Why Do Employment Lawyers Call it a "Wrongful Dismissal"?

Understanding What is a “Wrongful Dismissal”

In employment law, the term “wrongful dismissal“ refers to a situation where an employee is fired or let go from their job in violation of their employment contract. It is similar yet quite different from an unfair dismissal, which is governed by statutory laws aimed at protecting federal employees from being fired for reasons that are unfair or wrong.

By contrast, what makes a dismissal “wrongful” is an employer’s failure to comply with the contractual entitlement to provide an employee with either:

(a) prior reasonable notice of termination (or appropriate financial compensation in lieu of notice through a severance package) if terminating an employee without cause (the amount of which depends on whether there is a valid termination clause in an employment contract, or otherwise under common law severance pay calculations); or

(b) prove that it had “just cause” to dismiss the employee without prior reasonable notice of termination (or a severance package).

In other words, a wrongful dismissal primarily deals with breaches of contractual agreements between the employer and employee.

Key Factors in Wrongful Dismissal Cases

To establish that a dismissal was wrongful under Ontario employment law, employment lawyers examine certain factors:

Contractual rights: The terms of the employment contract are the essence of a successful wrongful dismissal claim. If the employer fails to honour these terms by not providing appropriate notice of termination or a severance package and is unable to justify not doing so based on a termination clause, or otherwise proving just cause for dismissal, it could constitute a wrongful dismissal.
Inadequate termination process: If an employer does not follow the correct procedure outlined in the employment contract—whether it is about amount of notice of termination or a severance package, or proper warnings or opportunities to improve performance—this can lead to wrongful dismissal, particularly in the event an employer claims just cause for dismissal.
Compensation for wrongful dismissal damages: If a claim for wrongful dismissal is successful, the dismissed employee may be entitled to financial compensation, called damages. This could include compensation for lost wages, benefits, bonus pay, pension plan, and other entitlements due to the breach of the employment contract.

What Is Bad Faith in Wrongful Dismissal?

A bad faith dismissal refers to a situation where an employer behaves in a dishonest, malicious, or highly unfair manner when terminating an employee. This can include humiliating an employee, making false accusations, or failing to properly follow the established termination procedures. Such conduct goes beyond the mere act of dismissal and involves a deliberate intention to cause harm, distress, or unnecessary suffering to the employee.

As an example, if an employer fires an employee in a public or demeaning manner or makes defamatory statements about them during the termination process, this could be considered bad faith. Bad faith dismissals not only breach the employment contract but also violate basic principles of fairness and respect.

Aggravated Damages: What Are They?

Aggravated damages refer to additional financial compensation awarded to an employee whose wrongful dismissal was accompanied by particularly egregious behaviour from the employer. These damages are designed to compensate for the emotional distress, hurt feelings, and reputational harm caused by the employer’s actions during the dismissal process.

In this respect, the key requirement is that an employer engages in conduct that goes beyond the simple decision to terminate employment (such as due to organizational downsizing), including deliberately humiliating an employee or making false allegations, the court may award aggravated damages in addition to the standard wrongful dismissal compensation.

Examples of Bad Faith and Aggravated Damages in Wrongful Dismissal

Several behaviors during the termination process could give rise to a claim for aggravated damages in a wrongful dismissal case:

Public Humiliation: If an employer publicly fires an employee in front of co-workers or customers, or uses degrading language, it can cause significant emotional harm. This often leads to a claim for aggravated damages.
False Accusations: When an employer falsely accuses an employee of misconduct as a reason for termination, especially when the accusation is baseless or not substantiated by evidence, it can severely damage the employee’s reputation and emotional well-being (such as improper allegations of theft, harassment or impropriety).
Refusal to Provide References: Employers may act in bad faith by withholding references or giving false or disparaging references to future employers. This could lead to aggravated damages for the employee, as it directly impacts their future employment prospects and mental health.
Failure to Offer an Opportunity to Respond: If the employer fires an employee alleging just cause without giving them a fair opportunity to respond to accusations or explain their actions, it can be seen as an unfair and bad faith act, especially if the employee has no history of misconduct.

The Legal Ramifications of Bad Faith and Aggravated Damages

Employees who experience bad faith actions during their dismissal can seek more than just basic compensation for lost wages or benefits (referred to as a severance package). Aggravated damages can be awarded to reflect the emotional distress caused by the employer’s wrongful conduct. These damages are particularly relevant when the employer’s behavior during the dismissal process is egregious, intentional, or malicious.

Courts typically award aggravated damages when the employer’s actions display an element of bad faith—where the conduct is not merely poor judgment but is intended to harm the employee’s dignity or emotional well-being. This additional compensation is meant to hold employers accountable for their unfair conduct during termination and to provide a remedy for the harm caused.

How to Claim Bad Faith and Aggravated Damages in Wrongful Dismissal

If an employee believes they have been wrongfully dismissed and that bad faith or aggravated conduct played a role in their termination, they should keep in mind the following points:

Document Everything: Keep a detailed record of all important documents, including employment contract, as well as the employer’s conduct during the termination process, including dates, times, any written communication, and the nature of the employer’s behaviour during the dismissal.
Seek Legal Advice: Consult with an employment lawyer who specializes in wrongful dismissal claims. They can assess whether the employer’s conduct warrants a claim for aggravated damages and help guide you through the process.
File a Claim: If the lawyer determines you have grounds for a claim, they will assist you in filing a wrongful dismissal lawsuit and seeking the appropriate damages for both breach of contract and the emotional harm caused by bad faith actions.

Seeking Legal Recourse for Wrongful Dismissal

Employees who believe they have been wrongfully dismissed should seek legal advice promptly. Ontario employment lawyers specializing in wrongful dismissal cases can help navigate the complexities of the law, assess the strength of a claim, and potentially pursue compensation for the wrongful termination, and especially help in severance package reviews and severance package negotiations.

Book a Consultation with an Employment Lawyer in Toronto

At Bune Law, we understand and are familiar the complexities of workplace law and are committed to helping both employers and employees navigate these challenges, including understanding just cause vs. wilful misconduct. Whether you are an employer or employee dealing with employment contracts, workplace disputes like a wrongful dismissal, or simply need guidance on your rights and obligations for a severance package review and negotiation, our experienced employment lawyer is here to assist you.

Book a confidential consultation with our Toronto employment law firm to protect your legal rights to understand your options and protect your rights.

Why Choose Bune Law When You Need an Ontario Employment Lawyer?

Experience in all areas of workplace law, including wrongful dismissal claims, constructive dismissal claims, severance package reviews, severance package negotiations, discrimination and human rights disputes, and employment contract reviews, including navigating the important issue between just cause vs. wilful misconduct in Ontario employment law.
Proven track record of successfully resolving workplace disputes through negotiation, mediation, and employment litigation.
Compassionate and personalized approach to each case, ensuring tailored solutions that meet your specific needs.

If you need a Toronto employment lawyer who is committed to delivering strong results and proactive solutions, please contact Bune Law online or by phone today at 647-822-5492.