Definition of Just Cause

Many agreements define the standard of just cause to terminate as exists at common law. Others may require that written notice be given to the alleged offender in the event of performance issues, which then allow corrective action by the employee within a set number of days.

A fixed term agreement which defines a specific issue as grounds for termination and is otherwise silent on what may be grounds for termination may be limited to that reason alone in termination for cause.

Such was the finding of Nunavut Court of Justice in Butschler v Waters

The written contract falls into the third type because it specifies the conduct that will constitute cause for dismissal.  That conduct is public disclosure of confidential information or public criticism of the defendants.  Since there are no other clauses dealing with termination for just cause generally, the defendants are restricted to the ground of public criticism and cannot rely on the alleged incompetence of the plaintiff.  In any event I am satisfied that the defendants did not have cause to dismiss the plaintiff for incompetence.  The problems that occurred in the business were a combination of personality conflict and disorganization resulting from the absence of the defendants during the critical startup of the new business.  Both parties take a risk when they sign a term contract. 

Differing Standard of Just Cause and ESA

Care should be taken to note, that even where the contract may define for its purposes the standard of just cause for termination, the ESA payment in Ontario may still be due as the degree of cause required to be proven to escape its provisions is much higher.

The wording of the regulation which sets out this higher standard is “wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer”.

Wien J. of the Ontario Superior Court noted this distinction in Plester v Polyone in which she stated:

  Both counsel seemed to be slightly bemused by the recent authorities that distinguish between the definition of just cause and willful misconduct. In my view, however, the distinction is quite obvious: Just cause involves a more objective test, albeit one that takes into account a contextual analysis and therefore has subjective elements. Wilful misconduct involves an assessment of subjective intent, almost akin to a special intent in criminal law. It will be found in a narrower cadre of cases: cases of willful misconduct will almost inevitably meet the test for just cause but the reverse is not the case.

This issue takes on added significance as the termination provision of the employment agreement will fail should the differing standards of just cause not be delineated in the employment contract. ¹

Agreement Allows for Suspension

There is little jurisprudence on this point, however, the late Justice Echlin of the Ontario Superior Court in Carscallen v FRI did state in the course of his decision, this not being the direct issue before him, that a contract which allows for a suspension for a defined offence will be upheld.

An agreement term which set out the employer's right of administrative suspension is reviewed here.