In a recent decision, Wilds v. 1959612 Ontario Inc., the Ontario Superior Court of Justice awarded punitive damages against an employer for its conduct at, and following, the time of termination. In so doing, the court provided a helpful reminder for employers to meet their lawful obligations when ending the employment relationship or risk exposure to additional liability.

Individuals in Ontario have a duty to mitigate their loss of employment when seeking damages for wrongful (or constructive) dismissal. In practical terms this means that while employees may be able to seek damages from their former employer (to put them in the position they would have been had they received adequate notice of termination), they must make reasonable efforts to replace their lost income by looking for, and accepting, other comparable work.  

Hirings and firings are common to workplaces across Ontario. For various reasons, people come and go. Employment dismissals, however, when mishandled, can bring with them significant risk and result in unintended liability.

In wrongful dismissal cases, absent a lawful written contractual entitlement, the courts conduct an individualized assessment to determine what would be reasonable notice of the dismissal. In a recent contribution to First Reference Talks (a collaborative HR and employment law advisory blog), Paul Willetts highlighted two wrongful dismissal cases where the short-service plaintiffs who otherwise differed significantly (in terms of age, compensation and character of employment), both received a 2.5 month notice period.

Dismissed employees are expected to actively search for new work if they want to preserve full severance rights. Yet a recent case out of Ontario suggests there may be more leniency for older workers. This reflects a judicial acknowledgment of the fact that re-employment opportunities tend to become scarce past a certain age.

Over the past year, numerous Ontario employers have had to downsize their operations and dismiss staff in response to the ongoing pandemic. Many of those who have lost their jobs turned to government income replacement programs while looking for new employment.

When Ontario courts assess whether an employee has been wrongfully dismissed, they often start by referencing the 1960 decision of Bardal v. Globe & Mail Ltd., 1960 CanLII 294 (ON SC).

Bardal directs courts to consider several factors specific to the employee when determining appropriate severance, including: 1) character of the employment; 2) length of service; 3) age at the time of termination; and 4) availability of similar employment.

When an employer dismisses an employee without cause, the employee’s work performance prior to termination is generally considered to be irrelevant. Ontario’s legal framework is concerned only with determining whether the employee was dismissed without receipt of either reasonable notice (in accordance with the common law or a written contract, as the case may be) and if not, calculating the value of damages that should be paid.

A recent decision from the Court of Appeal for Ontario has the potential to render many existing contractual termination clauses unenforceable. This development will have a major impact on employee severance rights and the costs employers may be required to incur when dismissing workers.

One of the issues we commonly encounter, when speaking with both individuals and employers, is whether the language in their employment contract addressing termination is enforceable.

For employees, where a termination provision is unenforceable, it can mean they have an entitlement to increased severance. Whereas for employers, if the clause does not hold, it can create uncertainty and result in unintended liability.

Tagg Industries v. Rieder serves as a useful reminder of the importance of proving (and communicating to employees) a termination for cause, as well as the high threshold that employers must meet in such circumstances.

When an employee is fired and not given sufficient notice, a common point of dispute becomes how to properly calculate the lost value of non-monetary benefits. Wages, by contrast, are a relatively simple affair. If a court orders the employee ought to have received an additional three (3) months’ notice, the parties need only calculate the value of three months’ wages and any resulting interest for the delay in payment.

Determining what conduct amounts to just cause for dismissal is no easy task. In part this is due to just cause being inherently situation specific. When describing what may constitute just cause, employment lawyers often refer to extreme examples: think of situations where a public-facing employee makes repeated racial slurs to a customer or commits major fraud in the course of their duties. Typically, such facts will prove fertile ground for successful assertions of just cause for dismissal by an employer.

Earlier this month, Vey Willetts lawyer Andrew Vey spoke with Global News about the novel implications of a recent Ontario court decision for sexual harassment complainants. 

On a recent Ontario summary judgment motion, Justice Kane considered whether a former employee of Algonquin College (the “College”) had been properly dismissed for just cause.

Q&A is a recurring series on the Vey Willetts LLP blog. The aim is to provide quick answers to questions we commonly encounter in our day-to-day practice of employment law. In this edition, we focus on wrongful dismissal from employment.

Dismissing an employee is not a pleasant experience. But whether you like it or not, this is one task that most businesses will encounter at some point. As President Trump reminded us again this week after reports surfaced that Secretary of State Rex Tillerson learned of his firing by way of a twitter post, there is both a right way and a wrong way to conduct employee terminations.

Last month, the Court of Appeal for Ontario released its decision in Nemeth v. Hatch Ltd. garnering a lot of attention within the province’s employment law bar.