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Termination For Cause in Canada: Understanding Your Rights
Being fired “for cause” in Canada has serious repercussions for employees. Termination for cause refers to dismissal due to intentional and severe misconduct by the employee, allowing the employer to fire them without providing notice or severance pay.
This guide will explore what constitutes termination for cause in Canada, examples of cause, the impacts on severance and EI eligibility, how to respond to such a dismissal, common mistakes employers make, and key takeaways for employees.
What is Termination For Cause in Canada?
In Canada, termination for cause is considered the most severe form of firing an employee. For an employer to legally dismiss someone for cause in Canada, they must conclusively prove:
- The employee intentionally engaged in serious misconduct
- The degree of misconduct was severe enough to warrant instant termination
- No other progressive discipline steps were reasonably available
Termination for cause typically requires evidence of willful behaviour by the employee that displays malice, recklessness, or blatant disregard for company policies and expectations. Examples of misconduct considered cause for termination include theft, fraud, assault, harassment, or direct violations of clearly established workplace rules.
Dismissal for cause allows the employer to immediately terminate the employee without providing any notice or severance pay, which they would otherwise be legally required to provide. However, the threshold for adequately establishing just cause for termination in Canada is high. Isolated minor problems or performance issues are generally not sufficient.
What are Examples of Termination For Cause?
Four most common circumstances that may justify termination for cause in Canada include:
| Type of Misconduct | Potential Examples |
| Theft | – Misappropriation of company assets – Embezzlement of funds – Stealing supplies |
| Substance Abuse | – Being intoxicated at work – Failing a drug or alcohol test |
| Harassment/Violence | – Physically threatening coworkers – Sexual harassment – Creating a toxic environment |
| Breach of Confidentiality | – Releasing proprietary information – Violating non-disclosure agreements |
Other potential grounds for termination with cause:
- Excessive absenteeism or lateness: Habitual unauthorized absences or continually showing up late for scheduled shifts despite warnings.
- Insubordination: Blatant refusal to follow reasonable directives given by management.
- Falsifying documents or records: Purposefully fabricating company documents, financial records, or HR paperwork.
- Off-duty conduct: Actions taken externally that reflect poorly on the employer or undermine the employment relationship.
- Conflicts of interest: Engaging in competing outside business activities or unethical personal dealings that harm the company.
Can You Be Fired For Cause of Poor Performance?
Yes, employees can potentially be terminated for cause due to chronically poor work performance. However, the employer typically must demonstrate that the performance issues were intentional or reckless, not just accidental mistakes or shortcomings.
Isolated incidents of substandard work or failure to meet sales targets generally do not qualify as just cause for dismissal in Canada. Employers are expected to provide support, training, warnings, and opportunities for the employee to improve before firing someone for performance reasons.
To establish cause, the employer must prove:
- Ongoing failed expectations, not isolated issues
- Clear warnings were provided about poor performance
- Adequate training and support was supplied
- The employee’s underperformance was willful
Without proper documentation showing willful negligence despite support, terminating someone for cause due to performance problems can be difficult to justify legally.
Do You Get Severance if Fired For Cause?
If an employer has legitimate grounds for termination with cause, the employee is not entitled to any severance pay or notice period. However, many employee dismissals alleged as “for cause” by employers do not actually meet the high legal bar needed to forgo severance.
In cases where the firing is found to be unjust or without merit, employees may be owed sizable severance packages under Canadian employment laws – often equivalent to several months or over a year of pay.
| Years of Service | Potential Severance Range |
| 1-3 years | 4-8 months of pay |
| 4-6 years | 8-12 months of pay |
| 7-10 years | 12-18 months of pay |
| 10+ years | 18-24+ months of pay |
Always consult an employment lawyer. Employers frequently wrongly assert cause as justification for terminating staff without severance when the situation does not truly warrant it.
Your lawyer can assess the merits of the dismissal and determine whether you may be eligible for wrongful termination damages, which could equal the severance you should have received.
Can You Get EI if Fired For Cause?
Employees terminated for cause will have an “M” code on their Record of Employment, generally disqualifying them from Employment Insurance benefits. This stems from EI rules denying benefits to those at fault for losing their job.
