Man using laptop

By: Ali Saghari

Termination for cause, also known as being fired, is the capital punishment of employment law. An employer may only fire an employee for conduct severe enough that the employment relationship could not reasonably continue. The bar for conduct that meets this threshold is very high, requiring actions such as stealing from your employer or refusing to do something that is an important part of your job without good reason.[1]

Termination for cause comes with serious consequences to the individual being dismissed. If dismissal occurs without cause, the employee has the right to reasonable notice or payment instead of notice. This money provides a financial cushion to someone while they look for a new job. However, termination for cause (being fired) does not entitle a person to this money. Also, being terminated for cause is a serious stain on a person’s reputation, which may make it harder to secure a new job.

Key Points

  • Termination for cause requires a set of circumstances that entitles employers to terminate an employee without the legal obligation to provide a notice period or termination compensation.
  • Termination for cause requires misconduct so severe that termination becomes the only reasonable alternative, such as if an employee engages in violence or theft. 
  • An employee might be dismissed due to repeated minor instances only if the employer created a progressive disciplinary plan or a performance improvement plan that provided employees with a chance to remedy the issue.
  • Employers who mistakenly fire an employee for just cause may be required to pay termination compensation and be subject to fees and fines.
  • Employees are typically free to do as they wish outside of their employment so long as it does not interfere with their work.

When can you be terminated for cause?

Minor performance issues are usually not sufficient to terminate an employee for cause. If an employee is not performing to the expected standard, it is easiest to dismiss them without cause. Termination for cause is difficult to determine because it is highly contextual: it considers several factors related to the employee, such as age and the length of employment, and to the employer, such as the relevant employer policies or practices.

If an employee is consistently not performing to the required standard, an employer may dismiss them with cause after repeated instances; however, this can only be done after expectations have been communicated. After the employee is notified that their performance has been subpar, the employer must create a progressive disciplinary plan in which the misconduct in question is made evident and a plan for its remedy put in place. This plan must also include a written warning to the employee indicating the seriousness of failing to abide by it. Once the employee is given a reasonable opportunity to improve, they may be terminated for cause.

In short, if the misconduct is performance-related, the employer must put in place a “performance improvement plan” that must indicate the following in writing:

·        The shortcomings of the employee.

·        The standards that they are expected to meet. 

·        The specific consequences of failing to follow the plan. 

·        A timeframe in which these changes are expected to occur.

An employer may also be able to terminate an employee for cause as a result of a single but severe incident. For example, an employee who is violent in the workplace or steals from their employer can usually be terminated for cause. However, even then, there are some cases where violence or theft is not sufficient to justify termination for cause.

Insubordination can also be a permissible reason to terminate an employee for cause. Refusal of lawful orders made by an employer can be grounds for termination if the orders are a central part of the employment of the relevant employee.[2] However, it is important to keep in mind that you cannot be fired for doing something the Employment Standards Act (ESA) says that you have the right to do. This includes things like taking parental leave or asking your employer to follow the law.[3]

Outside of the confines of their employment, an individual is typically free to act as they wish. However, this is not an absolute rule. Actions that directly affect the employee’s job, even if done outside their employment, can lead to termination for cause. In the social media era, this can include posting offensive tweets if the posts are deemed to be particularly harmful.[4]

What are the legal ramifications of misclassifying termination as being for cause?

Responsibility for proving that an employee was terminated for cause falls on the employer. The employer must demonstrate that more likely than not, the misconduct was so severe that termination for cause was warranted. Given that the bar for showing just cause is very high, it can be particularly difficult for an employer to successfully prove in court that their decision to terminate an employee for cause was justified.

The laws are particularly harsh on employers who unjustly terminate an employee for cause (also called wrongful dismissal). An employer might be subject to fees and fines beyond what would typically be owed to a fired employee if the dismissal was held to not be for cause. All this makes it clear why the vast majority of these disputes are settled outside of court, and why proving termination for cause may not be as easy as one might have thought.

Did you receive the correct amount of termination pay? Find out using our free tool at MyOpenCourt.org