Wrongful dismissal occurs when an employer terminates an employee without providing them with advanced notice of termination or appropriate pay in lieu of notice. It’s important to note that determining whether a dismissal was wrongful doesn’t solely rely on the fairness or reasonableness of the termination itself. Instead, it focuses on how the termination took place and the circumstances surrounding it.
Legal Principles
Notice Period:
In Ontario, employees have a right to receive pay in lieu of notice.
The entitlements to notice under Ontario’s Employment Standards Act (the “ESA”) are minimum standards only. The common law generally imposes greater obligations.
In determining the length of reasonable notice at common law, courts look to four major factors:
- the character of employment,
- the length of service,
- the age of the employee, and
- the availability of similar employment.
Termination Clause:
Employment contracts often include termination clauses specifying the notice period or severance pay. However, such clauses must comply with the ESA in order to be enforceable.
Constructive Dismissal:
Constructive dismissal happens when an employer unilaterally makes changes to the terms of employment without obtaining the employee’s consent. These changes could include:
- reductions in salary,
- demotions, or
- modifications in job responsibilities.
When employees experience dismissal they have the option to consider their employment as terminated and pursue compensation.
Just Cause (i.e., reasons for dismissal):
Employers can fire an employee for just cause, such as serious misconduct or repeated breaches of employment terms. However, proving cause requires evidence and employers must ensure fair procedures.
Rights and Recourse for Employees
Legal Representation:
Employees facing wrongful dismissal in most cases will benefit from seeking legal advice to navigate the complexities of their dismissal. An employment lawyer can thoroughly assess the circumstances, negotiate on behalf of the employee if necessary, and provide guidance on the most appropriate course of action.
Mitigating Damages:
Reasonable notice at common law is subject to mitigation. This means that you are required to search for similar or comparable employment to your employment and if you do secure employment then any amounts you earn can be reduced from any entitlements you are deemed eligible for by a judge or decision maker.
Legal Remedies:
Remedies for wrongful dismissal may include compensation of working notice (i.e., known as pay in lieu of notice), or bad-faith damages in the manner of termination, to name just a few. The specific remedy depends on the circumstances of the case and the employee’s entitlements.
Takeaway
Understanding wrongful dismissal is important for both employers and employees. Whether you are an employer seeking clarity on termination procedures or an employee facing dismissal, seeking legal advice can make a substantial difference in navigating the complexities of employment law. If you have any questions or require legal assistance, we encourage you to contact us online or call us today at 416-214-5111.
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