In the recent Ontario Court of Appeal decision in Render v. ThyssenKrupp Elevator (Canada) Limited, 2022 ONCA 310, the Court confirmed that there are effectively two levels of just cause misconduct, a less stringent threshold under common law and a more onerous definition required under the Ontario Employment Standards Act (“ESA”), 2000. Many employers are unaware that in certain circumstances, an employee may be rightfully terminated for cause, but nevertheless entitled to statutory termination and severance pay under the ESA.

Background

Mark Render (“Mr. Render”), an Operations Manager, was employed with ThyssenKrupp Elevator for 30 years before he was terminated for cause following a single incident in the workplace where he slapped the buttocks of a female co-worker.

At trial, the judge found that the incident justified dismissal for cause based on a breakdown of the employment relationship. The trial judge considered not only Mr. Render’s actions, but also his lack of remorse for his actions, in determining that “there was no other reasonable alternative to the termination of [the appellant’s] employment for cause”.

Mr. Render appealed this decision.

Court of Appeal Decision

Justice Feldman, in writing for the Court of Appeal, clarified that there are two different thresholds of just cause misconduct. Under the common law, the key question when assessing just cause is “whether an employee has engaged in misconduct that is incompatible with the fundamental terms of the employment relationship”. In contrast, the ESA, while not using the term “just cause”, nevertheless requires an employer to prove that the employee “has been guilty of wilful misconduct, disobedience or wilful neglect of duty which is non-trivial and which has not been condoned” when withholding termination and severance pay. As such, the ESA requires a higher level of misconduct, namely, in addition to proving that the misconduct is serious, the employer must also demonstrate that the conduct was wilful. Specifically, the employer must demonstrate that the misconduct was intentional, and that the employee was deliberately engaging in what they knew was serious misconduct.

In the case at issue, the Court found that while Mr. Render’s actions were not accidental, they were performed “in the heat of the moment” and not planned or deliberate. As such, while Mr. Render’s actions were highly inappropriate and merited a just cause dismissal, they were not intentional and deliberate and so did not rise to the threshold required under the ESA when withholding termination and severance pay.

Conclusions

As confirmed by both courts, even a single incident of sexual harassment in the workplace can lead to a summary dismissal. Sexual harassment in the workplace is amongst the most serious of workplace misconduct and will continue to be treated as such by the courts.

However, this case does introduce some ambiguity as to the degree of intention required to deprive an employee entirely of any severance or termination pay. We anticipate that future cases will provide additional clarity in this regard, particularly as long-service employees may rely on this decision to claim their statutory entitlements even when terminated for cause.

Lastly, this case demonstrates the value of implementing strong workplace policies and updated employment agreements, as both act as effective defences to claims for wrongful dismissal. 

Should you have any questions regarding employment agreements for your organization, please do not hesitate to reach out to the team at Rodney Employment Law at [email protected] or complete our contact form here.