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What is wrongful dismissal?

The term wrongful dismissal is spoken about widely, but very few people properly articulate the issue.

Employers have the right to dismiss employees for any reason and at any time during the course of the employment provided that the employer does not act in an unlawful way in its dismissal of the employee.

If the manner or reason of dismissal is unlawful, then in law this is wrongful dismissal.

The most common form of wrongful dismissal occurs when an employer does not provide the employee with reasonable notice of termination.

Notice Period

Notice is the period of time that serves as a warning to the employee of his/her termination. Employers are obligated to provide notice so as to alleviate the financial hardship that an employee will inevitably experience as a result of termination.

Employers can elect to provide notice in three ways:

  • Working Notice: The employee is informed that his/her employment will end at a definite point in the future and the employee continues to work for the employer until that date; or,
  • Pay in Lieu of Notice: This is often referred to as “termination pay” and it is a salary continuance or a lump sum payment equivalent provided to the employee for the notice period during which the employee does not continue to work; and,
  • Combination of Working Notice and Pay in Lieu of Notice: Employers can choose to provide notice as a combination of working notice and pay in lieu so that the employee works for a portion of the notice period and is paid a salary continuance for the remainder.

Length of Notice

Employees are entitled to minimum notice under provincial and federal employment legislation. In Ontario, employees who have worked for more than 3 months with the employer are entitled to 1 week of notice for every year of service up to a maximum of 8 weeks.

In addition to statutory entitlements, employees may also be entitled to reasonable notice under common law based on the specific circumstances of the case.

Unlike statutory entitlements, however, reasonable notice under common law can be restricted by termination provisions in the employment agreement. Common law notice is further subject to mitigation and requires the employee to make reasonable efforts to secure comparable employment as quickly as is reasonable.

For further information, our previous blog post on termination packages and assessing the fairness of notice can be found here.

If an employee is not provided reasonable notice including statutory minimum entitlements or notice under common law at the time of termination, then its wrongful dismissal.

Stay tuned and follow our series of posts where we will continue to discuss more situations that could be wrongful dismissal.

If you require more information or if you have been terminated, contact us to determine whether you have been wrongfully dismissed. Please contact Toronto employment lawyers at Sultan Lawyers by telephone at 416-214-5111, by email at mlahert@sultanlawyers.com, or by filling out the form below.

This post is part one of a six-part series.

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