In Ontario, if an employer terminates an employee, they must provide the employee with notice or pay in lieu of notice and potentially severance pay (depending on the circumstances). The amount of mandatory notice and severance pay is determined by the Employment Standards Act. These amounts are mandatory and thus must be paid by the employer unless there is a for-cause reason for not providing such payments.

An employer cannot make pay in lieu of notice or severance entitlements under the ESA conditional in any manner or seriously delay providing the employee with these entitlements. Ontario Courts have been willing to add damages on top of employees' common law claims if an employer fails to comply with the ESA.

Wilds v 1959612 Ontario Inc. (2024 ONSC 3452)

In Wilds v 1959612 Ontario Inc. (2024 ONSC 3452) Barbara Wilds worked for 1959612 Ontario Inc., which operated as Gibson Building Supplies (Gibson), as an executive assistant for 4.5 months. Ms. Wilds was terminated without cause. Gibson offered Ms. Wilds two weeks of pay in lieu of notice conditional on her signing a full and final release. When Ms. Wilds refused to sign a release, Gibson did not provide her with any termination pay. Gibson also refused to cover some typical business expenses that Ms. Wilds incurred, which it had covered previously during her employment. In court, Gibson claimed that it did not provide Ms. Wilds with pay in lieu of notice or the business expenses due to a clerical error. Gibson also took approximately a month to provide Ms. Wilds with her record of employment, which delayed her ability to seek employment insurance benefits and worsened her precarious financial circumstances.

The judge found that the termination provision in Ms. Wild's employment contract was not enforceable. Considering the circumstances, the judge awarded Ms. Wilds with two months of pay in lieu of notice, totalling $9,923.85. The court found that Gibson was liable for punitive damages for failing to comply with the ESA by failing to pay Ms. Wilds her one week of ESA pay in lieu of notice and for providing the record of employment late. Since this was a marked departure from expected employer conduct, the judge found that Gibson should pay Ms. Wilds an additional $10,000 in damages to deter it from doing similar conduct in the future.

Takeaways from Wilds v 1959612 Ontario Inc. (2024 ONSC 3452)

The main takeaway from this case is that employers should be mindful of their legal obligations under the Employment Standards Act (ESA). If an employer fails to comply with the ESA, the judge could significantly increase the damages that they may be liable for.

The other takeaway of this case is that short-term employees are becoming increasingly eligible for longer notice periods. Ms. Wilds was entitled to almost half of the time that she worked at Gibson as pay in lieu of notice. There is a line of cases that suggest that she may have been entitled to even more pay in lieu of notice, with some employees getting more notice than the time they actually worked for.

How Suzanne Desrosiers Professional Corporation can help

If you are an employer who is considering terminating an employee, you should contact our office immediately. Our employment lawyers can guide you through the termination process and help you minimize any liability that you may face.

If you are an employee and your employer is not providing you with any pay in lieu of notice despite not alleging a cause for termination, contact one of our employment lawyers. Our employment lawyer can help you get your legal entitlements, as they are well-versed in employment law. To contact one of our employment lawyers, please call us at 705-268-6492 or email us at info@sdlawtimmins.com.