In Ontario, there are generally two situations where an employer will terminate a non-unionized employee
Examples of Wrongful Dismissal
The first is when the employer has a legitimate reason to dismiss an employee for “just cause”. The second is when an employer terminates an employee without cause, for a variety of reasons, as long as they are not discriminatory or in bad faith (Please see the article titled “Discrimination” for more information). In the first case, when an employer dismisses an employee for “just cause”, the employer must have a legitimate reason for the termination, as the employee will not receive any termination or severance pay. Canadian employment law requires a very high standard to dismiss an employee for just cause. Generally, there must be serious misconduct by the employee (such as theft, violence, fraud, etc.) to warrant receiving no termination or severance pay.
The employer will normally have to prove “gross misconduct”, and the courts have noted that dismissal for “just cause” is the capital punishment of employment law. See Johar v. Best Buy Canada Ltd. 2016 ONSC 5287. The courts now require a contextual approach to fire an employee for just cause, and there is a requirement of proportionality. See McKinley v BC Tel, 2001 SCC 38 and Dowling v Ontario (Workplace Safety & Insurance Board) (2004), 37 CCEL (3d) 182 (Ont. C.A.). If an employer cannot show the court that dismissal was proportionate given the employee’s position, length of service and the circumstances of the case, then they may need to pay damages and legal fees. In the second case, when an employer dismisses an employee without “just cause”, they are required to provide termination notice or pay in lieu of notice to the terminated employee.
The Employee’s Reasonable Notice Period
The Ontario Employment Standards Act sets out the minimum entitlements that an employer must pay to a terminated employee. Employers may include a termination clause in an employment contract, which seeks to limit the amount of notice or pay in lieu of notice that an employee will receive. However, in the absence of an enforceable termination provision the employee’s reasonable notice period is determined in accordance with the common law. Employees should note that common law reasonable notice can be much greater than the minimums contained in the Employment Standards Act.
An employee who was terminated without cause may be able to claim wrongful dismissal in several situations. Common examples of this include:
- An employer terminates employment without cause, but refuses to pay the employee the appropriate compensation or reasonable notice
- An employer terminates employment and improperly claims there is “just cause”, thus refusing to pay any compensation or reasonable notice
- An employer fundamentally alters the terms or conditions of employment, which results in the “constructive dismissal” of the employee (please see the article titled “Constructive Dismissal”)
Please note that the above information does not constitute legal advice. It is general information about the law. If you are need of legal advice, such as a recently terminated employee or an employer looking to draft an enforceable termination provision, please contact the experts at Stacey Ball – Employment Lawyer in Toronto.
Canadian Employment Law
Mr. Ball is author of the authoritative and definitive text Canadian Employment Law - published by Canada Law Book (a division of Thomson Reuters). The text is used and cited by lawyers, law schools and judges across Canada.
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