Just cause | S2 EP14

When ending an employment contract, what constitutes just cause? Does employee misconduct mean they are not entitled to notice of termination or payment in lieu? And, what is the difference between a dismissal without cause and one that is legitimate? To answer these questions we turn to Paul Macchione, senior associate in our Toronto office, and Chanelle Wong, senior associate in our Vancouver office. They both advise on a wide range of issues pertaining to workers and the workplace, including labour relations, union matters, employment contracts and discipline and discharge. 

CPD credits: This episode qualifies for 0.67 hours of Substantive credit in Ontario and 0.67 hours of Substantive credit in British Columbia.

Transcript

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Transcript:

Andrew McCoomb  00:10
Welcome to Disputed, a Norton Rose Fulbright podcast. This episode will focus on the concept of just cause dismissal and what employee misconduct justifies an end to the employment relationship without any notice of termination, or payment in lieu of that notice. We start this discussion by setting out the difference between a without cause dismissal and a just cause dismissal. Following that, we discussed the threshold for just cause, specific actions that could constitute cause, and other employment considerations such as any implications of addressing the concept of employment contracts. Our guests are employment and labour lawyers, Paul Macchione and Chanelle Wong. Paul is based out of our Toronto office, while Chanelle is based out of our Vancouver office. They both advise on a wide range of issues pertaining to workers and the workplace. Some of those matters include labour relations and union matters, employment standards, occupational health and safety, employment contracts, human rights, accommodation, discipline and discharge. Paul and Chanelle regularly appear before various levels of court and tribunals related to these and other matters. It should be noted that in our discussion today, we focus on provincially regulated, non-unionized workplaces in common law provinces, i.e. not Quebec. For context 70% of workplaces in Canada are not unionized, and 90% are provincially regulated. With that said, we expect that the factual scenarios and practical considerations will be suited to a broad range of employers.

Ailsa Bloomer  01:47
Paul, Chanelle, welcome to the podcast. Thank you very much for joining us. So let's start with some basics. What does it mean to have just cause to terminate someone's employment?

Paul Macchione  01:57
Look, the idea of having a reason or having a basis is not the same thing as cause, cause means you've done something so egregious, that you are likely not entitled to anything, or very little. So without cause typically means you have done something by no fault of your own. So the employer, let's say, for example, is going through a restructuring, the employer doesn't have the money to keep you on. Or maybe you're just not the greatest fit, not for any discriminatory reason, but it's just not going well with the company and the employer makes that decision. In that scenario, that's a without cause termination. You as the employer owe the employee money as a result of a without cause termination. But here today, we're going to talk completely about the fun stuff, which is the cause terminations. Those are the things where if something happens in the workplace that is so egregious, what we say is willful misconduct, that the employee is entitled to very little or nothing. And we're talking about the theft cases, the fraud cases, the violence harassment, the intentionally breaking a safety rule that can result in someone not receiving any pay and being terminated. Full stop, you're done. 

Andrew McCoomb  03:23
So there's obviously a huge volume of employment law cases on point because people are challenging cause all the time. Is there a bright-line about where something that looks like misconduct turns into just cause? What's the marginal case?

Chanelle Wong  03:39
So what we're looking at when we're assessing just cause is we're asking the question, can this relationship continue? We're looking at misconduct that really strikes at the heart of that relationship. So if the employee’s done something so bad, that there's just no way that this relationship can continue, that's usually where you're thinking about whether or not there's just cause. It's an assessment of all the circumstances, you're looking at both the employee and the employer side. So for the employer, you're looking at how long has this person been with us? What's their role? Are they in a supervisory or managerial role where they're expected to a) know the rules, b) follow them, and c) set a good example? We're looking at their employment history, has there been a past record with some? Have they done something similarly bad before? Is this a situation where it's a lesson that hasn't been learned? And then on the employer side, you're looking at, what's the nature of our operations? How important is it that this person acts well and doesn't engage in this misconduct? Do we have a clear policy or procedure that's been communicated to the person, are they following that rule? Or do they know that they're not supposed to be doing this essentially? Anytime someone brings up just cause I'm always reminded about the show The Office. So for those who are familiar, the boss is Michael Scott, and he is a very interesting individual who doesn't shy away from wearing his heart on his sleeve and sharing his feelings. And he has a particular hatred for Toby Flenderson, the HR guy, and he's always trying to get rid of him. So in one episode, he - Michael, calls up his boss and says “is there any way we can get rid of Toby?” and his boss says, “not without cause, Michael” And Michael says, “I have cause, it is because I hate him”  And so unfortunately, and I share this with some of my clients, hatred is not going to cut it, unfortunately, we're going to have to look at this global analysis of all the circumstances, and really assess, does this employee’s misconduct fit the bill for Okay, we just cannot continue this relationship anymore, and basically, does the punishment fit the crime? So that's the bright-line approach that we use.

