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Wrongful Dismissal Law

ontario wrongful terminationQ. I was dismissed from my employment.  Is that a wrongful dismissal? What can I do about it?

The term “wrongful dismissal” or “wrongful termination” can be misleading.  Dismissed employees often believe that when their employment is terminated, they have an automatic right to sue.  However, the truth is that an employer is entitled to dismiss an employee when the employee’s services are no longer needed.  Therefore, the fact that an employee was dismissed, does not necessarily constitute, in and of itself, a “wrongful dismissal”.

Of course, there are circumstances where an employer does not have a right to dismiss an employee.  For instance, say an employee has just informed the employer that she is pregnant.  An employer cannot then dismiss the employee on the basis of pregnancy, as that can be deemed to be a breach of the Human Rights Code.    In such case, then you have a wrongful dismissal.

Assuming a routine situation where the employer simply no longer requires the services of the employee and the employer does not allege just cause for dismissal, the employer is obligated to provide the terminated employee with notice of termination or payment in lieu of notice (as well as any outstanding payments such as vacation pay).

Determining the length of the notice period or the amount of payment in lieu of notice can be tricky.  The first thing one should determine is whether or not there was an employment contract.  If so, then that will usually govern, though if found to be unreasonable by a court, then terms of the contract may not apply.

With or without a contract, Ontario’s Employment Standards Act sets out the minimum requirements to be paid to an employee upon dismissal, generally at least one week per year of service up to 8 weeks.

As well, many people do not realize that there are also provisions for severance pay which is separate and apart from payment in lieu of notice.  If the employee was employed with the employer for at least 5 years and the employee is one of 50 or more employees who had their employment severed within a 6 month period as a result of a discontinuance of operation of the employer’s business or the employer’s payroll was $2.5 million or higher, then the employee is eligible for severance pay.

Despite the legislation, the courts have repeatedly found the employer to be liable to the employee for an increased notice period, generally starting at a month per year of service.  The notice period can be adjusted upwards or downwards based on a number of factors such as the employee’s position, age at dismissal and prospects of finding suitable replacement employment.

Though one can go to the Ministry of Labour for his statutory payments, generally it is advisable to go to court because the recovery can be much higher and going to the board precludes one from suing in court.

Note, an important aspect to consider is the manner of dismissal.  Courts have repeatedly slapped damages against an employer where an employer acted harshly or callously at the time of dismissal such as by sending a nasty email, screaming at the employee, making unfounded accusations or dismissing he employee in front of co-workers.

As well, in instances where an employer claims just cause for dismissal but cannot substantiate it, then the court may award the employee with a higher notice period, particularly if the employee’s life was made miserable such as by unfair records of employment, humiliating allegations, etc.

Finally, regardless of the circumstances, an employee is expected to lessen his damages by immediately seeking to find suitable replacement employment.  By failing to do so, the courts can decide to award an employee less damages than what he could have received if he proved that he was making substantial efforts at finding a job. This is known as the duty to mitigate damages.

In conclusion, the above is a very basic discussion of a vey intricate area of law.  Each case will depend on its facts.  There are numerous considerations that go into determining whether or not you were wrongfully dismissed.  Before doing or signing any settlement proposed by your ex-employer, you should immediately contact a legal professional to discuss your rights and options.

The information herein should not be taken as legal advice and may have been changed since published. Do not treat information provided in the article as a recommendation to act or refrain from taking action, or as legal advice. The information provided is not a substitute for the assistance of a licensed legal advisor.