What Qualifies as Wrongful Termination in Canada?
Employment termination in Canada is regulated at the federal level by the Canada Labour Code (CLC) and in Ontario by the Employment Standards Act, 2000 (ESA). A company’s failure to comply with these laws can result in an employee’s wrongful termination and a possible lawsuit. In this article, we’ll highlight some instances that qualify as wrongful termination and misconceptions surrounding employee terminations.
Losing a job is an intensely upsetting and difficult life event for most people. If you have been fired and believe you were wrongfully dismissed, it’s best to hire an employment lawyer to assess your case and ensure that you speak with a professional to advocate for your best interests.
What Is Wrongful Termination?
Wrongful termination, or wrongful dismissal, occurs when an employer fails to give adequate notice of termination or violates an employment contract. Despite the misleading name, it only refers to an inadequate amount of severance or notice income being provided at dismissal. If the company mistreated you, discriminated or otherwise treated you poorly, that can be a part of a wrongful termination, but it is not always a core part of it. That has to be assessed separately.
The concept of wrongful dismissal is broadly applicable and applies to both federally regulated and provincially regulated (Ontario) employees.
What Qualifies as Wrongful Termination?
Various situations can count as wrongful termination. Business restructuring, being put on a temporary layoff, being dismissed after returning from a maternity leave, etc, all fall under the umbrella of a wrongful dismissal. However, even if a firing seems unfair or illegal, a wrongful dismissal lawsuit is narrowly related only to the employee’s rights after being dismissed.
There is a natural urge to want to advise a lawyer of all the rude, inconsiderate or even unbusiness-like conduct suffered by an employee. However, the law purposely closes its eyes to some of this conduct because everyone has experienced workplace conflict. The courts would be overwhelmed with these complaints and so limit employee’s legal rights to a strong right to sue for additional severance. It is up to the individual legal counsel to determine whether specific conduct merits additional compensation, but very generally, it does not.
Specific conditions must be met before legally claiming that you were wrongfully dismissed:
Failure to Provide Notice or Payment in Lieu of Notice
The law from Ottawa requires that if they have worked at federally regulated company for more than 12 months, employers provide two weeks’ notice of job loss (or pay instead of notice) and two days wages for every year of service. If an employer fails to do so, it can qualify as wrongful dismissal for violating the statutory or politician made law. This is low bar for most employers to meet and failure to comply at this level is a very serious legal violation.
Violation of the Employment laws
Companies must comply with the applicable employment laws of the jurisdiction they operate in. Some examples of this would be an employee is fired for going on maternity leave that she’s allowed to take – this is a strong case of wrongful dismissal. If they fail to pay vacation, holiday, overtime pay, can all be a part of a wrongful dismissal. Sometimes these amounts are not significant enough to justify a lawsuit, but are better suited to a complaint to the applicable Ministry of Labour. Other examples are if they refuse to provide a 30 minute lunch break, ask you to sign a non-compete clause (barring two exceptions) or monitor you electronically without telling you, are potential violations of Ontario statutory law.
Retaliation and Wrongful Termination
If a boss fires an employee because that employee reported the boss for sexual misconduct, or asks about their employment rights and is punished for doing so, are both considered illegal and a wrongful dismissal. If an accusation turns out to be false, but the employee is punished anyway, that is still generally illegal so long as it was genuinely held belief.
Harassment
Harassment can take different forms and means different things to different people. The worst and most obvious is physical abuse, but verbal, sexual advances and psychological abuse can be included. If an employee reports a superior’s acts of harassment to human resources and is fired shortly thereafter, the termination is considered a serious wrongful dismissal.
Discrimination
Various laws prohibit discrimination against individuals based on race, gender, ethnicity, sexual orientation, religion and other grounds. There are various types of discrimination, from polite, specific, systemic or direct/indirect. Firing an employee because of the colour of their skin or on any of the grounds above can be deemed wrongful termination. Even if it is only partially the reason, they were terminated or disciplined also because of bad performance, it taints the entire employment matter.
Incomplete Termination Procedures
Wrongful termination can also occur when a company fails to follow proper termination protocols when firing an employee. Termination should be in writing, promptly communicated, businesslike and private. Not doing any of these could result in a finding that the termination was unduly harsh or legally ineffective.
What Are Some Common Misconceptions?
There are many incorrect – yet commonly held – beliefs about employment termination. Here are the biggest misconceptions.
Employers Must Provide Cause for Termination
Contrary to popular belief, employers are not legally obligated to provide a reason for an employee’s termination. Instead, the law says they must provide compensation. Whether this is to protect people’s feelings or for the law to avoid scrutinising employers’ business decisions, the effect is the same. Otherwise, an employee may claim wrongful dismissal.
Severance Pay Is Equivalent to One Week’s Pay per Year of Service
Many people think severance pay is based on one week’s salary per year of service. The language used is confusing because ‘severance’ refers to two things: the act of ending the employment relationship and the statutory payment that is required when an employee has been with a company for a significant amount of time. Severance pay in this narrow context only considers an employee’s length of service and even then only up to twenty-six years or partial years.
Can I Sue for Being Fired Without Warning?
If you were let go without notice or severance, you may have a case for wrongful dismissal. At Lecker & Associates, we specialize in protecting employees who’ve been terminated unfairly. With over 40 years of experience, our employment lawyers can assess your situation and help you understand your legal options.
Call us at 416.223.5391 or complete our contact form to book a consultation.
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