Ailsa Bloomer  05:58
And it's, does the punishment fit the crime when considering all the surrounding circumstances, right, so presumably, that proportionality test is going to vary depending on the industry. So if you operate a private surgical practice, one of your staff tests positive for COVID, let's say, but doesn't tell you and then you find out afterwards, that's potentially something that that might constitute just cause because it undermines the trust and the employment relationship, and also the trust that you need to have in them to act in your patient's best interest and not put your patients at risk. Whereas there are other service industries, that it might not be generally acceptable to turn up to work with COVID, obviously, but it might not reach that threshold required for a just cause termination, in that context. One of the questions that comes to mind when you ask, has there been a history of similarly bad behaviour is, that you know, to what extent can employers point to past acts that in today's world are considered egregious, but perhaps 10 years ago, were passed off as just being you know, office banter. There has been obviously progress in the last decade in terms of respect in the workplace, attitudes to what is and is not acceptable behaviour. So what extent can employers point to behaviour from the past, when considering the cumulative effect of misconduct today?

Paul Macchione  07:13
Look, it's something that certainly happens. It's something that certainly comes up. But I think, you know, the response has to-- to fit the crime, so to speak. And I think in that type of a scenario, there's the questions of well, what did the employer do? So first of all, we might take a look back at, Did you have policies? Did you have training? Do you undergo harassment training, for example, there's an obligation within our various provinces to undergo harassment training and have harassment policies. Was the employee informed of this shift, right? It's not the same as it was in 1995, as it is in 2022. Now, if despite those policies, somebody continues to act in that way, and there was corrective behaviour along the lines, which is, you know, a letter in the file saying, look, this such and such thing occurred, this is how we expect you to act on a go-forward basis, then, you may be getting into the cause territory. Now, if it's, this is the first time that this has ever come up. But the employee says, well, look, I've always done it this way. Perhaps a lesser form of discipline is appropriate, whether it's a speaking to or perhaps in your employment contract, you have the ability to suspend, that type of thing. But going to the extreme degree of termination, that perhaps will not be appropriate. But you also have to think of it of course, from, let's say, the rest of the workplaces’ view, because the behaviour of the employee may have impacted another employee. And so you need to protect your employees, you have to take every precaution reasonable for the protection of your workers. And so, you want to make sure that you address that before the other person says, well, look, you've done nothing about this, I'm going to treat my employment as constructively dismissed. All in all, that's to say, you need to look at the context. And in all likelihood, if this occurred, if this is the first time you’re hearing about it, and the employee says, well, I've always done it this way. It's probably corrective discipline, as opposed to termination for cause.

Ailsa Bloomer  09:14
Yeah, so it's a balancing of context and whether or not someone should know better. Another element that you're hinting at, is the role that providing a warning plays in just cause dismissal. Can you talk about that?

Chanelle Wong  09:29
So generally, when it comes to misconduct, that's really not that egregious or it's minor. That's where the warning process goes. And you want to give the employee time, basically, awareness that what they're doing isn't right, training if they need it, and enough time for them to improve their behaviour or show the opportunity to improve the behaviour. But that's not to say that in other situations, you know, you're not able to end the relationship because there's one extremely bad thing that's happened. Again, you know, as our society changes what that is, that barometer will move. But for instance, you know, serious theft or-- or you know, sexual harassment in the workplace, those are situations where you're just saying, we can't continue, we have to pull the plug. The assessment of whether or not you're pulling the plug with or without cause, I think that's kind of a secondary question. You're first deciding, okay, am I ending the relationship? And then, am I doing it for cause, or am I doing it without cause? So the progressive warning system really kicks in for performance management situations where hey, you want to give this person a chance to address things and improve things. But-- but that's not always to say that that's the only path you can go down.

