Employment Termination for Just Cause v. Without Cause

Badre Law Employment Lawyers - Employment Termination

Employment termination can be very stressful and have negative consequences on your day-to-day well-being and on your family. It can be a confusing time as often employees are taken by surprise when their job is suddenly terminated.

The first thing to understand is that there are different circumstances where, as an employee, your job can be terminated. The two most common circumstances are:

1. When your employer claims to have a reason for your termination (also known as “just cause dismissal” or “termination for cause”)

and

2. When you are terminated without any given reason (known as “without cause dismissal” or “without cause termination”)


Termination for Cause

Contrary to popular belief, your employer does not have to tell you why you are being let go.

However, if your employer claims to have a specific reason, and if your employment is terminated immediately without notice or pay, then your employer must inform you that your termination is “for cause” and provide you with the reason for your termination.

Reasons for a Just Cause Dismissal

But not every reason is appropriate for a just cause dismissal. The reason you are being fired must be for serious, wilful misconduct on your part. Common examples of just cause dismissal include claims that:

  • You stole from the company
  • You neglected your job and duties
  • You were disobedient to your superiors
  • You lied or were dishonest to your employer

If your employer claims to have just cause to terminate you without notice or pay, then they must give you a chance to explain yourself and to respond to their allegations. Most of the time, your employer cannot simply kick you out the door.

When an employer claims to have just cause, it is the employer who must prove that the alleged misconduct caused irreparable harm to your employment relationship. For any court to accept a reason for just cause dismissal, the employer has to show that he misconduct was so sever that it justified the employer imposing the most severe consequence in response: complete termination of your employment.

Sometimes you may have done something wrong or improper, but that does not mean your employer will be allowed to fire you. Your employer may be expected to take incremental steps in your discipline and start with less harsh punishment, such as warnings or suspensions, before resorting to termination.

If your employer cannot convince a court that they had just cause to fire you, then it will mean you were terminated “without cause” and you may be entitled to termination notice or termination pay instead of notice.

Without Cause Dismissal

If you are not given a reason for your termination, or if the reason is not sufficient to justify a just cause dismissal, then you are considered to be terminated “without cause”.

When you are terminated without cause, your employer must give you advance notice of your termination so that you can continue working and earning a salary during your “notice period”. Alternatively, your employer does not have to give you notice if they pay you your salary for the notice period instead, which is known as pay in lieu of notice.

How much notice or pay in lieu of notice your employer is supposed to give you will depend on a number of different circumstances. It is important you contact an employment lawyer as soon as possible after being told your job is terminated to learn about your rights and entitlements.

Pay in Lieu of Notice

As an example, if you are told on January 1st that your employment is being terminated, and your employer is obligated to give you 4 weeks’ notice, that means one of three things can happen:

  • Your employer tells you that you have 4 weeks of working notice and your employment will end a specific date 4 weeks later.

or

  • Your employer will tell you that your employment is terminated immediately and you are no longer to come into work. Instead, you will receive your salary for 4 more weeks.

or

  • Some combination of the two, for example your employer asks you to continue working for 2 more weeks, and then to stop coming into work but pays you for an additional 2 weeks (for a total of 4 weeks of notice and pay).

Continuation of Work After Termination without Cause

Often, if you are terminated without cause and asked to continue working, you should do so. However, this does not apply in all situations. If continuing to work for the employer would be significantly humiliating and embarrassing, you may be allowed to decline working notice and accept a payout instead. You should always consult with an employer lawyer before making a final decision.

Constructive Dismissal

In order for your employment to be terminated, you do not always have to be expressly told that you are fired. In employment law, there is a concept known as “constructive dismissal”.

Constructive dismissal occurs when there is a significant change to a fundamental aspect of your employment that, even though your employer has not let you go, justified you treating your employment as being terminated. In such cases, you may be entitled to termination notice or pay as if you were fired without cause.

Sometimes an employer will try to force their employee to quit so that they can avoid paying the employee for their termination. The law of constructive dismissal exists to protect employees when their working situation becomes untenable and the employee is no longer able to keep working under the new conditions.

What Happens when there are Changes to your Job?

Minor changes to your employment circumstances are not enough for you to claim you were constructively dismissed. You cannot quit and try to collect compensation every time there is a small change to your job.

In order to classify as constructive dismissal, the change must be fundamental to your employment. It must affect a condition at the heart of your employment.

Some examples of constructive dismissal can include:

  • A demotion to a lower position.
  • A poisoned work environment caused by harassment, bullying, or discrimination.
  • A change in location of your employment that requires you to commute a significantly farther distance between your home and work.
  • A major change to your responsibilities or duties.
  • A reduction in your base salary.

