Termination of Employment: With Cause, Without Cause and Reasonable Notice

In Ontario, an employee can be dismissed in one of two ways:

  1. Termination for cause; or
  2. Termination without cause.

Termination for cause

When an employer terminates an employee for cause the employee will not be entitled to any compensation with regards to the dismissal. At law, this form of compensation is typically referred to as “reasonable notice”, “common law notice” or “termination pay”. Given that termination for cause is extremely prejudicial to the former employee, it has been labelled as being an extremely severe and punitive measure to be taken only in the most serious circumstances. As such, the courts have established a very high standard for an employer seeking to terminate an employee for cause.

Standards for terminating an employee with cause

There are two different standards that can be applied to determine if “just cause” for termination has been established:

  1. Under the Employment Standards Act: the employee was guilty of “wilful misconduct…that is not trivial and has not been condoned by the employer” ; or
  2. Under Common Law: the employee was guilty of basis prolonged incompetence and/or serious misconduct which led to “just cause” for termination.

The standard applied depends on whether or not there is an enforceable termination clause in the employment agreement.

If there is an enforceable, binding employment agreement, with an enforceable termination clause, that is in compliance with the Employment Standards Act, the standard of “willful misconduct” will apply. Alternatively, in the absence of an enforceable employment agreement, the common law standard of “just cause” will apply.

In the case of Plester v. PolyOne Canada Inc. 2011 ONSC 6068, the Ontario Superior Court of Justice made the following assertions on the difference between termination for cause under the Employment Standards Act (“wilful misconduct”) and at common law (“just cause”):

“Just cause involves a more objective test, albeit one that takes into account a contextual analysis and therefore has subjective elements. Wilful misconduct involves an assessment of subjective intent, almost akin to a special intent in criminal law.”

In summary, in order for an employer to terminate an employee under the Employment Standards Act, the employer will have to demonstrate that the employee intentionally engaged in serious misconduct. In the absence of an enforceable termination provision or an employment agreement, the burden to establish termination for cause at common law is lowered as the employer is only required to prove the act of serious misconduct.

Termination Without Cause

Termination without cause refers to when an employer terminates an employee without providing a reason for terminating the employee. To put it simply, termination for cause is when an employer dismisses an employee for reasons that are usually not related to serious workplace misconduct.

When an employee is dismissed without cause they are entitled to reasonable notice of termination – that being a reasonable amount of time in which the employee should be notified that their employment will be terminated.

What is reasonable notice?

There are two ways in which reasonable notice can be provided to the dismissed employee:

Working Notice – the amount of time the employee will working prior to the set termination date; or

Pay in lieu of Notice – payment equal to the amount of working notice the employee should have received.

Common law notice or statutory notice

The length of reasonable notice afforded to employees dismissed is determined by whether or not they are receiving statutory notice or common law notice. The length of statutory notice is determined by the Employment Standards Act, whereas common law notice is determined by evaluating several factors, which are discussed below.

Statutory notice is applicable when the employee has a valid employment agreement, with a valid termination clause, which limits the notice period to the notice period provided in the Employment Standards Act.

Reasonable notice under the Employment Standards Act

The reasonable notice periods under the Employment Standards Act are as follows:

Amount of notice required if an employee has been continuously employed for at least three months:

Period of employment                              Notice required

Less than 1 year                                                  1 week

1 year but less than 3 years                         2 weeks

3 years but less than 4 years                       3 weeks

4 years but less than 5 years                       4 weeks

5 years but less than 6 years                       5 weeks

6 years but less than 7 years                       6 weeks

7 years but less than 8 years                       7 weeks

8 years or more                                                   8 weeks

Reasonable notice requirements at common law

An employee who receives statutory notice may claim that they were wrongfully terminated as they did not receive sufficient notice and seek common law notice as the common law notice period is typically longer. An employee who is terminated without reasonable notice is entitled to damages for breach of contract asserted on the employment income the employee would have earned during the reasonable notice period. The length of reasonable notice is determined by the following principles as listed in the case of Paquette v. TeraGo Networks Inc., 2015 ONSC 4189:

  1. The character of employment. A longer notice period is provided for senior management or highly skilled and specialized employees and a shorter period is provided for lower rank or unspecialized employees
  2. The length of employment. Generally, the longer the duration of employment, the longer the notice period;
  3. The age of the employee at termination. A longer notice period will usually be justified for older long-term employees; and
  4. The availability of similar employment having regard to the experience, training and qualifications of the employee. Economic factors such as a downturn in the economy or in a particular industry or sector of the economy can also play a factor as they may indicate that an employee may have difficulty finding another position and may justify a longer notice period.

It is important to note that the determination of what period constitutes reasonable notice of termination is a principled art and not a mathematical science that turns on the particular facts of each case. There is no “right” figure for reasonable notice. Most cases yield a range of reasonable figures;


It is crucial for employers and employees alike to understand their rights and responsibilities as set out both in statute and in common law.

