“Near Cause” – Reason for Reducing Notice?

 

Most know the difference between “just cause” and “without cause”, and their implications for notice and severance. If an employer has just cause to terminate an employee, that employee is entitled to pay up to the date of termination, and nothing more. If the dismissal is without cause, however, the employer must provide notice to the employee or payment in lieu.

But what about situations that fall somewhere in the middle, where an employee’s misconduct is not quite severe enough to warrant dismissal? Can the employer provide the employee with less notice to account for that misconduct?

The short answer is No: an employer cannot rely on “near cause” to reduce the amount of notice required when terminating an employee.

The “near cause” doctrine is the principle that an employer may reduce the amount of notice given, or severance owed to an employee when dismissing him or her for misconduct that did not quite warrant dismissal for cause. This doctrine was given some credibility at one time, with Courts allowing employers to reduce their severance obligations on the basis of the employee’s misconduct. The jurisprudence has since established, however, that “near cause” dismissal is, in fact, wrongful dismissal, and the employee is entitled to the entirety of reasonable notice or pay in lieu.

This issue was settled by the Supreme Court of Canada when it overturned the Nova Scotia Court of Appeal’s decision in Dowling v. Halifax (City), bluntly concluding, “We do not accept any argument relating to near cause”.

Ultimately, an employer either has cause for terminating an employee, or they do not. When considering terminating an employee, it is vital that employers first obtain advice on what the law considers to be “cause” for dismissal, as this has significant implications for their potential notice obligations.

Minken Employment Lawyers is your source for expert advice and advocacy on today’s employment law issues. Whether you are an employer or an employee, we can help. Contact us to see how.