Just cause

A buyer weighing whether to dismiss inherited staff meets just cause as a limit on what the buyer can assume. Alberta’s government, for example, says that on an employee complaint the burden of proof is on the employer to show that just cause exists, and that some situations, such as a personality conflict, are not just cause.

How the rules treat it

Alberta’s government says serious misconduct may allow termination for just cause, that employers must be prepared to demonstrate it, and that in those cases no termination notice or termination pay is required. British Columbia’s Employment Standards Act discharges the employer’s liability for compensation for length of service where the employee is dismissed for just cause (s. 63(3)). The Canada Labour Code excepts dismissal for just cause from its severance pay rule (s. 235(1)), and its individual termination notice rules do not apply to it (s. 229.1). Ontario’s regulation under its Employment Standards Act uses a different test: an employee guilty of wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned is not entitled to notice, termination pay or severance pay (O. Reg. 288/01). Other provinces run their own regimes.

What to check or ask

• What the employee’s conduct actually was, and whether the seller knew of it and condoned it
• What records of warnings or investigations exist
• Which province’s test applies to the employee

Read what are my obligations if I terminate employees after buying a business. A related claim is constructive dismissal.