Cause means dismissal with nothing — no notice, no pay in place of it. Ontario courts treat it as the most serious sanction in employment law and set the bar accordingly. Most cause allegations fail, and a failed one usually costs the employer more than simply paying notice would have.
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The Supreme Court's decision in McKinley v. BC Tel settled the approach: the court asks whether the misconduct, viewed in context, was so serious that it struck at the heart of the employment relationship. That means looking at the nature and degree of what was done, the employee's role and seniority, their record, and the surrounding circumstances — not simply whether the conduct fits a label.
Some single incidents can amount to cause: theft, serious dishonesty, violence, a genuine conflict of interest, a deliberate breach of a critical safety rule. Poor performance, on its own, almost never does. Nor does a personality clash, a difficult manager, or one bad decision made in good faith.
Condonation defeats cause. An employer that knows about conduct and carries on as normal has accepted it and cannot resurrect it months later as the reason for dismissal. Employers who go looking for after-acquired reasons once a claim is filed rarely improve their position.
The burden is on the employer, and it is judged on the evidence it had and the reasons it gave at the time.
Common law just cause is what ends the obligation to give reasonable notice. It is difficult to establish, but it is not the highest bar in play.
The Employment Standards Act, 2000 sets a separate and higher test before an employer can withhold statutory notice and severance. The regulation exempts only an employee guilty of wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned. "Wilful" means deliberate — intentional or persistent conduct, not carelessness, incompetence or an error of judgment.
The practical result surprises people on both sides: an employer can establish common law cause and still owe the statutory minimums, because the conduct was serious but not wilful. Employers routinely miss this, and so do their contracts. A termination clause that lets the employer withhold statutory entitlements for ordinary "cause" can be found unenforceable, and that failure can wipe out the notice limit for the whole agreement.
Dismissing for cause on performance grounds requires groundwork that most employers have not done. There must be a reasonable standard, communicated clearly, clear warnings that performance is not meeting it, genuine support to improve, an explicit statement that failure will result in dismissal, and a real opportunity to meet the standard.
Documentation has to be contemporaneous. Reviews and warnings written after the decision to terminate carry very little weight, and their appearance in a file often damages the employer's credibility on everything else.
Investigate before deciding. Get the employee's account, keep the process fair, and do not treat the outcome as settled before hearing them. A rushed or one-sided investigation can add moral damages on top of the notice the employer was trying to avoid.
Where absence or conduct is connected to a disability, including addiction, the Human Rights Code duty to accommodate is engaged and discipline is the wrong tool. Getting that sequence backwards turns a notice claim into a human rights claim.
Ask for the allegation in writing, with dates, and ask for the documents relied on. Employers frequently soften or drop a cause allegation once it has to be set out and defended in detail rather than asserted in a meeting.
Write your own detailed account of events while you still remember them, and keep any emails, messages and performance records you already have. Do not remove company confidential material — that gives the employer the cause allegation it was missing.
A dismissal for cause can affect Employment Insurance, because misconduct can disqualify you from benefits. That decision can be reconsidered and appealed, and it often changes when the dismissal is later characterised differently or settled. Apply anyway, and appeal rather than accepting the result.
Do not resign to avoid the label. Resignation generally forfeits the claim. The limitation period to sue is two years, and where the real reason involved a protected ground, a Human Rights Code claim runs on a one-year clock.
Only if the mistake is serious enough to destroy the employment relationship — theft, violence, deliberate dishonesty, a knowing breach of a critical safety rule. A single error of judgment, a missed target, or one heated exchange almost never meets the standard on its own.
Because a cause allegation is easy to make and hard to prove, and the offer is cheaper than the risk. Treat it as a negotiating position, not a legal conclusion. It also means the employer is aware the allegation might not hold.
At common law, cause ends the right to reasonable notice. But the Employment Standards Act uses a separate, higher test — wilful misconduct that is not trivial and has not been condoned — so statutory notice and severance can still be owing even where common law cause is established.
Possibly not at first, because misconduct can disqualify you. Apply regardless and be accurate on the form. Ask for reconsideration and appeal if you are refused; the employer's characterisation is not the final word, and the outcome often shifts when the dismissal is settled.
Investigate before you decide, hear the employee, document as you go, and get advice before the meeting rather than after the claim. Also check whether your termination clause survives, because a clause that lets you withhold statutory entitlements for ordinary cause can be unenforceable in its entirety.
Open your file tonight — a licensed Ontario lawyer will confirm everything with you by tomorrow.