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Please note that this page contains general information only and is not intended to create a solicitor and client relationship. You should not act on the information contained herein without obtaining advice about your own circumstances.

Employment Law:

What is wrongful dismissal?

The term wrongful dismissal refers to a termination of employment made by an employer without just cause or without reasonable notice or payment in lieu thereof. This means that before an employer can dismiss an employee, it must have just cause to do so. If not, it must either provide the employee with sufficient notice of termination or sufficient payment instead of the notice provision.

What is just cause?

Canadian Courts have set high standards for a finding of just cause and have required conduct of a nature which causes a breakdown in the employer-employee relationship. This can include dishonesty, serious incompetence, insubordination and similar employee misconduct. These cases must be examined carefully before an assessment can be made on whether the employer genuinely had just cause to terminate the employment relationship. In the event that there was no cause, an employee would be entitled to receive damages representing a period of reasonable notice of termination, the value of benefits and possibly other damages.

What is reasonable notice?

Determining the appropriate period of reasonable notice is fact specific and depends upon such factors as the length of service, the position of the employee, whether the employee was induced to leave secure employment, the age of the employee, the likelihood of re-employment, the fairness of the termination and other factors. Furthermore, while the Employment Standards Act sets out certain minimum payments for termination and severance pay, these are legal minimums only and the Courts routinely award substantially more than the minimum depending on the circumstances of the individual case. It should be noted as well that the above principles apply to non-unionized employees. The terms of employment of unionized employees are set forth in the collective agreement governing the relationship between the employer and the union and these generally preclude access to the Courts. It should also be noted that employees who work for Federally regulated employers such as banks, airlines, railways and cable companies may bring a claim for unjust dismissal pursuant to the Canada Labour Code which provides for a remedy of reinstatement. Once again, it is important that appropriate legal advice be obtained before any judgment is made as to the best course of action.

What is constructive dismissal?

The term constructive dismissal refers to circumstances in which an employee has not actually been dismissed but the employment has changed to such a degree that the Courts treat it as though a dismissal had occurred. This might arise, for example, as a result of a demotion, a reduction in compensation or a significant change of duties. The Courts have also held that conduct of an abusive nature by an employer which makes it difficult for an employee to continue working can lead to a constructive dismissal. The circumstances of each individual case must be carefully examined before an assessment can be made that a constructive dismissal has occurred and it is essential that proper advice be obtained in this regard.

Are non-competition agreements valid?

An employer will frequently require an employee to sign an agreement prior to or during employment which has the effect of precluding the employee from working in the same industry or from soliciting the employer’s customers for a specified period of time following the termination of employment. The Courts have looked with disfavour upon agreements which limit an employee’s right to earn a livelihood, however such agreements are not automatically unenforceable for that reason alone and much depends upon the precise terms of the agreement and the nature of the termination. It can be said that the Courts will be slow to enforce agreements which go beyond the legitimate business interests of the employer.

What should I do if I get a severance package?

When terminating an employee without just cause, many employers will provide an employee with a written proposal containing a severance package designed to compensate the employee and, if the proposal is accepted, to ensure that the employee will not take legal action against the employer as a result of the termination. Since acceptance of such an offer can have serious legal consequences, it is important that a terminated employee obtain independent legal advice before signing any documents provided by the employer. It is also important to realize that the mere fact that a severance package complies with the provisions of the Employment Standards Act does not mean that it is a fair proposal for the employee. A range of factors must be looked at before advice can be given on the fairness of the severance package. Also, in an important decision known as Wallace v. United Grain Growers Ltd., the Supreme Court of Canada held that employers have an obligation to treat employees fairly during the termination process and the failure to do so may result in an increase in the notice period to which the employee would otherwise be entitled.

What can I do if my human rights have been violated?

The Ontario Human Rights Code prohibits discrimination on the basis of a wide range of circumstances, including gender, age, origin, sexual orientation and handicap. An employee who has been discriminated against contrary to the Human Rights Code may bring an application pursuant to the Code for the appropriate remedy. This is not, however, the only recourse and the Courts may also take into account any breach of the Humans Right Code in awarding damages in an action for wrongful dismissal brought by an employee.

What can I do if I am a unionized employee?

The rights of unionized employees are set forth in the collective agreement which governs the relationship between the employer and the union. Employment related disputes are resolved by way of the dispute resolution and grievance procedure provided for in the collective agreement and this would generally preclude access to the Courts. In addition, it is up to the union to decide whether to pursue an employment related grievance to arbitration. If a unionized employee is unsatisfied with the representation of the union, it can bring an application to the Ontario Labour Relations Board for breach of the duty of fair representation. The employee must show that the union acted in a manner that was arbitrary, discriminatory or in bad faith.