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Just Cause and Appropriate Notice Period
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Just Cause and Appropriate Notice Period

In Ruston v Keddco Mfg. (2011) Ltd., the Court of Appeal for Ontario considered the issues of just cause
for employee termination and the appropriate notice period owed to the employee if the employer did
not have cause to terminate? The Court found that the trial judge was correct in finding that the
employer failed to prove just causation in terminating the employee. The Court also agrees with the trial
judges award of a 19-month notice period. The trial judge applied the Bardal factors and emphasized
important considerations, such as the appellants age (54), finding of close family ties to the area for the
purpose of finding similar employment, and the finding that the employee was terminated for serious
allegations and was not provided a reference letter.

The employee was 54 years old at dismissal and occupied the highest position as President of the
company. He received quick promotions from his initial position as a sales representative in 2004. The
employee has a grade 12 education and has been unsuccessful in securing re-employment. The
employer justified the dismissal for cause stating that he was being terminated for committing fraud. No
explanation was provided. The employer also advised the employee that if he hired a lawyer, it would
counter-claim and would be very expensive.

McKinley v B.C. Tel (2001) states that an “employer has just cause for summary dismissal where the
employees dishonesty gives rise to a breakdown in the employment relationship”. Ontario courts have
focused on whether the employee’s behavior was sufficiently serious to undermine the core of the
employment relationship. (Fernandes v Peel Educational & Tutorial Services Limited (Mississauga Private
School); citing Dowling v Ontario (Workplace Safety and Insurance Board) (2004). In the case at hand,
the trial judge held that the employer failed to prove that the employee’s behaviour gave rise to a
breakdown in the employment relationship. The trial judge provides reasons such as a:

  1. Evidence relied upon the employer was known to the employer in January 2015 (emails
    regarding personality issues);
  2. High ranking employee (daughter of employer) provided the employee a bonus for the 2014
    business year and expressed her commitment to working with the employee to improve the
    business of the employer; and
  3. Two days prior to the termination, high ranking employee email to employer regarding the
    employee is silent regarding conduct concerning fraud or misfeasance.

The court then considered the issue of an appropriate notice period. The employer has failed to prove
for cause dismissal and the employee is entitled to reasonable common law notice (Machtinger v HOJ
Industries Ltd.,). The length of common law notice periods is determined by using the Bardal factors: the
age of the employee, the character of his or her employment, the length of service, and the availability
of similar types of employment, considering the experience, training and qualifications of the employee.
(Bardal v Globe & Mail). The employee was president of the company and was 54 years-old at the time
of dismissal. He was employed for 11 years and had 45 people reporting to him. The employee is seeking
a high-level position within the Sarnia area. The trial judge considered factors such as the employee’s
family obligations which require him to remain in Sarnia area and the fact that the employee’s highest
level of education is grade 12. There is no meaningful opportunity to gain similar employment in the
Sarnia region.

The trial judge distinguishes the case at hand from Singer, where the employee (51 years old) was
terminated without cause from his position as President and General Manager. The Court of Appeal
upheld the trial judges award of a common law notice period of 17 months. In the case at hand, the
employee is older, has family ties which interfere in finding similar employment, was terminated for
serious allegations and not provided a reference letter. On the basis of distinguishing this unique set of
facts from those of Singer, the Court of Appeal held the notice period of 19 months appropriate.

In determining just cause for dismissal, the Court in Ruston held the employer to a high evidential
burden of establishing conduct amounting to a breakdown in the employment relationship. It appears
that the employer failed to present any evidence regarding the behaviour of the employee that could
amount to such behaviour. In determining a common law notice period with no just cause for dismissal,
the Court is willing to take unique circumstances and considerations into account and consider each
case on an individual basis.

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