This document summarizes a presentation on dismissals in Canada. It begins by outlining some common myths regarding dismissals. It then discusses how much notice or severance is required for dismissals without cause, including factors considered for determining reasonable notice periods. The document also covers dismissals for just cause versus without cause, and considerations for conducting dismissal investigations and implementing dismissal policies. It provides examples of dismissals that were found to be for cause or not for cause. The importance of using employment agreements and properly drafting termination clauses is also discussed.

1. HRPA – West Toronto Chapter
December 3, 2014
Presented by
Stuart E. Rudner
You’re Fired!
Dismissals in Canada

2. 2
Toronto Star: CBC fires Jian Ghomeshi over sex allegations
National Post: Jian Ghomeshi reveals details of sex scandal
after threatening to sue CBC for $50 million
Toronto Sun: Jian Ghomeshi blames firing on ‘consensual’
rough sex
CBC Hamilton: Jian Ghomeshi allegations lead to rise of local
sex assault reports
MetroNews: Jian Ghomeshi video showed woman’s bruises,
cracked rib
Globe and Mail: CBC hiring outside investigator to probe Jian
Ghomeshi allegations

3. Common Myths
 Every employee has a probation period during
which they can be dismissed without notice or
cause.
 Unless a contract states otherwise, employees are
only entitled to the Employment Standards Act
minimum amounts of notice / severance
 Termination clauses are not enforceable
 Only the most recent period of employment
counts when calculating entitlement to severance
pay
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4. How Much Notice / Severance?
 You have to give a dismissed worker a “package”
 The common law requires one month of notice for
every year of service (or two weeks for every
year, or some other absolute amount).
 Pay in lieu of notice of dismissal includes base
salary only.
 An employer can discount the amount of notice of
dismissal required if the employee’s conduct or
performance was not up to par
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5.  You can’t fire someone in Canada
 Providing positive or negative references to
dismissed employees can result in liability.
 Non-competition covenants are enforceable
against former employees.
 If you are concerned about a human rights
complaint, dismissing the individual on a without
cause basis will preclude a claim being brought.
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Dismissals
 2 types: With cause or without
cause
 If with cause, no further
obligation to employee
 Otherwise, need to assess
employee’s entitlements to
notice/pay in lieu/severance
 No “near cause”

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For Just Cause
McKinley v. B.C. Tel., 2001, the Supreme Court of Canada:
More specifically, the test is whether the employee’s
dishonesty gave rise to a breakdown in the employment
relationship. This test can be expressed in different ways. One
could say, for example, that just cause for dismissal exists
where the dishonesty violates an essential condition of the
employment contract, breaches the faith inherent to the work
relationship, or is fundamentally or indirectly inconsistent with
the employee’s obligations to his or her employer. “In
accordance with this test, a trial judge must instruct the jury to
determine: (1) whether the evidence established the
employee’s deceitful conduct on a balance of
probabilities; and (2) if so, whether the nature and
degree of the dishonesty warranted dismissal.”

8.  Capital Punishment of Employment Law
 Employer must prove:
1. that the alleged misconduct took place,
and
2. that the nature or degree of misconduct warranted dismissal,
bearing in mind all relevant circumstances
 Proportionality is guiding principle – “punishment must fit the
crime”
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9. The Contextual Approach
 Employer must consider all circumstances,
not just alleged misconduct
– Length of service
– Disciplinary history
– Nature of position
– Response to allegation
– Mitigating factors
 Same set of facts can yield different
results
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10.  Lifting wheelchair-bound employee via
forklift – not cause: Barton v. Rona
Ontario Inc. (2012)
 Lighting co-worker on fire – not cause:
Dryco Drywall Supplies Ltd. And Teamsters
Local Union No. 213 (2012)
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Performance Issues
Employer must:
 Set a clear, reasonable standard
 Communicate expectations
 Measure the performance
 Take appropriate action
– Warnings (verbal and written) – document everything!
– Counseling
– Training
 Allow reasonable time for improvement

12. Off-Duty Conduct
 Generally, what you do on your time is your business
 Unless
– The conduct renders the employee unable to perform his
duties satisfactorily.
– The conduct interferes with the efficient management of
the operation or workforce.
– The conduct leads to a refusal or reluctance of other
employees to work with him.
– The conduct harms the general reputation of the Employer,
its product or its employees.


