Court of Appeal Recognizes that Employees Terminated “For Cause” May Still Be Entitled to Statutory Termination Benefits

The law concerning the rights and responsibilities of Ontario’s employers to dismiss an employee “for cause” , and the rights of employee to nonetheless receive statutory termination pay and severance pay in event of a termination “for cause” finally received such much-needed clarity in the Court of Appeal of Ontario’s decision in Render v. ThyssenKrupp Elevator (Canada) Limited, 2022 ONCA 310 (CanLII).

While both the facts of the case and the depth of the Court of Appeal’s analysis on the critical point have caused some commenters to challenge the correctness of the court’s ultimate decision, I could not be more ecstatic about the methodology of the court’s approach.

“It's Too Late to Apologize” Court of Appeal Finds Refusal to Apologize For Inappropriate Conduct Just Cause for Termination of Employment

If you can get thorough this post without hearing Ryan Tedder’s voice singing “It's too late to apologize,” well you’re stronger than I am. “I said it's too late to apologize, it's too late.” (For those who don’t get the lyrical reference, or those who just want to hear the song, here’s the link: Timbaland - Apologize ft. OneRepublic.)

In November of 2020, I wrote a post titled “Refusing to Apologize for Inappropriate Comments Not Cause for Dismissal”. In that post I reviewed the Ontario Superior Court of Justice’s decision in Hucsko v. A.O. Smith Enterprises, 2020 ONSC 1346 (CanLII), in which Justice G.E. Taylor held that an employer was not justified in summarily ending the employment relationship because the employee refused to apologize for inappropriate comments and it could not use the previous findings concerning inappropriate comments to later justify the termination.

The employer appealed.

For reasons reported as Hucsko v. A.O. Smith Enterprises Limited, 2021 ONCA 728, the Court of Appeal found that there was cause to terminate the employee’s employment.

Too late.

Time Spent as Independent Contractor Relevant Factor in Calculating Reasonable Notice

Is the amount of time spent as an “independent contractor” an appropriate fact for the court to consider when calculating the reasonable notice period if the worker later becomes either a true employee or dependant contractor?

In Cormier v. 1772887 Ontario Limited c.o.b. as St. Joseph Communications, 2019 ONSC 587 (CanLII), affirmed by the Court of Appeal for Ontario in Cormier v. 1772887 Ontario Limited (St. Joseph Communications), 2019 ONCA 965 (CanLII), Justice Paul Perell held that, it would be wrong in principle to ignore those years of the relationship in determining the reasonable notice period.

The case is an important read for those who may elect to start their relationship one way, but then change it over time.

When Worlds Collide – The Evolution of Employment Law Principles in the Termination of Independent Contractor Relationships

It is remarkable how much the law can change in as little as 14 years. In 2005, Justice Kathryn N. Feldman authored reasons for decision on behalf of the Court of Appeal for Ontario in the case of 1193430 Ontario Inc. v. Boa-Franc Inc., 2005 CanLII 39862 (ON CA). The essential holding of that case is that, “Employment law concepts such as just cause should not be imported into commercial law context to govern distributorship agreements.”

14 years later, in the case of Barresi v. Jones Lang Lasalle Real Estate Services Inc., 2019 ONCA 884 (CanLII), the two worlds could not be more intertwined.

Discretion to Depart from R.49 Costs Presumption Not Unfettered: ONCA

Does a trial judge have absolute, unfettered discretion in awarding the costs of a proceeding? To what extent does the fact that one of the parties made an offer to settle play a role in fettering the trial judge’s discretion?

In Barresi v. Jones Lang Lasalle Real Estate Services Inc., 2019 ONCA 884, the Court of Appeal for Ontario (Feldman, Fairburn and Jamal JJ.A.) held that, “The discretion to depart from the presumption as to costs in r. 49.10(1) is not unfettered and must be exercised in accordance with the purpose of the rule.” The case thus stands as an important reminder of the import of that rule.

Unfettered Right to Terminate Contract Must be Exercised in Good Faith: ONCA

If one party to a contract has the “facially unfettered right to terminate the contract”, must that party exercise its right to terminate the contract only in good faith?

In the case of Mohamed v. Information Systems Architects Inc., 2018 ONCA 428, Ontario’s top court answered that question with a “yes” – the unfettered right must be exercised in good faith.

Scissors Beat Paper; Statutes Beat Scissors: Severability Clauses Can't Fix Illegal Termination Provisions

Everyone knows that in the classic children's game, Rock, Paper, Scissors, scissors beat paper. But can scissors beat statutes?

To the point, can a trial judge use a severability clause to excise the offending portion of a termination provision, keeping the remainder of such provision enforceable? While that question might seem highly academic, it is one of critical importance to anyone employed pursuant to the terms of a written employment contract.

In North v. Metaswitch Networks Corporation, 2017 ONCA 790 (CanLII), the Court of Appeal for Ontario finally laid to rest both this issue and its earlier decision in the much-maligned case of Oudin v. Centre Francophone de Toronto, Inc., 2016 ONCA 514.

Court of Appeal Rules that Modest Earnings Earned during Notice Period Not to be Deducted from Wrongful Dismissal Damages

What happens when an employee takes a new job not so much to mitigate her damages, but rather to survive? More to the point, what if that new position is so much beneath the wrongfully dismissed employee’s previous position that to deduct such earnings would work a disservice to the employee?

In the case of Brake v PJ-M2R Restaurant Inc., 2016 ONSC 1795, the Honourable Justice Kevin B. Phillips of the Ontario Superior Court of Justice held that a wrongfully dismissed employee’s ability to find employment did not take away from the loss she suffered from being dismissed without cause. Moreover, her new position, that of a cashier, was so substantially inferior to the managerial position she held with the defendant that, “the former does not diminish the loss of the latter.” As a result no deduction was applied on account of the mitigatory earnings.

I blogged about the trial decision in my post Trial Judge Finds Mitigatory Earnings too Insignificant to be Deducted from Wrongful Dismissal Award .

On May 23, 2017, the Court of Appeal for Ontario released its reasons for decision in respect of the appeal of that case: Brake v. PJ-M2R Restaurant Inc., 2017 ONCA 402.