Are Short Term Employees Entitled to Wrongful Dismissal Damages?
Short-term employees who are dismissed are often under the impression that they are not entitled to a longer notice period. Yet, this is not always true, despite their shorter length of employment.
An employer may be liable for wrongful dismissal damages if they fail to provide enough notice to an employee upon termination without cause. This applies whether the employee has worked at the company for a long period of time or not. If the former employee pursues a claim for more notice period pay, their length of employment becomes a factor in determining how much notice is reasonable notice.
This article will explain when a dismissal is considered wrongful, how reasonable notice is calculated, and why a short-term employee’s notice pay is not automatically reduced simply due to their shorter tenure.
What is a Wrongful Dismissal?
In Ontario, an employer can terminate an employee for no reason at any time, with limited exceptions. An employee does not have to do something wrong to be terminated. This is referred to as termination without cause.
Termination without cause can result in a wrongful dismissal if the employer fails to provide the employee sufficient reasonable notice or pay in lieu of such notice. Reasonable notice can be in the form of working notice leading up to the termination date, pay instead of notice, or a combination of both.
Termination can also be a wrongful dismissal when an employee is dismissed for cause when the employer did not legally have just cause to do so. In the event an employer does have cause for employment, the employee may not be entitled to reasonable notice or pay in lieu of notice. However, just cause can be very difficult for an employer to prove in court.
How To Calculate Your Reasonable Notice Entitlements
What is considered “reasonable notice” or the total “severance pay” an employee is entitled to depends on the facts of each case. This can create uncertainty for employees seeking their termination entitlements, warranting a consultation with an employment lawyer to provide tailored legal advice.
The Employment Standards Act, 2000 (“ESA”) provides statutory minimum entitlements employees must receive when they are terminated. An employee’s maximum statutory entitlements to working notice, pay in lieu of notice, or a combination of both is generally 34 weeks.
If there is no enforceable termination clause in an employee’s written terms of employment or any written employment agreement at all, an employee may be able to seek common law reasonable notice upon termination. This includes their entitlements under the ESA, but can be as high as 26 months’ of pay.
- An employee’s age;
- An employee’s years of service with their former employer;
- The character of their job position (entry level, management, or executive, for example);
- Their compensation from their previous job;
- The current economic climate and specific industry of the employee; and
- Other factors a Court may consider appropriate to determine how long it may reasonably take for an employee to find a job comparable to the one they lost.
Determining the length of reasonable notice and your entitlements is an art and not a science. Before signing any severance offer or negotiating with your employer, it is best to consult with an employment lawyer to determine your legal entitlements and options for next steps.
How Short Service for an Employer Impacts Reasonable Notice
As explained above, one of the factors to determine an employee’s severance entitlements is how long they worked with their former employer. While employees with 3 months or less of service may not be entitled to certain entitlements under the ESA, they still may be entitled to common law reasonable notice.
Years of service is only one factor a Court may take into account to determine how much reasonable notice or pay in lieu of such notice you should receive. Other factors can warrant awarding more reasonable notice even where an employee worked for their employer for a short time.
As an example, an employee who worked for their employer for only 2 months may be awarded 6 months of reasonable notice if they are in their 60’s and occupied a senior executive position. The employee’s advanced age and high level executive position in this scenario would make it foreseeably harder to find a comparable job. The fact the employee worked only 2 months before being fired would be relevant, but not solely determinative of their reasonable notice entitlements.
Understanding your entitlements upon termination without cause is never a simple calculation. In some cases, while an employee may be only entitled 3 months of reasonable notice for a wrongful dismissal claim due to their short tenure of service, they may have a larger claim for damages if they have an appropriate case to instead seek lost wages from the date of their termination up to a date of hearing at the Human Rights Tribunal of Ontario and general damages through a Human Rights claim.
An employment lawyer can help you determine your entitlements, negotiate your severance with your employer, and navigate through the appropriate legal proceeding to achieve your desired result. No matter how short or long you worked for your employer, you should consult with an employment lawyer as soon as possible after you are terminated to determine your rights and possible avenues for damages.
Conclusion
Employees are entitled to working notice or pay in lieu of notice when they are terminated without cause. How much notice or pay in lieu of notice an employee should receive will depend on a variety of factors, including how long they were employed before they were fired.
The short tenure of employment could result in a lower amount in owed severance, but that is not always the case. The only way to take your unique facts into consideration and determine your legal entitlements is to consult with an employment lawyer soon after your employer terminates you.
Contact Us
If you are an employer with intentions of terminating an employee, an employee who has been terminated, or you otherwise need assistance at any stage of a workplace dispute, our team of experienced workplace lawyers at Achkar Law can help. Contact us by phone toll-free at 1 (800) 771-7882 or email us at [email protected], and we will be happy to assist.
