Being let go from your job can be an intensely difficult and emotional experience. It disrupts your income and routine and can leave you feeling confused about your rights. If you’ve been fired in Canada, determining whether your dismissal was “wrongful” is crucial.
According to Canadian employment law experts, over 90% of firings likely qualify as wrongful dismissal. But what does this actually mean? If your employer failed to provide proper notice or severance pay when they terminated you, you have a wrongful dismissal case. This gives you certain legal recourses to recover compensation.
This article will explain wrongful dismissal law in Canada, help you identify if you have a case, and guide you in protecting your rights if you believe you were wrongly terminated.
What is Wrongful Dismissal in Canada?
Wrongful dismissal, also called wrongful termination, refers to job loss that violates your legal rights as an employee. There are two main ways this can occur:
- You are fired without cause, and your employer failed to provide reasonable notice or pay in lieu of notice (severance) under the law.
- You are inappropriately fired with cause and given no compensation.
The core issue is the lack of sufficient notice or severance, not whether the reasons for firing were fair or reasonable. Canadian employment law does not require employers to give a motive for termination, only proper compensation.
Wrongful dismissal law comes from two sources:
- The Canada Labour Code or provincial Employment Standards Codes provide minimum standards for notice and severance.
- Common law precedents determine “reasonable notice” periods based on factors like age, service time, and career prospects.
If an employer breaches either the statutory minimums or common law reasonable notice standards, the termination is legally considered wrongful dismissal.
What Qualifies as a Wrongful Dismissal in Canada?
While each case depends on its facts, the following situations often qualify as wrongful termination:
Insufficient Notice and Severance for No Cause Dismissals
If you are fired without cause, your employer must provide reasonable notice or severance under the law. Failure to do so is the most common form of wrongful dismissal. Severance amounts are based on salary, age, service time, and other factors and can reach up to 24 months’ pay.
Inappropriate or Bad Faith With Cause Dismissals
If your employer alleges “cause” for firing you, they must have clear proof of misconduct, performance issues, or other justifications. If their reasons are vague, exaggerated, or outright false, you may have a case for wrongful dismissal. Egregious cases like fabricating reasons to harm your reputation could warrant extra damages.
Constructive Dismissal
Constructive Dismissal occurs when your employer makes substantial changes to your position, such as demoting you or cutting your pay without your agreement. This can force you to resign, allowing your employer to claim you “abandoned your post.” But ultimately it amounts to wrongful termination without compensation.
Breach of Employment Contract
If your employment contract, handbook, or policies outline a termination process that your employer failed to follow, their actions may constitute a breach of contract. For example, terminating you instantly without warning despite a progressive discipline policy.
Discrimination or Retaliation
Under human rights law in the Canadian workplace, firing someone due to workplace discrimination, including gender, race, sexual orientation, disability, or other protected grounds, is illegal. Retaliating against an employee for exercising their rights, such as taking legally entitled leave or reporting workplace harassment, is also wrongful.
How is Severance Calculated in Wrongful Dismissal Cases?
Severance pay, also called “pay in lieu of notice”, compensates you for the income you would have earned during the notice period you were entitled to under the law. Calculating reasonable severance is complex, but two key factors apply:
- Minimum statutory entitlements under the Employment Standards Act (ESA)
- Maximum entitlements based on “common law reasonable notice.”
Severance depends on several criteria, including:
- Your salary and benefits
- Length of continuous service
- Your age and career prospects
- The availability of similar jobs
- Industry standards and precedents
Ultimately, courts determine reasonable notice periods based on the context of each case. In Canada, severance pay is often equivalent to 6 months up to 24 months of compensation.
For example, a 50-year-old senior manager earning $100,000/year who has worked at a company for 15 years may be entitled to 18-24 months severance. But a young entry-level employee with only 2 years of service may only get 2-4 months.
Every situation is unique, so consult an employment lawyer to determine what you may be owed.
What Should I Do if I’ve Been Wrongfully Dismissed in Canada?
