The termination of an employment contract is a significant event with far-reaching consequences for both the employer and the employee. To
ensure fairness and legality, labor laws typically outline specific grounds for termination, broadly categorized as
just cause and authorized cause.
Just cause refers to circumstances where an employee’s misconduct, negligence, or breach of contract justifies their dismissal. It is typically linked to the employee’s performance or behavior. Examples of just cause include gross misconduct, habitual neglect of duties, fraud, or theft. These actions are considered serious enough to warrant immediate termination without notice. To successfully terminate an employee based on just cause, the employer must generally prove the employee's wrongdoing through substantial evidence.
On the other hand, authorized cause is grounded in economic or business reasons beyond the employee’s control. It is often related to the employer’s operational decisions. Common examples of authorized cause include redundancy, retrenchment due to financial losses, closure or cessation of business operations, and the introduction of labor-saving devices. While these reasons may necessitate job cuts, employers are usually required to comply with specific procedures, such as providing notice periods, severance pay, or assistance with job placement.
The distinction between just cause and authorized cause is crucial for several reasons. First, it protects employees from arbitrary dismissal by establishing clear standards for termination. Second, it ensures that employers have legitimate grounds for ending employment relationships. Third, it guides the determination of appropriate remedies for wrongfully terminated employees.
Understanding the concepts of just cause and authorized cause is essential for both employers and employees. By clearly defining these grounds, labor laws strive to balance the interests of both parties and maintain a fair and equitable employment environment. While just cause focuses on employee misconduct, authorized cause
addresses economic factors beyond the employee’s control. By adhering to the legal requirements associated with each category, employers can minimize the risk of labor disputes and ensure compliance with employment laws.