Labour & Employment Law Blog

What You Should Know About Wrongful Dismissal in Ontario

From our experience as GTA employment lawyers, a lot of people are confused by what wrongful dismissal is. We feel that this is a shame as it is a very important concept to understand given how many people it concerns.

Here are some things that everyone should know about wrongful dismissal in Ontario.

  1. What Is Wrongful Dismissal?

Wrongful dismissal means that the employee has been fired or terminated in the following situations:

  1. where an employer terminated the employment of the employee and improperly alleges cause, while failing to provide the employee with reasonable notice of termination; and
  2. where an employer has terminated the employment of the employee without cause and has refused or failed to provide the employee with reasonable notice of termination.

The bottom line is that wrongful dismissal occurs when an employee has been fired or they lose their job and they have not been given the proper notice of termination.

  1. What are an employee’s entitlements if they have been wrongfully dismissed?

Upon termination, an employee has certain entitlements that are owed to them or that they should receive when their employment has been terminated.

The first source of compensation is that employees are also entitled to their legal entitlements established under statutory regimes, including Ontario’s Employment Standards Act (“ESA”), which addresses requirements for notice periods and severance pay entitlements, among other things. These are statutory minimum entitlements, meaning that employers cannot restrict a terminated employee’s entitlements under the ESA.

The second source of entitlement or compensation is under the common law as employers must provide “reasonable notice” to fired employees. Reasonable notice is simply the amount of time that an employer should provide the employee before the employee’s job actually ends. The length of this notice is determined based on a variety of factors. These factors include age, position, length of service and the ability to find new alternative employment. When an employer requires the employee to work during their notice period, this is called “working notice.”

However, in the bulk of cases, employers choose to terminate the employee’s employment immediately, and they pay the employee for the notice period. This is called “pay in lieu of reasonable notice.” An employee that has been wrongfully terminated is entitled to pay in lieu of reasonable notice which would consist of all entitlements the employee would have been eligible for but for his or her termination, such as bonuses, pay increases, etc. More often, however, employees are entitled to what is colloquially referred to as a “severance package.” An employer cannot restrict these entitlements unless they have done so in a legally enforceable employment contract.

  1. What About Human Rights?

In certain instances, there are additional factors that come into play. For instance, an employee may have been terminated while they are on parental or sick leave, or the employee has been terminated due to their race, disability, gender or age. These are prohibited grounds of discrimination based on Ontario’s Human Rights Code. If discrimination based on a prohibited ground occurs, the employee may be entitled to additional human rights damages on top of the standard compensation relating to pay in lieu of reasonable notice under the common law as well as the minimum requirements under the ESA.

  1. How Can an Employment Lawyer Help?

Each employee’s case is specific to his or her circumstances and they should contact an employment lawyer when they have been wrongfully dismissed or risk losing out on compensation owed to them. A good example of this is in the context of the employment contract which attempts to restrict the employee’s common law notice entitlements thereby preventing the employee from receiving substantial compensation. Employment lawyers regularly fight unenforceable termination provisions contained in employment contract or agreements.

We cannot stress enough that where an employee has experienced a wrongful termination, or to determine whether that employee may be entitled to receive compensation, they should contact one of our experienced lawyers today to discuss their options. Do not attempt to negotiate with the employer without a lawyer’s assistance.

The above article is for general information purposes only, does not constitute legal advice or create a solicitor-client relationship. Because each case is unique and factually driven, if you have concerns with regard to the foregoing issues, please make an appointment with one of our lawyers or a qualified legal practitioner elsewhere. We represent clients in the Greater Toronto Area including Toronto, North York, Markham, Vaughan, Thornhill, Newmarket, Aurora, Brampton, Mississauga, Barrie, Ajax, Whitby, Pickering and Oshawa.