Wrongful Dismissal vs. Termination Without Causeachkarlaw-admin
(Revised August 10, 2023)
Imagine this: you are going about your usual workday, minding your own business, when out of the blue, you get an unexpected invite to a meeting. So, you join the meeting and guess who is there? Someone from HR. But here’s the kicker – your employer drops a bombshell: your job is over, effective immediately. They hand you a letter, some paperwork to scribble your signature on, and possibly instruct you to return any company stuff, pack up your desk, and make a swift exit. They might even walk you off the premises.
Maybe the details differ a bit, but this scenario is a pretty common way people get the boot. The weird thing? They do not give you a reason for the kick to the curb, and that just does not sit right. You glance at the letter and there it is, the dreaded phrase: “termination without cause.” After putting in solid effort for years, they are giving you the boot without an explanation.
You have probably heard the term “wrongful dismissal” thrown around. And you know what? This whole ordeal feels pretty darn wrongful. After all those years of knocking it out of the park, showing up with dedication, and clocking in uncountable unpaid overtime hours, they can’t even cough up a reason. It’s like ending a relationship without a word – it leaves you hanging, wondering, and frankly, quite uneasy.
But guess what? Termination without cause and wrongful dismissal are not the same. There is a difference. Want to know what it is? Keep reading, because it will be explained to you. Plus you will find some pointers on what steps to take if you find yourself terminated without cause.
What is a Termination Without Cause?
Contrary to what you might think, employers actually have the legal right to let employees go without giving a specific reason. When an employer does this, it’s like they’re saying, “I’m putting an end to our work arrangement, and it’s not because of something you did wrong.” In simpler terms, it’s a bit like the classic breakup line: “It’s not you, it’s me.”
A termination without cause means that an employer ends an employee’s job, but it is not because the employee did anything wrong. It could be because the company is changing or needs to cut back on staff. When this happens, the employer usually has to give the employee notice before their job actually ends. If they do not give notice, they need to pay the employee instead. This is something that is required by the law in Ontario. This is different from a “termination for cause,” where an employee is let go because they did something wrong or didn’t do their job well.
When an employer decides to terminate an employee without a specific reason, they have some obligations to fulfill. In Ontario, this includes either giving the employee advance notice of the termination or providing them with pay equivalent to that notice period. All employers in Ontario must adhere to the minimum rules set out in the Employment Standards Act, 2000 when letting employees go without cause.
Now, when there is not a clear termination agreement in writing that can be enforced, employers have to go even further. They’re then required to provide the employee with what’s known as “common law reasonable notice” for the termination. This includes the minimum entitlements stated by law. In Ontario, this statutory termination pay can go up to 34 weeks of regular wages. But in terms of common law severance, it can potentially extend up to a massive 26 months. The specific duration is decided based on various factors, known as Bardal Factors, that courts consider.
Normally, employers stick to the minimum statutory entitlements when they’re letting employees go without cause. But what happens if the common law reasonable notice exceeds these minimum standards? Or what if your employer doesn’t provide any termination entitlements at all? These are some of the things that can come into play.
What Is Wrongful Dismissal?
Wrongful dismissal refers to a situation where an employee’s employment is terminated by their employer without proper justification or without following the legal requirements. It typically occurs when an employer fails to provide the appropriate notice period or severance pay as required by employment laws or the employment contract. In essence, it’s a situation where an employee is let go in a way that goes against their legal rights. Wrongful dismissal claims can arise when an employee believes they were unfairly or unlawfully terminated, and they seek compensation for the losses they suffered due to the improper termination.
When is a Termination Without Cause a Wrongful Dismissal?
When the employer does not provide the employee sufficient working notice or pay in lieu, the employee can sue their employer for it. This would be a “wrongful dismissal action” or wrongful dismissal.
All wrongful dismissals are terminations, but not all terminations are wrongful dismissals. It is for a court to decide if your claim for wrongful dismissal should succeed. Because you are entitled to more than what you were paid for severance.
The most common scenarios of wrongful dismissals include an employer paying you:
- only your statutory minimum notice after terminating you without cause when you are entitled to more for common law notice;
- some but not all of your owed common law notice after terminating you without cause;
- no severance whatsoever upon terminating you without cause; and
- no severance whatsoever because your employer is alleging cause for your termination.
The key to suing for wrongful dismissal is understanding what your full severance entitlements are when your employer terminates you without cause. In fact, there are several steps an employee should take when terminated without cause to determine if they can sue their employer for wrongful dismissal.
What to Do If Terminated Without Cause
Determining whether your termination without cause is a wrongful dismissal requires knowledge about your legal entitlements and preserving your right to sue. An employee should take the following steps upon their employer terminating them without cause:
- Do not sign anything, even if your employer insists that you do it immediately upon terminating you. This can include a “Full and Final Release” that waives any right you may have to sue your employer. Stay calm and respectfully ask for time to seek legal advice.
- Ensure you take all your belongings with you before you leave and sign out of any personal digital accounts from any employer devices.
- Gather any documents you think may be relevant and ask your employer for a copy of your employment agreement if you do not have such a copy.
- After you leave the workplace, note any details about what happened at the termination meeting in writing.
- Schedule a consultation with an employment lawyer as soon as possible to determine your legal entitlements and guidance for the next steps.
Employers generally have the right to let go of an employee without a specific reason. When this happens, employees should either receive advance notice or payment instead, as per the law.
However, if an employer does not provide enough notice or payment, the employee can take legal action and sue for wrongful dismissal. It is important to note that not all no-cause terminations are considered wrongful dismissals. To understand your legal standing if you have been let go, it is a good idea to consult an employment lawyer.
At Achkar Law, our team of lawyers is experienced in assisting employees with negotiating and pursuing claims for wrongful dismissal.
If you are facing this situation, consider scheduling a consultation with one of our employment lawyers. They can review your severance offer, assess your legal rights, and help you understand how to make the most of your severance benefits.
Whether you are an employer or an employee needing assistance with termination without cause and wrongful dismissal our team of experienced employment and human rights lawyersat 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.
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- Ontario Employment Standards Act, 2000: Your Handbook
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