sought judicial review of the arbitrator’s decision. The majority of the Divisional Court upheld the arbitrator’s decision. However, the Ontario Court of Appeal allowed the appeal of the Divisional Court’s decision. In allowing the appeal the Court wrote:

In McKinley v. BC Tel, 2001 SCC 38, [2001] 2 S.C.R. 161, the Supreme Court made it clear that the principle of proportionality is the focus in the determination whether termination of an employment relationship is the appropriate sanction in response to employee misconduct. The requisite balancing of the severity of the conduct in issue with the severity of the penalty reflects an acknowledgment of the importance of work to a person’s life and identity. The analysis is a contextual one with the unique facts of each case ultimately informing the key issue whether the employee’s misconduct is reconcilable with sustaining the employment relationship. [emphasis added]

The Court of Appeal found that the Divisional Court had erred when it failed to:

  • examine whether the arbitrator’s reasons demonstrated a consideration of the context of the situation and balanced the nature and seriousness of Ferreira’s misconduct with the severity of the sanction imposed; and 
  • relied on the arbitrator’s finding that Ferreira had been less than completely honest. In this regard, the Court held that the arbitrator’s concerns about Ferreira’s lack of candour during the arbitration process was not relevant to the determination as to whether just cause existed because it played no part in Yellow Pages’ decision to terminate his employment and could not be used retroactively. In addition, Ferreira’s misrepresentation to Medisys about his blood pressure was a conversation that did not involve Yellow Pages and was not a factor in its decision to fire Ferreira. Therefore it could not be relied upon to support the dismissal.

In short, the Court of Appeal’s decision appears to be primarily motivated by the fact that the Court concluded the punishment was too severe. The Divisional Court and the arbitrator had not adequately considered whether the penalty was proportionate.

Harassment (Including Sexual Harassment)

An employee who engages in workplace harassment thereby creating a poisoned work environment is at risk of being terminated for cause if the misconduct is of sufficient severity and duration.

Workplace harassment has been defined as “engaging in a course of vexatious comment or conduct against a worker in a workplace that is known or ought reasonably to be known to be unwelcome”.22 “Vexatious” is defined by Black’s Law Dictionary23 as “without reasonable or probable cause or excuse”. Harassment comes in many shapes and forms and can include indirect harassment where inappropriate comments are directed at an employee who is not present.

To be classified as harassment the behaviour or conduct will normally be repeated or part of a pattern of behaviour. A single act of harassment may justify summary dismissal, particularly if the harassment rises to the level of a crime. The purpose or result of the harassment is often to isolate, humiliate and/or intimidate a targeted employee or group of employees. The term, obviously, refers to serious offenses such as sexual or racial harassment.  However, harassment can also include a course of conduct that involves unfair performance reviews and criticism if the criticism lacks a legitimate business purpose and, instead, is designed to personally attack and demean another employee. Depending on the nature of the harassment the conduct may also be in breach of the Ontario Human Rights Code or the Occupational Health and Safety Act placing the employee at liability under these statutes.

The Ontario Ministry of Labour has listed the following as examples of workplace harassment:

  • making remarks, jokes or innuendos that demean, ridicule, intimidate, or offend;
  • displaying or circulating offensive pictures or materials in print or electronic form;
  • bullying;
  • offensive or intimidating phone calls or e-mails; or
  • inappropriate sexual touching, advances, suggestions or requests.

It is not unusual for employees to believe that they are being harassed when, in fact, their treatment is entirely appropriate. The Ministry of Labour provided the following useful description of what is not workplace harassment:  

Reasonable action or conduct by an employer, manager or supervisor that is part of his or her normal work function would not normally be considered workplace harassment. This is the case even if there are sometimes unpleasant consequences for a worker. Examples could include changes in work assignments, scheduling, job assessment and evaluation, workplace inspections, implementation of dress codes and disciplinary action.

Differences of opinion or minor disagreements between co-workers would also not generally be considered workplace harassment.