Another common situation when constructive dismissal occurs is when an employer forces an ultimatum on their employee. If your employer tells you that they will make a significant change to your duties, but then gives you the option to either accept the change or quit, this can be treated as constructive dismissal even though the employer tried to make it seem like they gave you a choice.

What if your were Given Advance Notice of a Fundamental Job Change?

Sometimes a fundamental change can occur and it will not be classified as constructive dismissal, if your employment contract in effect at the time of the change contemplated such changes. For example, if the employment contract you accepted when you began work warned you that the company might relocate, and then this happens, you might not be able to claim that your new longer commute constitutes constructive dismissal.

For constructive dismissal to arise, the change that occurs must have been made unilaterally by the employer without your permission, consent, or acquiescence. Just because you continue working for your employer after a change does not necessarily mean you agreed to the change. Many people cannot afford to quit, but disagree when a change is made solely by their employer.

If you continue working for your employer after a fundamental change, you must advise your employer that you disagree and do not accept the proposed change. It is crucial that you draw your employer’s attention to your concerns immediately. If you remain silent, there is a risk that a court will say that you accepted the change implicitly.  

Ways to Raise Concerns or Objections to your Employer when a Change is Made

  • Tell your superior or human resources representative in a meeting that you disagree with the change.
  • Send an email or letter stating your disagreement.
  • If you are asked to sign a document concerning the change, write beside your signature that your signature is not to be considered as acceptance of the change. You could write something like “signed but not accepted.”

Uncommon Forms of Dismissal & Termination

When people think of wrongful dismissal claims, they are usually talking about a situation where someone was expressly fired. However, there are other circumstances that can arise where an employee is not officially or formally fired, but which can end up becoming a wrongful dismissal.

Other, less common forms of dismissal and termination include:

  1. Temporary lay-off
  2. Purchase and sale of a business
  3. Quitting with working notice that your employer rejects.

1. Temporary Lay-off

You often hear people say that they were “laid off” from their job. However, the term “lay-off” has a very specific meaning in the employment law world, and is not the same as being fired, terminated or dismissed.

A lay-off occurs when your employer temporarily stops your work without terminated your actual employment. This frequently happens when there is not enough work at a particular time of the year, or when business slows down, such as in seasonal work. When this happens, your employer expects or hopes that they will bring you back to work when things pick up again.

In such circumstances, your employer must be clear that they are laying you off and not terminating your employment. As long as your employer tells you that you are being laid off and not fired, then your employer does not have to provide you with a specific expected date of return.

When can a Lay-off can Become Employment Termination?

However, a temporary lay-off can become employment termination if the lay-off period exceeds what is permitted under the law. There are two important time periods to consider in lay-off situations:

  • You can be laid off for a maximum of 13 weeks in any 20-consecutive week period.
  • Despite the time period above, you can be laid off for a maximum of 35 weeks in any 52-consecutive week period only if any one of six special exceptions apply. These exceptions include but are not limited to:
  • You continue receiving substantial payments from your employer; or
  • Your employer keeps making payments for a benefit under a group or employee insurance plan; or
  • You receive or would be entitled to supplementary unemployment benefits.

Once the applicable lay-off period expires, if your employer has no recalled you back to work, then you may be entitled to employment termination notice or pay as if you were actually fired.

2. Purchase and sale of a business

If your employer sells their whole or part of their business to a new owner, the new owner cannot fire you without notice or without pay in lieu of notice.

When your company is sold to a new owner, your employment is considered to continue with the new owner. If the new owner wants to let you go, they must have just cause, or they must give you termination notice or pay the same way the previous owner would have been required to do.

Sometimes a new owner will try to force changes onto you after they acquire the business. For example, they may offer you a new position, a change in duties, or change in salary. When this happens, it is important you understand you are not required to accept a lower position, demotion, or drop in salary with the new owner. You have the right to negotiate your new contract. If the new owner does not accept your reasonable and fair proposal, you may be entitled to termination notice or pay in lieu of notice.

3. Quitting with Notice that Employer Rejects

If you quit your job, you might give your employer working notice. You may even be required to give notice under your employment contract. For example, you may have to give your employer 4 weeks’ notice of your intention to leave your job.

Sometimes when you give notice that you are quitting, your employer will reject the working period you offer and tell you that they are accepting your immediate resignation.

In most cases, your employer is not allowed to disregard your notice period. If they do, they still have to pay you for the period of time that you intended to work. Other times, your employer may be allowed to decline your working notice period and rightfully deny you further pay. This arises in situations when your continued work for the employer may pose a risk to their business. This commonly occurs when an employee has accepted a position with a competitor. Such cases, you may have to leave work immediately without pay, even if you offered your employer working notice.