Wrongful Dismissal Ontario: FAQs

In the ever-evolving landscape of employment law in Ontario, understanding the concept of wrongful dismissal is crucial for both employees and employers. This complex area of law not only encompasses a wide range of legal considerations but also directly impacts workplace rights and relationships. Whether you’re navigating an unexpected termination or seeking to ensure your practices are in compliance with provincial standards, being informed is your first line of defense.

Wrongful dismissal, also known interchangeably as wrongful termination, unlawful dismissal, unjust dismissal, and unjust termination, involves ending an employee’s contract or employment without proper legal justification or failing to follow due process as outlined in employment standards, contracts, or legislation. 

This article aims to answer frequently asked questions about wrongful dismissal, providing clear, comprehensive insights tailored for Ontarians. From identifying what constitutes wrongful dismissal to understanding your rights and the steps you can take if you find yourself in such a situation, this FAQ is designed to empower you with knowledge and confidence in the face of employment disputes.

Whether you’re an employee who feels unjustly terminated or an employer striving to navigate the complexities of employment law, this guide offers valuable perspectives on ensuring fairness, respect, and legal compliance in the workplace.

What is Wrongful Dismissal in Ontario?

Wrongful dismissal, also known as wrongful termination, occurs when an employee is dismissed from their job in a manner that breaches one or more terms of their employment contract, or violates employment law principles. In Ontario, this concept is particularly significant as it touches upon the legal protections afforded to employees under provincial legislation, such as the Employment Standards Act, 2000 (ESA), and common law principles.

A dismissal can be deemed wrongful for several reasons, including but not limited to:

• Termination without adequate notice of termination or pay in lieu of notice, contrary to what is stipulated in the employment contract or the ESA.
• Dismissal based on discriminatory reasons, which are prohibited under the Ontario Human Rights Code.
• Termination as a retaliatory action, for instance, if an employee was dismissed after making a legal complaint against their employer.

Is it Possible to Experience Wrongful Dismissal Even When an Employment Contract is in Place?

Yes, experiencing wrongful dismissal is possible, and sometimes even more contentious, when an employment contract is in place. In Ontario, the presence of an employment contract does not exempt either party from adhering to the standards and protections laid out in employment law. Whether your employment terms are detailed in a written contract, implied through verbal agreements, or established by customary practice, the principles of wrongful termination, unlawful dismissal, unjust dismissal, and unjust termination apply.

An employment contract aims to outline the rights, responsibilities, and expectations for both employers and employees. However, it must align with Ontario’s Employment Standards Act, 2000 (ESA), and relevant federal laws, including provisions for termination. A contract that attempts to circumvent an employee’s rights to fair treatment, adequate notice, or severance pay, as prescribed by law, may be challenged for being in violation of those statutory rights.

Can I Claim Wrongful Dismissal if I’m a Unionized Employee?

For unionized employees in Ontario, the process and entitlements regarding wrongful dismissal, differ significantly from those applicable to non-unionized workers. This distinction arises primarily from the presence of a collective agreement, which governs the terms and conditions of employment, including the procedures for addressing dismissals that are deemed unfair or unjust.

Unionized environments operate under the framework of collective bargaining agreements, which are contracts negotiated between the union and the employer. These agreements typically include specific provisions related to discipline, termination, and grievance procedures, offering protections beyond what individual employment contracts and even some aspects of the Employment Standards Act, 2000 (ESA), may provide.

Are There Exceptions to the Notice Requirement for Wrongful Dismissal?

Yes. In Ontario, while the Employment Standards Act, 2000 (ESA) outlines the general requirements for notice of termination or pay in lieu thereof, there are indeed exceptions to these requirements. These exceptions can significantly impact the application of wrongful dismissal principles.

• Termination for Cause: Employers can terminate employment immediately without notice if there is serious misconduct that breaches the employment relationship’s fundamental terms. This includes actions like theft, fraud, or severe policy violations. The burden of proof for “cause” is high, and without sufficient evidence, such termination could be challenged as wrongful.

• Fixed-term Contracts: Employees on contracts with a specific end date may not be entitled to notice if the employment ends on that date. However, terminating a fixed-term contract early without a clause allowing it may lead to claims of wrongful dismissal.

• Contractual Clauses: Some contracts have clauses that modify notice requirements. These must still meet or exceed the minimum standards set by the Employment Standards Act, 2000 (ESA). Clauses that fall short could be invalidated.

What Compensation May Be Available for Wrongful Dismissal in Ontario?

In Ontario, individuals who have been wrongfully dismissed may be entitled to various forms of compensation, reflecting the nature of their termination and the provisions of both statutory law and common law. The main components of potential compensation include:

• Notice Periods: Beyond the minimum statutory notice required under the Employment Standards Act, 2000 (ESA), employees might be entitled to more extended notice periods as determined by common law, which considers factors such as the employee’s age, length of service, the character of employment, and the availability of similar employment.

• Severance Pay: In addition to notice or pay in lieu of notice, employees may be eligible for severance pay, particularly if they have been employed for five years or more and the employer has a payroll in Ontario exceeding $2.5 million or has severed the employment of 50 or more employees within a six-month period due to the permanent discontinuation of all or part of the business.

• Damages: Damages for wrongful dismissal may also include compensation for loss of benefits (such as health insurance, pension contributions, and stock options) during the notice period, moral or punitive damages if the dismissal was conducted in a manner that was unfair or in bad faith, and, in some cases, damages for loss of reputation.

Can I Negotiate a Settlement for Wrongful Dismissal?

Yes, negotiating a settlement for wrongful dismissal is a common and often preferred route for resolving disputes related to wrongful termination in Ontario. Settlement negotiations can provide a more timely, cost-effective, and flexible resolution compared to litigation. These negotiations allow both parties—the employee and employer—to reach a mutually agreeable compensation amount and terms without the need for a formal legal proceeding.

The process typically involves discussions on various forms of compensation, such as notice pay, severance pay, and potentially damages for loss of benefits or emotional distress. The goal is to compensate the wrongfully dismissed employee adequately while considering the employer’s capacity to pay.

What Evidence Do I Need to Prove Unjust Termination?