In Tomala v. Wal-Mart Canada Corp.24Justice Charbonneau considered the case of a pharmacist who had been fired for cause for a single incident of berating and swearing at other employees. The pharmacist had taken his car to a service centre operated by Wal-Mart but became upset when he discovered his tires had been improperly inflated, causing a safety risk. He drove his care back into the service area and attempted to correct the problem himself. Two attendants told the pharmacist that he was not allowed in the service area. The pharmacist responded by telling the attendants that they had “fucked up” his tire pressure and he was going to fix it himself. He then told the two attendants they were incompetent.

Justice Charbonneau found that the pharmacist’s misconduct fell far short of the level required to terminate his employment for just cause. The penalty imposed by Wal-Mart was not proportional to the misconduct.

In contrast, in Neen v. Cobble Hill Grocery Ltd.25 the trial judge found that the employer had cause to dismiss an assistant grocery store manager for causing a poisoned work environment. The assistant manager, despite several warnings, had treated the employees under his supervision in a demeaning and belittling manner. He rarely, if ever, commented positively on his employee’s job performance. He also directed vulgar and profane remarks at them personally, embarrassed them in front of fellow employees by yelling at them and criticizing them publicly; and assigned tasks unfairly.

Sexual Harassment

In the 2007 decision Foerderer v. Nova Chemicals Corp,26 Madam Justice Topolniski provided a useful summary of the law of dismissal for sexual harassment, writing at paragraphs 161 to 163:

Sexual harassment may justify summary dismissal because it interferes with the proper operations of the employer’s business.

The law is clear that, while all sexual harassment must be taken very seriously, there is a spectrum of misconduct. Not all sexual harassment will justify dismissal. Sexual harassment involving a non‑consensual physical component is at the most serious end of the spectrum. Since such conduct is a criminal act and an employer is not obliged to warn employees not to commit criminal acts, one transgression can warrant summary dismissal. At the lower end of the spectrum are the “less serious” forms of harassment, including sexual verbal remarks, crude jokes, suggestive words, and suggestive gestures. 

Each case must be assessed on its own unique facts.

Sexual Harassment was defined by the Supreme Court of Canada in Janzen v. Platy Enterprises27 at 1284, per Dickson C.J. in the following terms:

…I am of the view that sexual harassment in the workplace may be broadly defined as unwelcome conduct of a sexual nature that detrimentally affects the work environment or leads to adverse job-related consequences for the victims of the harassment. It is, as Adjudicator Shime observed in Bell v. Ladas, supra, and as has been widely accepted by other adjudicators and academic commentators, an abuse of power. When sexual harassment occurs in the workplace, it is an abuse of both economic and sexual power. Sexual harassment is a demeaning practice, one that constitutes a profound affront to the dignity of the employees forced to endure it. By requiring an employee to contend with unwelcome sexual actions or explicit sexual demands, sexual harassment in the workplace attacks the dignity and self-respect of the victim both as an employee and as a human being.

In the 1996 decision Quirola v. Xerox Canada Inc.28 the employee was suspended and ultimately dismissed on the basis of by two complainants made by coworkers. The court accepted the evidence of only one of them. She had complained that the employee had once tried to hug her, he had attempted to engage her in conversations about her sex life with her law husband and had provided unsolicited, vulgar information about his sexual prowess and practices. The court allowed the employee’s wrongful dismissal suit, finding that the conduct had occurred 18 months prior to his dismissal and had been out of character. Mention was made that there was only one physical event

However, judicial tolerance of employees who commit acts of sexual harassment has decreased. In 1998 the Ontario Court of Appeal released Bannister v. General Motors of Canada Ltd.29 and Gonsolves v. The Catholic Church Extension Society of Canada,30 decisions that signaled an increased willingness by courts to uphold summary dismissals for instances of sexual harassment. The Court in Bannister and Gonsolves emphasized the following principles:

  1. when a manager or other senior employee engages in serious sexual harassment and denies that the misconduct occurred or otherwise refuses to recognize the unacceptable nature of his or her conduct, termination of the employment relationship may be the appropriate employer response; and 
  2. an employer is duty bound to protect employees from offensive conduct and to shield itself from civil liability as the result of actions brought by employees victimized by sexual harassment.

