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Since COVID-19 vaccinations have become widely available across Canada, there has been a rise in claims by employees alleging they were wrongfully dismissed on the basis of their unvaccinated status. Over the past year, many private sector employers implemented vaccine mandates and deemed an employee’s failure or refusal to become vaccinated as just cause for dismissal. But what is “just cause”, and how is it established when an employee is terminated from their job?

“Just Cause” Termination

In Ontario, an employer may terminate an employee for just cause where the employee’s misconduct gives rise to a breakdown of the employment relationship. Just cause termination is known as “the capital punishment” of employment law, as an employee terminated for just cause is not provided with notice of dismissal or a severance package. An employee will also not be eligible for Employment Insurance benefits, and it may be more difficult for the employee to find new employment.

Given that an employee is denied these entitlements and may be hindered in securing a new job, just cause termination has a high threshold for employers to establish and is typically reserved for only the worst workplace violations.

There are several types of misconduct that may be grounds for dismissal for cause. The following are common grounds for just cause dismissal:

  • dishonesty (e.g., fraud, theft, breach of trust, deception etc.)
  • breach of trust
  • workplace harassment and violence
  • criminal conduct
  • insubordination and insolence
  • culpable absenteeism and lateness

Common Law Standard for “Just Cause”

The employer bears the evidentiary burden of proving, on a balance of probabilities (i.e. it was more likely than not), that it had cause for terminating the employee. Typically, to establish just cause, an employer must prove that an employee’s act or omission was so significant that the effect of the employee’s misconduct repudiated the employment contract. The employee’s actions must be so incompatible with the employee’s duties that it is prejudicial to the employer’s interest, making it virtually impossible for the employment relationship to continue.

In the seminal case of R. v. Port Arthur Shipbuilding Co. et al., the Ontario Court of Appeal stated that an employer may terminate an employee’s employment for just cause if the employee is:

“guilty of serious misconduct, habitual neglect of duty, incompetence, or conduct incompatible with his duties, or prejudicial to the employer’s business, or if he has been guilty of wilful disobedience to the employer’s orders in a matter of substance.”

“Just Cause” Under Ontario’s Employment Standards Act

While each employment law case is considered on its own particular set of facts, the Ontario Employment Standards Act establishes a standard for termination with cause. To establish just cause for termination, the Act requires the employer to establish that the employee’s misconduct was both serious and wilful. For misconduct to be serious, demonstrable harm must have been done to the employer’s operation such that the misconduct amounts to a rejection or breach of the employment relationship. Finally, wilful misconduct requires intentional or deliberate misconduct on the employee’s part or behaviour so reckless that it would be considered intentional.

The Ontario Superior Court of Justice has held on several occasions that the standard to terminate an employee without notice pursuant to the Employment Standards Act is higher than the common law standard to terminate an employee for cause.

Wrongful Dismissals for “Just Cause” Lead to Higher Notice Periods

An employee who believes they were wrongfully dismissed for just cause can challenge the employer’s dismissal. Courts in Ontario have routinely held that where an employee was wrongfully terminated on the basis of just cause, they are entitled to a notice period at “the outer end of what is reasonable to reflect the additional challenge of finding new employment.” Given the potential of having to pay an employee dismissed for cause even greater notice than they would have been entitled to had notice been provided (as well as the costs of any litigation), it is imperative that employers be certain they have met the threshold for establishing a just cause dismissal.

Terminations in the Time of COVID-19

As with most other things in life, terminations for just cause have been impacted by COVID-19. Employers who have implemented a vaccine mandate may face challenges when dismissing an employee for failing or refusing to be vaccinated against COVID-19.

Changes to Record of Employment Codes

In response to dismissals arising from employer vaccination policies, Employment and Social Development Canada (ESDC) issued guidelines for the preparation of Records of Employment for employees who breach a workplace vaccine mandate.

These guidelines state that when an employee doesn’t report to work because they refuse to comply with an employer’s mandatory COVID-19 vaccination policy, employers are to use code E (quit) or code N (leave of absence). This suggests that the ESDC will treat employees who do not comply with an employer’s mandatory vaccination policy as having quit their employment and are therefore not entitled to receive Employment Insurance benefits.

Just Cause and Vaccination Status

The next few years will determine whether courts across Ontario and Canada will come to a consensus on whether a failure to comply with an employer vaccination policy amounts to just cause. Vaccine mandates should be clearly articulated to employees, so they understand their rights and consequences under the policy. Employees with concerns about the fairness of their employer’s vaccination policy or who feel they have been wrongfully dismissed pursuant to such a policy should seek legal advice on the potential remedies available to them.

Bader Law Provides Skilled Advice & Representation to Employees in Wrongful Dismissal Claims

At Bader Law, our experienced employment lawyers counsel employees on their rights under Ontario’s employment laws. We resolve workplace disputes as efficiently and amicably as possible and advocate for employees at all levels of court and before tribunals when the relationship is beyond repair. To schedule a consultation, contact us online or by phone at 289-652-9092.