Author: Stacey Staios - Articling Student
Edited By: Ryan Carson

Wrongful dismissal is a commonly misunderstood term. In Ontario, an employer is allowed to terminate an employee on a without cause basis, so long as the employer’s decision to terminate the employment relationship is not discriminatory and the employer provides advance notice to the employee or payment in lieu of such notice, which is also known as termination pay. An employee is wrongfully dismissed when an employer terminates their employment without providing the proper notice or termination pay in lieu of such notice.

Under the Employment Standards Act, 2000 (“ESA”), advance notice is required for every employee who has been continuously employed for at least three months.¹ The minimum amount of statutory notice an employer must to provide an employee with depends on the employee’s length of service and can be found in the chart below.

During the applicable statutory notice period, the employer must fulfil specific obligations. An employer may not reduce the employee’s wages or alter the terms or conditions of their employment. The employer must provide benefit continuation throughout the statutory notice period and pay the employee wages that they are entitled to, which cannot be less than the employee’s regular wage for a regular work week.²

According to section 61(1) of the ESA, an employer may terminate the employee’s employment without notice if the employer pays the employee a lump sum amount that is equal to the amount the employee would have been entitled to receive under section 60 of the ESA had notice been given in accordance with that section and if the employer agrees to contribute to the employees benefit plan during that time.

Wrongful dismissal occurs when an employer terminates an employee without providing the proper amount of notice or pay in lieu thereof. In some circumstances, employees may be entitled to common law reasonable notice. Common law reasonable notice is determined by looking at factors such as the character of the employment, the length of service, the age of the employee and the availability of similar employment. Some employees may have an employment contract that includes a termination clause which removes their right to common law severance and limits their entitlements upon termination to those prescribed in the ESA.

In the event that an employee is terminated, section 2 of the Employment Standards Act sets out a list of employees who are not entitled to notice of termination or termination pay.³ Employers may want to claim that there was just cause for the dismissal to avoid providing notice or termination pay to the employee.

However, if an employee believes that their termination was incorrectly labelled as being for cause, they may bring a claim to prove that their dismissal was not justified. In this case, the terminated employee may file such a claim against their employer seeking damages, which is also known as a wrongful dismissal action.

Period of Employment Notice Required

Less than 1 year 1 week
1 year but less than 3 years 2 weeks
3 years but less than 4 years 3 weeks
4 years but less than 5 years 4 weeks
5 years but less than 6 years 5 weeks
6 years but less than 7 years 6 weeks
7 years but less than 8 years 7 weeks
8 years or more 8 weeks

Disclaimer

The content on this web site is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this web site are advised to seek specific legal advice by contacting members of Carson Law, Carson IP, or their own legal counsel regarding any specific legal issues. Carson Law does not warrant or guarantee the quality, accuracy or completeness of any information on this web site. The articles published on this web site are current as of their original date of publication, but should not be relied upon as accurate, timely or fit for any particular purpose.

References

¹Employment Standards Act 2000, s.54(a)
²Employment Standards Act 2000, s.60(1)
³Employment Standards Act 2000, s.2 .