13. Implementing Policies
A. Have a policy
B. Use clear and unambiguous language
C. Keep the policy up to date
D. Publicize the policy
E. Make employees aware of concerns
F. Ensure supervisors and managers are aware
of the policy and how to monitor
G. Monitor behaviour
H. Discipline violators

14. Responding to allegations
 do not ignore
 Check policy
 Undertake investigation
 Be mindful of complainant and accused
 Once investigation is complete, prepare
report with clear conclusion
 Take action based upon findings
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The Importance of the
Investigation
 Investigate first
 Ensure fairness, objectivity, thoroughness
 Give opportunity to respond
 Often, employee response is critical factor
in determining appropriate discipline

16. Vernon v. British Columbia
 30 year employee accused of
bullying/harassment
 Known as “The Little General”
 Offensive language, racial and other
inappropriate comments

17.  Investigators:
– Pre-judged
– Attacked accused and those who supported
her
– Misled decision-makers in report
 Result
– 18 months’ notice
– $35k in “The Damages Formerly Known as
Wallace”
– $50k punitive damages
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18. Can you package someone out
instead of investigating
misconduct?
 Investigations becoming more important
 Recent decision suggests employers may not be entitled to
terminate without cause in order to 'side-step' the duty to
investigate
 Ontario Superior Court of Justice:
“it is a triable issue whether the employer adopted the
procedure intentionally to side step the criteria for fair treatment
of an employee against whom cause is alleged”
 When an employee is alleged to have engaged in misconduct,
employers are expected to investigate before taking disciplinary
action
Brownson v. Honda Canada Mfg., 2013 ONSC 896

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Without Just Cause
 Notice of Dismissal or Pay in Lieu
 Two sources of entitlement
– Employment Standards Act /
Canada Labour Code
– Common Law
 Can contract out of common law

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Common Law: The Length of
Notice
 Requirement: “reasonable” notice
of dismissal
 The Bardal Factors
1) Length of service
2) Age
3) Position / Character of Employment
4) Availability of Similar Employment

21. What is “reasonable”?
 No “rule of thumb” or direct 1:1
relationship between years of service and
months of reasonable notice
 Beware the short-term employee
 Inducement
21

22. The Changing Times
 End of mandatory retirement, people
working longer --> Wrongful dismissal
claims by workers in 70s and 80s!
 Recent decision:
I do not think there is a place in this social reality
for an automatic presumption that persons should
or would naturally retire on reaching senior age.
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23. The Changing Times
Di Tomaso v. Crown Metal Packaging Canada
LP:
there is recent jurisprudence suggesting
that, if anything, (position/character of
employment) is today a factor of declining
relative importance.
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Without Cause: Options
 Working notice
– must allow opportunity to
look for new employment
 Salary & benefit continuance
 Lump-sum
 Combination
 Dangers of failing to continue benefits

25. Termination Clause: Benefits
 Employer sought to enforce termination clause
 Termination clause provided for pay in lieu of notice of
termination, but did not provide for continuation of
benefits
 Although the employer did, in fact, continue
employee’s benefits during notice period, by failing to
require it, the contract provided for less than the ESA
and was therefore unenforceable.
 As a result, common law requirement of reasonable
notice applied:
Stevens v. Sifton Properties Ltd., 2012 ONSC 5508

26. Mitigation & Termination
Clauses
 Employment contract provided that employee would
be entitled to 6 months of notice, or pay in lieu
thereof, in the event he was dismissed on a without
cause basis.
 No mention of mitigation
 Within weeks of the dismissal, employee obtained new
employment with comparable compensation.
 Ontario Court of Appeal: If employment contract
contains a termination clause, employee will not be
required to mitigate his or her damages by seeking
new employment unless the clause specifically says so
Bowes v. Goss Power Products Ltd., 2012 ONCA 425

27. Employment Agreements
 Use them!
 Do it properly
– Before there’s already an agreement
– With consideration
– Explained and understood
– Independent legal advice

28. Employment Agreements
 Basic Checklist:
– Duties (maintain flexibility)
– Remuneration and benefits (maintain
flexibility)
– Restrictive Covenants
– Vacation
– Termination
– No conflicting obligations

29. Employment Agreements
 Basic Checklist (cont’d):
– Hours of work
– Vacation / holidays
– Dress code
– Conflict of interest
– Expenses
– Social Media

30. Termination Clauses
 Enforceable if done properly
 Avoid uncertainty of “reasonable
notice” & reduce dismissal costs
 Use clear language
 Don’t go below employment
standards
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31. Termination Clauses
 Address benefits
 Address mitigation
 Temporary layoffs
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Stuart E. Rudner
srudner@rudnermacdonald.com
416.640.6402 or 905.530.2484
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