Today’s Topic

The Common Law of

Employment Termination

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 A Termination Situation

Distribute and discuss fact scenario of

employee Bob Newhart

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 A Brief History of the Common Law on
Employee Termination

The common law rules on

employment termination
are rooted in the English
law of master and servant,
since those were the
original employment
situations

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 A Brief History of the Common Law on
Employee Termination (cont’d)
The common law on
dismissal of an employee
seems to date from the
1817 case of Spain v. Arnott
decided by Lord
Ellenborough (see Rubel
Bronze v. Vos (1917), [1918] 1
K.B. 315 at 320-21)

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 A Brief History of the Common Law on
Employee Termination (cont’d)

Therefore, the common law regarding

dismissal of an employee in Ontario is much
older than the statute law on it

The provisions in the Employment

Standards Act merely sets minimum
standards. Common law may increase what
is required by an employer in a case.
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 Ways Employer May Terminate
Employment
There are three (3) ways an employer may
end their relationship with an employee.
What are they?

1. Terminate the employment

immediately for cause, in which case
employee receives no notice or pay in
lieu of notice
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 Ways Employer May Terminate
Employment (cont’d)

2. Terminate on notice and ask the

employee to work through the notice
period

3. Terminate the employee immediately

and give pay in lieu of notice

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Notice is Not That Imposed by E.S.A.

For over 100 years, the common law has

implied a term in employment contracts that
an employer who does NOT have cause to
fire an employee, will not terminate the
contract without giving “reasonable notice”
(e.g., Carter v. Bell & Sons, [1936] 2 D.L.R.
438 at 439 (Ont. C.A.))

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 Notice is Not That Imposed by E.S.A.
(cont’d)

The notice required by the E.S.A. is

minimum notice, it is usually not equal to
what the common law considers reasonable
notice

Except in very short employment

relationships, reasonable notice > minimum
notice in E.S.A.
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 Express Term in Employment Contract
May Override Implied Term of
Reasonable Notice

At common law, the employee and

employer have the right to expressly agree
on whatever length of notice they wish and
it will override the implied notice
requirement subject to three (3) conditions

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 Express Term in Employment Contract
May Override Implied Term of
Reasonable Notice (cont’d)
The conditions:

1. The express term must be clear and

understandable

2. The express term cannot be onerous or

blatantly unfair to the employee (Wallace
v. T-D Bank (1983), 41 O.R. (2d) 161 at
180 (C.A.))

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 Express Term in Employment Contract
May Override Implied Term of
Reasonable Notice (cont’d)

3. Also, the express notice period in

the employment contract cannot be
shorter than the one in the
Employment Standards Act, or the
term is void, and the implied one will
apply

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 When Can Employer Dismiss Employee
For “Just Cause”

“Just cause” = Very bad

behaviour by the
employee which justifies
the employer terminating
the employment
relationship immediately
without notice
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 Probationary Employee

A probationary employee is one who is in a

trial period where the employee proves they
are suitable for permanent employment in
that position (Mitchell v. The Queen (1979),
23 O.R. (2d) 65 at 83 (H.C.J.))

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 Probationary Employee (cont’d)
Although E.S.A. does not protect
probationary employees for first 3 months,
common law says there is an implied term in
the contract of employment that employer
must establish probationary employee is
being dismissed because their work is
unsuitable for the position and not for some
other reason (see Cao v. SBLR LLP, [2012] O.J. No. 3328
(Small Claims Ct.) at http://blog.firstreference.com/wp-
content/uploads/2013/04/Cao_v._SBLR_LLP_2012_O.J._No._3328.pdf
)
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 When Can Employer Dismiss
Employee For “Just Cause”
The Supreme Court of Canada has said that
the nature of the employee conduct which
justifies dismissal for cause is such as to
“violate the ‘essential conditions’ of the
employment contract (McKinley v. BC Tel,
[2001] 2 S.C.R. 161 at para. 39 per
Iacobucci, J., speaking for the court)

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 Bhasin v. Hrynew, 2014 SCC 71

In late 2014, the Supreme Court of Canada held in

the above-noted case that employers and
employees have a “general duty of honesty in
contractual performance” which means parties
must not lie or knowingly mislead each other on
contractual matters. What implications does this
have for employers in terms of alleging cause for
dismissal on certain grounds?

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 The Kinds of Behaviour Gives Rise to
“Just Cause”

Distribute and review handout on types of

behaviour the courts have recognized as
giving rise to “just cause” for termination
without notice or pay in lieu of notice

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 The Kinds of Behaviour Gives Rise to
“Just Cause” (cont’d)

If employee’s behaviour does not clearly fall

into one of those nine (9) types, you can
usually only terminate their employment with
“reasonable notice” or pay in lieu thereof

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 Blogging About Your Employer

What does the term “dooced” mean?

See Collins English Dictionary Online at
http://www.collinsdictionary.com/dictionary/english/to-get-
dooced#to-get-dooced_1

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 Blogging about Employer

• http://blogcritics.org/employee-fired-by-starbucks-over-
blog/ (Employee Fired by Starbucks over Blog)

• http://employmentlawpost.com/northernexposure/2008/0
9/02/canadian-employees-fired-for-inappropriate-
blogging/ (Canadian employees fired for inappropriate
blogging)

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 Blogging in relation to Employer

• http://www.aero-
news.net/index.cfm?do=main.textpost&id=63bd8f52-7688-447a-
bd40-4503c74e7fa0 (Queen of The Sky: Unemployed)

• http://www.georgianewsday.com/news/61845-teacher-ashley-
payne-fired-for-posting-picture-of-herself-holding-beer-on-
facebook.htmlhttp://www.georgianewsday.com/news/61845-teacher-
ashley-payne-fired-for-posting-picture-of-herself-holding-beer-on-
facebook.html (Teacher Ashley Payne fired for posting picture of
herself holding a beer on Facebook)

