Imagine this: you’re called into a meeting at work, expecting another ordinary day. Instead, you’re told that your job is over—effective immediately. You feel a mix of confusion, anger, and panic. Was this even legal? If you’ve faced this situation, you might be dealing with wrongful termination in Canada. Being terminated is an overwhelming experience, but when it feels unfair or abrupt, it adds a layer of stress.
This guide will walk you through the basics of wrongful termination in Canada, what steps to take if you think you’ve been wrongfully dismissed, and answer some common questions to clear up any confusion you may have surrounding the topic.
Wrongful termination basics
In this section, we’ll break down the fundamentals of wrongful termination, including what it is, the different types of dismissal, and how severance pay works. By the end, you’ll have a solid understanding of the basics.
Let’s dive in!
What is wrongful termination in Canada?
Wrongful termination, or wrongful dismissal, occurs when an employee is let go without proper notice or severance or when the terms of an employment contract are breached. It’s crucial to understand that wrongful termination specifically deals with the lack of adequate notice or severance rather than workplace mistreatment or discrimination.
Discrimination and harassment can be part of a wrongful dismissal. However, they are typically assessed separately.
Common dismissal types
When researching dismissal, you’ll likely encounter four main types: termination with cause, termination without cause, constructive dismissal and frustration of contract.
1. Termination with cause
In this scenario, employers argue that they had a valid reason for firing you, such as serious misconduct or gross negligence. However, proving “cause” is challenging and requires substantial evidence. The bar is set high for employers to justify such a termination.
Some common examples of termination for cause are repeated insubordination, theft of company property, assaulting a co-worker, and potentially secretly recording conversations with your employer without consent. See ‘Can I Record My Employer Without Their Consent?‘ for more information.
To learn more about termination for cause, see Termination With Cause Ontario.
2. Termination without cause
This is the most common form of termination. Here, employers don’t need to give a specific reason for letting you go but are required to provide adequate notice or termination pay, as specified by your employment contract or law.
Want to learn more? Check out our Ultimate Guide to Termination Without Cause Ontario.
3. Constructive dismissal
Constructive dismissal occurs when your employer significantly alters your job conditions or makes it intolerable for you to continue working. This could involve a drastic salary cut or a demotion. Even though you technically resigned, the law may treat this as wrongful dismissal if your employer’s conduct meets the criteria for constructive dismissal.
To learn more about constructive dismissal, see What is Constructive Dismissal Ontario?
4. Frustration of contract
Frustration of contract occurs when an employment agreement can no longer be fulfilled due to unforeseen circumstances beyond either the employer’s or employee’s control. This often happens when an employee is permanently unable to work due to illness or disability.
When a contract is frustrated, employment ends immediately, and generally, there’s no entitlement to working notice or severance pay in lieu of notice. However, provincial and federal employment standards legislation may provide exceptions, allowing for limited severance pay even when the contract is frustrated.
To learn more, check out: What is frustration of contract Ontario?
Note: All of these dismissal types can fall under the umbrella of wrongful dismissal if the employee was NOT provided with proper severance or notice or if the employer breached the employment contract.
What is termination pay?
Termination pay, often referred to as severance pay, is the money your employer gives you when you’re let go from your job without cause — meaning it’s through no fault of your own.
Note: In Ontario, “severance” has a special meaning under the Employment Standards Act. It refers to the type of statutory notice that some employers must give when dismissing an employee who has been employed for five years or more. This serves to increase the statutory pay given to the employee upon dismissal.
Employers have two options when terminating an employee without cause: they can either give you notice and allow you to work through that period or provide termination pay in place of notice. Essentially, termination pay covers the time you would have worked during the notice period.
How much termination pay could you receive?
The amount of termination pay you might receive depends on several factors, including:
- Employment laws in your province or territory
- Your collective agreement, if you’re part of a union
- Your employment contract
- How long you’ve worked for the company
- The reason for your dismissal
Termination or severance packages also vary. Some employers offer a lump-sum payment, while others provide ongoing salary payments or deferred compensation. Certain packages may include conditions, like preventing you from working for the same company again.
Common law severance vs. Statutory severance
You may come across the terms “common law notice” and “statutory notice” if you’ve been dismissed without cause. Here’s what they mean.
Common Law Notice
Common law notice of dismissal is based on previous court cases where people in similar situations received compensation. Courts consider things like your age, years of service, salary, and your ability to find a comparable job. Common law termination pay often results in higher payments, but some employment contracts include clauses that limit or exclude common law entitlements.
Statutory Notice
Each province sets a minimum statutory notice of dismissal that cannot be waived, even by contract. These minimums are often much lower than what you could receive under common law.
If you’re offered termination pay, it’s always a good idea to get legal advice to ensure you’re receiving fair compensation. Now that you understand the basics of severance pay, let’s explore how it can affect your long-term disability claim.
Understanding how much notice or termination pay you are owed can help you assess whether your termination was handled appropriately. If you have concerns or doubts about your entitlements, seeking legal advice can provide clarity and help you navigate any potential claims.
