Understanding Employment Law 02

Wrongful Dismissal

A fundamental proposition of employment law, as discussed in the most recent post, is to provide fair notice of termination. This principle will allow a terminated employee to claim lost income over this notice period provided that:

1. There is no just cause for termination; and
2. There is no employment contract which limits the claim on termination.

This summary, deceptively simple, sets out the basic concept of a wrongful dismissal claim. There do remain many qualifiers and refinements to this proposition. The more prominent of these include:

1. The employee must take reasonable steps to reduce the claim by seeking comparable employment. This is referred to as the “duty to mitigate”. It is the obligation of the employer to prove such a failing on the employee.
2. The employee must always be paid the statutory notice and/or severance pay on termination without the need to sign a release. The statutory notice is, roughly speaking, one week for every year of employment to a cap of 8 weeks. All benefits must be continued for this time period. Severance pay is also owing when the employer’s payroll exceeds $2.5 million annually and the employee has worked for at least 5 years. The severance pay sum is one week per full or part year of service to a maximum of 26 weeks. No benefits are mandated by statute for this incremental payment.

These principles form the basics of a common law, or judge made law, of wrongful dismissal.

Workplace Human Rights

To complicate matters, human rights issues in employment law are based on entirely different concepts. A termination or other adverse treatment which is based, or to be exact, influenced, by a human rights violation leads to remedies which are very different from those offered by a wrongful dismissal claim.

Protected Rights

Employment law protected human rights include age, ancestry, colour, race, citizenship, ethnic origin, place of origin, creed, disability, family status, marital status, gender identity, gender expression, record of offences, sex, and sexual orientation. Marital status includes the status of being single.

Human Rights Remedies

Take as an example, a person who has been terminated due to the last example of being single. The claim in such a context, which is typical of all human rights remedies, allows for compensation for injured feelings, lost income from the date of termination to the date of hearing, reinstatement and in lieu of reinstatement, a future lost income claim beyond the date of hearing.

Damages for injured feelings tends to be modest in the given example, in the range of $5,000 to $15,000. The claim for lost income, however, can be quite substantial. Such a claim has no relationship to the wrongful dismissal factors. An employee with 3 months service history in a human rights case can assert a claim for lost income to the date of hearing and reinstatement. A comparable claim in a wrongful dismissal setting would be likely one or two months on the high side. A contract which limits the severance claim has no impact on a human rights case.

But-For

The reason for this distinction is that human rights cases are based on the “but-for” concept; that is, but-for the unfair termination, what would have happened? Absent unusual factors, the employee may assert that he or she would have remained employed through to the hearing date. The severance clause is of no consequence.

This being said, human rights cases can present a risk to an employee. If the employer can argue, even in the face of a human rights violation, that the business or the department in which the employee worked, was due to be closed, the income claim will be so limited.

If the employee has signed a contract which limits employment to a fixed term, then the employer may rightly argue that the lost income claim should be capped by the set time period.

Hybrid Relief

Ontario law allows an employee to sue for human rights remedies, as long as there is a companion action, which is usually, but need not be, a wrongful dismissal claim. The employer then faces not only the possibility of a human rights liability, but failing success in this claim, a wrongful dismissal case. The plaintiff lawyer has the advantage of pleading the case to determine which remedy is sought as the primary relief and which one is the alternative remedy sought in the case.

Let Legal Advice Be Your Guide

Legal advice must be the foundation of your case. Whether you are the plaintiff employee or the defending employer, the intricacies of common law employment law principles and human rights law must be understood to properly guide your position and safeguard your rights. While the employee may enjoy the tactical advantage of pleading the case, the employer maintains a firm upper hand in creating and promoting a safe and humane workplace, a proper human rights manual and training, and effective employment contracts.

If you are facing such employment issues, contact Sultan Lawyers by phone at 416.214.5111 or by here.