What is Wrongful Dismissal?

2020 was a rough year for many. The covid-19 pandemic wreaked havoc on the World causing widespread death and illness. In response, local and national governments instituted public safety measures designed to minimize the harm caused by the pandemic. All over the World, lockdowns forced businesses to close their doors to customers and downsize their workforce. Here in Ontario, the situation was no different. Unfortunately, I expect the first half of 2021 to look a lot like 2020.

As an employment lawyer, I am keenly aware of the hardships businesses and their employees have faced and will continue to face. One of the questions we get most often from employees who have lost their job, whether as a result of the pandemic or for other reasons, is “was I wrongfully dismissed?”

As usual in law, the answer is complicated. For simplicity, let’s assume that you are a non-unionized employee, and that Ontario law governs your employment. Now, let’s go through several questions to help you get a better idea if you were wrongfully dismissed.

Question 1: Did the employer fire you for cause?

Simply, did the employer allege that it was terminating your employment for a reason such as misconduct, violation of company policies or poor performance? If so, the employer has also likely given you no notice of your dismissal and has offered you no money instead of notice. If this is your situation, do not assume that you have no right to notice, or money instead of notice. Just because your employer has alleged cause does not mean that a court would agree that your employer had just cause to dismiss you without notice or payment instead of notice. Whether an employer has just cause to fire an employee is one of the most frequently litigated issues in employment law. It is therefore vital that you contact an employment lawyer as soon as possible to help you determine whether you have been wrongfully dismissed.

If your employer has fired you but has not alleged cause, the next question to ask is…

Question 2: Do you have a written employment agreement?

Whether you have a written employment agreement often dictates your entitlement upon termination. Many employers use a written employment agreement to limit their employees’ entitlement upon being fired to the minimums provided in Ontario’s employment legislation, the Employment Standards Act (ESA). If you have a written employment agreement and it contains a termination clause that purports to limit your entitlement to minimums set out in the ESA, it is so important that you have an employment lawyer review the employment agreement for you. Many termination clauses used by employers can be attacked as invalid for various reasons. If you can do that successfully, then may have a right to common law damages arising from your dismissal. The benefit of this is that common law damages are often much more generous than the minimum standards in the ESA. So, don’t assume that just because you have an employment agreement with a termination clause that supposedly limits your entitlement to ESA minimums that you are automatically disqualified from seeking the more generous common law damages.

Question 3: You have received a severance package and the employer is asking you sign a release in exchange for payments – Should you sign the release?

Absolutely Not! Never sign a release given to you by your employer without consulting an employment lawyer and having an employment lawyer review the severance package first. If you sign the release, you are likely giving up your right to sue your employer for wrongful dismissal. Many employees worry that if they don’t sign the release immediately, the employer will withdraw its offer and they will be left with nothing. Do not worry about this happening. I have never seen this happen in over a decade of practicing employment law. Employers know that any release signed by an employee under duress is subject to being set aside by a court. So, take your time. Find an employment to review your severance package and let you know whether you are entitled to more before signing that release. The few hundred dollars you spend for this service may lead to thousands of dollars in your pocket.