Andrew McCoomb  10:45
If you're at that point, Chanelle, where you're past the point of trying to give some warning, what role does remorse or an apology play into that, if the person that acknowledges that they've crossed a line that probably can't be uncross?

Chanelle Wong  10:59
Yeah, and that's a great question, because I think it also triggers a discussion around investigations. And that's one piece that we always say, employers should really look at. A lot of times, you know, we get calls and people are upset, they hear about things that someone did, and they're just, we have to do something right now. And it's important to take a step back and say, hold on, let's make sure we have the full picture, let's investigate these allegations. And part of doing that investigation is to speak to the person that the allegations are about, let them share their side of the story, give them an opportunity to respond. And that's exactly where your point about showing remorse might come in. If they're in this investigation, or you're having a meeting with them to talk about what's been brought to light, and they say, I'm sorry that this happened, I know better, next time, I'm going to do this. And they express that remorse, they acknowledge their wrongdoing, that can actually go towards lessening, you know the case for cause, because this person is showing capacity to change. Conversely, if they're saying I don't think that what I did was wrong, this person asked for it, that supports the conclusion that this is not a relationship that can continue. Now, showing remorse, it's not a get out of jail free card. It factors into the assessment. It's one relevant factor but-- but it can be, you know, something that does sway things one way or the other.

Ailsa Bloomer  12:20
And Paul, what tips do you have for conducting an effective workplace investigation that could ultimately lead to a lawful just cause termination?

Paul Macchione  12:29
In respect of conducting an investigation, you're-- you're really going to want to make sure that you spend adequate time with the employee to put forward all the potential allegations towards that employee. If it's a complaint against the employee for inappropriate conduct, you're going to want to put forward all of the different things that you've considered inappropriate. And you're going to want to ask for those explanations, then if the employee saying, well, so and so was there and this is how this event actually occurred. You're gonna want to make sure that you speak with that employee, you're gonna want to make sure that you let it be known that this is a confidential process, and there is absolutely no determination that's otherwise been made that you would like to take matters seriously, and you respect not only the complainant, but of course, the respondent, so to speak in this situation. Then when you go to the individuals, you're going to want to reaffirm that same process and you're going to want to keep everybody apprised of what's happening, and that sort of thing. You may want to, depending on the conduct, bring in somebody who's entirely impartial. So you may want to go outside of the organization and have a third-party investigator. Now, where we find that employers perhaps get things wrong, would be not coming back to the employee, after checking in with either the complainant again or the witnesses, it's to say, okay, in-- in response, we understand that this may be the scenario, what do you have to say about that? The last thing you want is to be facing an allegation that you have not conducted a fulsome investigation. So you want to do that, you know, other best practices, for example, is while you're doing this investigation, a lot of people say, well, how could I have this person in the workplace? Well, that's a good point. So you want to potentially say, look, you're off on absence, by all means, continue to be our employee, you will be paid during the absence, and you continue with the investigation in that way. It's a reassurance that no decision has been made, and you continue to go forward and evaluate the fulsome complaint. So it's really, just make sure you go back to that individual, that that would be my most significant tip. And you want to be able to say and you want to be able to have it documented. Is there anything else you would like to add? Is there any other documents you'd like to provide us with? You'd be surprised how many times someone says, you know what, I actually tape recorded the conversations. Really? Okay, would you mind providing us with the tape recordings, or actually I sent an email on that topic, okay, would you mind sending us the email? We'll take a look, you know, that sort of thing absolutely does happen. But what it sometimes is the determination that it's not possible to carry forward with the employment relationship doesn't necessarily mean that the employee doesn't receive their statutory or common law entitlements. So, you know, unfortunately, employees are sometimes found to be in the position well, I certainly have found that I cannot employ this person any longer as we are not aligned in terms of our beliefs, or we believe that this looks bad on the company to continue to employ this person. But the court might otherwise say, well, that's fine, we can understand that being a justifiable reason for letting the person go. But we do not agree that that should disentitle them from their statutory entitlements or their common law entitlements. So you may decide, look, this is absolutely the best thing to remove this person from the organization. But you will look at the actual conduct itself in the context to determine if it's enough to say, you get nothing. 

