Wrongful Dismissals in Ontario – FAQ

Despite what some may think, employees can be dismissed for any reason. Employers can dismiss employees without cause so long as it’s not discriminatory and done in a good-faith manner. However, employers must then provide the employee with their proper termination entitlements. What specifically is owed depends on what type of law governs the employment relationship. Too often, the dismissal of an employee will give rise to a wrongful dismissal claim. As these claims are prevalent, employers and employees will likely have questions about how it works, when it applies, and how much can be awarded. This wrongful dismissals in Ontario FAQ answers some of the most common questions surrounding wrongful dismissals in Ontario. 

What Entitlements are Employees Owed upon Dismissal?

In a without cause dismissal, employees are entitled to a notice period which can be provided as working notice (where the employee continues working for a certain period of time) or as pay in lieu of notice (payment representing what the employee would have earned had they continued working through the notice period).

Depending on their employment agreement, employees may also be entitled to any bonuses, raises, and benefits coverage they would have received over the notice period.

Considering that termination entitlements can vary case by case, it is prudent to seek the advice of a legal professional to ensure you are receiving all of your entitlements if you are an employee, and to ensure you are providing the correct termination package if you are an employer.

What is Wrongful Dismissal in Ontario?

Wrongful dismissal occurs when an employee is dismissed without receiving their proper entitlements upon the dismissal of their employment, normally when an employer fails to sufficiently pay an employee for the proper notice period they are entitled to under law.

When wrongful dismissal occurs, an employee can sue the former employer for the termination payments to which they are entitled.

What is Just Cause in Ontario?

When an employer has just cause to dismiss an employee, the employer does not owe them any termination entitlements. Just cause will typically be established where the employee engages in severe or repeated misconduct.

Just cause can be extremely difficult for an employer to prove in court, and a false allegation of cause will result in a wrongful dismissal, entitling the employee to pay in lieu of notice.

An employment lawyer can assess whether there is just cause, and can provide steps on how to prove cause for employers, or push forward a wrongful dismissal claim for employees.

How Much Notice are Employees Entitled To?

The amount of notice an employee is entitled to first requires examination of the employment agreement. For provincially regulated, non-unionized employees, if an employment agreement’s termination clause is enforceable and successfully limits an employee’s entitlements to the mandatory minimums under statute, the employee will only be entitled to those mandatory minimums.

Under the Employment Standards Act, 2000 (“ESA”), an employee’s notice period is limited to a maximum of eight (8) weeks, and benefits must be included within the notice period. In certain circumstances, employees may also be entitled to what is known as severance pay.

For federally regulated, non-unionized employees, the Canada Labour Code (“CLC”) mandates that during an individual dismissal entitles an employee to two (2) weeks of notice if they have worked for at least three (3) months.

When an employment agreement’s termination clause is not enforceable, employees are entitled to common law reasonable notice, which will determine the notice period based on a variety of factors, including, but not limited to, the employee’s age, years of service, salary, and position—known as the Bardal factors. Without any exception circumstances, the maximum common law reasonable notice period determined by the courts is twenty-four (24) months.

Both federally and in Ontario, enforceable employment agreements can provide more notice than the ESA or CLC mandatory minimums, but less than common law reasonable notice. In this case, the termination clause will outline how much an employee should expect upon a dismissal.

What Makes a Termination Clause Unenforceable?

There are several ways a termination clause may be deemed unenforceable, such as: it violates or potentially violates statute, it was drafted ambiguously, or there was no consideration. The termination clause may also fail to expressly limit an employee’s entitlement to the statutory minimums.

However, it is difficult for employees to know whether their agreement is enforceable. As such, a legal professional should always be consulted.

Contact Us 

If you are an employer or an employee and want to know more about the details of wrongful dismissal claims, our team of experienced workplace lawyers at Achkar Law can help. Contact us by phone toll-free at 1 (800) 771-7882 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, visit our CLO program page for our strategic solutions.

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Disclaimer: This blog is not intended to serve as, or should be construed as legal advice, and is only to provide general information. It is in no way particular to your case and should not be relied on in any way. No portion or use of this blog will establish a lawyer-client relationship with the author or any related party. Should you require legal advice for your particular situation, fill out the contact form, call 1-(800)771-7882, or email [email protected].