Is the intentional destruction of company property cause for termination of employment without notice? Does it meet the higher burden of statutory “wilful misconduct”?
In Park v. Costco Wholesale Canada Ltd., 2023 ONSC 1013 (CanLII), a decision of the Ontario Superior Court of Justice sitting at Ottawa, the Honourable Madam Justice Robyn M. Ryan Bell held that summary dismissal was warranted.
On September 16, 2021, I published a post titled “Hope for Ontario's Employer Bar: The ONSC's Decision in Rahman v. Cannon Design Architecture Inc.” The artwork I selected for that post was the iconic “HOPE” poster used in 2008 by the Obama campaign when the then-US Senator was running for President.
“Hope” was an appropriate word to describe the employer bar’s reaction to the Superior Court’s decision in Rahman. In that case, Justice Sean F. Dunphy of the Ontario Superior Court of Justice had held that an employee’s sophistication and the fact that she had retained independent legal advice were factors in the determination of whether a contractual termination provision ought to be enforced as written.
Justice Dunphy further held, following the approach more commonly employed in British Columbia (see my commentary in my post Employment Law Isn't Real) that, “Every contract – including this one – must be interpreted with a view to giving expression to the mutual intention of the parties as expressed in the words used by them.”
The employee in the Rahman case appealed Justice Dunphy’s decision to the Court of Appeal for Ontario.
And, just as “Hope” left Washington on January 20, 2017, hope for the employer’s bar was “trumped” when the Court of Appeal released its decision in Rahman v. Cannon Design Architecture Inc., 2022 ONCA 451 (CanLII).
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.
This is an opinion piece and, yes, a bit of a rant.
Since the Ontario Court of Appeal’s decision in Waksdale v. Swegon North America Inc., 2020 ONCA 391, about which I blogged in my post Employment Law Isn’t Real, the Ontario Superior Court of Justice has taken an interest in ensuring drafters of employment contracts appreciate that there is fundamental difference between “just cause” at common law and “wilful misconduct” in Ontario Regulation 288/01, made pursuant to Ontario’s Employment Standards Act, 2000.
For example, in the recent decision in Steve Livshin, 2021 ONSC 6796 (CanLII), (released October 14, 2021,) Justice William Black writes,
“Just cause” is … as held in various cases, ... understood as a common law notion connoting a basis, from an employee’s performance or conduct, justifying termination of the employee’s employment without the need for advance notice.
…
As set out in various cases, “just cause” can be contrasted with the requirements of the ESA. Pursuant to O. Reg. 288/01, s. 2(1), para. 3, an employer can only withhold termination pay, severance pay and the continuation of relevant benefits in response to workplace conduct that amounts to “wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer”.
Justice is Black is absolutely correct, “just cause” is the phrase understood as a common law notion connoting a basis justifying termination of the employee’s employment without the need for advance notice. And the reason that understanding exists is because that is exactly how the court almost invariably uses the phrase. In fact, I would submit, the court has only recently started parsing the wording between “just cause” and “wilful misconduct” for the purpose of striking down employment agreements; not to provide employees who might have otherwise been entitled to statutory termination pay a greater benefit.
And that is really my problem. In its reasons for decision, the court almost invariably uses the phrase “just cause” or “cause” to define a situation in which the employer is excused from providing a dismissed employee with notice of termination of employment or payment in lieu. It almost never uses (until recently) the phrase “wilful misconduct.”
If the court is going to be particular about how parties draft their employment agreements, it could at least use the language expected in its own writing.
Are these words automatically fatal to a contractual termination provision post the Court of Appeal’s decision in Waksdale v. Swegon North America Inc.: “[The Employer] maintains the right to terminate your employment at any time and without notice or payment in lieu thereof, if you engage in conduct that constitutes just cause for summary dismissal.”
While many in Ontario’s employment law bar (especially those predominantly acting for plaintiffs) would respond with an emphatic “of course!” In Rahman v. Cannon Design Architecture Inc., 2021 ONSC 5961, Justice Sean F. Dunphy of the Ontario Superior Court held otherwise.
Can sharing intimate photos of one your coworkers with your friends result in the summary termination of your employment for cause?
In an unreported decision from the Ontario Ministry of Labour, the answer was a resounding “yes.”
Does a termination clause that only allows an employer to terminate an employee without notice for “just cause” comply with the provisions of the Ontario Employment Standards Act, 2000?
In the case of Khashaba v. Procom Consultants Group Ltd., 2018 ONSC 7617, the Honourable Justice Carole J. Brown of the Ontario Superior Court of Justice held that it does not.
Just cause for termination is a thorny issue. Employers often wish to advance it as a means of reducing (hopefully to nil) their obligations to an employee on termination. However, under Ontario employment law, one can be both dismissed for just cause and entitled to termination pay and severance. A fact, I would respectfully submit, lost on many including most judges unfamiliar with the nuances of Ontario employment law.
The 2011 case of Oosterbosch v. FAG Aerospace Inc., 2011 ONSC 1538 (CanLII) succinctly demonstrates the difference.