Andrew McCoomb  16:03
And in your practices in particular, I assume, layered on top of it is the question of, Okay, but what happens if we terminate someone ostensibly for cause, they challenge whether or not we have cause, and we get into litigation, and it costs us $100,000 in legal fees, and we might not win the lawsuit or whatever kind of difficulty it's going to be, there's a cost associated with making that determination of without cause or with cause, and a risk associated with it, that they have to sort of factor into that assessment, the real world analysis layered on top of that call that-- that your clients, I imagine, are tasked with making all the time when they're dealing with difficult employees?

Chanelle Wong  16:43
Absolutely. I think on top of, you know, the financial costs, there's also the reputational costs, you want to be sure if you're going to disentitle an employee from certain notice requirements, you generally want to make sure this is this is something that is defensible. And if it's going to go to a public hearing, you're going to be stating those reasons, sharing those reasons, you don't want to find yourself in a David versus Goliath situation where you're just really going after the little guy. And conversely, though, I think employees are also considering that. So if they've done something that isn't that great, maybe they don't want to shine the light of day on that. That's also a consideration for whether or not they pursue a claim. So I think there's both financial and non-financial considerations going on both sides in terms of do I pursue this claim, and a lot of care, I think has to be taking in, in the type of allegations that you're making in a just cause case, because and we'll probably talk about this later on, that can impact or create a claim for aggravated or punitive damages on top of damages for breach of contract

Andrew McCoomb  17:48
Separate and apart from the court of public opinion, Glassdoor, what's the impact on the rest of our workforce gonna be from removing this person? If -- if they're going to speak in a certain way about the experience, you know, how's it going to affect everybody else? Sometimes, removing a cancer can be net beneficial for everybody else on your teams, if that's what's needed, and maybe that's leading to the dismissal, but that's not always what happens when you remove someone as well, in handling everything the right way is so politically and financially sensitive across all these different measures.

Paul Macchione  18:23
Oh, absolutely. And I think when you terminate someone with cause, frankly, there's probably a greater chance of litigation than without cause. But also, like we're, I think we're touching on which is, this really shines the light on the potential behaviour. So let's say somebody did engage in something off duty, and that off duty conduct was someone wearing the company logo or driving the company van, and you decide to terminate and they decide to litigate. Well, all of a sudden, this potentially does become headline news. And when I say headline news, I actually mean, it could be in the newspapers. And frankly, we are finding that some plaintiff's counsel will actually go to the newspapers before they bring the claim, right, and to bring up the public opinion of the scenario, especially if they don't think you were close to cause, right, how terrible this potentially was that, that this occurrence happened. So it's really interesting that the court of public opinion does have a significant-- significant impact on whether or not to terminate for cause or without.

Chanelle Wong  19:25
Yeah, it can be pretty ironic that you know, in a situation where it is off duty, and there's reputational considerations and you're taking action against an employee for that, that they can then take it to the newspapers. I always think about, like the Barbra Streisand effect, where you, Don't pay attention to this! and then everyone starts publicizing it. On Reddit, they posted this picture of Beyoncé is performing at the Super Bowl, and she's making a very odd face. And she went on this very conservative campaign to try to take it down. And of course, that had the opposite effect and people kept posting about it. 

Andrew McCoomb  19:58
And of course because the employee’s name will be forgotten the next day, but the employer associated with that story, with a brand, and a trademark, and a reputation, that will be the one that carries that story around as if they own it forever.

Paul Macchione  20:13
Well, and-- and you know how many times employers receive something that says, I know so and so is employed by your company who did X, I cannot believe you employ this person. And if that individual who's making that complaint, does not receive an answer from the employer quickly, perhaps it's now posted, like you said, on Reddit, on Facebook, on Instagram, and it just blows up. So I mean, it's just another element to think about, which is, you're not just responding to the employee complaint quickly, you're keeping your-- your eyes and ears open for any complaint and you're responding quickly.

Ailsa Bloomer  20:49
Okay, I want to talk now about some recent developments in Ontario, and just consider their significance, what they could mean for the other common law provinces. So in Ontario, and in all the other provinces, there are some basic entitlements that an employee has, if they're dismissed. So that's entitlements to notice periods or payment in lieu of notice. And then in an employment contract, you can attempt to set out what would be grounds for just cause immediate termination that rids you of this entitlement. So no notice, no pay in lieu of notice. But as I understand it in Ontario, there is a recent case that said if you are going to deny an employee their statutory entitlements, under employment standards legislation, otherwise known as the-- the minimum entitlements, the degree of misconduct required to do that, is something more than the general common law test for just cause that we talked about earlier. So can you talk us through what is going on here?