Here are some tips if you believe you have a wrongful dismissal case:
Don’t Sign Any Termination Agreements Yet
Carefully review any severance offers or termination contracts the employer presents. If you sign, you could forfeit your right to pursue further compensation later on. Consult with an employment lawyer before signing any termination papers.
Collect and Preserve All Documentation
Gather employee records like your contract, workplace policies, performance reviews, correspondence with the employer, HR files, and anything related to your termination. Also, document details and notes from meetings. These will help support your case.
Consult an Employment Lawyer
An experienced lawyer can assess if your dismissal was truly wrongful and a violation of the law. They can also begin building your case, demand letters to the employer, and guide you in maximizing compensation.
Act Quickly
In most cases, you have two years from the date of termination to file a wrongful dismissal claim in court. So, acting fast preserves your rights. Complex cases may have longer limitation periods.
Wrongful Dismissal Claims Process in Canada
If you determine your dismissal was wrongful, understanding the next steps can help ensure you take timely action and position your case for maximum compensation. Here is an overview of the wrongful dismissal claims process in Canada:
Step 1: Consult an Employment Lawyer
The first step is to set up a consultation with an employment lawyer experienced in wrongful dismissal cases. They can analyze your situation, advise if your termination appears wrongful, and discuss potential strategies and damages. Having expert counsel on your side early is key.
Step 2: Negotiate Severance and Settlement
Your lawyer will likely first attempt to negotiate a severance settlement by sending a demand letter to the employer requesting compensation for wrongful dismissal. This settlement can potentially avoid proceeding to court.
Step 3: File Lawsuit for Wrongful Dismissal
If initial negotiations fail, your attorney can file a lawsuit against your employer seeking damages for wrongful termination. This involves submitting a statement of claim and other litigation processes.
Step 4: Discovery and Evidence Collection
During legal discovery, your lawyer and the defendant’s counsel exchange relevant documents and information to build the case. Your lawyer will gather vital evidence like employment records, correspondence, HR documents, and financial information.
Step 5: Mediation
Before trial, the presiding judge may order mediation or other alternative dispute resolution methods to reach a settlement and avoid trial. This can save time and legal expenses for both parties.
Step 6: Wrongful Dismissal Trial
If mediation fails, the case proceeds to a civil trial, where both sides present evidence and arguments. Your lawyer must prove your dismissal was wrongful under the law and justify the damages you seek.
Step 7: Settlement or Judgment
If a settlement cannot be reached at trial, the judge (or jury in some cases) determines if your dismissal was wrongful and issues a binding judgment ordering compensation if warranted. Damages could include lost pay, benefits, bonuses, interest, legal fees and potentially human rights or punitive damages.
Key Takeaways
- Wrongful dismissal involves termination without proper notice or severance, not firing for an unfair or invalid reason.
- You have up to 2 years to file a legal claim against your employer for compensation.
- An employment lawyer can help you understand your rights and build a strong case if you were wrongfully dismissed.
The bottom line
Losing your job can be extremely difficult and disruptive. But if you were dismissed without proper notice or severance pay, you have legal recourses. Being aware of wrongful termination laws in Canada helps you recognize when your rights have been breached. With an employment lawyer’s help, you can recover the compensation you deserve and take action against unethical dismissals.
FAQs Related to Wrongful Dismissal in Canada
Are employers required to give a reason when they fire someone?
Generally no - except for unionized employees governed by a collective agreement, employers can dismiss staff without specifying a reason. What matters is that they provide proper notice or severance.
Is severance pay one week’s salary per year worked?
This is a common misconception. While some employers use this basic formula, it typically underestimates what you are legally entitled to, which depends on the factors noted earlier like age and service time.
What if my dismissal seems unfair but I got some severance?
The law focuses on notice and severance standards rather than the fairness or rationale for termination. Even if the reasons seem unfair, unjust, or lack compassion, if statutory minimums and common law reasonable notice requirements were met, the courts are unlikely to award additional compensation.
Can my employer fire me for any reason as long as they pay severance?
Essentially yes, with a few exceptions. If they fabricate reasons to damage your reputation, discriminate, or retaliate, that can warrant additional damages. But they can terminate your employment for almost any other reason if proper notice/severance is given.