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What Situations Create a “Wrongful Dismissal”?

Employees generally occupy the less powerful position when it comes to power dynamics in an employer-employee relationship. As such, it is important to know your rights as an employee and know how to spot situations that create a wrongful dismissal. While some of these situations may appear obvious, others require a nuanced understanding of employee entitlement when an employee is dismissed without cause. You should always consult an employment law professional before you sign any termination related agreement.

What is Wrongful Dismissal?

An employee is wrongfully dismissed when they are terminated for an illegal reason under Ontario law. An employer has the legal right to terminate an employee without cause as long as the employer provides the employee with their legal entitles upon termination under the applicable legislation or at common law, depending on the enforceability of the employment agreement. However, if an employee is terminated without cause but believes their termination is in fact for an illegal reason under Ontario law, the employee may have been wrongfully dismissed.

Additionally, an employee is wrongfully dismissed when an employee is terminated without cause and the employer fails to provide the employee with their legal entitlements upon termination. These include, but are not limited to, appropriate notice or pay in lieu of notice or some combination thereof, severance pay, and benefits. Since recent developments in the law have rendered many termination clauses within employment agreements invalid, an employee that is provided the minimum statutory requirements based on limiting language in an invalid termination clause of their employment agreement has been wrongfully dismissed.

Finally, an employee may have been wrongfully dismissed even if dismissed for cause. The courts have set the bar to justify a just cause dismissal extremely high, so if an employee does not believe their misconduct justifies a with cause termination, or if they believe the allegation is false, the employee will have likely been wrongfully dismissed.

Termination for Illegal Reason

An employee cannot be terminated for reporting harassment in the workplace. While the employer may have officially terminated the employee without cause, if the termination comes on the heels of the employee filing a report of harassment in the workplace, the employee may have been wrongfully dismissed.

Similarly, an employee cannot be terminated for asking an employer to comply, or ensure employee compliance with, health and safety legislation. Due to the on-going COVID-19 pandemic, Ontario has regulated the mandatory wearing of masks or a face covering through Regulations 263/20 and 82/20, made under the Reopening Ontario (A Flexible Response to COVID-19) Act, 2020. Employers have a duty to comply with and ensure their employees comply with these regulations. If an employee is officially terminated without cause, but the termination follows closely after the employee has requested their employer comply with or ensure compliance with these regulations, this situation may result in a wrongful dismissal. Please note that these regulations do contain certain exemptions.

Additionally, an employer cannot dismiss an employee based on a protected ground under the Ontario’s Human Rights Code (the “Code”). Prohibited discrimination grounds under the Code that may apply in the area of employment include, but are not limited to, race, creed (religion), sex, sexual orientation, disability (or perceived disability), and family status. While the employer may have officially terminated the employee without cause, if the termination comes after the employer makes repeated remarks to the employee, or takes action against the employee, which the employee feels are caused by or based on any of the protected grounds listed in the Code, the employee may have been wrongfully dismissed.

Employer Fails to Provide Employee with Legal Entitlements Upon Termination

An employer is required to provide an employee with certain legal entitlements upon termination without cause. Every employee terminated without cause is entitled to a notice period. Under the Employment Standards Act, 2000 (the “ESA”), an employee is entitled to a minimum of one week of notice per year of service, up to a maximum of eight weeks, with employee benefits included during the notice period. If an employer fails to provide the employee with at least their minimum entitlements under the ESA, the employee has been wrongfully dismissed. If the employee’s employment agreement does not limit their entitlement to the minimum under the ESA, yet that is all the employee is provided, the employee has been wrongfully dismissed. If the employee is entitled to severance pay and the employer fails to provide severance pay, the employee has been wrongfully dismissed.

Wrongful Dismissal or Just Cause Termination?

When an employee is terminated for cause, the employee does not retain their legal entitlements. However, the Court has set the bar to justify a just cause termination extremely high. As such, if an employee is fired for just cause and the cause is later disproved in court, the false allegation of cause will result in the employee having been wrongfully dismissed entitling the employee to the legal entitlements they would have received had they been terminated without cause.

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.

If you are a small or medium-sized company looking for full-service support with same day response, visit our CLO Program page for our strategic solutions.