Termination for Just Cause

In general terms all terminations fall into two broad categories

Where an employee is terminated for "just cause" the employer terminates the employee for some form of wrong doing that is of sufficient seriousness to satisfy the requisite legal threshold, and that irreparably damages the employment relationship between the employee and employer. Many employers allege that an employee was terminated for "just cause". Despite these common allegations not all wrongdoing meets this high legal standard. As a result although employers often allege that they have "just cause" when they terminate an employee, more often than not the courts ultimately conclude that no "just cause" existed in the circumstances.

The onus rests with the employer to prove that it had just cause for termination in the particular circumstances of the case. Should the employer successfully prove that just cause existed in the circumstances it is not required to provide the dismissed employee with any notice of termination or severance pay. In these circumstances the employee may be immediately terminated without any compensation. Where an employee is dismissed for just cause he will also be unable to qualify for Employment Insurance.

Constructive Dismissal

In some circumstances an employee may be entitled to a remedy against their employer where the employer made significant unilateral changes to the terms of the employment relationship. Where the employer has made significant changes the employer may have breached the terms of employment. Where this is proven to have occurred a constructive dismissal has taken place. Common examples of situations where courts have found a constructive dismissal to have taken place include unilateral changes to: salary, bonuses, commissions or commission structure, health and insurance benefits, job titles, job descriptions, positions, and duties and responsibilities.

If the employer has committed a constructive dismissal, the employee may have the right to terminate the employment and sue for severance pay.

Determining whether a constructive dismissal has occurred is a complex matter, and every employee's situation is different. Many employees who believe they have been constructively dismissed subsequently discover (after receiving legal advice or after the court rules against them) that they were not constructively dismissed. As a result employees must be cautious in acting on a perceived constructive dismissal.

If you feel that your employer has made changes to the terms of your employment that may amount to a constructive dismissal you should obtain immediate legal advice.

Non-competition and Non-solicitation Agreements

Employers regularly have their employees sign non-competition and non-solicitation agreements. These agreements come in many forms and may form separate agreements between the employer and employee, or may be inserted into the general employment agreements. No matter what form these agreements take, their significance to an employee cannot be overstated.

The consequence to an employee of an enforceable non-competition or non-solicitation agreement can severely limit an employee's future employment options should they decide to leave the employer's employment to go into business for themselves, or work for a competitor of their former employer.

An employee who leaves secure employment (giving up his severance entitlement) with the belief that their non-competition agreement is unenforceable can be met with an injunction (an order to cease work) and a law suit seeking substantial damages. Despite the merits of the law suit, the employee will be required to spend substantial funds defending the law suit.

In many cases a non -competition or non-solicitation agreement will be found to be unenforceable because it fails to satisfy the relevant legal test. Nevertheless, any employee that executes an non-competition or non-solicitation agreement faces the risk that the clause may be enforceable. Given the severity of the potential consequences of a finding that these agreements are enforceable, all employees should obtain legal advice prior to executing any such agreements.