Termination for Cause — Ontario Employment Law
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About Termination for Cause
A termination for cause is often called the 'capital punishment' of employment law in Ontario. It occurs when an employer dismisses an employee without providing any notice, termination pay, or severance pay, based on an allegation of very serious workplace misconduct. Unlike a 'without cause' termination, where an employer can end the relationship for almost any business reason as long as they provide proper notice or payment, a 'for cause' dismissal asserts that the employee's actions were so severe that they fundamentally broke the employment contract.
The bar for an employer to prove just cause is extremely high. It is not intended for minor issues like occasional lateness, poor performance that hasn't been addressed through progressive discipline, or a simple personality conflict. Instead, it is reserved for actions that irrevocably damage the trust and honesty essential to the employment relationship. Examples include theft, fraud, serious insubordination, workplace violence, or significant breaches of company policy.
Ontario courts apply a 'contextual approach,' established in the landmark case McKinley v. BC Tel. This means a judge won't just look at the misconduct in isolation. They will consider the nature and severity of the act, the employee's length of service, their disciplinary record, and whether the employer's response (immediate termination) was proportional to the employee's actions. An employer who alleges cause but fails to prove it in court will likely be found to have wrongfully dismissed the employee, making them liable for significant damages. Because the stakes are so high and the legal test is so stringent, understanding the specifics of your situation with professional guidance is often a critical step.
Frequently Asked Questions
What is the difference between being fired 'for cause' and 'without cause'?
A termination 'without cause' means your employer is ending your employment for business reasons, and they must provide you with notice or pay in lieu as required by the ESA and common law. A termination 'for cause' means your employer is firing you for alleged serious misconduct, and they argue they owe you no notice or severance.
Can my employer fire me for cause for poor performance?
Generally, no. Poor performance alone is rarely sufficient for a just cause termination. An employer typically must prove they provided clear expectations, warnings, and an opportunity for you to improve, and that despite this, your performance remained at an unacceptable level.
Do I get any termination pay under the ESA if I'm fired for cause?
Under Ontario's Employment Standards Act, 2000 (ESA), you are disqualified from termination and severance pay only if you are guilty of 'wilful misconduct, disobedience or wilful neglect of duty that is not trivial'. This is a very high standard, and even some actions that constitute 'cause' at common law might not meet this specific ESA definition.
My employer accused me of something I didn't do and fired me for cause. What should I do?
If you believe the allegations are false or don't justify a for-cause dismissal, you should not sign any termination documents and contact an employment lawyer immediately. An employer's allegation of cause is not the final word; you may have a strong case for wrongful dismissal.
Is there a time limit to challenge a termination for cause?
Yes, there are strict deadlines. In Ontario, you generally have two years from the date of your dismissal to file a lawsuit for wrongful dismissal. It is crucial to act quickly to ensure you don't miss this limitation period.
What is the 'contextual approach' to just cause?
The contextual approach requires a court to look at all the circumstances surrounding the alleged misconduct. This includes your role, length of service, disciplinary history, and the severity of the incident to determine if immediate termination was a proportional response.
Can I be fired for cause for one mistake?
It is highly unlikely, unless the single mistake is exceptionally serious, such as an act of theft, fraud, or violence. For most misconduct, employers are expected to use progressive discipline rather than immediate termination for a first offence.
Common Scenarios
- A senior financial analyst is terminated for cause after an audit reveals they were involved in an insider trading scheme.
- A construction worker is immediately dismissed for cause after being found intoxicated while operating heavy machinery, in clear violation of the company's health and safety policy.
- A long-service administrative assistant with a clean record is fired for cause for sending a single, inappropriate email, raising questions about whether the punishment was proportional.
- An IT employee is terminated for cause for allegedly stealing company data, but the evidence is circumstantial, leading to a potential wrongful dismissal claim.
- A retail store manager is fired for cause based on accusations of time theft, but the manager claims the logged hours were for work completed from home as per an informal agreement.
What You Should Know
Featured Cases
S. v. Royal Bank of Canada
2026 ONSC 3841 (CanLII) · 2026-06-30S. v RBC: 16 Months Notice for Wrongful Dismissal
This wrongful dismissal case involved a financial planner terminated for alleged cause, which the court set aside after finding the employer's investigation inadequate and biased. The court awarded sixteen months' reasonable notice and damages for aggravated mental distress and bad faith in the manner of dismissal, while rejecting the employer's mitigation defence.