In Bannister the trial judge had found numerous incidents of unwanted kissing, hugging and touching, repeated sexual requests and lewd commentary by a supervisor involving at least five female staff members did not constitute cause for dismissal. The Court of Appeal overturned the decision of the trial judge rejecting the concept that a certain degree of sexual harassment could tolerable in an industrial workplace. The Court of Appeal was of the view that the prevalence of such behaviour at the employer’s workplace did not make it tolerable, rather it showed the extend of the supervisor’s dereliction of duty: “A supervisor who permits such an atmosphere as the trial judge describes to develop, and then participates in the exchanges as much as anyone else is a supervisor who is not performing his duties”.

In Gonsolves the Ontario Court of Appeal held that an employer was not required to warn an employee prior to summary dismissal in cases involving serious sexual harassment. The employer did not have a formal sexual harassment policy. However, the acts of the employee were very serious including the criminal act of sexual assault. The Court held that once the allegations were found to be true, then the employer could not reasonably have left its female employees in charge of the offending employee.

Bannister and Gonsolves were followed in 2001 by the Ontario Court of Appeal’s decision in Simpson v. Consumers’ Assn. of Canada31 which, again, demonstrated the Court’s willingness to uphold an employer’s decision to dismiss an employee who committed acts of sexual harassment. In Simpson the Court overturned the decision of the trial judge that found that the employee, the Association’s executive director, had been wrongfully dismissed. Shortly after the executive director joined the association he propositioned a female employee suggesting if they had a “personal relationship” he could “make things happen for her.” He also engaged the association’s female counsel in intimate, sexual conversations. Later, at a conference, he went into the hotel’s hot tub naked with his executive secretary who was topless. The executive director also dismissed a subordinate for being disloyal shortly after the subordinate alleged that the Simpson pinch a female employee while she was bending over.

The trial judge found that the incidents complained of took place outside the workplace, the employee had made a timely apology to the victim which he had accepted and several of the incidents alleged to have amounted to sexual harassment and breach of the employment contract in fact was found to be “consensual conduct among friends”.

The Court of Appeal rejected the trial judge’s analysis. In doing so the Court of Appeal held:

  • the determination of whether an activity that occurs after hours or outside the confines of the business establishment can be the subject of a harassment complaint is a question of fact. It is contrary to the purpose of controlling sexual harassment in the workplace to say that after-work interaction between a supervisor and other employees cannot constitute the workplace harassment; 
  • the trial judge erred by suggesting the executive director could not be held accountable for any prevailing sexual culture at association because there was no sexual harassment policy in place. Given that he was the executive director in charge of staff, he could have implemented such a policy, and should not benefit from its absence; 
  • where a supervisor in a position of authority offers advancement in employment in exchange for sexual favours, this conduct represents the clearest abuse of power. It is also a breach of duty both to the employee and to the employer, who is obliged to offer advancement fairly and equally on the basis of merit; and 
  • an employer may be liable to those employees who are consequently disadvantaged when another employee receives job benefits for consenting to a supervisor’s request for sexual favours. Therefore, it is not only those in the workplace who are the direct victims of sexual harassment who may have a complaint about the conduct of a harassing supervisor.

In Alleyne v. Gateway Co-operative Homes Inc.32 MacDougall J. set out the factors to be considered when assessing whether sexual harassment amounts to just cause for dismissal as follows:

  • whether the impugned conduct amounts to sexual harassment; 
  • the degree and nature of the conduct amounting to sexual harassment; 
  • the nature of the employment relationship between the offending employee and the victim employee(s), and whether the offending employee was in a position of authority over the victim(s), such that the degree and nature of the conduct was, thereby, exacerbated by a particularly offensive abuse of power; 
  • whether the offending employee was told that the impugned conduct was unwelcome or offensive; 
  • whether the offending employee continued or repeated the unwelcome or offensive behaviour, after being told that the conduct was unwelcome; 
  • whether the employer warned the employee that the misconduct was inappropriate and that dismissal was a possible consequence of further similar misconduct; 
  • whether the employer had a formal, and known, sexual harassment policy, which was enforced by the employer; 
  • the nature of the employment relationship between the offending employee and the employer, including the length of service and position, and whether there were implied or express terms of the employment contract which gave rise to additional obligations on the employer’s part, such as with respect to warnings or the opportunity to respond; and 
  • whether the impugned conduct was condoned by the employer.

