Employee Entitlements on Dismissal Under Common Law

When an employer chooses to terminate a worker's employment, one the most important considerations is whether the termination is a wrongful dismissal or for just cause. Most terminations are wrongful dismissals, typically entitling the dismissed employee to both reasonable notice damages at common law and damages under the Ontario Employment Standards Act.

A dismissal for just cause occurs when an employee has fundamentally breached their employment contract. This is often established by demonstrating acts of dishonesty, gross insubordination, or a persistent neglect of their duty. When an employer can demonstrate that they have just cause for terminating an employee they are typically relieved from paying any reasonable notice or Employment Standards Act damages. Many employment cases before the courts turn on whether an employee was dismissed for just cause.

However, a recent case demonstrates that even when an employee is found to have been dismissed for cause at common law, they may still be entitled to damages. The case of Oosterbosch v. FAG Aerospace Inc. 2011 ONSC 1538 (Can LII) is interesting because the trial judge found that the employee's conduct allowed a dismissal for just cause but still awarded damages under the Employment Standards Act. The court examined the difference in definition between just cause for termination at common law, and "wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer", being the conduct that disentitles a dismissed employee to damages under the Employment Standards Act.

The trial judge in FAG Aerospace found that while the employer did have just cause to terminate employment, there was not sufficient evidence to conclude that the employee's behaviour was “wilful misconduct, disobedience or wilful neglect of duty” to disentitle him to damages under the Employment Standards Act. It was accepted at trial that the employee was often late and was a poor performer at work despite numerous coaching sessions, but the judge concluded that this behaviour was not wilful on the part of the employee, but occurred simply through carelessness.

There are few employment cases that draw such a fine distinction between the common law and Employment Standards Act but FAG Aerospace demonstrates that proving just cause for termination is not the only consideration an employer should have when letting an employee go without offering severance.

Frequently Asked Questions

Fired without Cause - Should you take the offer?

I was fired without cause. My employer has given me an offer. Should I take it?

Answer: Employers aren’t handcuffed to their employees. If they act in accordance with their statutory and common law obligations, employers are free to part ways with employees without cause. Typically, the employer is obliged to provide statutory or common law reasonable notice or payment in lieu of notice. Costs, benefits, risks and reward of bringing legal action, should all be considered, prior to starting a claim.

Needlessly pursuing litigation could potentially prejudice the employee. You could delay the settlement and run the risk of losing a fair offer. You may find another job in the weeks following termination. If this happens, then the employer’s settlement may be subject to mitigation which means that they are credited the wages you obtain from that new job. You may also pay more in legal fees then the additional notice you should have received.

There are cases where employees are grossly underpaid when it comes to severance, so I do advocate that everyone who faces termination seek counsel to go over any severance offer. Do not sign it blindly. Speak to a Lawyer and make sure the offer is fair. Employers will often expect and, if prudent, will insist that their past employees reach out to counsel when deciding to sign a severance offer. You should do so as soon as possible after receiving the offer.

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Workplace Travel: Must I go if I'm worried about my safety?

My employer has again asked that I work in a foreign country. I am concerned that this posting is unsafe. Last time I worked abroad multiple bombings took place and several governments closed their embassies. I also had my personal belongings stolen while I was in what was supposed to be a secure area. Do I have to go work in this country? If I do is my employer required to provide travel insurance in case something goes wrong?

‍The first thing to look at is your employment contract. Most employment contracts contain both written terms, and unwritten terms that are implied into the contract by law. The written portion of an employment contract usually mentions the benefits and insurance coverage that an employer is required to provide and it may also mention work locations and travel.

Unless travel insurance is covered in the original contract, or has since been agreed to by the employer, an employer generally cannot be forced to provide travel insurance. Also, most travel insurance policies will not cover all of the risks you’ve outlined. However, the failure to mention travel or relocation in a contract may prevent an employer from requiring that an employee work in a foreign country. Whether an employer can make such a request, without it being specifically mentioned in the contract, depends primarily on the nature of the work and if foreign travel to that country was expected or foreseeable when the employee was hired or promoted into their current position.

If an employee has a legitimate fear for their safety they may be able to argue that a travel request from their employer is not consistent with their contract. The context of the employment and the country involved are important considerations. For example it could be implied into many contracts that travel to the United States is acceptable, whereas travel to parts of Afghanistan is not. It is always best to review your contract, check your facts, and consult with a Lawyer before making any demands of your employer.

Are managers and supervisors ineligible for overtime pay?

I recently changed roles at work. My new title is “Accounts Manager” and I am responsible for all the company’s accounts payable and receivable. I also help other staff price our products and develop new accounts. I am very happy about my new role but my job used to be “9 to 5” and now I have to work late and on weekends. I asked my boss about overtime but was informed that managers and supervisors do not receive overtime pay. Is this true?

For most employees in Ontario overtime hours start after 44 hours of work in a week. For every hour worked in excess of 44 hours an employee is supposed to receive time and a half.

Under the Employment Standards Act there are exceptions to the general rule including that managers and supervisors do not receive any overtime compensation. For this “manager exception” to apply, an employee generally needs to be performing work that involves the supervision of other employees in a leadership role as opposed working in general administrative duties. Also, the exempt employee must be working in the manager role the majority of the time while at work - not just every now and then. The fact that someone’s job title includes the word “manager” or “supervisor” does not determine their entitlement to overtime pay. Rather, it depends on what the actual duties of the employee are.

Although many job titles, such Accounts Manager, include the word “manager” this does not necessarily mean you don’t get overtime pay. If your job does not involve supervising other employees this is a good indication that you may be entitled to overtime compensation. For more information you can seek legal counsel or examine the Ministry of Labour’s website at http://www.labour.gov.on.ca/.