Dismissal Without Cause in Ontarioachkarlaw-admin
(Revised August 10, 2023)
In Ontario workplaces, employers have the right to terminate an employee’s job at any time. This ending of the employment relationship is often referred to as dismissals, terminations, lay-offs, or firings. These can be categorized into two primary types:
- Dismissals with Cause: This refers to situations where the employee’s actions or behavior provide a valid reason for the termination.
- Dismissals without Cause: This involves ending the employment even if there isn’t a specific reason related to the employee’s actions.
In most cases, when an individual experiences job loss, it is not due to their own wrongdoing. Employment contracts can be concluded without attributing fault to either party. A specific reason for termination is not mandatory, provided that advance notice is given or a monetary equivalent is provided in lieu of notice, commonly referred to as severance pay.
If you are concerned about the possibility of losing your job or if you are an employer considering letting an employee go, it is advisable to familiarize yourself with the permissible actions defined by the legislation. You can gain a comprehensive understanding of these matters by referring to the Employment Standards Act (“ESA“).
The purpose of this article is to provide clarity on situations where employment may conclude without assigning blame in Ontario. Furthermore, it will explore the options available to employees after experiencing job loss and outline the corresponding obligations that employers need to fulfill in such scenarios.
What Happens If You Are Dismissed Without Cause?
Dismissal without cause can occur at any point for employees who are not part of a union. Employers are free to let go of non-unionized employees, even those who excel in their roles. Simply asserting that you have been performing your job exceptionally well is not sufficient grounds for keeping your position if your employer decides to end your employment contract.
In the context of Ontario, if you experience an unexplained termination, you are entitled to one of two possibilities:
- receiving a written notice of termination, or
- receiving payment in lieu of notice, with a few exceptions applying.
It’s also possible to receive a combination of both notice and payment in certain situations.
You are not entitled to payment in lieu of notice if you:
- Have been terminating with a cause that is not trivial (i.e. for misconduct, disobedience, neglecting duties, etc.)
- You are a construction employee
- Your layoff is temporary
- You have refused a reasonable alternative employment opportunity
- You have not been an employee for more than three months
If the total of weeks’ worth of pay and notice adds up to the length of notice you were entitled to, you might receive a combination of both notice and severance pay.
Under certain circumstances, the amount of severance pay an employee is entitled to might be restricted by a termination clause in the initial employment agreement. However, this limitation holds true only if the termination clause is deemed valid.
Can I Argue My Dismissal Without Cause?
Under certain conditions, employees have the ability to consult legal counsel and make a case for a wrongful dismissal. It is important to note that employers are prohibited from dismissing or taking punitive measures against employees for:
- Asking an employer to comply with or asking questions about the ESA
- Filing complaints, exercising their rights or participating in a proceeding under the ESA
- Disclosing their rate of pay to another employee or asking another employee about their rate of pay
- Taking or being eligible for any kind of leave (family, pregnancy, bereavement, etc.)
- Being subject to a garnishment order
Additionally, if you have a record of encountering discrimination due to a protected ground outlined in the Ontario Human Rights Code (“Code”), and you believe that your dismissal was directly linked to this discrimination, you might have grounds to assert a case of wrongful dismissal. In such instances, you could take steps to file a complaint with the Human Rights Tribunal of Ontario (HRTO). However, it’s important to understand that the HRTO has established a rigorous standard for presenting arguments of wrongful dismissal.
As an Employer, What are My Obligations When Dismissing Someone Without Cause?
As an employer, you have the authority to dismiss an employee without a specific reason. However, you are required to provide reasonable notice or payment in lieu of notice, unless exceptions apply.
When delivering notice to an employee, it should be provided in written form, which can be sent through mail, fax, or email.
Termination pay is generally given as a single lump sum and is calculated according to the guidelines outlined in the Employment Standards Act (ESA). If you’re an employer utilizing a termination clause to limit the termination pay for an employee, it’s crucial to ensure that the termination clause remains legally valid.
If you’re an employer involved in the termination of 50 or more employees, it’s advisable to consult the guidelines specified in the ESA.
Dismissals without cause can occur at any time for any employee. If an employer is letting go of an employee, they should be ready to give a reasonable written notice or provide payment instead of notice.
If you’re an employee and you’re worried about being let go without a specific reason, it’s a good idea to talk to an experienced employment lawyer at Achkar Law. They can help you figure out if your dismissal was unfair and guide you on what steps you can take.
Likewise, if you’re an employer and you’re thinking about letting go of an employee without a specific reason, an employment lawyer can assist you in understanding if your termination clause is valid and what you need to provide to your employee.