Lost A Non-Union Job Within
the Last 6 Years?

Did you get the compensation to which you were entitled by law?

by

Paul McKeever, B.Sc.(Hons), M.A., LL.B.

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When one person hires another person to provide some labour or service, a contract is typically formed. This is true even if the contract is neither written-down on paper nor signed. Some contracts are formed when people make an oral (i.e., spoken) agreement.

The law does not consider all labourers or service providers to be employees. For example, a person who has his/her own typing business might not be considered to be an employee if they use their own equipment, invoice the person requesting the work to be done, control the way in which they do the requested work, et cetera. But, where the law considers the relationship between the two people to be a relationship of employer and employee, the courts will, under some circumstances, consider the contract of employment to contain certain terms (i.e., the court will interpret the contract as if certain terms are implied).

If an employment contract contains no valid, express term about the amount of notice to which the employee is entitled about the termination date of their employment contract, the courts will usually state that the contract contains an implied term concerning notice. The implied term can be summarized as follows:

Similarly, if an employee resigns, he will have been the person to have terminated the contract (not the employer) and the employer will not be required to give the employee notice of any sort. For this reason, employers have sometimes encouraged, or even coerced an employee to resign in the hopes that they would not have to compensate the employee for having failed to give reasonable notice. For example, to encourage the employee to resign, the employer might, without the employee's consent, cut the employee's pay, give him/her an unwarranted demotion, give the employee relatively stressful, labourious, or demeaning tasks, or force the employee to work in very uncomfortable working conditions. To coerce the employee to resign, the employee might be unjustly accused of unlawful conduct (e.g., stealing, falsifying information about the amount of time worked), or warned of being 'black-balled' among other potential employers. In response, the law requires that resignations be voluntary. If an employee was encouraged or coerced into resigning, he/she often will be considered, by the courts, not to have resigned (even if the employee signs a note stating that they are resigning for one reason or another). Where the employee's resignation is thereby disregarded by the court, it often decides that the employee was constructively dismissed. For the purposes of wrongful dismissal, a person who has been constructively dismissed has typically been wrongfully dismissed, and is typically entitled to the same compensation as a person who was expressly dismissed by his/her employer .

If the employer has not had just cause to deny the employee notice, but the employee has not received a "reasonable" amount of notice and has not voluntarily resigned, the employer is usually considered to have wrongfully dismissed the employee (there are, of course, exceptions to the rule). A person who has been wrongfully dismissed is usually entitled to be compensated for his/her losses that resulted from the dismissal. The rationale for implying a right to reasonable notice is that the employee ought to be able to continue to work with his/her employer for a reasonable time so that he/she will still have an income while he/she looks for another job.

How much notice is as reasonable amount of notice? Unfortunately, it depends upon some or all of a wide variety of things. In determining how much notice is reasonable notice, a court is trying (at least in part) to gauge how long it would reasonably take for the dismissed employee to find another, similar job. Therefore, the courts may consider such things as the employee's age, sex, abilities, and qualifications. Probably the most definitive factor, however, will be the duration for which the employee worked for the employer before being dismissed. It is not uncommon for the courts to determine a "reasonable notice period" (implicitly) by multiplying the number of years of service by approximately one month per year of service, even though this practice has recently been rejected by the Ontario Court of Appeal: such a rejection may be of little effect in situations where a judge has not, in a given case, stated that he/she has used such a method. Thus, if a wrongfully dismissed employee worked for his employer for 10 years, the employer might still be required to give the employee 10 months notice. This is not to say that a person will always be given one month of notice per year of service: the courts could specify a greater or lesser amount of notice.

Sometimes, if the employer enticed or lured his/her wrongfully dismissed employee away from another job, the court will take this into account when determining the appropriate notice period. For example, suppose that a person was working for employer #1 for 10 years and was enticed away from that job by employer #2 who promised job security, great pay and better chances for advancement. Were employer #2 to wrongfully dismiss the employee after only 1 month of employment, the court might - in determining what is a reasonable notice period - treat the employee as if she had worked with employer #2 for 10 years + 1 month.

A person who has been wrongfully dismissed is entitled to be put in the same situation, monetarily, that they would have been in had they not been wrongfully dismissed. Most typically, the employee's gross losses over the reasonable notice period will include the wages that he would have received during that period, plus such things as out-of-pocket expenses for medical or other services that should have been covered by the employer's benefit plan (if any), or the cost of relocating to take another job (e.g., the legal, realty, and moving expenses associated with the selling of a house and the buying of another in another, distant locale). However, the law also requires wrongfully dismissed employees to try and mitigate (minimize) their losses by looking for similar employment: earnings from such employment during the notice period will usually be deducted from an employee's gross losses. Also, failing to try to mitigate one's losses could result in a reduction to the compensation owed by the former employer.

It is important to note that, usually, the law of wrongful dismissal does not apply to unionized employees.

It is also important to contact a lawyer with expertise in the area of wrongful dismissal before one makes a claim for termination or severance pay through the Employment Standards branch of the Ontario Ministry of Labour. For example, if an employee makes a claim for termination or severance pay through the Ministry but does not retract the claim within 2 weeks of having made it, the employee may be prevented from suing the employer for wrongful dismissal. Similarly, a person who sues for wrongful dismissal cannot also make a claim to the Ministry for termination pay or severance pay. The choice is important, primarily because the amount of notice (and, typically, compensation) to which an employee is entitled can differ drastically depending on the route one takes (i.e., a claim for termination or severance pay through the Ministry versus a wrongful dismissal lawsuit in the courts). For example, the court may decide that a particular employee was entitled to 24 months of notice, but the Ministry might be prevented from granting that same employee any more than 8 weeks notice.

Also, certain time limits apply to the commencement of a lawsuit against one's former employer for wrongful dismissal. Thus, if you are considering the possibility of getting the compensation to which you might be entitled, it is best to see, as soon as possible, a lawyer who practices in the area of wrongful dismissal.

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This page last updated on April 18, 2004