Canada: Discipline and Discharge

Last Updated: December 19 2014
Practice Guide by Blaney McMurtry LLP

Many companies, especially in unionized environments, have adopted progressive disciplinary policies. These policies have two functions. First, they are used to correct unsatisfactory performance in the early stages before it becomes a serious problem. Second, if necessary, it can be used to support the decision to terminate an employee for just cause.

The threshold for establishing grounds for just cause is very high. Most offences will not lead to automatic grounds for termination for just cause. In order to establish those grounds, an employer will need to show that it has taken steps to correct the behaviour prior to a culminating incident. In this regard, clearly establishing that an employee has been disciplined in the past; given an opportunity to remedy the offending conduct; and warned of the consequences of failing to remedy the conduct is essential in the ordinary course to justify a just cause termination.

Progressive discipline policies also have the advantage of setting the standards by which all employees are treated, and thus ensuring a level of consistency in the disciplinary process.

The standard progressive disciplinary policy has the following steps:

  1. Verbal warning;
  2. Written warning;
  3. Suspension* or final written warning;
  4. Termination

*Care must be used when making a decision to suspend an employee outside of a union environment. Unless the disciplinary process is expressly, or impliedly part of an employee’s employment contract, an employee who is suspended could claim to have been constructively dismissed, depending upon the circumstances.

In those situations where an employer cannot rely on the right to suspend an employee for misconduct, employers usually use a final written warning which clearly states that the next offence will lead to termination for cause. Alternatively, employers may use a performance improvement plan whereby employees are given a timeframe to improve with counselling and warned that failure to comply with the performance improvement plan will lead to termination for just cause.

A standard progressive disciplinary policy is attached.

Dismissal

Dismissal for just cause can only be established if there has been a fundamental breach of the terms of the employment contract.

In cases of termination for just cause, an employee may be dismissed without notice or pay in lieu of notice. However, whether an employee may be dismissed immediately for misconduct will depend on the nature of the conduct. In most instances, the misconduct must be objectively significant and not trifling and the employee will have to be warned (usually several times with progressive severity) of the consequences of future infractions before an employer may terminate the employee for just cause.

The threshold for establishing just cause is very high. For example, in McKinley v. B.C. Tel, [2001] 2 SCR 161,the Supreme Court of Canada held that the employer did not have just cause to terminate an employee for dishonesty in those particular circumstances. The Supreme Court of Canada noted that whether an employer has just cause to terminate an employee for dishonesty will depend on whether the employee’s dishonesty has given rise to a breakdown in the employment relationship.

It should also be noted that even though an employer may have just cause at common law to terminate an employee the employer may be obliged to pay the employee or give the employee notice, termination pay or severance pay under the applicable employment standards legislation. The employment standards legislation in some provinces only allows an employer to deny payment or notice to employees who are engaged in willful misconduct or wilful neglect of duty. It is therefore always prudent to check the applicable employment standards legislation before making the decision to terminate for just cause.

Some of the grounds for termination based on just cause are:

  1. Incompetence

Normally, an employer will have to warn an employee of their failure to meet acceptable standards, set out the standards that are expected and give an employee a reasonable time to improve. An employer will also have to provide the necessary support or training before terminating them for incompetence. If the failure to meet the standards is not the fault of the employee or there are mitigating circumstances (such as a disability), an employer will not be able to rely on incompetence as a basis for termination.

  1. Conduct outside normal working hours

Normally, an employee’s conduct outside of normal working hours will not constitute grounds to terminate the employee for just cause unless the employer can establish that the employee’s conduct is wholly incompatible with employee’s discharge of his duties for the employer or causes damage to the employer’s reputation.

  1. Harassment/Sexual Harassment

Most employers now have harassment policies which caution employees that a violation may result in the termination of their employment. As with other types of misconduct, a decision as to whether to terminate for just cause will depend on factors such as the nature of the misconduct, whether the employee shows remorse and the length of service of the employee and whether the employee has been disciplined for similar conduct in the past.

  1. Dishonesty

The Supreme Court of Canada has held that in determining whether just cause for termination on the basis of dishonesty exists the employer must have regard to the nature of the business, the level of seriousness of the dishonesty as well as its impact on the employer’s business.