In Gillam v. Waschuk Pipeline Construction33 the Saskatchewan Court of Queen’s Bench upheld the employer’s summary dismissal of a supervisor for indirect sexual harassment. The supervisor was found to have created a hostile work environment by using extremely offensive and degrading language to describe three women employees who staffed the office at the company’s northern work camp. Significantly, the supervisor had not used the offensive language in front of the female employees but instead had directed his comments about the women to other employees.

Workplace Violence

An employer has an obligation to protect its employees from workplace violence. Although this legal obligation has always existed as part of an employer’s common law duties in 2010 the obligation was codified in Ontario by way of amendments to the Occupational Health and Safety Act.34 The workplace violence and harassment provisions can now be found in Part III.01 of the Act.  The Act provides employees in Ontario with the right to refuse work if they believe they are in danger of workplace violence.

A single incident act of serious workplace violence will likely be cause for dismissal. This is particularly true if the violence is committed by or against a manager. Nevertheless, even in cases involving serious acts of violence, a court will still apply the contextual approach set out the Supreme Court of Canada in McKinley before deciding whether summary dismissal is the proportionate response to the act of workplace violence.

Lesser acts of violence may not be grounds for dismissal after the contextual analysis has been applied. For example, in Shakur v. Mitchell Plastics35 a 2012 decision of the Ontario Superior Court of Justice, an altercation broke out between the plaintiff and another employee. The two employees had been engaged in some verbal jousting which led to the plaintiff striking the other employee in the face with an open hand. The strike caused some brief facial redness. There was evidence that the two employees had previously engaged in trash talk but that it had never escalated to physical contact. There was not, however, any evidence, that the plaintiff had a history of violence prior to the incident. The court found that the employer did not have cause to dismiss the plaintiff.

Similarly, in Gjema v. Mercury Specialty Products Inc.36 the Manitoba Court of Queens Bench held that the plaintiff, the general manager of a production plant, was wrongfully dismissed after his employer had terminated his employment for cause. The plaintiff, using both hands, had pushed away a subordinate employee who had charged the plaintiff challenging him to a fight and poking his finger into his chest. The plaintiff’s push resulted in the subordinate falling to the floor and breaking his glasses. The subordinate was given a lesser penalty. The court, considering the surrounding circumstances and the fact that it was the subordinate who had initiated the confrontation reached the conclusion that the plaintiff’s misconduct was not sufficiently serious to result in the plaintiff’s dismissal for cause.

Off-Duty Conduct

Generally, an employee’s off-duty conduct is irrelevant to his or her employment status and cannot be relied upon by the employer to support a decision to summarily dismiss the employee. However, an employee’s off-duty conduct may become relevant if it has a substantial negative impact on the employer.

Obvious examples of off-duty conduct that may result in an employee’s termination for cause are instances where the employer establishes a competitive business with his or her employer or arrives at work to begin a safety sensitive job under the influence of drugs or alcohol. Other examples of off-duty conduct include misconduct that may take place off the employer’s property but within the context of a work-related function such as a Christmas party.

Barry J. in Strowbridge v Re/Max United Inc.37 recognized the following test for off-duty conduct, writing at paragraph 16:

I believe it is useful also to consider the approach taken by labour arbitrators in dealing with off–duty conduct. In Kashinsky & Sack, Discharge and Discipline (Lancaster House 1989), at p. 319 ff., the authors have set out 33 arbitration awards since 1979 involving off–duty offences and preface these with the following comment:

While arbitrators are generally of the view that employers are not custodians of their employees’ character, whether an employee may be disciplined for off–duty conduct will depend upon whether the conduct is work–related. This will involve a consideration of the nature of the offence, the employment duties, and the nature of the employer’s business. In particular, it will depend upon whether the employee’s conduct:

(1) detrimentally affects the employer’s reputation;

(2) renders the employee unable to properly discharge his or her employment obligations;

(3) causes other employees to refuse to work with him or her; or

(4) inhibits the employer’s ability to efficiently manage and direct the production process.