M. v. Bison Transport Inc.
2026 ONSC 3729 (CanLII) · 2026-06-25M. v. Bison Transport: Drug Policy Termination
This wrongful dismissal case involved an employee terminated for cause following a second positive drug test, raising issues regarding safety-sensitive policies, human rights accommodation, and the justification of dismissal. The court found the termination justified due to consistent policy enforcement and lack of disability, dismissing the wrongful dismissal claim. The court assessed four months' notice only in the alternative, and dismissed overtime claims as barred by limitation periods or unsupported by evidence.
O. v Direct Coil Inc.
2026 CanLII 77416 (ON SCSM) · 2026-01-26Dismissal for Cause: HR Employee Confidentiality Breach
This case addresses whether an employer had just cause to dismiss an HR employee for breach of confidentiality and dishonesty, applying the McKinley and Dowling standards regarding trust in sensitive positions. The court upheld the dismissal for cause, finding that the misuse of personnel records and repeated denials were incompatible with continued employment. Additionally, claims for aggravated damages based on the manner of dismissal and human rights discrimination were dismissed.
T. v. D.
2025 ONSC 5104 (CanLII) · 2025-09-29Termination for Cause: Fraud and Fiduciary Breach
This case addresses whether an employee's termination for cause was justified following a fraudulent invoicing scheme and breach of fiduciary duties. The court applied the McKinley test to determine if the dishonest conduct warranted dismissal, ultimately upholding the termination as a proportionate response to the breach of trust.
B. v. M.
2024 ONSC 7015 (CanLII) · 2024-12-13Termination for Cause: Investment Advisor Case
This case addresses whether an investment advisor was terminated with just cause for engaging in unauthorized discretionary trading. The court applied the proportionality test from McKinley and found the employer had just cause. In the alternative, if the termination had been without cause, the court would have assessed reasonable notice at 11 months, reduced by three months due to a failure to mitigate. Claims for lost opportunity to sell a book of business and corporate oppression were dismissed.
P. v. Costco Wholesale Canada Ltd.
2023 ONSC 1013 (CanLII) · 2023-02-10This is a wrongful dismissal case involving a dispute over whether the employer had just cause for dismissal following a demotion. The legal issues center on the reasonableness of the notice period and the employer's duty of good faith in the manner of dismissal.
B. v. Schiffer, CPA Professional Corporation
2023 ONSC 724 (CanLII) · 2023-01-30Wrongful Dismissal Appeal: Resignation and Termination for Cause
This is an appeal from a Deputy Judge's decision in a wrongful dismissal action brought by an employee against a CPA professional corporation. The employee alleged wrongful dismissal and defamation after resigning and being terminated for cause following the discovery of an unauthorized invoice. The appeal focused on whether the Deputy Judge erred in dismissing the wrongful dismissal claim and in defining the term 'fraudulent' in the context of the defamation claim.
A. v. Thrifty’s Inc. (2005)
2021 ONSC 5525 (CanLII) · 2021-08-12A wrongful dismissal case involving an employee terminated for cause, which proceeded to a civil procedure stage regarding the discovery of documents.
Sunwing Airlines Inc. v. M.
2021 ONSC 1376 (CanLII) · 2021-07-28Termination for Cause: Kickback Scheme Damages
This is a wrongful dismissal case where an employee sued after being terminated for cause, alleging involvement in a kickback scheme. The court found that the employee's dishonesty and self-dealing justified termination for cause, dismissing the wrongful dismissal claim. Additionally, the employer was awarded $537,885 in damages for misappropriated funds.
R. v. Keddco MFG. (2011) Ltd.
2019 ONCA 125 (CanLII) · 2019-02-19Wrongful Dismissal: 19 Months Notice & Punitive Damages
This is an appeal from a wrongful dismissal trial decision where the employer alleged cause and counter-claimed for damages. The Court of Appeal dismissed the employer's appeal, upholding the trial judge's award of 19 months' reasonable notice, a bonus, $25,000 in moral damages, and $100,000 in punitive damages based on the employer's misconduct during litigation.
M. v. The Centre for International Governance Innovation
2019 ONSC 858 (CanLII) · 2019-02-04Wrongful Dismissal: 12 Months Notice Awarded After Cause Claim Failed
This wrongful dismissal case addressed whether an employee's use of peer-to-peer software and retention of corporate documents justified termination for cause. The court applied the McKinley framework and found the employer failed to prove the misconduct warranted dismissal, awarding 12 months' reasonable notice while considering the plaintiff's age, length of service, and seniority. The court also examined the enforceability of the employment contract's termination provisions, finding them void for non-compliance with statutory minimums, and rejected a claim for punitive damages due to lack of evidence of high-handed conduct.
