Wrongful dismissal is the term used in Canadian employment law to describe a termination by the employer of the employee when the employer fails to give proper notice of that termination or money in lieu of notice.
Not every employment dismissal is wrongful or unfair. There are rules which govern when an employee is dismissed, as set down in the legal cases as precedents. If an employer has just cause to dismiss the employee, he can do so without any notice or payment of severance. Cause can be varied, and may include many situations such as dishonesty, refusal to follow orders, tardiness, absence, competing with the company, and other such behaviour.
Not all misbehaviour will result in summary dismissal. Some companies have a policy of progressive discipline, with warnings given first before termination is allowed. You must read the company policy to see if it applies.
If you have been dismissed wrongfully, you are entitled to sue in court for damages which are essentially for breach of contract, in that the employer on hiring you tacitly agrees in all unwritten contracts not to dismiss you without adequate notice, and if there is no cause, then they must give that notice or pay you money instead. In Ontario, many companies pay only according to the Employment Standards Act, and they will tell you that is all the must pay, but in fact, that is only the minimum amount required, as the common law requires them to pay on a higher scale, which could amount to a month for every year spent at that workplace, so do not be fooled.
The damages are calculated based on the number of years employed, the type of work, the age of the employee, and the possibilities of gaining similar employment, as well as other components. These factors are all supposed to be weighed equally by a court, but usually the length of employment appears to carry the most weight.
There are limitation periods for bringing a lawsuit against the employer. At present, the limitation period is two years from the date of termination, although you may still have rights under the old rule of six years, if applicable. If you fail to bring the action in time, your rights are extinguished.
Damages awarded for wrongful dismissal are taxable, but can be placed tax free into your RRSP under certain conditions. Your lawyer will advise you on this.
You can also sue for punitive damages if the dismissal was worthy of deterrence, denunciation, and retribution by the courts. These damages are tax exempt.
Further emotional damages may be in order where, as a result of the dismissal, you suffer provable emotional damages as verified by doctors’ reports.
Most of these cases are settled before trial as a result of mediations or negotiations. Few go to court. It is always in the best interest of the client to settle these matters before trial to keep legal expenses down.
