The termination of one's employment is a difficult and stressful event, both on a personal and on a financial level. The remedies available at law are limited and often unsatisfying.
Samuel A. Mossman has extensive experience in the area of employment law including having successfully conducted a number of trials and having successfully defended substantial damage awards made in favour of his clients in the Ontario Court of Appeal. Mr. Mossman acts for both employers and employees in this area of his practice.
The comments here are relevant to non-unionized employment situations only. If you are a unionized employee, your rights and remedies are found within the bargaining agreement. Generally speaking, your remedies are exercised through the "grievance" procedure and you do not have the right to have access to the Court.
Here is what you need to know.
For the employee:
- You do not have a "right" to your job
- It is not against the law for an employer to terminate your employment, whether the employer has cause to do so or not
- When an employer terminates the employment of an employee without just cause the employer is required to give the employee "reasonable notice" of termination or pay in lieu of notice. This is what is referred to as "severance pay" or "termination pay"
- The amount of notice or pay in lieu of notice that an employer has to give to the employee is based on the facts of each individual case. The factors taken into consideration by the Court include:
- a) The employee's years of service to the employer
- b) The employee's age at termination
- c) The nature of the employment
- d) The economic environment in which the employee will be seeking other work
- e) The transferability of the employee's skills
- Whether the employer has legitimate business reasons, economic or otherwise, to terminate an employee is generally irrelevant. An employer's difficult financial circumstances do not provide a defence to a claim for damages for wrongful dismissal
- The Employment Standards Act sets out certain minimum notice provisions but the provisions of that Act do not limit the Court's jurisdiction to award an appropriate amount
- A terminated employee has an obligation to "mitigate" his/her damage by making reasonable efforts to seek other work, including, in some cases, other work offered by the terminating employer, and any income earned by the employee during the "notice period" is deducted from the value of his claim
- If the employee collects EI benefits after being terminated, EI is entitled to be repaid from the proceeds of any settlement or Judgment in a claim for damages for wrongful dismissal
- If the employer alleges that there was just cause to dismiss the employee, he has to be able to prove it. Cause justifying dismissal is more than mere dissatisfaction with work performance but must be conduct that undermines the ongoing employer / employee relationship such that an objective observer would agree that it is unreasonable that the relationship continue
- Where, in addition to dismissing an employee the employer deals with the employee in "bad faith" or commits some other actionable wrong, additional damages may be awarded
- Often an employee alleges that his/her dismissal was motivated by some form of discrimination, either based on age, disability, race, gender or the like. In such a case it is possible to add to the employee's claim a claim for additional damages for contravention of the Ontario Human Rights Code
- Damages for wrongful dismissal are taxable to the extent that those damages represent wages that would have been earned during the "notice period" and, as a consequence of that, legal fees incurred to "earn" those damages are tax deductible
- It is often the case that when the employment was for a short period of time or whether similar work is readily available a claim for damages for wrongful dismissal is not worth enough to pursue even though the employee may legitimately feel "wronged"
- Even though an employee was not fired, if the employer creates or permits a situation to exist where the employee finds continuing in his employment intolerable, or where the employer unilaterally alters the contract of employment in a material way, the employee may be able to elect to consider himself/herself to have been "constructively dismissed", to treat the employment as at an end and sue for damages for wrongful dismissal, as the Court may equate such circumstances with the employee having been fire
For the employer:
- The above comments fairly set out the law, in general terms
- If you are contemplating terminating the services of an employee you should get legal advice from a lawyer who specializes in this area of legal work to insure that you have a sufficient basis to do so or, if you do not, to assist you in negotiating a termination package and securing a release against claims from the employee. Employers who dismiss employees, in particular long-standing employees, without the benefit of good legal advice can find themselves embroiled in a costly and time-consuming Court matter that could have been avoided
Call the Law Office of Samuel A. Mossman to arrange a consultation if you feel that you have been wrongfully terminated from your employment or may be, or if you are an employer who is desirous of terminating an employee or if a claim is being made against you for damages for the wrongful dismissal of an employee.