How Does Wrongful Dismissal Work in Ontario?​

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You may have heard of the phrase “wrongful dismissal”, and you probably already know that it has something to do with losing a job in a way that might be unfair or against the rights of the employee. In Ontario, there are unfortunately many instances where employers don’t always fully respect the rights of employees when it comes to terminating a person’s employment. Most employers are careful about following the law, and they deal with employees in a way that the law requires; however, this is not always the case. 


So what does the phrase “wrongful dismissal” actually mean? 


You may be surprised to learn that the answer may be a bit more complicated than you might expect. However, in this article, you’ll learn a few basics about how wrongful dismissal works in Ontario. Keep in mind that this article will not address issues that involve discrimination or harassment in the workplace, but if you’d like to learn more about that topic, you can check out our human rights page.  


Before we get started, it’s important to understand a legal term that Employment Lawyers call, “cause”. When an employer fires an employee, the termination generally falls into one of two types of situations. Specifically, either the employee was terminated “for cause”, or “without cause”. As the words suggest, the concept of cause deals with the employee’s conduct or behavior. 


If an employee is dismissed from his or her job for cause, then the employer believes that the employee did something, or perhaps failed to do something, which justified firing the employee. 


On the other hand, if the employee did not do anything that would justify losing his or her job, then the termination is generally considered to be “without cause”. It’s important to remember that these phrases have specific legal meanings, and the formal definition of legal terms can sometimes be confusing. For example, the Ontario Court of Appeal, which is the highest Court in Ontario, has said that employers may dismiss employees for cause if the employee is 


“guilty of serious misconduct, habitual neglect of duty, incompetence, or conduct incompatible with his duties, or prejudicial to the employer’s business, or if he has been guilty of wilful disobedience to the employer’s orders in a matter of substance.”


Does that sound like a mouthful? Don’t worry if that technical definition didn’t quite sink in. 


It’s important to simply to keep in mind that employers have very different duties and obligations depending on whether the employer fired an employee with or without cause. For example, employees who are dismissed without cause are generally entitled to receive advanced notice before their last day of work. Employers can also choose to pay the employee a certain amount of money instead of providing the employee with advanced noticed. However, an employee who is fired for cause is not entitled to notice or payment. 


So now that you have an idea about the difference between being dismissed for cause and without cause, you’re ready to understand a little bit more about wrongful dismissal in Ontario. 


In most cases, a wrongful dismissal happens in one of two situations.


The first situation is when an employer dismisses an employee without cause, fails to provide the employee with advanced notice, and also fails to provide the employee with payment instead of advanced notice. This type of situation is usually considered to be a wrongful dismissal. 


The second situation is when an employer dismisses an employee for cause, does not provide any advanced notice, but the employer did not actually have cause to dismiss the employee. 

 

Some dishonest employers might claim that an employee is being dismissed for cause simply to avoid providing the employee with advanced notice or to avoid the responsibility of paying the employee. These types of conflicts are common, and if you believe that you have been wrongfully dismissed in any of the ways we’ve mentioned, you should speak to a lawyer about your specific situation. 


If you find yourself in a legal dispute with your former employer, you might be wondering who is responsible for proving in Court whether or not there was cause to dismiss you from your job. According to the law, the employer has the responsibility of proving that he or she had a good reason to terminate the employee for cause. 


You might also be wondering how many weeks or months of notice an employer must provide to an employee, or how much money should be paid to the employee if he or she was fired without any notice. In Ontario, there are a set of laws called the “Employment Standards Act” that determine how much notice, or payment instead of notice, an employer should give to an employee who is going to be terminated. However, it’s important to keep in mind that the Employment Standards Act simply describes the absolute minimum obligations that employers have. In fact, when Judges decide cases that involve the wrongful dismissal of an employee, they will often require employers to meet much higher standards than the minimum requirements described in the Employment Standards Act. 


For example, if a Judge in Ontario is hearing a case about an employee who was dismissed without cause, and the employee did not receive any advanced notice or payment instead of notice, then the Judge will usually need to determine how much notice the employer should have given the employee, or how much money that employer should have paid to that employee. In many cases, instead of using the minimum standards in the Employment Standards Act, a Judge will usually consider four factors, and those factors are the employee’s age, how long the employee was employed by the employer, the character of the employment, and the availability of similar employment. After the Judge considers these four factors, he or she will determine how much notice or money the employee should have received when the employee was wrongfully dismissed. 


You may be wondering about what happens when employers mistreat employees, and how that impacts a Court case where the employee was wrongfully dismissed. For example, some employers might falsely accuse the employee of misconduct, intentionally humiliate the employee, interfere with employee’s future career, fire the employee to make the employee lose his or her pension benefits, or commit some other type of hurtful act. The law calls this type of behavior, “bad faith”. In these situations, a Judge can order the employer to compensate the employee with money, and the money that the employee receives in compensation for the employer’s bad behavior is called, “Moral Damages”. 


Some employers might act in bad faith, but they do not actually fire the employee. Oftentimes, the employee continues to put up with the hurtful treatment because he or she does not want to lose his or her job. Many employees also fear that they won’t be entitled to any compensation for wrongful dismissal if they quit their job. However, an employee who quits his or her job in these circumstances can sometimes be considered to be, “Constructively Dismissed”. In other words, even though the employer did not actually fire the employer, the law may treat the situation as if the employer actually did so. The concept of constructive dismissal can be complicated, and you should speak to a lawyer if you have quit your job and you believe you’ve been constructively dismissed.