Terminated for Cause: Severance Entitlement

Jul 14, 2022

Employment relationships generally come to an end in one of a few ways – with one of the more common manners being the employer choosing to terminate the employment relationship. When an employer terminates the employment relationship they usually do so “without cause”, meaning that the employee is then entitled to a severance package. However, on rare occasions an employer will allege “cause” for the termination of the employee’s employment because of the employer alleging that the employee has engaged in some form of gross misconduct. Employees terminated for cause are not entitled to severance packages, and that is why cause terminations are often referred to as the “capital punishment” of employment law.

Because of the severity of a cause termination – no severance package – the Supreme Court of Canada places a very heavy burden on employers who try to allege cause for the termination of the employment relationship. Trivial errors or issues in the workplace will not meet this very high threshold for an employer to establish cause for termination. The Supreme Court stated that when assessing whether there was cause for termination, the nature and context of the alleged misconduct needs to be measured in light of the entire employment relationship, and the punishment needs to be proportional to the alleged misconduct. 

Employers should only allege just cause for termination when a very serious issue has occurred that fundamentally destroys the trust in the employment relationship. Employers who improperly allege just cause for termination are often penalized by the courts for doing so, in addition to then having to then pay the employee a severance package.

If you are an employee who has been terminated for cause, or if you are an employer considering terminating an employee with cause, you should seek legal advice to better understand your rights and responsibilities with regards to cause terminations. We at Whitten & Lublin are happy to provide insight and advice into your specific circumstances.  If you are looking for employment lawyers and would like more information about what Whitten & Lublin can do for you, please contact us online or by phone at (416) 640-2667 today.

Author: Nasyr Asmi


 

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