There is some uncertainty in the bar for terminations for cause, as the Employment Standards Act, 2000 (“ESA”) requires an employer to establish wilful misconduct whereas the common law requires just cause. Recently, the Ontario Court of Appeal has provided guidance on what constitutes wilful misconduct under the ESA. This provides insight to employers in understanding how to differentiate between wilful misconduct under the ESA and just cause under the common law.
Regulation 288/01 of the ESA states that an employee “who has been guilty of wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer” is not entitled to notice of termination or termination pay under the ESA. Wilful misconduct under the ESA is a much higher threshold, so an employee’s conduct may constitute just cause under the common law but will not amount to wilful misconduct under the ESA. If an employee’s misconduct is not considered wilful, an employer will be required to provide the employee with statutory benefits.
In Render v ThyssennKrupp Elevator (Canada) Limited, 2022 ONCA 310, the Court of Appeal reviewed the trial court’s decision regarding an employee’s termination for cause after he slapped a female co-worker on the buttocks. The employee subsequently sued for wrongful termination.
The Court found that, while this single incident was serious and inappropriate, it did not amount to wilful misconduct under the ESA. Wilful misconduct requires an element of intent and is therefore a high threshold to meet. In Render, the single incident was found not to have been preplanned and was considered a spontaneous act. With that being said, the court did state that the employee’s conduct did warrant a dismissal for cause at common law, thereby disentitling the employee to reasonable notice of his termination. However, since the conduct did not amount to wilful misconduct under the ESA, the employee should have been provided his ESA minimum entitlements.
The Court of Appeal provided some guidance as to what wilful misconduct means. The Court said the following,
“In addition to providing that the misconduct is serious, the employer must demonstrate, and this is the aspect of the standard which distinguishes it from ‘just cause’, that the conduct complained of is ‘wilful’. Careless, thoughtless, heedless, or inadvertent conduct, no matter how serious, does not meet the standard. Rather, the employer must show that the misconduct was intentional or deliberate. The employer must show that the employee purposefully engaged in conduct that he or she knew to be serious misconduct. It is, to put it colloquially, being bad on purpose.”
This case illustrates that, in order to establish wilful misconduct, employers will have to demonstrate that the employee engaged in a preplanned and intentional act. Employers will have to pay employees their minimum entitlements under the ESA, unless they can establish wilful misconduct occurred. Given this high threshold, employers will have a complicated task in determining whether an employee is entitled to statutory benefits. In some cases, the facts may support terminating an employee for cause while simultaneously providing them with their ESA termination entitlements due to there not being a preplanned and intentional component to the conduct. Employers are encouraged to seek legal counsel when terminating an employee to ensure compliance with the relevant laws. The lawyers at Heeney Vokey LLP would be more than happy to assist with this.