Terminated During Restructuring? Is it Wrongful Dismissal?

Terminated During Restructuring: Is It Wrongful Dismissal?

Restructuring can be challenging for employers and employees. When employees are terminated as part of a restructuring process, they may have a claim for wrongful dismissal. During the restructuring process, it is essential to understand the rights and obligations of employees and employers. 

This article aims to provide a comprehensive overview of wrongful dismissal in the context of restructuring, outline key considerations, legal obligations, and potential remedies for employees and employers affected by such terminations.

What Are Employees Entitled to In a Wrongful Dismissal?

Generally speaking, an employer can terminate an employee without cause if they give the employee sufficient working notice or pay in lieu of notice, as long as the reason for the dismissal is not discriminatory. 

The most common type of wrongful dismissal occurs when an employee has been terminated without cause, and the employer fails to provide the employee with sufficient notice. As a result, the employee may be entitled to damages. Terminating an employee due to restructuring does not automatically amount to a wrongful dismissal. 

In Ontario, the Employment Standards Act, 2000 (“ESA”) protects employees by setting out minimum entitlements for notice period pay. Typically, employees are entitled to a minimum of 1 week of regular wages for every year of employment, up to a maximum of 8 weeks notice. However, employees may be entitled to more under the ESA if the restructuring results in a mass termination, or if they are entitled to severance pay. 

Employees may also be entitled to common law reasonable notice period pay upon termination. It is always advisable to consult with an employment lawyer if you are unsure about your entitlements in a wrongful dismissal. An employment lawyer can advise regarding your notice period pay entitlements and whether the package offered by the employer is sufficient.

Contact us today to schedule a consultation with our Experienced Employment Lawyers

Contact us by phone toll-free at 1-866-561-2176 or email us at [email protected], and we will be happy to assist.

What Employers Need to Know in Restructuring Terminations

When the restructuring process results in employee terminations, employers must ensure that they comply with employment standards and fulfill their legal obligations. At a minimum, employers must provide employees with either working notice or pay in lieu of notice, as outlined in the ESA, as long as the termination is without cause. It is also important to determine if the employee is entitled to common law reasonable notice, in addition to the minimums under the ESA.

In Ontario, an employer who terminates 50 or more employees within a six-month period due to the permanent closure of part of the business, where the employee has worked at least 5 years with the company, owes the employees mass termination pay. 

Under the ESA, the employer may also owe severance pay, which is an additional payment beyond the notice period and is based on the employee’s length of service.

The terms of the employment contract, including any provisions regarding termination and notice, can impact an employee’s entitlements. Employers must ensure their employment contracts are legally sound and do not violate the ESA

An experienced employment lawyer can help your business structure its termination packages and advise before you dismiss your employees as part of a restructuring. A litigation lawyer can also help your business defend against a wrongful dismissal claim.

Remedies for Wrongful Dismissal

Employees who have been wrongfully dismissed during a restructuring process may be able bring a wrongful dismissal claim.

If employees are not provided their minimums under the ESA, they can file a complaint with the Ontario Ministry of Labour or seek legal action to enforce their entitlements. Employees can also start a civil lawsuit against their employer for their entitlements. However, employees cannot pursue civil action against their former employer while also filing complaints with the Ministry on the same set of facts. This is why it is important to speak to a lawyer to determine the appropriate avenue to bring your claim.

In some cases, employees may argue that restructuring fundamentally altered their employment relationship, constituting a constructive dismissal. This could entitle them to notice period pay, severance pay, and mass termination entitlements, if applicable..


Terminations during a restructuring process can be challenging and legally complex for employers and employees. Understanding the concept of wrongful dismissal and the legal obligations surrounding termination is crucial for all parties involved. By adhering to employment standards and seeking legal advice, employers can navigate restructuring terminations more effectively and minimize the risk of wrongful dismissal claims.

Employment lawyers can help employees initiate legal action, navigate the complexities of wrongful dismissal claims and seek appropriate compensation. 

Contact Us

If you are an employer facing a wrongful dismissal claim or an employee who believes you’ve been wrongfully dismissed, our team of experienced workplace lawyers at Achkar Law can help. Contact us by phone toll-free at +1 (866) 508-2548 or email us at [email protected], and we would be happy to assist.

Related Articles