Now that we’ve covered the basics let’s talk about what qualifies as a wrongful termination in Canada.
What qualifies as wrongful termination in Canada?
Wrongful termination can occur through layoffs, discrimination, or malicious intent, but a wrongful termination lawsuit focuses on your rights after being let go.
Though you might want to share every unpleasant workplace incident with your lawyer, only specific actions matter legally to avoid overwhelming the courts with minor conflicts. Typically, wrongful dismissal claims involve seeking more severance, with your lawyer determining if further compensation is warranted.
To claim wrongful dismissal, certain legal conditions must be met:
1. Inadequate notice or pay in lieu of notice
One frequent form of wrongful termination is when an employer fails to provide notice or payment in lieu of notice. Under Canadian employment law, employees are generally entitled to advance notice or compensation if their employment is being terminated without cause. If an employer fails to give reasonable notice or provide adequate compensation for this notice period, it can be deemed a wrongful dismissal. This failure can lead to the employee facing unnecessary financial hardship, and the employer may be held accountable.
2. Violation of the employment laws
Another scenario occurs when an employer violates employment laws. In Canada, employment is governed by both federal and provincial laws designed to protect workers. For example, firing an employee without adhering to proper legal procedures or contravening statutory rights such as vacation pay, overtime, or health and safety standards can result in a wrongful termination claim. If these laws are violated, employees may have a valid case for wrongful dismissal.
3. Retaliation
Retaliation is another form of wrongful termination. This occurs when an employee is fired for asserting their legal rights, such as filing a workplace complaint, whistleblowing, or seeking accommodation for a disability. Such retaliatory actions are not only unethical but also unlawful. Terminating an employee for standing up for their rights can lead to significant legal consequences for employers.
4. Harassment
Harassment in the workplace, if not adequately addressed, can also result in wrongful termination. In cases where an employee reports harassment and the employer fails to act or retaliates by terminating the employee instead, this can be grounds for a wrongful dismissal claim. Employees have the right to a safe working environment, and termination under these circumstances is both unjust and illegal.
5. Discrimination
Discrimination is another form of wrongful termination that violates human rights laws in Canada. If an employee is terminated based on a protected characteristic such as age, gender, race, disability, or religion, this would not only be considered discriminatory but also illegal. Discriminatory dismissals can lead to significant damages awarded to the affected employee.
6. Incomplete termination procedures
Lastly, incomplete termination procedures can also give rise to wrongful termination claims. In some cases, employers may fail to follow internal policies or contractual obligations when terminating an employee. For example, not adhering to disciplinary steps outlined in an employment contract or improperly conducting a performance review process can lead to claims of wrongful dismissal if these lapses contribute to the termination.
Exceptions to wrongful termination
There are a few exceptions where an employer may terminate you without providing notice or severance. These include situations where you’ve engaged in serious misconduct, also known as termination for cause. Termination for cause is rare and applies in cases of severe behaviour, such as theft, fraud, or serious breaches of workplace policies.
Wrongful dismissal vs. Termination for cause
While employers are typically required to provide notice or severance when terminating without cause, they can bypass this requirement if they have just cause to terminate you. However, proving cause is often difficult for employers, and the courts usually take the employee’s side unless there is clear evidence of serious misconduct.
If you’ve been terminated for cause, it’s essential to consult with an employment lawyer to determine if the cause was legitimate. In many cases, employers fail to meet the high standard required for a for-cause dismissal, meaning you could still be entitled to notice or severance.
Click on the button below to schedule a free consultation with our team if you were terminated for cause.
Examples of wrongful termination in Canada
Understanding wrongful termination can be more apparent with concrete examples. Here are a few scenarios that illustrate what wrongful termination might look like in practice:
1. The unexpected layoff
Alex, a dedicated employee who has worked for the company for five years, is suddenly terminated without any prior warning or explanation. The company fails to offer any severance pay or adequate notice, leaving Alex in a difficult situation. This could be a classic wrongful termination case if the dismissal did not follow the contractual or legal requirements for notice and severance.
2. Retaliation for reporting safety concerns
Jamie reports unsafe working conditions to management, hoping to improve the workplace for everyone. Instead of addressing the concerns, the employer retaliates by firing Jamie, claiming it was due to performance issues. This situation exemplifies wrongful termination when an employee is punished for raising legitimate concerns about workplace safety.
3. Disability discrimination
Taylor requests reasonable accommodation for a disability, such as flexible hours or modified duties. The employer dismisses Taylor shortly afterward, allegedly due to “performance issues,” but the timing and context suggest retaliation for requesting workplace accommodations. This could be a case of wrongful termination based on discrimination or failure to accommodate.
4. Unfair termination following a complaint
Sam, who had been a high-performing employee, filed a formal complaint about harassment by a colleague. Instead of investigating the issue, the employer terminates Sam’s employment, citing a vague breach of policy. If Sam’s firing appears to be directly related to their complaint, it could be considered wrongful termination, especially if it violates policies against retaliation.