Paul Macchione  21:55
Sure, there are minimum legislated entitlements when someone is dismissed. And then there's sort of the common law entitlements. So typically, you can put into an employment contract, for example, that you will only receive the minimum entitlements. Now, if you don't have an employment contract that specifies that you receive the minimum entitlements, you receive the minimum entitlements, and you receive the common law entitlements, potentially. So what the Court is saying in Ontario, anyway, is that there is a higher standard to disentitle someone from those minimum entitlements. So if you are terminating with just cause, you potentially could be disentitled to the common law entitlements, but not the minimum entitlements. And what the Court is saying is, the misconduct can be severe. But if it is not willful, you have to pay out these Employment Standards Act entitlements. And the court has gone so far as to say that willful misconduct involves pre-planned behaviour. So very recently, our Court of Appeal decided a case where there was actually some inappropriate touching in the workplace by a senior manager, the person was fired with cause. And the employer did not provide either the minimum entitlements or the common law entitlements. The case went through the court system, obviously it was decided. And the Court said, Look, you are justified in terminating this person for just cause in respect of those common law entitlements, but in respect of taking away those minimum statutory entitlements in Ontario, you are not entitled to do that. And the reason is, we did not find the conduct willful. Now this person specifically put their hands on a female employees’ buttocks, but it was found that that behaviour was not pre-planned, and ultimately, as wild as it is, and the day that we, you know, living in 2022, the Court said, “Fine, it's okay that this person was fired. It's okay that they don't get their common law entitlements, but you are going to pay them their minimum legislated entitlements”. So what we call the Employment Standards Act minimums.

Andrew McCoomb  24:20
It's hard not to analogize this sort of like first degree murder versus manslaughter. That this wasn't premeditated, and because of what premeditated misconduct, that that's somehow, you know, relates to this case split at the end of the day when it comes to awarding a penalty. 

Paul Macchione  24:37
It's-- it's absolutely bizarre, and you know, and I've actually made that exact comparison with my colleagues. I said, Well, yeah, but what happens if it was manslaughter as opposed to first degree murder? Look, there are other factors in the case, you know, that were taken into account and whether or not something we talked about earlier, which is, you know, was this an environment where perhaps there wasn't actual proper training, did the employer let the culture get out of hand, but ultimately, this-- this focus on pre-planned behaviour, I just don't support it. But the court is using that as a way to provide someone with their Employment Standards Act minimums here in Ontario. 

Ailsa Bloomer  25:17
Yeah it does seem odd, though, I can see the views that the court may be taking, in that sometimes people do things without thinking, when they're under stress, for whatever reason, it may not be their fault, they just fail to think through the consequences of their actions. And so by virtue of doing that, that in itself, I suppose it should not cause them to lose their statutory minimum entitlements. So would you say this is kind of the Court creating a buffer to account for the flaws in human nature?

Paul Macchione  25:49
Well, I think you're right, I think that's exactly what the Court is doing. And look, there are other aspects to the case, which certainly could play into it. I mean, the employee, again, was a very long service employee, and the employee does end up saying, showing remorse and saying, Look, I thought that this was perhaps welcome behaviour, I-- you know, we were, we were joking about such and such. And then this happened, the touching occurred in front of other employees, which perhaps lends itself to the idea that well, if I intended to do this in a malicious way, you know, I wouldn't have done in front of other people, it's not that willful behaviour. I still don't agree with the Court on this one. But yeah, this-- this pre-planned effect is really something that employers are-- are dealing with. And frankly, that's resulted in advice on our part, sometimes it here in Ontario to say, look, we think you have just cause in common law, but we suggest that you pay out your Employment Standards Act minimums.

Ailsa Bloomer  26:46
And so this is obviously an Ontario Court of Appeal decision, I should say the name of it for listeners in case they're interested is Render and ThyssenKrupp Elevator, to what extent are the other provinces likely to follow this direction.

