Wrongful Dismissal- Provincial Regulation

In Ontario, provincially regulated employers must provide the correct notice of termination to an employee who has been terminated. Employers are required by law to provide at least the minimum requirements for notice under the Employment Standards Act (ESA). If the employee's employment contract provides for greater notice than the ESA minimum standards, then the employer is contractually obligated to provide notice as per the contract. If the termination clause in the employment contract is not valid, or does not exist, then the employee is entitled to common law notice which is considerably more than the ESA. For more general information on termination, see our blog here: Termination in the Workplace

A “wrongful dismissal”, simply put, means the employer has failed to provide the proper notice or pay in lieu of notice that an employee is entitled to under the ESA as provided in their employment contract or based on the common law. The term “wrongful dismissal” does not necessarily mean that the employer was unlawful in dismissing an employee, but rather that the proper compensation had not been provided. However, there are different circumstances that can bring rise to a wrongful dismissal and improper conduct on behalf of the employer in the manner of dismissal will likely amount to a wrongful dismissal as well.

Wrongful dismissals are very serious for both the employer and the employee. Experiencing a termination is never easy for an employee, but not being provided with the proper notice or pay in lieu thereof and experiencing a wrongful dismissal is even harder. If an employee feels as though they have faced a wrongful dismissal, they should seek the advice of an employment lawyer before signing any severance package documents or offers, especially a full and final release. The most common resolution, if a wrongful dismissal is in question, is through negotiation and settlement. If a settlement cannot be reached, then an employee may wish to issue a statement of claim with a court of competent jurisdiction within two years of the termination date. If a court determines that an employee has indeed been wrongfully dismissed, then the employee may receive common law damages to be made whole provided that the employment contract does not have a valid termination clause.

For employers, an allegation of a wrongful dismissal can be quite costly both finically and reputationally. If a wrongful dismissal claim is brought forward by an employee who the employer has terminated, the best course of action is to ensure the employee has been paid out at least their minimum entitlements under the ESA or contract that is owed to them, and then negotiate a higher termination package in addition to what they are entitled to in exchange for a full and final release. Employers should do their best to reach a fair and reasonable settlement to avoid an even costlier court experience.

If you are an employer or an employee who would like assistance at any stage of the wrongful dismissal process, our team of employment lawyers at SD Law would be happy to help.

Unjust Dismissal- Federal Regulation

For federally regulated employers, the term “unjust dismissal” refers to recourse that is available only under the Canada Labour Code. Termination under the Canada Labour Code (CLC) differs substantially from termination under the Employment Standards Act. See the above linked blog for more information on proper terminations, just cause, and progressive discipline under the Canada Labour Code.

If a federally regulated employee who has been continuously employed with an organization for 12 months or more believes that their dismissal was unwarranted, because they believe the employer did not have just cause to terminate or the employer did not properly apply progressive discipline, then they have the option of alleging an unjust dismissal and can file a complaint with the Labour Program. If the employee chooses this avenue, they must file an unjust dismissal complaint within 90 days of the date of the dismissal.

This is quite different than the ESA because if a provincially regulated employee wishes to challenge a termination, then the court is the only option available to them and they can only seek damages. Under the CLC, an employee can also seek reinstatement to their former position, whereas reinstatement is not an option that is available for a provincially governed employee. Federally regulated employees that claim an unjust dismissal and file complaint with an adjudicator under the Canada Labour Program can seek a wide range of damages to make them whole as if the dismissal has never occurred. If the federally governed employee that was dismissed misses the 90-day filing period deadline they can no longer claim reinstatement but can choose to pursue a claim at common law through the court for the notice period to which they are entitled. If the matter is brought to court, certain remedies will no longer be available.

Not all federally regulated employees will have the option to proceed under the Canada Labour Code because there are certain criteria for eligibility for filing a complaint. However, if an employee is eligible, then they may move forward with filing a complaint with the Labour Program and an inspector will be assigned to their complaint. The first step of this process will be mediation.

Generally speaking, if the complaint cannot be mediated with the help of an inspector, then it will be sent to adjudication based on the discretion of the Minister of Labour. If an adjudicator is selected, then a date for a hearing is set and the evidence from both parties can be heard. Again, the major difference in this process from the typical court process is that there are different remedies and an adjudicator has the power to order the employer to reinstate the employee with or without compensation of lost wages, order the employer to pay legal costs or other equitable remedies that offer amends for the dismissal such as amending the termination letter to a discipline letter, ordering the employer to provide the employee with a positive letter of reference, or amending the ROE. As an employer, there are some permissible defences for an unjust dismissal complaint. The Canada Labour Code states that an employer may terminate an employee who has worked for more than 12 continuous months, without just cause, if there is a discontinuance of a function or lack of work. These may only be used in specific circumstances and must be alleged in the termination letter. To be proactive, employers should always discuss potential terminations with an employment lawyer before taking any steps to minimize the risk of an unjust dismissal.

If you are a provincially or federally regulated employer or an employee who would like assistance with a wrongful or unjust dismissal, our team of lawyers is available to help. Reach out to our firm at 705-268-6492.