In short, a connection or nexus must be established between the employee’s actions and the employment relationship.

In Harrop v. Markham Stouffville Hospital38 a nurse was dismissed by the hospital after it was learned that she had formed a close personal relationship with a recently discharged psychiatric patient. Although their relationship obviously began in the patient’s treatment at the defendant hospital, the conduct itself took place outside business hours, away from the premises. In dismissing the plaintiff’s action the judge wrote at paragraphs 56 to 62:

It has long been the law that where a person has entered into the position of employee, if he or she does anything incompatible with the due and faithful discharge of his or her duty to the employer, the latter has a right to dismiss the employee. If the employee does anything inconsistent with the faithful discharge of his duty, it is misconduct, which justifies immediate dismissal. It is sufficient if it is conduct which is prejudicial to or is likely to be prejudicial to the interests or reputation of the employer. (Pearce v. Foster (1886), 17 Q.B.D. 536 (C.A.) and Levitt The Law of Dismissal in Canada 2nd ed. (Aurora, Ont: Canada Law Book, 1992) at pp. 122, 123 and 133.)

Although each case turns upon its own facts, misconduct, which is inconsistent with the fulfilment of the express or implied conditions of service, will justify dismissal. Actual harm need not be shown. Apprehended harm will suffice. (Charlton v. British Columbia Sugar Refining Co., [1924] 1 D.L.R. 570 (B.C. S.C.).

A single act of misconduct can be sufficient grounds for termination. The test in such cases is whether the alleged misconduct of the employee was such as to interfere with and to prejudice the safe and proper conduct of the business of the employer and therefore to justify immediate dismissal. (Stillwell v. Audio Pictures Ltd., [1955] O.W.N. 793 (C.A.).

Cause for dismissal is more likely to be found if there are negative consequences for the public or other employees as a result of the employee’s conduct. (Levitt, p. 132.).

In determining the seriousness of the misconduct, the Court must consider the consequences of the wrongful act or omission. In circumstances where the employee’s misconduct interferes with and prejudices the safe and proper conduct of the business of the employer, and has serious consequences, this constitutes serious misconduct, and a single incident is sufficient to justify dismissal. (Murphy v. Sealand Helicopters Ltd. (1988), 72 Nfld. & P.E.I. R. 9 (Nfld. T.D.).

The misconduct which may justify termination is not confined to misconduct in the place of work. Where, for example, a bank teller establishes an extra-curricular relationship with a bank robber, thereby jeopardizing the interests of the employer, dismissal is justified. (Canadian Imperial Bank of Commerce v. Boisvert (1986), 68 N.R. 355 (Fed. C.A.) and Levitt, p. 177.).

More recently, in the 2005 decision Kelly v. Linamar Corporation,39 the employer’s decision to summarily dismiss a management employee with 14 years of service was upheld by the Court. The employee supervised 8 to 10 other employees and was a member of the Plant Operating Committee. The company was the largest employer in Guelph. The employee had been arrested and charged with the possession of child pornography. The arrest was publicized in the local media. The employer dismissed the employee for cause despite the fact that the employee had a clean disciplinary record. Ultimately the employee pled guilty to the offence and received a three-month conditional sentence. The trial judge found that the employer’s decision to summarily dismiss the employee was legitimate because the employer was entitled to take steps to protect its public reputation. In addition, the employee’s subsequent conviction could be relied upon as after-acquired cause to support the employer’s earlier decision to dismiss the employee.