Chanelle Wong  27:01
So BC doesn't have the specific statutory definition of just cause that has led to these cases in Ontario. So, at this point, we're-- we're just using the same kind of concept of just cause in BC that we've been talking about today that just cause at common law. There are other jurisdictions in Canada that have similar statutory language, that is Nova Scotia, and Newfoundland and Labrador. And so I don't think it would be a far stretch to say the courts in those jurisdictions may start to adopt a similar approach as the Ontario Courts just because the language is there for them to do it. And it'll be interesting to see if this Ontario case gets appealed to the Supreme Court of Canada, or further up. And whether or not there's any arguments made at those higher levels, that suggests that a different standard of just cause should be applied with respect to statutory minimums as opposed to common law, it will be very interesting to see whether that happens. So obviously watching with some interest from the other provinces.

Andrew McCoomb  28:09
And that is what it all turns on, right? This idea that there's somehow a failsafe in the statutory definition that gives you kind of an off-ramp, or whether just cause or without cause are all or nothing type issues, once you get to Court and whether or not there should be any kind of different-- different standard. It's an interesting question.

Ailsa Bloomer  28:30
Okay, so-- so with that in mind, should your employment contract contain a definition of cause or-- or just cause termination provision? And are there any risks associated with doing that, with defining just cause in your contract?

Paul Macchione  28:46
Employers like to have a just cause provision, and I think it's, it's perfectly fine and good to say that your employment may be terminated for just cause. It's also fine to provide examples of just cause, which is to say, just cause, and perhaps you use the language may include, then you could list off things like, you know, thefts and safety violations, harassment, but actually, where we don't necessarily recommend that employer, at least do it on their own is to say, what, what the result would be if there is a finding of, of just cause. So to say, look, if you're terminated for just cause you get $0, that can actually be problematic. And there's a case that came out about two years ago, that says that's particularly problematic because of what we spoke about earlier, which is this ESA standard, that perhaps you are entitled to your statutory minimums. And frankly, a lot of employers out there have these clauses that say, if you're terminated for just cause you get nothing. And the reason that actually becomes problematic is in the without cause terminations where you have a well defined clause that says exactly what you're going to receive, the courts are finding that even if that clause is sound, and perfect and well drafted, that if your with cause provision is not appropriate, it will invalidate the termination provisions in both. And so the employee terminated without cause will potentially be entitled to more than their contract set out. Because the just cause provision is not enforceable. So it's great to set out that someone may be terminated with cause. It's also great to have policies right, well on harassment, violence, theft, expenses, confidential information. But when it comes to defining a just cause termination provision, that's where employers have to be careful. But not necessarily for the reason of employees terminated with cause. But because employees terminated without cause, an improperly drafted provision could invalidate that contract, and that language.

Ailsa Bloomer  31:06
I am struggling to understand the logic of that, because it sounds like it sounds like what you're saying to me is that putting to one side the ability to terminate for just cause. So you're terminating an employee without cause, they're no longer a good fit for the business, the employment contract says that, in that case, the employee is entitled to eight weeks’ notice or payment in lieu of eight weeks’ notice. But then completely separately, you have this other just cause term, which is not relevant at all to this situation, and the employer is not relying on it, they're not using it. But if that just cause term is improperly drafted, or it somehow conflicts with the statutory minimums, it then voids the other without cause term, that you're trying to rely on. So that would mean that your eight week notice period under your employment contract disappears. And the default common law comes in, which could mean that your employee could get up to what, two years’ notice instead of instead of eight weeks?

Paul Macchione  32:14
So you do have it right, and you are also right to be shaking your head. Okay, so you have it right. I can't, Why should the perfectly enforceable without cause provision be thrown out just because the cause provision, which is not at all related to this case, is drafted inappropriately, and the Court simply says that all provisions with respect to termination in the employment contract must be drafted in accordance with the ESA and the allowable laws in place. Otherwise, sorry, those provisions are out the window, and it is as though you do not have any limitations. And then we sort of go to the analysis of well, what is the person entitled to and, and you know, that's a different podcast, but it you know, it weighs things like your age, your length of service, availability of similar employment, and it's like you have no contract. It's-- it's contract preference, and to the extreme sort of thing, you know, you're the, you know, you're the drafter of the contract employer, you have to get everything right. And if you don't, we're throwing out all of this.