  1. Disobedience/Insubordination

If an employee regularly uses language which is inconsistent with the employment relationship or refuses to respect the authority of management, the employer may have grounds to terminate for just cause. This is also a situation where progressive discipline should be used prior to termination. It is also recommended that you find out from the employee whether there is any other factor causing the defiant behaviour before making a decision to terminate.

One act of disobedience will not normally give rise to grounds for termination for cause. However, if there is a repeated failure to follow the employer’s direction, policies or procedures, grounds for termination for just cause may exist and employer’s should ensure that any directions given to the employees are clear and unequivocal.

  1. Revelation of Character

If an employee has engaged in behaviour which shows that he is an untrustworthy character, an employer may have grounds to terminate for just case, especially in situations where an employee is in a position of trust.

  1. Lateness and Absenteeism

Employers must be able to satisfy a court that the employee’s level of absenteeism far exceeds that of the average employee and that there is no reasonable expectation that the level of attendance will improve in the future.

Absenteeism because of a disability will not normally be grounds for termination for cause. However, even when employees are absent because of a disability, employers are entitled to a reasonable amount of information confirming that the employee is unable to attend work because of illness or accident, that they are undergoing treatment and whether they are likely to return in the future.

When calculating the level of absenteeism it is important not to include leaves of absence permitted by statute, such as, maternity leave, family medical emergencies and jury duty.

Employers are cautioned to seek legal advice before terminating anyone based on a frustration of contract because of absenteeism.

  1. Alcohol or Drug Use

Alcohol or drug use during working hours is certainly grounds for discipline and may be grounds for termination for just cause depending on the impact upon the employer’s business. However, addiction to drugs or alcohol is considered a disability, and thus an employer has an obligation to accommodate these disabilities by at minimum, giving employees a leave of absence to seek treatment.

  1. Conflict of Interest

Employees have an obligation to avoid actual or potential conflicts of interest in the course of their employment. Some conflicts are so serious as to justify immediate dismissal for cause. For example, if an employee were to carry on and divert business in direct competition with their employer a fundamental breach of contract would likely be established.

  1. Disciplinary Demotion

In a non-union situation, an employer has no right to discipline by demoting the employee, unless it is a term of the employee’s contract that he/she is subject to demotion for misconduct.

  1. Condonation

One of the biggest impediments to arguing a successful case for just cause is the doctrine of condonation. If an employer has allowed an employee to engage in misconduct repeatedly without taking any steps to address and remedy the misconduct, it can be argued that the employer has condoned the misconduct. In this event, an employer will have to re-establish the standards of behaviour, clearly communicate them to the employee and give the employee an opportunity to mend his/her ways before termination.

A draft termination letter for just cause is attached.

This document is not intended to create an attorney-client relationship. You should not act or rely on any information in this document without first seeking legal advice. This material is intended for general information purposes only and does not constitute legal advice. If you have any specific questions on any legal matter, you should consult a professional legal services provider.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Contact the Author?
Click here to email the Author
View Template
Click to View the Template
In Association with
In Partnership with
Supporting Documents
Other Canada Advice Centres
Competition and Antitrust
Mergers and Acquisitions
Intellectual Property
More Advice Centers
Significant Recent Cases
Blaneys@Work is a site produced and run by Blaney McMurtry LLP’s Employment and Labour Group. It is full of useful information regarding recent events and decisions in the world of labour and employment law.
Useful Resources
Latest updates regarding current employment and labour issues.
Employment standards are essentially the foundation for creating productive workplaces, help protect the rights of workers and and provide the necessary conditions for a productive economy.
Federal labour standards set out the minimum standards that federally regulated employers and employees must follow.
The right to fair wages and working conditions extends to trades workers employed on construction sites under federal contracts, and is guaranteed under the Fair Wages and Hours of Labour Act and Regulations.
If you are an employee legally entitled to work in Canada, you have certain protections under the Wage Earner Protection Program Act concerning payment of your wages, vacation, severance and termination pay if your employer becomes bankrupt or subject to a receivership under the Bankruptcy and Insolvency Act.
The minimum wage is a basic labour standard that sets the lowest wage rate that an employer can pay to employees who are covered by the legislation.
Canadians have the right to be treated fairly in workplaces free from discrimination.
Upcoming Events
View the latest and upcoming Blaney Seminars.
A list of all the upcoming CBA programs.
Tools
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.