Wrongful Termination in Ontario

Understanding Your Rights and Remedies

Wrongful termination, also known as wrongful dismissal, is a significant issue for employees in Ontario who find themselves terminated from their job without just cause or without adequate notice or severance. Understanding the rights of employees and the obligations of employers under Ontario and federal laws is essential to navigate such situations. This article outlines the critical aspects of wrongful termination in Ontario, the legal framework, potential remedies, and what employees should know when facing a wrongful dismissal.

What Constitutes Wrongful Termination in Ontario?

Wrongful termination in Ontario generally occurs when an employer terminates an employee without providing reasonable notice or adequate compensation, as mandated by the Ontario Employment Standards Act (ESA) and common law principles. The key elements of wrongful termination involve:

Lack of Just Cause: If an employer dismisses an employee without just cause, they must provide either reasonable notice or pay in lieu of notice. Just cause typically involves serious misconduct, such as theft, dishonesty, or gross incompetence. If such cause does not exist, the dismissal may be deemed wrongful.

Insufficient Notice or Severance: Under the ESA, the minimum notice period or severance pay is calculated based on the employee’s length of service. For example, an employee with three years of service is entitled to at least three weeks’ notice or pay in lieu thereof. However, common law notice often exceeds ESA minimums and is determined based on factors like age, length of service, position, and availability of similar employment.

Constructive Dismissal: Constructive dismissal occurs when an employer makes significant unilateral changes to the terms of employment (e.g., demotion, significant pay cut, or relocation) that are unacceptable to the employee. The employee may treat this as a termination and seek compensation.

Provincial and Federal Legal Frameworks Governing Wrongful Termination

In Ontario, wrongful termination is governed by both statutory law (the ESA) and common law principles. The ESA provides minimum entitlements for notice, severance, and other benefits, but employees often have greater rights under common law. Under common law, courts assess what constitutes “reasonable notice” or “just cause” on a case-by-case basis, often providing more significant compensation than the ESA minimums.

For employees working under federal jurisdiction (such as those in banking, telecommunications, and transportation industries), wrongful termination is governed by the Canada Labour Code. The Code provides additional protections for federally regulated employees who have been unjustly dismissed. Under Section 240 of the Code, an employee who has completed at least 12 months of continuous service with the same employer and who believes they have been unjustly dismissed can file a complaint within 90 days of the dismissal. If successful, remedies may include reinstatement or compensation, depending on the circumstances.

Additionally, Ontario’s Human Rights Code prohibits termination based on discriminatory grounds, such as race, gender, disability, or age. If a wrongful dismissal is accompanied by a human rights violation, the employee may be entitled to additional remedies.

Employment Standards Act (ESA) in Ontario

The Employment Standards Act (ESA) in Ontario provides clear guidelines regarding the termination of employment. The key points include:

Minimum Notice Period: Employers are required to provide a minimum notice period based on the length of service. For instance, one week of notice is required for every year of employment, up to a maximum of eight weeks.

Severance Pay: If an employee has been employed for at least five years and the employer’s payroll exceeds $2.5 million, or if 50 or more employees are terminated within a six-month period, severance pay is also required.

Exemptions: Certain situations exempt employers from providing notice, such as when an employee is dismissed for wilful misconduct, disobedience, or neglect of duty.

Federal Labour Standards and Unjust Dismissal

Unjust Dismissal: Federally regulated employees who have completed at least 12 months of continuous employment have the right to file a complaint for unjust dismissal under the Canada Labour Code. This provision offers robust protection, including the possibility of reinstatement if the dismissal is deemed unjust. Unlike provincial standards, the federal framework allows for reinstatement, which is a unique remedy under the Code.

Filing a Complaint: Employees must file a complaint within 90 days of the termination date. An adjudicator may then investigate the complaint and determine whether the dismissal was justified.

Compensation for Unjust Dismissal: If the dismissal is found to be unjust, employees may be entitled to compensation that includes lost wages and, in some cases, reinstatement.

Government Resources:

Remedies for Wrongful Termination

Employees who believe they have been wrongfully terminated have several potential remedies:

Notice Pay and Severance Compensation: Employees can claim compensation equivalent to the notice period they should have been given. Severance pay may be due in addition to notice pay for employees with five or more years of service, where the employer’s annual payroll is at least $2.5 million or where 50 or more employees are terminated within a six-month period due to business closure.

Damages for Constructive Dismissal: In cases of constructive dismissal, an employee may be awarded damages equivalent to the compensation they would have received if they had been dismissed with notice.

Human Rights Damages: If a termination involves a violation of the Human Rights Code, employees can seek additional compensation for pain, suffering, and loss of dignity.

Reinstatement: In rare cases, especially under the Canada Labour Code for federally regulated employees, an employee may seek reinstatement to their former position.

If your organization is facing a serious internal conflict, it may be time to consult a third-party professional. Not just anyone will do – it’s incredibly important to do your research and pick the right investigator near you to conduct a thorough, unbiased workplace investigation. The goal is to get all the facts required to make a thoughtful, informed decision based on the outcome of the process.

Discover Global Mindful Solutions’ Investigation services to better understand how we can help you resolve conflict and maintain workplace productivity.

Explore Workplace Investigation Services

Steps to Take if You Are Wrongfully Terminated

If you believe you have been wrongfully terminated, here are some critical steps to consider:

Review Your Employment Contract: Understand the termination clause in your contract. Some contracts contain clauses that limit an employee’s right to common law notice.

Document Everything: Keep records of all communications with your employer, including termination letters, emails, and any relevant employment documents.

Seek Legal Advice: It is crucial to consult with an employment lawyer who can provide legal advice tailored to your specific situation. They can help evaluate the merits of your case, negotiate severance packages, or represent you in court if necessary.

File a Claim: If an agreement cannot be reached with your employer, you may file a wrongful dismissal claim in court or pursue it through the Ministry of Labour or the Canada Labour Program, depending on the nature of your claim and the compensation sought.

Average Settlements for Wrongful Termination in Ontario

The amount of compensation for wrongful termination varies widely based on individual circumstances. However, settlements generally include notice pay, severance pay, and, in some cases, additional damages for bad faith conduct by the employer or human rights violations. The average wrongful termination settlement can range from a few weeks to several months of salary, depending on the employee’s position, length of service, and the specifics of the case.

The Takeaway

Wrongful termination can have significant financial and emotional consequences for employees. Understanding your rights under Ontario and federal law and taking appropriate legal action can help ensure fair treatment and adequate compensation. If you believe you have been wrongfully terminated, consulting with an experienced employment lawyer is vital to explore your options and pursue the remedies you are entitled to under the law.

If your organization is experiencing roadblocks in finding effective ways to manage workplace conflict and needs professional investigation or mediation services, consulting with a neutral third party will help resolve distracting, challenging situations and empower all participants to settle on an agreeable solution that propels your organization forward.

At Global Mindful Solutions, we have established processes that aim to provide insightful, comprehensive solutions with a compassionate and unbiased approach. This allows everyone involved to focus on returning to work and continuing to make a positive contribution to their organization while leading fulfilling careers.

Contact Global Mindful Solutions for neutral, knowledgeable, and effective mediation, facilitation, and restoration services.

613-869-9130 | info@globalmindfulsolutions.com

Contact

343 Preston Street, Suite 1100, Ottawa, ON, K1S 1N4

Recommended articles: