WRONGFUL DISMISSAL

Wrongful dismissal is a legal term, describing a situation in which an employee’s contract of employment has been terminated by the employer in circumstances where the termination breaches one or more terms of the contract of employment, or a statute provision in employment law. A number of expressions are commonly used to describe situations when employment is terminated. These include “let go,” “discharged,” “dismissed,” “fired” and “permanently laid off.” The scope for wrongful dismissal varies according to the terms of the employment contract.

An employer is entitled to dismiss an employee according to the terms of the employment contract. There are oral employment contracts, and written employment contracts, and combinations of oral and written employment contracts. In Canadian common law, there is a basic distinction as to dismissals. There are dismissals with cause, and dismissals without cause. Cause is employee behaviour that constitutes a fundamental breach of the terms of the employment contract. Where cause exists, the employer can dismiss the employee without providing any notice. If no cause exists yet the employer dismisses without providing lawful notice, then the dismissal is a wrongful dismissal. A wrongful dismissal will allow the employee to claim monetary damages.

Fired for “Just Cause”

Employers can fire employees for “just cause” – without notice, or without pay instead of notice. “Just cause” usually means a good reason to fire you for:

  • not performing your job duties
  • doing something seriously wrong, like stealing from your employer
  • using drugs or alcohol that interfere with your job performance
  • ignoring a strict workplace rule
  • intentionally disobeying your boss
  • consistently refusing to follow a clearly defined chain of authority
  • putting yourself in a conflict of interest; for example, you have started a business that directly compete with your employer
  • ignoring a workplace policy, procedures, or rules
  • being dishonest about something important
  • being incompetent; for example, if you got a job only because you said you could repair automatic transmissions, and it turns out you cannot

Situations for Filing a Claim for Wrongful Dismissal in Small Claims Court

An employer is not required to give an employee a reason why his or her employment is being terminated. However, under the Employment Standards Act, 2000 (ESA), there are some situations where an employer cannot terminate an employee’s employment even if the employer is prepared to give proper written notice or termination pay. Wrongful dismissal may be constituted (but not limited) by the following:

  • Discrimination: The employer cannot terminate employment because the employee is a certain race, nationality, religion, sex, age, or sexual orientation.
  • Retaliation: An employer cannot fire an employee because the employee filed a claim of discrimination or is participating in an investigation for discrimination.
  • Employee exercising a right under the ESA or asking questions about the ESA
  • Employee’s refusal to commit an illegal act: An employer is not permitted to fire an employee because the employee refuses to commit an act that is illegal.
  • Employee’s refusal to work in excess of the daily or weekly hours of work maximums
  • Taking  a leave of absence specified in the ESA more often then employer considers “reasonable”
  • Employer not following own termination procedures: Often, the employee company policy outlines a procedure that must be followed before an employee is fired. If the employer fires an employee without following this procedure, the employee may have a claim for wrongful dismissal
  • Employer harasses or abuses an employee
  • Employer gives an employee an ultimatum to “quit or be fired”

Under the Employment Standards Act, 2000 (ESA), certain employees are not entitled to notice of termination or termination pay. Examples include but not limited to the following:

  • employees who are guilty of willful misconduct, disobedience, or willful neglect of duty that is not trivial and has not been condoned by the employer
  • employees on temporary layoff
  • employees who refuse an offer of reasonable alternative employment
  • employees who have been employed less than three months

To file a claim for Wrongful Dismissal with the Ministry of Labour or with Small Claims Court?

If you were wrongfully dismissed you have two options:

  • to sue your employer in Small Claims Court
  • file a claim with the Ministry of Labour of Ontario

You cannot sue your employer for wrongful dismissal and have a claim for termination or severance pay investigated by the Ministry of Labour of Ontario for the same termination or severance. You have to choose one procedure or the other.

Written Notice of Termination

Under the Employment Standards Act, 2000 (ESA):

  • employer can terminate the employment of an employee who has been employed continuously for three months or more if the employer has given the employee proper written notice of termination and the notice period has expired;
  • employer can terminate the employment of an employee without written notice or with less notice than is required if the employer pays termination pay to the employee.

When an employee is terminated, the written notice required under the ESA is generally determined by how long someone has been employed by an employer. The following table specifies the periods of statutory notice required:

 

Length of Employment Notice Required
Less than 3 months None
3 months but less than 1 year 1 week
1 year but less than 3 years 2 weeks
3 years but less than 4 years 3 weeks
4 years but less than 5 years 4 weeks
5 years but less than 6 years 5 weeks
6 years but less than 7 years 6 weeks
7 years but less than 8 years 7 weeks
8 years or more 8 weeks

 

During the statutory notice period, an employer must:

  • not reduce the employee’s wage rate or alter a term or condition of employment;
  • continue to make whatever contributions would be required to maintain the employee’s benefits plans; and
  • pay the employee the wages he or she is entitled to, which cannot be less than the employee’s regular wages for a regular work week each week.

Termination Pay

An employee who does not receive the written notice required under the ESA must be given termination pay in lieu of notice. Termination pay is a lump sum payment equal to the regular wages for a regular work week that an employee would otherwise have been entitled to during the written notice period. An employee earns vacation pay on his or her termination pay. Employers must also continue to make whatever contributions would be required to maintain the benefits the employee would have been entitled to had he or she continued to be employed through the notice period.

Extending Time Limits

Although the limitations on recovery of wages and filing a claim are set out in the legislation and mandatory, it may be possible to make a claim that would otherwise be outside the applicable time limit if:

  • an employee has been misled as to his or her entitlements under the ESA by his or her employer and for that reason delayed in filing his or her claim

the employee took prompt steps to file a claim after he or she found out that what the employer said about the ESA entitlement was inaccurate.

 

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