A recent decision by the Ontario Superior Court provides a
useful reminder regarding the difference between just cause at
common law and wilful misconduct under employment standards
legislation. This distinction is important for plan administrators
who will be dealing with grow-in entitlements on and after July 1,
In Oosterbosch v. FAG Aerospace Inc., an 18-year
employee of FAG Aerospace was dismissed pursuant to the
employer's progressive discipline policy. Under the policy,
four written warnings within a 12 month period could result in
dismissal. Oosterbosch received four written warnings between
August 22, 2007 and March 20, 2008 for: (i) failure to notice a
defect on the production line; (ii) returning approximately 15
minutes late from a 30 minute break; (iii) arriving late for his
shift; and, (iv) further failure to notice a defect on the
production line and falsification of a production report.
Oosterbosch filed a claim for wrongful dismissal. As part of its
defence, the employer argued that Oosterbosch was guilty of
"wilful misconduct, disobedience, or wilful neglect of
duty", and, therefore, pursuant to the regulations under the Employment Standards Act, 2000 (the ESA), he
was not entitled to statutory termination or severance
The Court found that, while Oosterbosch was dismissed for just
cause and his conduct was casual and careless – it was
He was undoubtedly careless and the persistence of that
carelessness justified his dismissal. I would not, however,
characterize his offending behaviour as "wilful misconduct,
disobedience or wilful neglect of duty" that would disentitle
him to receipt of termination and severance payments under the
provisions of the Employment Standards Act, 2000.
Accordingly, the Court awarded Oosterbosch statutory termination
pay and severance pay pursuant to the ESA.
The Oosterbosch decision may prove to have implications
for employers who sponsor defined benefit pension plans.
As result of the changes to the Ontario Pension Benefits Act
(the PBA), employees who are dismissed on or after July 1, 2012 for
reasons other than "wilful misconduct, disobedience or wilful
neglect of duty" or other prescribed circumstances (such
circumstances have not yet been prescribed), will be entitled to
grow-in benefits. The test in the PBA mirrors that in the ESA.
Based on the Oosterbosch decision, the fact that an
employee who is eligible for "grow in" benefits (or will
be eligible for "grow in" benefits within the applicable
notice period) is dismissed for cause at common law will not
necessarily disentitle him or her from receipt of "grow
in" benefits. To avoid paying "grow in" benefits,
the employer must establish that the employee's conduct is
"wilful" and not merely careless.
James Fera advises on legal issues relating to federally and
provincially regulated pension and employee benefit plans.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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