In employment law, there are two mechanisms by which an employer may terminate an employee’s employment for just cause or without cause. If employment is terminated without cause, the employer must pay the departing employee damages (including termination and severance pay) by the laws applicable to terminations without cause.

Where employment is terminated for cause, however, the terminated employee is entitled to only reduced or, in some cases, no damages at all. As such, the determination of whether a particular employee has been terminated for cause or without cause has significant implications for the employee in question in terms of the amount of damages they are entitled to recover.

In the specific context of “for cause” termination, the courts have delineated several different categories of behaviour to constitute just cause for termination. Such categories include inability or refusal to adhere to company policies and guidelines, serious misconduct, deceit, and engaging in harassment or assault, to name just a few. In this blog, we explore employee misconduct as a justification for just cause termination, including what type of behaviour constitutes severe misconduct to justify termination for cause and whether more than one such incident is required before termination is considered an appropriate response.

An Employee Refuses to Follow his Supervisor’s Instructions

The case of Johnson v 2582720 Ontario Limited o/a Swiss Chalet Franchise Store #1215 involved a wrongful termination claim. In that case, the employee had been hired by the defendant’s employer in September 2019 as a part-time cook. Approximately one year later, on September 24, 2020, the employee had clocked out for the day and was preparing to leave the workplace when his supervisor asked him to complete a task before leaving. The employee refused to complete the task as someone else had already undertaken the relevant job, and he had already clocked out for the day. As a result, the employee was written up for insubordination.

Another Day, Another Act of Insubordination

The next day, September 25, 2020, the employee advised the shift supervisor that he had received permission to leave his shift early because he had something time-sensitive to attend. As such, he left work several hours before the scheduled end of his shift. Only later did the shift supervisor discover that the employee had been permitted to leave early only if he first completed all of his work-related tasks. As the employee had failed to complete several crucial tasks before his early departure, the employee was again written up for insubordination (i.e., neglecting to follow his supervisor’s instructions).

On His Third Strike in as Many Days, Employee is Fired for Misconduct

On September 26, 2020, the employee was asked to attend the manager’s office for a disciplinary meeting. During the meeting, the employee was asked to sign two forms to indicate that he understood what he had done wrong and would not engage in such behaviour. The employee refused to respect the authority of the managers who attended the meeting, all of whom were female and insisted that he was only answerable to the (male) manager or the owner of the franchise, neither of whom was present during the meeting. As a result, the employee refused to sign either of the forms presented to him and thereby refused to acknowledge his own wrongdoing. The male manager, whom the female managers had contacted on the telephone during the meeting because they realized that the employee would only listen to another male, determined that the employee was behaving in a manner so insubordinate and unacceptable that to allow him continued employment would have poisoned the work environment for all employees. As such, he immediately terminated the employee’s position with the company. The employee was thus terminated without notice or remuneration on September 26, 2020.

Terminated Employee Alleges Wrongful Termination, Seeks Damages

The employee commenced a legal action seeking $35,000 in compensation for the wrongful termination of his employment. The employer defended itself by asserting that the employee’s termination had been justified based on his wilful misconduct and insubordination, and thus, he was not entitled to recover any damages for his termination.

Termination for Cause and Progressive Discipline

Under Ontario’s Employment Standards Act, 2000, every person whose employment is terminated is entitled to at least two weeks’ termination pay. However, the right to such damages dissolves when the terminated employee engaged in “wilful misconduct or disobedience” that justified termination of employment.

Generally speaking, an employee may only be terminated for cause when the employer has engaged in progressive discipline to correct and modify the offending behaviour of the employee in question. This is particularly so where the employer includes guidance concerning progressive discipline in its company policies and procedures, as the employer did in this case. In such cases, the expectation is generally that the employer will provide an employee with a “warning,” either written or verbal, that the behaviour in which they engaged was inappropriate or offensive. The steps to be taken to correct the behaviour. Should another such incident arise, then the discipline of the employee should progress through escalating stages such as a second and third written/verbal warning, suspension from employment for short durations with or without pay, and ultimately culminate in termination.

Employers Skip a Few Steps in Applying its Progressive Discipline Policy

For a progressive discipline scheme to be effective, it must be applied in its totality; in other words, to only apply the first two steps, then skip two or three steps and jump immediately to termination, is generally not considered justifiable by the courts, unless the offending behaviour was so egregious as to constitute cause for termination all on its own. As the courts have acknowledged, where an employer has a company policy concerning progressive discipline, it must be applied as a whole, not only as a part.

In this case, the employer had devised a company policy that dictated the progressive discipline standards to be applied to all employees, as and when necessary. The policy included 5 steps – a verbal warning, followed by a first and second written warning, which progressed to a fourth written warning and a temporary suspension, culminating in step five – termination of employment. The court recognized that all of the managers and supervisors who had testified regarding this case indicated that the employee had not been brought into the office on September 26, 2020, to be fired. Rather, the meeting had been devised as a disciplinary event during which the management sought to have the employee recognize and acknowledge, in the format of two written forms, the wrongful conduct he had engaged in and craft a plan to move forward without such misbehaviour. The managers each testified that the intention, at the outset of the meeting, had been to ask the employee to sign the two forms acknowledging his wrongful behaviour and then have him return to work. If the employee refused to sign one or both of the company forms, then the managers planned to impose an immediate relief of duties whereby the employee would be asked to discontinue his shift and return home without payment for the balance of his shift.

Refusal to Accept Instruction from Female Supervisor Does Not Justify Immediate Termination

As it happened, tempers and voices were raised during the meeting when it became clear that the employee would not accept any guidance, discipline or orders from female superiors in any capacity. Ultimately, the male manager, who had been called into the meeting as a last resort via telephone, indicated that he felt the employee would not change his ways and thus decided on the spot to terminate his employment for insubordination instead of imposing an unpaid suspension and another written warning. As noted by the court, “the essence of this case is that the [employer] was under an obligation to follow its own 5-step discipline process, no matter how difficult [the employee] was behaving on September 26th”. This failure to follow its own progressive discipline policy was fatal to the employer’s defence on the wrongful termination claim, as the court noted that “had [the employee] been suspended, and then a further meeting with him having shown he was not going to obey female management, the Defendant might have satisfied the ‘wilful misconduct…not trivial and…not condoned by the employer’ set out in the Regulation”. As it stood, the employer “did not follow its own discipline process and therefore had not reached the point where it could terminate [the employee] for cause.”

Contact the Toronto Employment Lawyers at Haynes Law Firm to Discuss Progressive Discipline Policies and Their Application

Should you find yourself in a position where you have been terminated from your employment without fair application of your company’s progressive discipline policy, or if you are an employer who seeks guidance concerning crafting and implementing an effective progressive discipline scheme, then you need legal guidance to ensure that your rights are asserted and protected every step of the way.

Fortunately, the Haynes Law Firm is here to help. From our offices in downtown Toronto, we are proud to provide knowledgeable, capable legal assistance to employment law clients from all over the province. Contact us today, either online or via telephone (416) 593-2731, and we would be pleased to schedule a confidential consultation to discuss your needs.