M. v. The Authentic T-Shirt Company
2019 ONSC 205 (CanLII) · 2019-01-08Wrongful Dismissal: Insubordination and Temporary Duties
This is an appeal from a decision regarding a wrongful dismissal claim where the employee was terminated for cause after refusing to perform temporary shipping duties without a pay increase. The Divisional Court reviewed whether the refusal constituted repudiation of the employment contract and whether the dismissal was a proportionate response to the employee's conduct, applying principles from McKinley and Dowling.
Render v. ThyssenKrupp Elevator
2018 ONSC 3182 (CanLII) · 2018-05-23Wrongful Dismissal: Intervener Status in Harassment Case
This is an interlocutory motion regarding intervener status in a wrongful dismissal lawsuit involving allegations of sexual harassment. The proposed intervener, likely the complainant, seeks to participate to protect their integrity and reputation against allegations of workplace misconduct, raising questions about whether their participation would unduly delay the trial or prejudice the parties.
R. v. Keddco Mfg. (2011) Ltd.
2018 ONSC 2919 (CanLII) · 2018-05-16Wrongful Dismissal: 19 Months Notice & Punitive Damages
This wrongful dismissal case involved a senior employee terminated by the employer who alleged financial misconduct and fraud. The court found the employer failed to prove cause, applying the McKinley framework, and determined the employee was entitled to reasonable notice based on Bardal factors. Additionally, the employer's bad faith conduct during termination warranted punitive and moral damages.
E. v. Algonquin College
2018 ONSC 1898 (CanLII) · 2018-03-23Wrongful Dismissal: 9-Year Employee Awarded 12 Months Notice
This is a wrongful dismissal case involving a plaintiff with nine years of satisfactory service who was terminated for cause. The court assessed the proportionality of the dismissal under McKinley v. BC Tel and found the dismissal for cause disproportionate, granting summary judgment for 12 months' notice and damages for lost salary and benefits.
N. v. Allstate Insurance Company of Canada
2017 ONCA 948 (CanLII) · 2017-12-05N. v. Allstate: Working Notice & Compensation
This appeal concerns a wrongful dismissal claim where the appellant, an insurance agent, was terminated for cause after refusing to comply with fundamental changes to employment terms during a working notice period. The Court of Appeal for Ontario held that the respondents lacked the authority to impose such changes and that the appellant was entitled to compensation for the balance of the notice period.
B. v. 2220742 Ontario Ltd.
2017 ONSC 7207 (CanLII) · 2017-12-01Termination for Cause: Trial Required for Just Cause Dispute
This is an interlocutory decision regarding an application to determine rights under an employment contract, which was converted to a trial. The central issue is whether the employer established just cause for the employee's termination, requiring a contextual analysis of alleged misconduct. A secondary issue involves the interpretation of contractual terms regarding RRSP contributions. The court ordered a trial to resolve disputed material facts and credibility issues.
D. v Royal Group, Inc.
2017 ONSC 4391 (CanLII) · 2017-07-20Wrongful Dismissal: Senior Executive Dismissed for Cause
This wrongful dismissal case involves a senior executive dismissed for cause, with the employer alleging misappropriation of corporate opportunities and assets. The central legal question was whether the plaintiff's breaches of fiduciary duties and duty of fidelity justified summary dismissal. The court determined that such breaches constitute cause for dismissal in cases of serious misconduct, resulting in no damages being awarded for wrongful dismissal.
A. v. Atomic Energy of Canada
2017 ONCA 598 (CanLII) · 2017-07-11Wrongful Dismissal: Dishonesty & National Security
This is an appeal from a motion judge's decision in a wrongful dismissal case where the employee was terminated for cause due to dishonesty and failure to disclose prior employment. The Court of Appeal for Ontario addressed whether the breach of honesty justified dismissal in the context of national security concerns and essential security clearances.
D.J. v. Linamar Holdings Inc. (Camcor Manufacturing)
2017 ONCA 384 (CanLII) · 2017-05-15D.J. v. Linamar: Just Cause Appeal
This is an appeal from a wrongful dismissal decision involving a production supervisor dismissed for cause following an incident involving defective products and alleged dishonesty. The Court of Appeal for Ontario addressed whether the trial judge erred in finding just cause, specifically regarding the burden of proof and the application of the McKinley framework, as well as allegations of judicial bias. The appeal was dismissed, upholding the trial judge's finding that just cause for dismissal existed.