Sep 17

Terminated for Cause? Why you should still apply for Employment Insurance! Toronto Employment Lawyer


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When an employee is terminated, it is typically categorized as “with cause” or “without cause”. Without cause implies that the employee has been terminated through no fault of their own (for example, due to a lack of work or restructuring). When terminated “without cause”, it is a good idea to apply for employment insurance (“EI”) benefits through Service Canada. EI is designed to assist with bridging the gap until new employment is found.

On the other hand, if an employee has been terminated “with cause” collecting EI may be more difficult. In accordance with Employment Standards Act, 2000 (“ESA”) an employee can only be terminated due to “wilful misconduct”. Wilful misconduct occurs when an employee has engaged in serious acts of wrongdoing and/or a breach of trust between the parties. The difficulty is that often employers incorrectly classify behaviour as “cause” for instance, performance issues this complicates the process of obtaining EI. If it is determined that the employee’s conduct meets the required threshold for “cause”, they will most likely not be able to collect EI.

So when terminated for cause, why should you apply for EI?

In Ontario, the threshold of terminating an employee for cause is very high, this is in accordance with the ESA and common law. Sometimes employers have a fundamental misunderstanding regarding terminations and employee’s rights. Therefore, allegations of cause from your employer may not be sufficient in accordance with the definition of Service Canada or the court system. When your Record of Employment has been marked as “M”, it is likely that Service Canada will require you to fill out a survey relating to your termination. That is your opportunity to provide reasons for your termination. Following which Service Canada will contract the employer to determine if your Record of Employment has been coded correctly. In the event your application is denied you should file a Request for Reconsideration within 30 days. This is another opportunity to outline why your termination does not amount to wilful misconduct.

Service Canada will obtain the reasons for the termination and the employee’s response to similar questions to evaluate the application. If Service Canada determines that the reasons provided do not support a termination for cause, then the employee will likely receive EI. Unfortunately, this does not mean that the employee will be reinstated however, it may support a claim for wrongful dismissal and a severance package.

Similar to EI, the employer must provide sufficient information to rely on cause allegations. Thus, employees in similar circumstances should obtain legal information prior to accepting the allegations put forth from the employer.  For example, employer’s often attempt to rely on poor performance after only one warning, however this alone would likely not be accepted by a Judge.

As stated above, these benefits can be very helpful in supplementing income until the employee can find new employment.

If you have been terminated for cause and you are unsure about your rights, please contact Monkhouse Law today for a free 30-minute consultation!

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