Employers should be cautious in drafting their employment agreements as particular language and reference to the Employment Standards Act is required to limit notice period to the statutory minimum. Invalid termination clauses can cause expensive litigation for both parties.

If you have questions regarding your employment contracts, whether or not you have been provided adequate notice, or any other employment issue contact by phone at 905-471-6161 or email us at info@eruditelaw.com.

“Personal Use” Evictions and what you need to know

Those who are currently renting in the Greater Toronto Area know that it is very challenging to find good value in this market.

A study by the Canadian Mortgage and Housing Corporation (“CMHC”) shows that the vacancy rate of rental properties in the GTA is the lowest it has ever been in 16 years. With rental properties becoming more scarce in the GTA and the average cost of rent increasing, some landlords are looking to get around the 2.5 percent rent increase cap as prescribed by the Ontario Fair Housing Plan through creative means.

Personal Use Evictions


The Residential Tenancies Act (“RTA”) governs non-commercial, residential tenancies.

According to the RTA, if the landlord requires the property for “personal use”, a landlord may apply to the Landlord Tenant Board (“LTB”) to terminate the tenancy and evict the tenant. Personal use involves use by the landlord, the landlord’s family member, or a person who provides or will provide care services to the landlord or the landlord’s family.

To initiate a personal use eviction, the landlord will file a “Notice to End your Tenancy”, and deliver it to the tenant. The termination date in the notice must be at least 60 days after the landlord provides the notice to the tenant.

If you have a month to month tenancy, the termination date must be on the last day of the rental period. In the alternative, if you have a fixed term tenancy, the termination date must be on or after the last day of the fixed term. An incorrect termination date would render the notice of termination defective.

Key Requirements to Note

In evicting the tenant for personal use, the landlord must be acting in good faith. The landlord must demonstrate to the LTB that the landlord (or the landlord’s family member) will indeed move into the unit within a reasonable time after the rental property becomes vacant.

The unit also must be used for “residential occupation” post eviction. For the most part, this means that the unit cannot be left empty, used as storage of items for the landlord, or be turned into a home office or study (a common occurrence for basement rental units).

Finally, for notices given after September 1, 2017, the landlord must compensate the tenant for eviction. This amount will be equal to one month’s rent. The compensation must be made before the termination date. In the alternative, the Landlord may also offer the tenant an acceptable alternate rental unit when terminating a tenancy based on own use, rather than paying an amount equivalent to one month’s rent.


If the landlord terminated your tenancy in bad faith or otherwise, you could apply to the LTB for certain reliefs.

Amongst other things, the LTB can provide relief from eviction, a specified sum for increased rent that you may incur for one-year after vacating the rental unit, reasonable out-of-pocket moving expenses and more.

If you feel that your tenancy has been unfairly terminated, the lawyers at Erudite Law LLP may be able to help. Please drop us a line at http://Eruditelaw.com/#contact. We look forward to hearing from you!

By: Jimmie Z. Chen

Ontario Door-to-Door Sales Ban

Bill 59, lovingly called the “Putting Consumers First Act (Consumer Protection Statute Law Amendment)” will make some sweeping changes to the Consumer Protection Act of Ontario on March 1st, 2018.

A quick summary of the Ontario Consumer Protection Act

The Consumer Protection Act covers most common consumer transactions and provides specific rules and regulation that protects a consumer against unfair business practices. Some examples include:

  • Providing a cooling-off period that allows you to cancel some agreement without reason or penalty
  • Providing specific rules with regarding misrepresentation to what product or services that a business offers.
  • Providing specific requirements for towing and storages services, car repairs, and credit agreements.

Ontario Door-to-Door Sales Ban

On March 1, 2018, the amendments contained in Bill 59 that speak to door-to-door sales will come into effect.

Most importantly, the amendments will prohibit some suppliers (the person selling you something) from soliciting or entering into agreements at the customer’s home, unless the customer has specifically requested for the supplier to attend.

  1. What does that mean for the supplier?

If you are in the business of selling heating, ventilation, and air conditioning (HVAC) goods and services, like water heaters, furnaces, and air conditioner units, you can no longer arrive at your target customer’s home unrequested to sell or offer your services in person.

Leaving marketing materials at the customer’s home is not considered to be “solicitation” and is currently still an acceptable practice.

      2. What does that mean for the consumer?

If, after March 1, 2018, you are a customer that entered into an agreement with a supplier at your home without sending an initial request, the agreement that you have entered into is considered to be void. Any related agreements with the supplier, such as guarantees, security agreements, and credit agreements provided by the consumer will also be considered to be void.

As such, you may be able to return all the goods you accepted from the supplier and ask the supplier to reimburse you for all the charges you have incurred from the solicited agreement.

If you feel like you have been unfairly treated by a business and are looking for legal options, the lawyers at Erudite Law LLP may be able to help. Please drop us a line at https://eruditelaw.com/#contact. We look forward to hearing from you! 

By: Jimmie Z. Chen