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

Duty to Accommodate – Where do employers draw the line?

Duty to accommodate – Where do employers draw the line?

‍Employers should do what they can to accommodate their employee’s disability, but there’s a line to be drawn between accommodation and frustration of the employment contract. If the contract is in fact “frustrated”, the employer can end the employment relationship without violating the Human Rights Code (Code). The question is whether the employer suffers undue hardship.

Section 11 of the Code allows the employer to show that a requirement, qualification or factor that results in discrimination is nevertheless reasonable and bona fide (legitimate). However, to do this, the employer must show that the needs of the person cannot be accommodated without undue hardship.

The duty to accommodate has both procedural and substantive obligations. The procedural component requires that the employer take steps to understand the employee’s disability-related needs and undertake an individualized investigation of potential accommodation measures to address those needs. The employer bears the onus of demonstrating what considerations, assessments and steps were undertaken to accommodate the employee to the point of undue hardship. The purpose of the duty to accommodate in an employment context is to ensure that an employee with a disability could continue to perform the essential duties of his or her employment if his or her needs can be accommodated without causing undue hardship to the employer.

The test for undue hardship is not total unfitness for work in the foreseeable future. If the characteristics of a disability are such that the proper operation of the business is hampered excessively or if an employee with such a disability remains unable to work for the reasonably foreseeable future even though the employer has tried to accommodate him or her, the employer will have satisfied the test. The duty to accommodate is compatible with general labour law rules, including both the rule that employers must respect employees' fundamental rights and the rule that employees must do their work. The employer's duty to accommodate ends where the employee is no longer able to fulfill the basic obligations associated with the employment relationship for the foreseeable future.

In Nason v. Thunder Bay Orthopaedic Inc. the employee was terminated while on unpaid medical leave. The trial judge awarded damages for wrongful dismissal. The Court of Appeal ruled that the employer’s decision to put the employee on an unpaid leave of absence was not an infringement of his rights, at that time, since the employer had already attempted to accommodate the employee. The employee could not fulfill the basic obligations of his position, despite the accommodations he received. However, the Court rejected the employer’s argument that the employment contract had been frustrated.

The onus to prove that the contract was frustrated was on the employer. The employer believed that the employee’s limitations were permanent. However, the employer did not seek medical information to sufficiently explore and conclude whether there was no reasonable likelihood that the employee could be returned to work with accommodations in the future.

The employer must assure that the tasks required of the employee are actually necessary to meet the employer’s goals. If the employee could continue his/her employment while avoiding such tasks and while still achieving the employer’s requested goal, there is no undue hardship. The test was set out by the Supreme Court of Canada. To establish a bona fide occupational requirement, the employer must prove that the requirement:

was adopted for a purpose or goal that is rationally connected to the function being performed (such as a job, being a tenant, or participating in the service);
was adopted in good faith, in the belief that it is necessary for the fulfilment of the purpose or goal; and
is reasonably necessary to accomplish its purpose or goal, in the sense that it is impossible to accommodate the claimant without undue hardship.

What does this mean for Employers?

Employers should err on the side of caution and seek counsel prior to claiming frustration of the employment agreement. If it’s done prematurely, the employer could be subject to a wrongful termination claim, giving rise to common law reasonable notice or a claim for discrimination pursuant to the Code. Employers should also run an individual investigation into the employee’s limitations. It’s one thing to say that the employee cannot meet the demands of the job regardless of available accommodations. The employer must prove it by way of a proper and full investigation into the employee’s limitations. Prior to claiming frustration of the contract, the employer should consider the following:

whether it investigated alternative approaches that do not have a discriminatory effect;
reasons why viable alternatives, if any, can’t be put in place;
whether it can meet the legitimate objectives in a less discriminatory way;
whether the job requirement is properly designed to make sure the desired qualification is met without placing an undue burden on the people it applies to; and
whether other parties who are obliged to assist in the search for accommodation have fulfilled their roles.

British Columbia (Public Service Employee Relations Commission) v. BCGSEU, [1999] 3 S.C.R. 3.

Ellis v. General Motors of Canada Ltd., 2011 HRTO 1453.

Nason v Thunder Bay Orthopaedic Inc, 2015 ONSC 8097, [2015] OJ No 6892.

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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.

Short-Term Disability Insurance: What should you do when a claim is denied?

I have been off work since May 2016 and have been trying to obtain short-term disability insurance since then. My doctor has provided me with three sick notes since then and at our last appointment she told me not to work. However, my application for short-term disability insurance has been denied. I’ve given the disability insurer the notes from my doctor and I’ve gone through the appeal process but have been denied again. My employer is now asking when I will return and I’ve booked an appointment with my doctor to see what she thinks. What should I do?

‍It is not uncommon for disability insurers to deny an initial application for short-term disability benefits. Often the reason cited for the denial is a lack of medical evidence of a disability. If the only documentation you have provided to the insurer are sick notes from your doctor it is usually of assistance to obtain further medical records from your doctor including something documenting your diagnosis. Often, after receiving such additional documentation an insurer will approve an application for disability benefits. If you continue to be denied benefits, it is likely time to consult with legal counsel. Also short-term disability benefits typically end within 6 months even if you are approved. Ensure you know when these benefits end and decide with your doctor whether you should be applying for long-term disability benefits if they are available to you.

With respect to returning to work you are entitled to rely on your doctor’s advice. If your doctor tells you not to work this should be documented in a doctor’s note and provided to your employer. Forcing you to return to work when your doctor says you’re sick is in breach of human rights legislation and it’s unlikely that your employer will insist on your return to work in the face of your doctor’s advice.