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Wrongful dismissal 101: What are your rights under Ontario’s ESA?


By Erin Moores

If you are a non-unionized employee working in a provincial sector job in Ontario, you have a certain number of legal protections. But what can you do if you are fired from your job? This blog post sets out the basics of wrongful dismissal law for employees whose termination rights are covered by Ontario’s Employment Standards Act.

What is meant by “wrongful dismissal”?

For most non-unionized employees in Ontario, your employer can terminate your employment at any time without cause. However, it must give you notice of termination of your employment. An employer can require you to work through the notice period or it can end your employment immediately and pay you during the notice period instead.

“Wrongful dismissal” simply means that your employer did not give you the correct notice of termination (either as a period of time or as pay in lieu of notice) required by law.

How much notice am I owed?

Minimum notice periods are set out in Ontario law and are based solely on your years of service with your employer. Simply put, Ontario law provides for a minimum of one week of notice for each year of service, up to a maximum of eight weeks. In cases of mass layoffs of more than 50 employees in a four-week period, the minimum amount of notice is higher than eight weeks.

However, the notice you are owed could be more than the minimum. For example, if you have a written employment contract that provides for a longer notice period, or if your employer has a policy providing for longer notice, you may be entitled to more.

You also may be entitled to what is called “common law notice”, which can provide a longer period than what is set out in the Employment Standards Act. Whether common law notice applies to you depends on whether you have a written employment contract, on what that contract says, and on several other factors.

What is severance and am I owed any?

Severance is an amount of money paid to an employee upon termination in recognition of long service with the same employer.

The Employment Standards Act law sets out minimum severance entitlement for employees who have at least five years of continuous service with the same employer. To be entitled to severance, you must have worked for an employer with a payroll of $2.5 million or more or have been dismissed because your employer shut down all or part of its operations. Severance is calculated as one week’s severance pay for each year of employment, to a maximum of 26 weeks.

You could be entitled, however, to a greater severance amount. This depends on whether you have a written employment contract and on what that contract says. It can also depend on whether your employer has a policy about severance.

What if I was terminated “for cause”?

Being terminated “for cause” or “for just cause” means that your employer is terminating you because it believes you have engaged in serious misconduct or have had very serious performance issues that you did not improve upon. If your employer had just cause to terminate you, it does not owe you any notice or any severance.

What if my employer discriminated against me?

Your employer cannot terminate your employment for reasons related to the prohibited grounds of discrimination set out in Ontario’s Human Rights Code, which currently include the following:

  • Race
  • Colour
  • Ancestry
  • Creed (religion)
  • Place of Origin
  • Ethnic Origin
  • Citizenship
  • Sex (including pregnancy)
  • Sexual Orientation
  • Gender Identity
  • Gender Expression
  • Age
  • Marital Status
  • Family Status
  • Disability
  • Record of criminal offences

If you believe that your employer may have terminated you for a reason related to one of the above grounds, you may be able to allege that your employer discriminated against you. If discrimination based on one of the above grounds was a factor in your employer’s decision to terminate you, then the dismissal would be unlawful.

What are my recourses and options?

1. Complaint to the Ontario Ministry of Labour

You can file a complaint to the Ontario Ministry of Labour to claim notice and severance owing under the Employment Standards Act within two years of your termination. You can also start a legal proceeding in court, but you cannot do both. If you have already filed a complaint to the Ministry, you have two weeks to withdraw it from the date of filing, otherwise you will not be able to file a claim in court. If you have already started a civil action, you cannot file a complaint with the Ministry.

If you do file a complaint, the Ministry will assign an investigator who will likely attempt to help the parties reach a settlement. If the investigator finds that you were not correctly paid, they can order the employer to pay the notice and severance it owes to you.

3. Complaint to the Ontario Human Rights Tribunal

You also may be able to file a complaint to the Ontario Human Rights Tribunal if you believe your termination had something to do with one of the prohibited grounds of discrimination. You should file this type of complaint within one year of the last incident of discrimination.

3. Civil proceeding in court

You can file a civil action against your employer (sue your employer) for wrongful dismissal to try to recover fair compensation in lieu of notice and other amounts you may have lost related to your termination. This is a costly, lengthy and technical process, and is most worthwhile for those who worked many years with their employer and who are likely owed significantly more notice than what their employer gave them.

4. A negotiated settlement

A settlement is an agreement that you and your employer sign to forever put an end to any dispute between you and your employer about the termination of your employment. Simply put, the employer usually gives a sum of money and/or other benefits to the employee in exchange for the employee agreeing not to file any complaints and not to start/continue any legal actions against the employer. This means each party gets something it wants and neither party must go through the expense and uncertainty of a legal proceeding.

Whether a settlement is fair and reasonable for both parties depends on factors like your length of service and your chances of success if you were to pursue a legal proceeding, including whether you can produce good quality evidence to support your allegations.

In many cases it can be worthwhile to pursue a settlement agreement if the employer is willing to negotiate. This is by far the most economical and common solution to employment disputes.

Settlements are typically confidential, meaning both you and your employer would agree not to disclose the terms and details of the settlement to others.

The takeaway

These are the bare-bones basics, but wrongful dismissal cases and their chances of success vary greatly from one to the next. Chances of success are highly dependent on many factual elements in addition to the ones we have mentioned above, like type of work you did, the circumstances of your employer, and whether you have made efforts to find new work, among many more. Conclusions about whether you were wrongfully dismissed and decisions about whether you should pursue legal action should only be made after a thoughtful and thorough review of your circumstances.

We welcome calls from anyone who would like to learn about their options for legal advice and representation.