Andrew McCoomb  33:20
Because it's-- it's completely inconsistent with the law on restrictive covenants. Because the law and restrictive covenants would say that if you've got, and I could have this wrong, but-- but let me play this out for a second. If you've got a non-solicited, non-compete, I mean, how many cases have there been where the court says a non-solicit, that's something that's necessary to protect the company's business, it's fair to protect your customer list and relationships with your employees, but a non-compete to keep somebody out of the workforce and their industry is going to go too far. And, but they don't cut up the contract and say, it's all thrown out the window. They just-- they actually go and sever only the part that's problematic.

Paul Macchione  33:59
One thing, I'm afraid that you may be giving some plaintiff counsel some ideas here, and potentially to make that argument. But look, I agree with you, and that's how it currently stands. I mean, one other thing for-- for your listeners, here is, look, typically, what I've just said, still happens despite there being a severability clause and saying that all of the clauses are, you know, if one clause is otherwise thrown out that, the other clause still stands, and the court saying I don't care, any violation of the Employment Standards Act will invalidate both termination clauses.

Ailsa Bloomer  34:33
And this was another Ontario Court of Appeal decision that-- that said this. There's a case called Waksdale. It's over two years old now. So what has the response been to it since, and again, are the courts in other provinces applying it?

Paul Macchione  34:50
So I'll speak to the what's happened to it and-- and it's continually upheld. So this is, take a look employers at your with cause termination provisions. And frankly, let's put it this way, it's probably better not to have a-- a with cause termination provision at all, as opposed to having an improperly drafted with cause termination provision. Because certain behaviour, it's still going to allow you to terminate with cause without having it in the contract, right? The idea of, Oh, I didn't know I couldn't steal, you know, that's not going to fly, you-- you're still going to have that, right. Or, you know, I guess we call it the-- the George Costanza defense. Oh, I didn't know I couldn't do that when he's having relations with the cleaning staff. That's not going to fly. So this is to say, revisit your with cause provisions. 

Chanelle Wong  35:39
So in BC, because we don't have that specific definition, the statutory definition of just cause. I think the facts that led to Waxdale or Waksdale, don't wouldn't really arise in BC. But I know that when that decision came out, I felt like thousands of workplace lawyers cried out and were silenced at once. It was a very dramatic decision. I think it kind of had ripple effects across the country, even though other provinces may not have the statutory language. For BC, I think it really underscores the importance of the name of the game is to review your contracts regularly, make sure that they're up to date, make sure that whatever changes are in employment standards legislation you're reflecting. We're a lot more cautious now in-- in drafting, even the just cause provisions, I think throwing in references to accept as minimally required by employment standards legislation is very standard now to try to pre-empt these issues. So--so I think, even though that specific fact pattern may not be the case, in other provinces, without this statutory language, it still has made management side lawyers and employers a lot more cautious in how they draft their contracts and making sure that they're regularly reviewed.

Paul Macchione  36:54
I think one of the important pieces of how this potentially arose right, thinking of the context, it happens in a case where an employee is terminated without cause, the Court is looking at the fact that potentially someone is trying to limit the notice entitlements. So we're not talking about the just cause employee who's necessarily done something wrong. So now you're looking at a contract. And you know, the plaintiff side lawyer is pointing to different places the contract may be wrong, and pointing the judge to the fact that there's a recognized power imbalance between employer and employee and saying, hey, look at this clause that violates the Employment Standards Act, my client should receive a greater entitlement in that without cause scenarios. You know, the context that it comes up in perhaps there's a oh, I want to provide this employee who was terminated for no wrongdoing with something more than the minimums. Now, I'm not saying that that's how the Court thinks. And you know, that's the last thing I want to say. But it's a scenario whereby you're getting this law, not from just cause terminations where someone's acted so poorly. You're getting it from cases where someone likely didn't act poorly at all. And you're looking to see if you can provide more than those minimum entitlements. So you're saying, look, the employer got it wrong here. The common law applies.


Andrew McCoomb  38:21
Paul, everything you just said is really interesting. It obviously ties into the ideas of the dignity of work and the importance of people to be in the workforce and work to their identity and that part of their lives. And there's a huge equity component to these decisions that factors in to everything that makes them a little bit more complicated. And that complexity, I think, is something that we're going to have to continue to explore with you guys as this area evolves, as our labour and employment correspondents. So please-- please join us again in the future. And thanks very much for coming on the podcast.

Chanelle Wong  38:55
Thank you for having us.

Paul Macchione  38:57
Appreciate it.

Ailsa Bloomer  38:59
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