5. Breach of contractual procedures
Jordan’s employer has a clear disciplinary process outlined in the employment contract. Jordan is terminated abruptly without going through the required steps or a performance review, which breaches the agreed-upon procedures. This lapse in following contractual obligations can also qualify as wrongful termination if the process is not adhered to.
Each of these examples illustrates how wrongful termination can manifest in different scenarios. It’s essential to remember that while the specifics of each case vary, the underlying issue often involves a failure to adhere to legal or contractual obligations, retaliation, or discrimination. If any of these scenarios resonate with your experience, it might be worth seeking legal advice to explore your options.
Click on the button below to schedule a free consultation with our team today. We can review the details of your situation and let you know if you have a wrongful termination case.
Related reading: Termination While on Long-Term Disability Canada
What to do if I was wrongfully terminated: step-by-step
Step 1: Stay Calm and Gather Your Thoughts
Getting fired can be shocking, but try to stay calm. Take a moment to collect your thoughts before reacting.
Step 2: Caution – Do not sign a release without legal advice
Think of this as a firm “do not” rather than just a step. If your employment has ended, avoid signing any release or settlement agreement without first consulting with a lawyer. Employers frequently use these documents to offer less than what you are entitled to.
Reach out to us before agreeing to anything to ensure that your rights and interests are fully safeguarded.
Step 3: Request written termination details
Ask your employer for a written explanation of your termination. This could be in the form of a termination letter that outlines the reasons for your dismissal and any severance offers.
Step 4: Review your employment contract
Take a close look at your employment contract to understand what it says about notice periods, severance, and termination. This document can help determine whether your dismissal was lawful or not.
Step 5: Document everything
Keep records of any conversations, emails, or documents related to your termination. This will be crucial evidence if you decide to pursue legal action.
Step 6: Seek legal advice
Consult with an employment lawyer to evaluate your case. They can tell you whether you’ve been wrongfully terminated and help you understand your rights.
Contact Resolute Legal’s experienced employment lawyers today. We’re here to help you navigate this challenging situation and ensure your rights are protected.
Step 6: Consider filing a claim
If your lawyer confirms wrongful termination, you may decide to file a legal claim. This could result in additional severance pay, damages, or other compensation.
Step 7: Job hunt
While seeking legal advice or filing a claim, it’s okay to look for a new job. Just make sure to communicate this with your lawyer, as it may impact your case or termination pay.
Need help? Hire Resolute Legal’s wrongful termination lawyers
If you believe you’ve been wrongfully terminated, don’t navigate this alone. Resolute Legal’s experienced Canada employment law attorneys are here to help you fight for your rights. Whether it’s negotiating for a fair severance package or filing a wrongful dismissal claim, we’re on your side every step of the way. Contact us today for a free consultation, and let’s work together to get the compensation you deserve.
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Frequently Asked Questions About Wrongful Termination
Can I get EI if I was terminated wrongfully?
Yes, you may still qualify for Employment Insurance (EI) if you were wrongfully terminated. Even if your termination is in dispute, you should apply for EI benefits as soon as possible. Be sure to mention any legal action you’re taking to avoid future complications with Service Canada.
What is just cause for dismissal?
A termination citing just cause means serious employee misconduct that justifies immediate termination without notice or severance. This includes actions like theft, violence, or significant breaches of company policy.
Can I look for a new job if I was wrongfully terminated?
Absolutely. In fact, you should start looking for a new job while pursuing a wrongful dismissal claim. However, your severance package may be adjusted depending on how quickly you find new employment. Always notify your lawyer before seeking new work opportunities, as it may affect your case.
Can my employer fire me for reporting harassment at work?
No, not legally. If you’ve been fired for reporting harassment or any other workplace issue, that’s considered retaliation and can lead to a wrongful termination claim. Canadian law protects employees who assert their rights in the workplace. Regardless of the law, some employers may still fire employees for this reason.
What is the difference between wrongful dismissal and constructive dismissal?
Wrongful dismissal occurs when you’re fired without proper notice or severance, while constructive dismissal happens when your employer makes a major change to the terms of your employer or creates an unbearable work environment.
How much can I get for wrongful termination?
Employees who win a wrongful termination lawsuit typically receive compensation between $5,000 and $100,000. However, there is no set average for these cases, as the outcome depends on factors such as your position, salary, length of employment, and whether there were any additional damages involved.
How often are wrongful termination cases won?
Determining how often wrongful termination cases are won is challenging because many of these cases are settled privately before they ever reach the courtroom. Settlements often happen because employers want to avoid the time and expense of a trial, which means the actual success rate in court isn’t easily tracked.
That said, having an experienced employment lawyer on your side is crucial. A good lawyer can help you assess your case, negotiate a fair settlement, or represent you in court if necessary, significantly improving your chances of securing a favourable outcome. While there’s no guaranteed win, professional legal guidance can make a world of difference in how your case is resolved.