An improper end to the employment relationship can have long-lasting effects on an employee’s future employment, or on the employer’s reputation. In this post, we explore the legal implications in the termination of an employment relationship when the employer is the one who initiates the breakup and chooses to end the relationship for ‘just cause’ without providing any notice or pay in lieu of notice.
The recent case of Fernandes v. Peel Educational & Tutorial Services Limited (Mississauga Private School), 2016 ONCA 468 provides insight into defining ‘just cause’.
Fernandes involved the termination of a teacher. The school had terminated the teacher without notice or pay, claiming it had just cause for the termination as the teacher had falsified student grades, and, when confronted, had lied about it or had tried to conceal it. Mr. Fernandes (the teacher) brought a wrongful dismissal suit against the school. The school defended its actions citing the falsification of student grades and other infractions as just cause for his termination.
At first hearing, the Trial Judge found the school DID NOT have just cause to terminate the Mr. Fernandes and that he had been wrongfully dismissed. On appeal, the Court of Appeal overturned the Trial Judge’s finding, and ruled in favour of the school. The Court of Appeal found that the school DID have just cause and that Mr. Fernandes had not been wrongfully dismissed.
What is Just Cause?
When an employer has ‘just cause,’ the employer can terminate an employment relationship without providing the employee reasonable notice or payment. Because of its severity, just cause termination has been termed the “capital punishment crime in employment law” and to rely on it, the employer must satisfy the high standard imposed by the courts.
The seminal case on just cause in employment law comes from the Supreme Court of Canada, McKinley v. BC Tel,  2 S.C.R. 161. Although McKinley applied to dishonesty, courts have gone on to apply the reasoning from this case to all cases where just cause is alleged by an employer.
Just cause only exists where the employee’s conduct is such that it is impossible for the employment relationship to continue. In McKinley, the Court stated a contextual approach was required when conducting this analysis. That is, the test requires proportionality: the punishment must be proportional to that of the misconduct in the context of the entire employment relationship. For example, minor dishonesty might be just cause for a security guard in his first week on the job, but may not be just cause for an administrative assistant who contributed to her employer for over 26 years.
When conducting its analysis, courts must determine whether the employee’s misconduct gave rise to a breakdown in the employment relationship in so far that it could no longer possibly continue after the misconduct. In so doing, the Court in McKinley held that Just Cause for dismissal exists where:
the misconduct violates an essential condition of the employment contract; breaches the faith inherent to the work relationship; or is fundamentally or directly inconsistent with the employee’s obligations to his or her employer.
When applying the McKinley test in Dowling v. Ontario (Workplace Safety and Insurance Board), the Court of Appeal concluded that the core question was “whether the employee’s misconduct was sufficiently serious that it struck at the heart of the employment relationship.” To answer that question, the court examined the nature and extent of the misconduct, considering the surrounding circumstances; and decided whether dismissal was warranted.
Application of the Test in Fernandes
As per McKinley and Dowling, for a finding of just cause at termination, an employer must show that an employee’s misconduct was sufficiently serious that it struck at the heart of the employment relationship. The Court of Appeal in Fernandes applied the three stages of analysis detailed above:
[A] Determine the Nature and Extent of the Misconduct
In Fernandes, the trial judge, Justice Lemon, conducted a thorough analysis of the facts of the case. Justice Lemon found that Mr. Fernandes’ misconduct in providing grades later than required, allowing students to submit overdue assignments, lying to his employers about how the marks were calculated, and lying to the court about how student presentations were marked.
Although the nature of the misconduct was the same at the trial and appellate levels, the Court of Appeal emphasized the seriousness of the misconduct. Distinctly, it contradicted the trial judge’s interpretation of the misconduct.
The Court wrote [of the trial judge], “. . . His only discussion of seriousness related to the incorrect grades that Mr. Fernandes had provided. The trial judge said that because the school sent out the April interim report cards, knowing of the irregularities of Mr. Fernandes’ grades and without comment as to their accuracy, Mr. Fernandes’ conduct in providing inaccurate and false marks was not as serious as the School contended”
The Court said this failed to address the position that Mr. Fernandes held in his position as a teacher – a position of trust. It stated that falsification of documents in such a position of trust and power was “incompatible with Mr. Fernandes’ professional obligations as a teacher and with the essential conditions of his employment obligations.”
[B] Examine the Surrounding Circumstances
Having taken into account Mr. Fernandes employment history and length of employment, the Court stated that “Mr. Fernandes offered no explanation for his misconduct” and that the school had no reason to inquire into Mr. Fernandes’s situation as he had not given the school any indication that he was troubled.
As for the school’s submission of the fabricated grades, the Court of Appeal held that the school would have suffered serious harm had it failed to submit the grades as it was a private school whose accreditation from the Ministry relied upon it meeting its obligations in respect of granting credits towards earning an Ontario Secondary School Diploma.
[C] Determine Whether Dismissal is Warranted
For the third step, a court must consider [A] the nature, extent and seriousness of the misconduct in [B] the context of the surrounding circumstances and weigh these findings to decide whether there was just cause for dismissal.
The Court of Appeal held: “. . . That misconduct – particularly, the intentional disregard for the fair and accurate grading of his students – was incompatible with Mr. Fernandes’ professional obligations as a teacher and with the essential conditions of his employment obligations. No explanation was offered for the misconduct”.
The failure to accurately grade the students put the school’s reputation into jeopardy, and although the duration of the misconduct was short as compared to the length of Mr. Fernandes’ employment, the Court of Appeal held that it did “strike at the very heart of the employment relationship.
To determine whether just cause exists in a termination, a court will view the nature and extent of the misconduct in the milieu of the surrounding circumstances. Fernandes demonstrates that it is particularly important for a court to not only view the nature and extent of the misconduct but to also pay heed to the seriousness of the misconduct.
It is likely that the seriousness of misconduct will not be assessed simply by the consequences following the misconduct, as in what another party does as a result, but the seriousness of the misconduct in and of itself. When an employee is in a position of trust, power, and authority, it is likely that the misconduct will be deemed more serious than if the employee was not.
For employers with questions about terminating an employee for cause or if you would like assistance in determining whether an employee’s misconduct is serious enough to warrant dismissal without payment, it is paramount to contact an employment lawyer.
Employees who have been dismissed for cause and disagree with your employer’s assessment of the situation, it is just as important to seek assistance from an employment lawyer to discuss your case and protect your rights.
Employment Lawyers at Monkhouse Law are available to help you with any questions you have about dismissal or any other employment law questions. Contact us today.