The Costly Difference Between Termination for “Just Cause” and “Wilful Misconduct”

In Render v. ThyssenKrupp Elevator (Canada) Limited, 2022 ONCA 310, (“Render”), the Ontario Court of Appeal recognized that employees terminated for “just cause” may still be entitled to statutory termination and severance pay.

In Render, a long-term employee, Mr. Render, was terminated for “just cause” following a single incident in which he slapped a female co-worker on her buttocks. Mr. Render explained that the slap was “playful” and not done on purpose. The workplace investigation into the co-worker’s complaint found that Mr. Render had violated ThyssenKrupp’s sexual harassment policy. As such, ThyseenKrupp terminated Mr. Render’s employment without any notice or pay in lieu of notice. Mr. Render sued for wrongful dismissal.

The Trial Court held that this single incident of sexual harassment justified Mr. Render’s termination without notice or pay in lieu of notice. Accordingly, the Court dismissed his claim for wrongful dismissal.

However, the Court of Appeal, while being careful to denounce Mr. Render’s behaviour, ultimately found that his behaviour did not meet the standard of “wilful misconduct” under the Employment Standards Act, 2000, S.O. 2000, c. 41, (the “ESA”). The Court of Appeal had this to say:

“While the trial judge found that the touching was not accidental, he made no finding that the conduct was preplanned…Although his conduct warranted dismissal for cause, it was not the type of conduct in the circumstances in which it occurred that was intended by the legislature to deprive an employee of his statutory benefits.”

In other words, while his behaviour was reprehensible, Mr. Render should not have been deprived of the minimum notice provisions under the ESA. Mr. Render was therefore awarded eight (8) weeks of statutory termination pay for his dismissal.

The Court of Appeal also clarified the fundamental difference between the “just cause” standard at common law and the very strict “wilful misconduct” standard under the ESA. In short, the ESA standard of “wilful misconduct” involves an assessment of the employee’s subjective intent, which is not required to meet the standard of “just cause.”

The Court of Appeal further clarified that:

“Careless, thoughtless, heedless, or inadvertent conduct, no matter how serious, does not meet the [legislative] standard. Rather, the employer must show that the misconduct was intentional or deliberate. The employer must show that the employee purposefully engaged in conduct that he or she knew to be serious misconduct. It is, to put it colloquially, being bad on purpose.”

Implications for Employers

In all cases where an employee behaves in a manner which is inconsistent with continued employment, (whether it is a single incident or a course of conduct) it is incumbent on employers to ask themselves whether the employee intended to misbehave. An answer in the affirmative may warrant a termination without any notice or pay in lieu of notice. However, an answer in the negative will mean that the employee is still entitled to the minimum statutory termination and severance pay provisions, in accordance with the ESA.

It will be interesting to see if this case is further appealed to the Supreme Court of Canada. For now, we will continue to provide our clients with the same advice – do not terminate an employee for cause before speaking with a lawyer; as ThyssenKrupp learned, a termination misstep can be costly.

Reach out to our Employment Law Team if you have any questions.