However, if the investigation reveals the employer wrongly claimed cause when dismissing you, you may still qualify for EI after being fired. Examples include:
- Firing for substandard performance without proper warnings
- Citing vague, hard-to-prove allegations like insubordination
- Terminating for financial reasons and falsely alleging cause
The EI adjudicator will assess if there is convincing proof you were at fault for the job loss and intentionally engaged in willful misconduct. If not, EI benefits may still be awarded.
If your employer specifies a for-cause dismissal, always apply for EI regardless. The initial denial can be appealed. If your termination is determined to be unjustified, you can dispute it and may receive EI benefits after all. An experienced employment lawyer can help navigate this process.
How to Respond to Termination For Cause in Canada
If you are dismissed for cause, here are important steps to take:
- Remain professional and ask for the specific reasons in writing. Do not get angry or confrontational.
- Carefully review employment contracts, workplace policies, employee handbooks, and your personnel file for relevant details.
- Document events leading up to termination, including past performance reviews, reprimands, warnings, and any communications related to the alleged misconduct.
- Do not immediately sign any waivers or agreements the employer presents without proper review. You may be signing away your rights.
- Contact an employment lawyer ASAP after dismissal to schedule a consultation and assess whether the termination for cause was warranted or potential grounds for wrongful dismissal exist.
- Apply for EI benefits regardless of what your employer alleges. You have the right to apply and dispute unjust cause allegations through the EI process.
Mistakes Employers Make with Termination For Cause
Some common mistakes made by employers when alleging just cause include:
- Citing performance issues as cause without following progressive discipline processes like warnings and formal action plans.
- Failing to provide evidence of willful misconduct, relying instead on hearsay or speculation.
- Disregarding mitigating factors like remorse, apology, or efforts to correct the behaviour.
- Lacking documentation to prove the misconduct was severe enough to warrant for-cause dismissal.
- Using ambiguous criteria for what constitutes cause opens up disputes over interpretation.
- Relying on the after-acquired cause by using evidence discovered after dismissal to justify the firing. This can be considered an improper cause.
- Failing to investigate allegations thoroughly before determining cause exists.
Key Takeaways for Employees in Canada
If you are terminated for cause in Canada, key lessons to remember include:
- The employer must meet a high bar to prove willful misconduct under Canadian law.
- Even if fired for cause, always apply for EI benefits within 14 days. Do not assume you are automatically ineligible.
- Carefully review any waivers, releases or severance offers presented to you before signing.
- Consult an employment lawyer immediately to understand your rights. Act quickly, as strict deadlines apply.
- If wrongly terminated, you may be eligible for significant severance pay, even if fired for alleged cause.
- Keep detailed records related to your performance and any allegations made against you.
- Stay calm and professional during the termination process, as emotions could be used against you later.
- Exercise caution in communications with the employer after dismissal and consult a lawyer before responding substantively.
The bottom line
Being fired for cause in Canada is challenging, but knowing your rights, acting prudently, documenting events properly, and seeking legal counsel can help employees navigate the process smoothly.
There are options available if an employer wrongly terminates for cause or fails to adequately demonstrate willful misconduct under Canadian law. With the right support and strategy, employees can overcome a potentially dubious termination for cause and still safeguard their interests.
FAQs related to Termination for Cause in Canada
Can an employer fire you for poor performance in Canada?
Yes, but the employer typically must prove the underperformance was intentional and that sufficient warnings, training and chances to improve were provided. Isolated mistakes or failures generally don't qualify as just cause.
Do you get severance pay if terminated for cause in Canada?
No, just cause termination removes the employer's requirement to provide notice or severance. But if the cause is unfounded, the dismissal may be deemed wrongful and severance owed.
What should you do if terminated for cause in Canada?
Don't get angry, review relevant documents, consult an employment lawyer immediately, apply for EI regardless, carefully draft any response, and preserve evidence related to your dismissal.
What mistakes do employers make with termination for cause?
Citing performance issues without following progressive discipline, lacking evidence of willful misconduct, failing to investigate properly, providing shifting rationales, and neglecting to give warnings.
How hard is it to prove just cause for dismissal in Canada?
Very difficult. The legal bar is high. The employer must conclusively demonstrate severely damaging willful misconduct that irreparably harmed the employment relationship.
Is termination for cause common in Canada?
No, most dismissals are without cause. Only around 1-2% of firings are substantiated as termination for cause after legal scrutiny, due to the high evidentiary burden on employers.
Article Sources
Termination For Cause in Canada: Understanding Your Rights
Ben Nguyen