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I have an employee who has been off work since late 2015 on medical leave and has not returned to work. As of last week, January 2016, this employee has begun working at the competitor without resigning at our establishment. We have given them ample time and opportunity to return to work in there previous status of full time employment of 40 hours. Do we have just cause of terminating their employement with our organization under these circumstances? Do we have an obligation under these circumstances to pay them termination pay? What are our legal rights?

It sounds like you do not have to terminate the employee for cause, but can treat their actions as a constructive resignation. I would strongly recommend that you speak to an employment lawyer at the number below in order to figure out the best way of proceeding.
Lior Samfiru
Direct Tel (Toll Free): 1-855-821-5900     Email: lior@stlawyers.ca     Web: www.stlawyers.ca
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Thank you for your response. For clarity sake, their job description has not changed at all. We just required him to return back to work in their original position as he was hired. I don't understand where "constructive resignation" applies in this case when we didn't change their employment role in anyway. While being off work under medical for several months, they seeked employement elsewhere and accepted the position without giving notice to our business that they began work elsewhere in a full time position. They remain on our payroll still. Do we have the legal right to terminate their employment under these circumstances? As they have made no attempt to return to work, are we obligated in anyway to payout severance? They have been employed with us for 15 years. Looking forward to your response.
It sounds like you might be confusing "constructive dismissal" with "constructive resignation". I am not at all suggesting that the company has constructively dismissed the employee. Rather, I think that, legally speaking, you can treat the employee's actions as constituting a resignation, whereupon you have no further obligations to the employee. However, and as noted, I strongly recommend that you speak to an employment lawyer.