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After-Acquired Cause in Ontario: Can Your Employer Deny Severance After Firing You?
You were terminated. A severance offer was made. Then your employer comes back claiming they have discovered misconduct and are withdrawing or reducing the offer. This is called after-acquired cause, and it is one of the most stressful situations an employee can face after termination. Understanding what after-acquired cause actually requires, how high the legal threshold is, and why many of these claims do not succeed is critical before you accept any change to your compensation.
The legal threshold is high. The employer must prove the misconduct actually occurred, that it was serious enough to justify a for-cause termination, and that it would have led to termination had it been known at the time. Courts do not accept these arguments automatically, and many fail to meet the standard required.
Has your employer raised new allegations after termination and reduced or withdrawn your severance offer?
Do not accept the new position or admit to anything before speaking with a lawyer. After-acquired cause claims often fail to meet the legal threshold. Get advice before your compensation is affected.
Call: 1-800-771-7882 Get Your Situation ReviewedWhat an employer must prove for after-acquired cause to succeed
After-acquired cause is a legal doctrine, not a free pass for employers to search for reasons to avoid paying severance after the fact. Ontario courts require employers to meet all three of the following elements before after-acquired cause can eliminate or significantly reduce a severance entitlement.
The misconduct actually occurred
The employer must establish on the evidence that the misconduct they are alleging genuinely took place. Allegations without substantiation, or conduct that is reframed to look worse in hindsight, are not sufficient.
The misconduct was serious enough
Not every workplace policy breach or performance issue meets the threshold for just cause. The conduct must be serious enough that it would have justified termination for cause if it had been discovered before the termination occurred.
It would have led to termination
The employer must show that had they known about the conduct at the time, the employment would have been terminated on that basis. Where the conduct would have resulted in a lesser response, after-acquired cause is unlikely to succeed as a complete defence.
Common situations where after-acquired cause is raised and why many fail
After-acquired cause arguments are most commonly raised in situations involving alleged dishonesty or misrepresentation, misuse of company resources or expense accounts, undisclosed conflicts of interest, breach of confidentiality or company policy, and performance issues that are retrospectively reframed as misconduct. Many of these claims fail because the alleged conduct does not meet the high just cause threshold, because the employer was already aware of or had tolerated the conduct, or because the investigation was conducted improperly or in bad faith after the termination.
Why after-acquired cause is particularly risky for employees
Was your severance offer reduced or withdrawn after your employer claimed to discover misconduct?
After-acquired cause is a high legal threshold and many claims fail. Do not accept a reduced offer or admit to anything before getting legal advice. Your severance entitlement may still be recoverable.
Get Your Situation Reviewed Or call us: 1-800-771-7882What to do if your employer raises after-acquired cause
Do not accept the new position immediately
Your employer's claim that newly discovered misconduct justifies eliminating your severance may not be valid. You have the right to have the allegation properly assessed before accepting any change to your compensation. Do not sign anything or agree to anything verbally without getting advice first.
Do not admit to the alleged misconduct
Statements made quickly and without legal advice in response to after-acquired cause allegations can be used against you in subsequent legal proceedings. Be careful about what you say in writing or in any conversation with your employer while the allegation is being raised.
Gather relevant documentation
Collect and preserve any documentation relevant to the alleged conduct including emails, performance reviews, expense records, communications with management, and any prior acknowledgment by your employer of the conduct at issue. Documentation showing the employer was aware of or tolerated the alleged conduct significantly undermines an after-acquired cause claim.
Get legal advice promptly
A lawyer can assess whether the alleged conduct meets the legal threshold for after-acquired cause, whether the employer's investigation was properly conducted, and what your severance entitlement remains. The earlier you get advice, the more options you have and the stronger your negotiating position will be.
Frequently asked questions about after-acquired cause in Ontario
Can my employer deny severance after firing me in Ontario?
Only where they can prove after-acquired cause meets the full legal threshold: that the misconduct actually occurred, was serious enough to justify just cause termination, and would have led to termination had it been known at the time. This is a high bar. Many after-acquired cause claims fail in Ontario courts. Do not assume you have no rights simply because your employer has raised the argument.
Can my employer change the reason for termination after the fact?
Employers can raise after-acquired cause as a legal argument where they genuinely discover new information after termination. However, they cannot retroactively investigate a terminated employee looking for reasons to avoid paying severance. Where the employer knew or should have known about the alleged conduct before termination, after-acquired cause will generally not succeed. Courts scrutinize the timing and the genuineness of the discovery carefully.
What if the alleged misconduct was never raised before I was fired?
The fact that an issue was never raised during employment is relevant but not automatically fatal to an after-acquired cause claim. The doctrine specifically applies to conduct the employer did not know about at the time of termination. However, where the employer was aware of or had tolerated the conduct, or where it does not meet the just cause threshold, the claim will likely fail regardless of when it was raised.
Does after-acquired cause mean I get nothing?
Not necessarily. Even where some misconduct is established, it may not meet the threshold for complete just cause. Courts may find the conduct justifies a reduction in severance rather than complete elimination. In other cases the after-acquired cause claim fails entirely and the full severance entitlement is restored. The specific facts of your situation determine the outcome. Get legal advice before accepting any reduced offer.
What if I disagree with the allegations?
You have the right to dispute after-acquired cause allegations. Denying the conduct occurred, challenging the adequacy of the employer's investigation, or demonstrating that the conduct does not meet the just cause threshold are all available arguments. A lawyer can assess the strength of the allegations against you and advise on the best way to respond without inadvertently weakening your position.
How long do I have to challenge an after-acquired cause claim in Ontario?
The general limitation period for wrongful dismissal claims in Ontario is two years from the date of termination. Do not wait, however the earlier you get advice, the stronger your negotiating position and the more options you have. If you have been presented with a deadline to accept a reduced offer, do not let that deadline pass without getting legal advice first.
Has your employer reduced or withdrawn your severance offer after raising new allegations?
After-acquired cause is a high legal threshold and many claims do not succeed. Our team advises employees across Ontario on severance pay disputes and wrongful dismissal claims. Contact us for a confidential consultation before accepting any change to your compensation.
Call us at 1-800-771-7882 or fill out the form below and we will be in touch.
The article in this client update provides general information and should not be relied on as legal advice or opinion. This publication is copyrighted by Achkar Law Professional Corporation and may not be photocopied or reproduced in any form, in whole or in part, without the express permission of Achkar Law Professional Corporation. ©