Sultan Lawyers on Dismissal Pt. 4: The Difference Between Wrongful and Unjust Dismissal

Most employees understand that they have a right to be treated fairly upon the termination of their employment by their employer and to be free from wrongful dismissal. However, there are many common misconceptions that employees can have regarding their specific rights and entitlements upon dismissal.

This is not helped by the fact that there is a wide range of terminology that gets casually used by employers and lawyers to describe the various claims that can be made following a termination.  As experienced employment lawyers, the following is intended to provide some clarity.

Wrongful dismissal vs. unjust dismissal: Is there a difference?

“Wrongful dismissal” is the general term used to describe any situation where an employer has terminated the employment of one or more of its workers without providing that worker with her or his entitlements under the law.

Types of wrongful dismissal claims

Generally speaking, there are four main types of wrongful dismissal claims:

• Where an employer terminates employment without cause but fails to provide the employee with notice and/or refuses to pay proper compensation.

• Where an employer inappropriately alleges that they have cause to dismiss an employee and refuses to pay any compensation.

• Where an employer constructively dismisses an employee, by modifying fundamental terms of the employee’s employment agreement and/or by making the work environment intolerable for an employee.

• Where the reason for the employee’s dismissal is based on a prohibited ground (such as human rights discrimination or as an act of reprisal against an employee who exercised their rights under applicable employment legislation).

Keep in mind that a dismissal is not “wrongful” merely because an employer dismisses an employee for an illegitimate or untruthful reason (for instance, by asserting that the termination is happening because the employer is in financial difficulty, when in fact this is not the case). While an employer should not lie about the reasons for termination, there is no strict legal obligation for them to be “honest” when terminating an employee without cause, so long as adequate severance is paid out to the departing employee.

Unjust dismissal

Conversely, the term “unjust dismissal,” while colloquially used interchangeably with the term “wrongful dismissal,” legally refers to a specific recourse in the Canada Labour Code that is available only to employees of federally-regulated workplaces who have completed at least 12 consecutive months of continuous employment with the same employer and who believe their dismissal to be unwarranted.

This means that if an employee works in a federally-regulated industry, they have additional protection from unjust dismissal by their employer after 12 months of service in the following circumstances:

• The employee files a complaint alleging unjust dismissal at a Labour Program office no later than 90 days from the date of the dismissal;
• The employee is not a manager;
• The employee is not covered by a collective agreement; and
• The reason for the dismissal does not stem from economic considerations such as lack of work or discontinuance of a function.

The main difference between the rights of these employees and of those in provincially-regulated workplaces is that the added protections under the Canada Labour Code require that a number of factors be considered before an employer decides to dismiss for disciplinary reasons.

While there are some cases where the violation of a workplace rule or the degree of incompetence or negligence is so great that an employer is justified in dismissing an employee immediately, in most cases federally-regulated employers are expected to follow a system of progressive and corrective discipline for misconduct or poor performance before terminating the employee’s employment. 

For more information

If you believe that you may have been wrongfully or unjustly dismissed and you would like to consult with a qualified employment lawyer to better understand your rights and obligations, please contact Sultan Lawyers by telephone at 416-214-5111 or by here.

This post is part four of a six-part series. Please see the previous posts below:

• Part 1: What Defines Wrongful Dismissal?
• Part 2: My Employer is Reducing my Pay. Am I Entitled to Damages for Constructive Dismissal?
• Part 3: The Difference Between Wrongful and Constructive Dismissal