For many, the loss of a job is a life-altering event and can be very traumatic. Not only do you have to find a new way to support yourself financially, it can also be embarrassing to explain to friends, your professional network and even to family. The search for new employment can stretch from weeks into months, depending on market conditions, making the financial picture very uncertain.
Therefore, it is critical to know your financial and legal entitlements upon dismissal.
In employment law, there are generally two types of dismissal: 1) dismissal “for cause” and 2) dismissal “without cause”. There is a major legal and financial difference between the two types of dismissals.
If you have recently been fired, and especially if you think you have been unjustly fired, read on to gain valuable information regarding your rights under the law.
1) Dismissal Without Cause
The law recognizes the right of an employer to unilaterally dismiss a non-union employee without cause at any time. Under Ontario law, provincially regulated employers are not required to provide a reason or justification for termination. In fact, an employer need not have any good reason at all. Even employees considered to be top performers can be legally dismissed without cause.
The employer is legally allowed to terminate any non-union employee at any time without cause, so long as the employer gives reasonable advance working notice of termination or payment in lieu (often referred to as a severance package). The amount of one’s severance package entitlement will depend on the individual’s circumstances at termination, including their age, position, length of service, the availability of comparable jobs in the marketplace, and whether the employee signed a contract of employment containing a termination clause.
2) Dismissal for Cause
Cause is considered the ‘capital punishment’ of employment law. In order to terminate for cause, the employer must establish that the employee engaged in serious wrongdoing or serious neglect of duty, tantamount to a repudiation of the employment relationship. The employer bears the burden of proving just cause. Allegations or mere suspicions of misconduct are insufficient, meaning that the employer must generally have concrete evidence of the misconduct.
The distinction between “cause” and “without cause” is very simple. If an employer has just cause for dismissal, it is not legally required to provide any advance notice of termination or payment in lieu. Simply put, if there is just cause, the employee is not entitled to any severance package at all (subject only to minimum statutory requirements).
Dismissal for cause can have severe financial impacts, and long-lasting negative effects on the employee’s reputation and future employment prospects. As a result, allegations of “cause” are not taken lightly by the courts. In order to justify terminating for cause, the conduct must be severe and egregious. Some examples of misconduct that may amount to cause include:
- Sexual misconduct
- Extreme insubordination
- Work-related dishonesty, theft, or fraud
- Serious and habitual neglect of duty
Assessing whether “cause” exists entails applying a contextual approach, taking into consideration a number of relevant circumstances, including the nature of the misconduct, any prior discipline, the employee’s length of service and the nature of the employee’s job duties. Not all misconduct amounts to “cause” for dismissal. In reality, termination for cause is very difficult to justify, due to the harsh financial and reputational repercussions to the employee.
If you have been terminated and not given a fair severance package, it is imperative that you consult with an expert employment lawyer.
The experienced employment lawyers at Pak Smith LLP specialize exclusively in employment law, and have over a decade of experience, representing and advocating for employees in connection with their severance entitlements.
Pak Smith Employment Lawyers will get the job done right.