What is wrongful dismissal?
Employers in Ontario are permitted by law to terminate an employee without cause for various reasons, but only if they provide notice of termination ahead of time or payment in lieu of notice – often referred to as severance pay or termination pay.
A wrongful dismissal occurs when an employer terminates an employee without providing them advanced notice of said termination nor the appropriate severance pay in lieu of notice. Many employers often provide zero severance, or only comply with the province’s legislation under the Employment Standards Act, which covers minimum amounts, while ignoring the fact that full, common law severance pay must be provided.
The term “wrongful dismissal” doesn’t always mean that an employer’s reason for firing an employee was wrong or necessarily broke any laws. As long as the employer provides the employee with appropriate notice or severance in place of notice, the termination is not considered a wrongful dismissal. The term should also not be confused with “unjust dismissal” – a topic for another day.
What types of wrongful dismissal are there?
In general, there are three types of wrongful dismissal claims:
When a company fires an employee without cause or warning, and doesn’t provide enough or any compensation.
When an employer incorrectly fires an employee for cause doesn’t provide them a severance package.
When an employer makes drastic and/or unwanted changes to an employee's job, thereby “constructively” dismissing the individual and failing to give them proper compensation.
How do I know if I’ve been wrongfully dismissed?
You know you’ve been wrongfully terminated if you lose your job in Ontario without getting the right amount of severance pay. The quickest way to know if you’ve been wrongfully dismissed is by talking to an employment lawyer. They can review all aspects of your unique situation to determine if you receive enough severance pay from your employer – and what the correct amount SHOULD be. It’s their job, once hired, to secure a full severance package to ensure that you are financially protected while you’re between jobs.
Calculating severance pay for a wrongful dismissal
Severance pay is provided to a non-unionized employee working in Ontario once the employer decides they no longer want to employ the individual, and chooses to end their employment immediately or as soon as possible.
In legal terms, severance is referred to as reasonable notice, notice, or pay in lieu of notice. A severance package is designed to provide someone with financial support while they’re in between jobs, considering it can be difficult depending on the person’s age, experience, previous position, and industry they work in. A variety of factors must be considered when calculating proper severance, or compensation, that an employee should receive. These factors include:
Salary
Age
Length of service
Ability to find new work
Benefits
Bonus
Other payments earned while employed.
A severance package can generally add up to as much as 24 months pay and relies on both Ontario’s minimum entitlements under the Employment Standards Acts, and full compensation according to the law.