What Nova Scotia Employees Need to Know About “Just Cause” and Termination Without Notice

If you work in Nova Scotia, you may have seen a “just cause” clause in your employment contract—often worded to say your employer can terminate you without notice or pay-in-lieu of notice if the employer has “just cause”. The phrase “just cause” has become well known as the standard which the employer has to meet in order to terminate your employment with no notice. However, is this actually the legal standard in Nova Scotia? The answer is more complicated—and importantly, more protective of employees—than you might think.

This blog breaks down recent legal principles about “just cause” and termination without notice, focusing on how the law protects employees in Nova Scotia. It also highlights key Ontario decisions that, while not binding here, are persuasive authorities. Understanding this can empower you to protect your rights if you face termination.

What Is “Just Cause” — And Why Does It Matter?

“Just cause” is a legal term rooted in common law, describing employee misconduct that has historically been used to justify termination without notice. It includes things like wilful misconduct, dishonesty, gross neglect of duty, insolence, insubordination, and in general, behaviour fundamentally damaging to the employment relationship.

However, in Nova Scotia, s. 72 of the Labour Standards Code (the “Code”) sets a distinct and generally more protective standard for termination without notice. The Code permits termination without notice only for “wilful misconduct or disobedience or neglect of duty that has not been condoned by the employer”—a narrower and stricter test than the broad “just cause” concept.

This difference is important because:

• The Code’s minimum protections cannot be overridden by contract.
• If it is true, as I’m suggesting, that “just cause” is a broader concept than the standard set out in the Code, this means that “just cause” clauses are actually illegal/void. 
• When employment contracts contain illegal provisions, the courts will refuse to give effect to the illegal provisions, and may even go further than that, refusing to give effect to any termination clause in the contract that is unfavourable to the employee. 

Since the Supreme Court of Canada’s decision in Machtinger v. HOJ Industries Ltd., [1992] 1 S.C.R. 986, we know that the courts will not give effect to contracts that violate minimum labour standards. If an employer attempts to do so, then the court will ignore such provisions entirely, and award the employee wrongful damages consistent with common law principles (i.e. they will order the reasonable pay in lieu of notice be provided to the employee). 

In Nova Scotia, does this apply to “just cause” clauses? 

The Kelly Case: Clarifying the Distinction in Nova Scotia

In Kelly v. Nova Scotia (Labour Standards Tribunal), 2016 NSLB 156 the Nova Scotia Labour Board clearly explained that “just cause” and the Code’s standard for termination without notice are not identical. They overlap in many respects, but the Code’s standard governs the minimum legal threshold for when notice can be denied.

The Board confirmed that:

• Employees are entitled to at least minimum notice or pay in lieu unless the employer proves wilful misconduct, disobedience, or neglect under the Code.
• The common law concept of “just cause” includes things not listed in the Code, like dishonesty and incompetence.
• The Legislature’s omission of such grounds in the Code indicates an intent to give employees enhanced protections beyond common law.

While Kelly noted that the “just cause” standard is still a relevant legal principal in Nova Scotia (namely, for employees with tenure of over 10 years), and that “just cause” and the s. 72 standard in the Code may overlap in many important respects, they are not the same and the terms should not be used interchangeably.  

What Ontario’s Courts Have Said About “Just Cause” Clauses

Ontario’s labour laws are similar but not identical to Nova Scotia’s, and Ontario courts have gone further in addressing “just cause” clauses in contracts. Several recent Ontario Court of Appeal decisions—such as Rahman v. Cannon Design, 2022 ONCA 451 and Waksdale v. Swegon North America Inc., 2020 ONCA 391—have held:

• Clauses allowing employers to terminate employees without notice for “just cause” violate Ontario’s Employment Standards Act, because Ontario’s labour legislation uses a standard much narrower than “just cause” (similar, I submit, as does Nova Scotia). 
• Employers cannot contract out of minimum statutory notice requirements by relying on “just cause” clauses that are broader than the legislation.
• Such illegal termination provisions are not severable from the contract. This means that if any of the employment contract provisions are found to be illegal, that means that all termination provisions will be considered void. The courts have taken this approach with a view to encouraging employers to respect and comply with the minimum standards of labour legislation. Courts have repeatedly noted that this should not be such a difficult thing for employers to do, and yet we have seen, again and again, employers drafting contracts that do not comply with the minimum standards of labour legislation. 

Why Nova Scotia May Follow Ontario’s Lead

While Nova Scotia courts have not yet ruled on whether “just cause” clauses are illegal/void, there are not many distinctions between Ontario’s labour legislation and Nova Scotia’s. Ontario’s legislation uses the standard of “wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer”. The provision uses the word “wilful” twice, and also says “that is not trivial”, whereas in Nova Scotia, the word “wilful” is used once and the word “trivial” does not appear. The distinction does not seem significant. In either case, it seems clear to us that the “just cause” standard has been made stricter by the legislation in both provinces.  

Given this, and Ontario’s recent case law, we see a very strong case for Nova Scotia following the trend in Ontario. Doing so would be most consistent with the Supreme Court of Canada’s ruling in Machtinger, ensuring that employees in Nova Scotia are protected from unlawful termination clauses and maintain their statutory minimum notice rights.

What Does This Mean for Nova Scotia Employees?

If your employment contract says your employer can fire you without notice for “just cause,” remember:

• That clause may be an attempt to override your rights under Nova Scotia’s Labour Standards Code, and may therefore be void.
• Your employer must meet the higher standard of wilful misconduct, disobedience, or neglect to deny you notice or pay.
• You may be entitled to reasonable notice or pay in lieu, regardless of what your contract says.

For Nova Scotia Lawyers

Ontario decisions like Machtinger and Waksdale offer persuasive guidance on interpreting termination clauses in light of labour standards. While Kelly clarifies that “just cause” and statutory standards are distinct, courts will be wary of contracts that try to circumvent the Code’s minimum protections.

We see a very strong case for Nova Scotia following the trend in Ontario, as that approach aligns most consistently with the Supreme Court of Canada’s ruling in Machtinger. Although it remains to be seen how Nova Scotia courts treat  a “severability” clause, my cautious prediction is that they will follow the trend in Ontario. 

Final Thought

Employment contracts often look like ironclad rules—but when it comes to termination and notice, Nova Scotia law protects you more than your contract might suggest. If you’ve been terminated without notice, it’s important to understand your statutory rights—and don’t hesitate to get advice to ensure those rights are respected.

If you want help understanding your employment rights in Nova Scotia or believe your employer is trying to avoid giving you proper notice, feel free to reach out for support. You deserve to know what protections the law offers you.