Cause Termination: The Threshold for Cause at Common Law vs ESA

When an employer fires you “for cause,” the legal standard they must meet depends on which law applies: the Employment Standards Act or common law. 

Understanding this distinction is critical because it determines whether you’re entitled to severance or nothing at all. For example, an employer may have cause at common law, but not under the ESA. Accordingly, ESA payments may still be due upon termination.

The ESA sets out specific grounds for termination without notice. 

These include willful misconduct, disobedience, or willful neglect of duty that isn’t trivial and hasn’t been condoned by the employer.

At common law, cause requires conduct that fundamentally breaches the employment relationship and makes continued employment impossible or untenable.

Examples include:

Serious dishonesty or theft: stealing from the employer or committing fraud. 

Serious insubordination: repeatedly refusing to follow legitimate directions after warnings.

Serious incompetence: generally after warnings and opportunities to improve.

Even serious misconduct doesn’t automatically justify termination for cause. Courts apply a proportionality analysis, asking whether termination is a proportionate response to the misconduct.

An employee with 15 years of excellent service might receive progressive discipline for conduct that would justify immediate termination for a new employee.

If an employer knows about misconduct and continues to employ the person without taking action, they’ve likely condoned the behavior and can’t later rely on it as a cause for termination.

Condonation can be explicit (“we’ll overlook this time”) or implicit (knowing about the conduct and doing nothing). Once conduct is condoned, employers likely can’t resurrect it later to justify termination for cause.

The employer has the burden of proving just cause. They must show, on the balance of probabilities, that the employee’s conduct justified summary dismissal.

If you’re terminated “for cause,” don’t assume the employer is right. Most for-cause terminations don’t meet the common law standard.

You may be entitled to significant severance even though the employer claims to have cause.

Contact us at 416.901.9984 or info@pintoshekib.ca for a confidential consultation about your termination or employment issue.