What is a Wrongful Dismissal Claim in Ontario Employment Law?

Just Cause for Dismissal in Ontario: A Comprehensive Guide

What is a wrongful dismissal? In Ontario, Just cause for dismissal is a legal concept that allows employers to terminate an employee’s employment without notice or severance pay. In general, it is a high bar to meet, and employers must be able to demonstrate specific grounds to justify such a severe action. This blog post will delve into the key elements of just cause and provide insights for both employers and employees.

Understanding Just Cause for Dismissal

Just cause for dismissal typically arises from employee misconduct or incompetence that is so serious as to justify immediate termination of employment. It is important to note that just cause is a narrow legal concept and should not be invoked lightly. In other words, employers should generally think of it as a last resort when determining dealing with performance management or otherwise deciding how to handle employee misconduct situations.

Key Practical Elements of Just Cause for Dismissal

To establish just cause for dismissal, an employer must generally prove the following:

Serious Misconduct: The employee’s misconduct must be of a serious nature, such as theft, fraud, or violence.
Malice or Willful Disregard: The employee’s conduct must be intentional or reckless, rather than accidental or simply poor performance in their job
No Reasonable Alternative: The employer must demonstrate that termination was the only reasonable course of action, and that less severe disciplinary measures would not be effective, such as a verbal warning, written warning, demotion or suspension from employment.

Common Examples of Just Cause for Dismissal under Common Law

While each case is unique, some common examples of just cause include:

Willful Disobedience: Intentionally disobeying or refusing to follow lawful and reasonable instructions from a supervisor.
Theft or Fraud: Stealing company property or engaging in fraudulent activities.
Violence or Threats: Physical or verbal abuse towards coworkers or customers.
Gross Negligence: A serious failure to perform job duties, resulting in significant harm to the employer or others.
Serious Incompetence: A persistent and serious lack of ability to perform the job, despite adequate training and opportunities.

The Role of Employment Contracts

Employment contracts can play a role in determining the grounds for just cause for dismissal. However, even if a contract specifies certain grounds for termination, an employer must still meet the legal requirements for just cause.

Consequences of Just Cause Dismissals

If an employer can establish just cause for an employee’s dismissal (which is not an easy feat), the employee is generally not entitled to a severance package (this refers to financial compensation for termination, including termination pay and severance pay). However, it is essential to note that the burden of proof lies with the employer to demonstrate just cause.

It is important to note that just cause for dismissal is a legal concept (and employer termination right) that exists under common law. However, it is fundamentally different from an employer’s legal obligation to still provide an employee with their minimum statutory entitlements to termination pay and severance pay under the Ontario Employment Standards Act, 2000. Put simply, unlike in a just cause for dismissal under common law, an employer cannot provide an employee without any notice of termination or a severance package unless it can prove the employee was guilty of wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer. If not, and the employer can only justify a just cause for dismissal under common law, it must still provide the employee with these minimum statutory entitlements upon termination.

Conclusion

Just cause for dismissal is a serious matter that requires careful consideration and adherence to legal principles. Employers must be able to demonstrate that they have acted fairly and reasonably in terminating an employee. Employees, on the other hand, should be aware of their employee rights and seek legal advice from an experienced Toronto employment lawyer if they believe they have been wrongfully dismissed.

The Risks of Wrongful Dismissal Claims

If an employer fails to establish just cause for dismissal, they may face a wrongful dismissal claim. A wrongful dismissal claim can result in significant financial and reputational damage, including:

Severance Package: Even if just cause is not proven, the employer may still be liable for financial compensation for the termination of employment.
Damages for Wrongful Dismissal: If the court finds that the dismissal was wrongful, the employee may be awarded damages for lost wages, benefits, and mental distress.
Aggravated/Moral Damages and Punitive Damages: In cases of egregious misconduct in terms of how the employer treats the employee upon termination (bad faith manner of dismissal), the court may award punitive damages to punish the employer and deter similar behavior.
Legal Fees: Employers may be required to pay their own legal fees and the legal fees of the employee.
Reputational Damage: A wrongful dismissal claim can damage the employer’s reputation and make it difficult to attract and retain top talent.

To mitigate these risks, employers should carefully consider all factors before terminating an employee and consult with legal counsel to ensure compliance with employment standards and human rights laws.

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. Whether you are an employer or employee dealing with employment contracts, workplace disputes like a wrongful dismissal or constructive 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.
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.