Understanding termination without cause examples is useful for anyone in HR or for employers.
When an employer ends an employment relationship for reasons unrelated to the employee's actions, it's called termination without cause.
This is different from termination "with cause," where the dismissal is due to misconduct or poor performance.
Making this decision can be tough, but it is often necessary for a company's growth, financial stability, or restructuring.
In this article, we will explain what termination without cause means and give real-world examples.
Termination without cause happens when an employer lets go of an employee for reasons that aren’t their fault, rather than issues like bad behavior or poor performance.
Usually, employers need to provide a few things:
If terminations aren't handled well, they can cause legal troubles, lower morale, or hurt the company's reputation.
That’s why it’s really important to have some good HR advice.
To figure out how to have these discussions with empathy, check out our post on how to conduct a termination conversation professionally.
Here are some common reasons why employers might let employees go without a specific cause.
(These are also the most common terminations without cause in Ontario)
When companies merge or change their structure, some jobs may overlap.
Even strong employees can lose their jobs if their position is no longer necessary.
For instance, a marketing manager might be let go after a merger if the new company already has someone in that role.
When times get tough economically or sales take a nosedive, companies might cut back on their workforce to save some cash.
This move isn’t about the employee's performance or behavior.
Take an e-commerce company, for instance; they might lay off warehouse workers if demand drops.
Sometimes, new technology makes certain jobs redundant.
Like, payroll software can handle what manual payroll clerks used to do, meaning those jobs might vanish.
Companies struggling with cash flow may have no choice but to reduce staff in different departments, even if those workers are performing well.
An example would be a nonprofit that has to downsize after losing a critical source of funding.
Companies occasionally switch up their strategy.
This could mean closing a branch, stopping a product line, or even exiting a market, leading to layoffs.
A typical scenario is when a retail chain shuts down several stores, resulting in the termination of store managers and staff.
When an employer lets someone go without a reason, they still have some things they need to handle:
1. Notice period or pay
Employees should get a heads-up before their job ends, or at least get paid for that notice period.
2. Severance packages
Employers might offer some financial help to make the transition a bit easier.
3. Benefits continuation
In some areas, benefits and compensation, like healthcare must continue for a certain time.
4. Record of employment
Employers must give paperwork that proves employment for unemployment benefits.
To stay within the law, many organizations work with expert HR partners like TROIS Collective, who help manage legal requirements and create respectful offboarding processes.
It's important to understand the difference between two types of job dismissals:
This means an employee is fired for bad behavior, like stealing, harassment, or poor performance (even union workers)
Employers usually don't have to give severance pay in these cases.
This means an employee is let go for reasons that are not their fault, such as company restructuring, financial issues, or job redundancy.
In these situations, the employer must provide severance pay or notice.
If you’re unsure about these legal differences, an HR audit can help find any compliance gaps and prepare you for risks.
Termination without cause in Ontario (or any other province) occurs when an employer ends an employee’s job for reasons not related to misconduct or poor performance.
Examples of termination without cause include layoffs during a recession, removing a job due to automation, closing an office, or restructuring after a merger.
These choices do not relate to how the employee performed.
Yes, in most cases, employers must provide notice or severance pay when terminating an employee without cause.
The amount usually depends on how long the employee has worked, their employment contract, and local labor laws.
On the other hand, the manager should be trained to deliver the notice.
Termination with cause happens because of misconduct, breaking company rules, or poor job performance, and typically does not come with severance pay.
Termination without cause occurs for business reasons outside the employee’s control, and usually requires severance or notice.
Understanding examples of terminations without cause can help businesses navigate one of HR's challenging tasks.
When companies go through downsizing, restructuring, or financial challenges, terminations often happen.
If handled properly (with clear communication, empathy, and legal care), it can actually help maintain your reputation and support both the employees and the organization during the transition.
At TROIS Collective, we’re here to guide you through each step.
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