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 Blogging and the Employer

Blogs and social media sites like Facebook

exist in a public forum, which probably
means employers have a right to access
them and use them against the employee
because employee has no expectation to
privacy, even when privacy settings active (Leduc
v. Roman, 2009 CanLII 6838 (ONSC); Chatham-
Kent (Municipality of) and Canadian Auto Workers, Local 127 (2007),
159 LAC (4th) 321 at 335)

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 Blogging about Employer

Employers often have software that

monitor the Web for any references made
to them on a daily basis and provide a
report. As a result, the moment the
employee refers to the employer by name
on the Web, the employer knows about it

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 Blogging about Employer

Depending on the content of the blog, the

employee may be guilty of (1) dishonesty,
(2) insolence, (3) off-duty conduct harming
business reputation

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 Where is the Onus?

When you dismiss an employee without

notice who has the onus of proof?

Onus is on the employer to prove that the

employee’s behaviour clearly falls within
one of the categories of “just cause”

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 Dismissal Without Notice Not
Justified

If an employee, who has been

dismissed without notice for cause,
feels there was no cause, then the
employee may sue his/her former
employer for damages for breach of the
employment contract (lawsuit for
“wrongful dismissal”)
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 Dismissal Without Notice Not
Justified (cont’d)

If the judge agrees with the employee, the

employer will be ordered to pay the former
employee the amount of salary in lieu of
proper notice that it feels the employee is
entitled to plus the employer will be
ordered to pay most of the employee’s
lawyer bills for the lawsuit
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 Dismissal Without Notice Not
Justified (cont’d)

Thus, what do you want to be sure of

before you recommend dismissing an
employee without notice or pay in lieu of
notice?

That the employer clearly has cause for

the dismissal!!
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 Conclusion on “Just Cause”

Questions about “just cause” as a grounds

for termination without giving notice or pay in
lieu of it?

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 Summary Sheet on Dismissal

Handout summary chart on the law of

dismissal

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 Test Understanding of “Just Cause”

Please get into groups to discuss

the cases I am about to hand out

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 “Reasonable Notice” at Common
Law
“Reasonable notice” can range anywhere
between about two (2) months and thirty-
six months (36), but rarely goes
over twenty-four months (24). Note, however,
that recently the Ontario Court of Appeal has
rejected the idea of caps for awards of
damages in such cases (see Di Tomaso case
at p. 433 in Course Textbook)
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 “Reasonable Notice” at Common
Law (cont’d)

What constitutes “reasonable notice”

depends on the particular circumstances
of each situation (Carter v. Bell & Sons,
[1936] 2 D.L.R. 438 at 439 (Ont. C.A.))

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 “Reasonable Notice” at Common
Law (cont’d)

Factors:

Judges will look at a primary set of

factors and a secondary set of factors in
determining what is “reasonable notice”
in a particular case

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 “Reasonable Notice” at Common
Law (cont’d)
Primary Factors:

1. How much status and responsibility the

employee had (higher = longer notice)

2. Length of service

3. Age (older the higher)

4. Current availability of similar positions

having regard to the experience, training,
and qualifications of the employee (Bardal v.
Globe & Mail Ltd., [1960] O.W.N. 253 (H.C.))

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 “Reasonable Notice” at Common
Law (cont’d)
Secondary Factors:

1. Employer lured employee to it with promise of a

secure job position
2. If employee pregnant when employment terminated
3. If employee suffers from poor health
4. If employee has poor language skills
5. If employer refuses, without justification, to promptly
supply a reference letter

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 “Reasonable Notice” at Common
Law (cont’d)
Rough Rule of Thumb:

A very rough rule of thumb used by

lawyers is one (1) month for each year of
service. But, with executives it can easily
be more than 1 month for each year, and
with entry level jobs it can be as low as
about ½ month for each year of service. So, the
rule of thumb is not very reliable.
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 “Reasonable Notice” at Common
Law (cont’d)
H.R.’s Role:

When management is considering

terminating an employee without cause, H.R.
should warn and guide them as to roughly
what the notice should be or pay in lieu
thereof. If H.R. unsure, encourage
management to consult a lawyer especially
where numbers could be large.
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 “Reasonable Notice” at Common
Law (cont’d)

GROUP EXERCISE ON DETERMINING

“REASONALBE NOTICE” IN VARIOUS
SCENARIOS

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 Notice or Pay in Lieu of

Why do employers generally feel it is

better to give the terminated employee
pay in lieu rather than notice and have
them continue to work (3 reasons)?

1. Productivity of departing employee

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 Notice or Pay in Lieu of (cont’d)

2. May erode the morale of other

employees with comments, etc.

3. Risk of sabotage or theft

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 The Dead Doctrine of “Near Cause”

Traditional Approach to Just Cause:

Before the 1980s, “just cause” was like

pregnancy. If an employer established “cause”
then the employee was not entitled to any notice
or pay in lieu. If the employer could not prove
cause, then any employee misconduct was NOT
relevant to determining what notice period was
relevant. There was no “sort of” cause.

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 The Dead Doctrine of “Near Cause”
(cont’d)

The Rise of the “Near Cause” Doctrine:

In the 1980s, courts in several provinces

started to take into account employee
conduct in determining what was
“reasonable notice” where the employer
could not prove just cause. This practice
was labelled “near cause.”
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 The Dead Doctrine of “Near Cause”
(cont’d)

The Supreme Court of Canada

rejected or killed the doctrine of
“near cause,” thus, employee
misconduct will not reduce the
period of “reasonable notice”

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 The end!

… for now 

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