 
  1. see Matheson v. Matheson International Trucks Ltd. (1984), 4 C.C.E.L. 271 at 275;
  2. see Radio CJVR Ltd. v. Schutte, 2009 SKCA 92
  3. see Goldberg v. Natural Footwear Ltd. (1986), 2 A.C.W.S. (3d) 130 (Ont. D.C.) and Fonceca v. McDonnell Douglas Canada Ltd. (1983), 1 C.C.E.L. 51 (H.C.J.);
  4. Boulet v. Federated Co-operatives Ltd., 2001 MBQB 174; affr’d 2002 MBCA 114
  5. Vernon v. British Columbia (Liquor Distribution Branch), 2012 BCSC 133;
  6. F.H. v. McDougall, 2008 SCC 53 at para. 40.
  7. Chawrun v. Bell Mobility Inc., 2013 BCSC 102;
  8. Schulman v. Xerox Canada Ltd. (1986), 15 CCEL 200 (Ont. C.A.);
  9. Radio CJVR Ltd. v. Schutte, 2009 SKCA 92;
  10. The Honourable Mr. Justice Randall Scott Echlin, Matthew L.O. Certosimo, Just Cause: The Law of Summary Dismissal in Canada (Toronto, Canada Law Book: 1998) pg 17-1
  11. Stein v. British Columbia Housing Management Commission, 1992 CanLII 4032 (BCCA);
  12. Karmel v Calgary Jewish Academy, 2015 ABQB 731;
  13. Adams v. Fairmont Hotels & Resorts Inc., 2009 BCSC 681;
  14. Bennett v. Cunningham, 2006 CanLII 37516 (ONSC), 2011 ONSC 28, 2012 ONCA 540;
  15. Grewal v. Khalsa Credit Union, 2012 BCCA 56;
  16. McKinley v. BC Tel, 2001 SCC 38;
  17. Dowling v. Ontario (Workplace Safety and Insurance Board), 2004 CanLII 43692 (ONCA);
  18. Carias v. CIBC, 2003 BCSC 587;
  19. Giancola v. Jo-Del Investments Ltd., 2003 CanLII 48118 (ONCA);
  20. Emery v. National Capital Commission, 1995 O.J. No. 612 (S.C.J.) (Q.L. registration required);
  21. Canadian Office and Professional Employees v. Yellow Pages Group Co., 2012 ONCA 448;
  22. see: Occupational Health and Safety Act  R.S.O. 1990, CHAPTER O.1, section 1.1 “workplace harassment”;
  23. Blacks Law Dictionary
  24. Tomala v. Wal-Mart Canada Corp., 2005 CanLII 2819 (ONSC)
  25. Neen v. Cobble Hill Grocery Ltd., 2006 BCSC 1494;
  26. Foerderer v. Nova Chemicals Corporation, 2007 ABQB 349;
  27. Janzen v. Platy Enterprises, 1989 CanLII 97 (SCC);
  28. Quirola v. Xerox Canada Inc. (1996), 16 C.C.E.L. (2d) 235 (Ont. Ct. (Gen. Div.));
  29. Bannister v. General Motors of Canada Ltd., 1998 CanLII 7151 (ON CA);
  30. Gonsolves v. Catholic Church Extension Society of Canada, 1998 CanLII 7152 (ONCA);
  31. Simpson v. Consumers’ Assn. of Canada, 2001 CanLII 23994 (ONCA);
  32. Alleyne v. Gateway Co-operative Homes Inc., 2001 CanLII 28308 (ONSC);
  33. Gillam v. Waschuk Pipeline Construction Ltd., 2011 SKQB 25
  34. Occupational Health and Safety Act, RSO 1990, c O.1;
  35. Shakur v. Mitchell Plastics, 2012 ONSC 1008;
  36. Gjema v. Mercury Specialty Products Inc., 2012 MBQB 83;
  37. Strowbridge v. Re/Max United Inc., 1992 CanLII 7355 (NL SCTD);
  38. Hanrop v. Markham Stouffville Hospital (1995), 16 C.C.E.L. (2d) 214 (ONSC)
  39. Kelly v. Linamar Corporation, 2005 CanLII 42487 (ONSC);