In this age of downsizing, outsourcing and global recession,
misinformation is your enemy. You need to know your rights.
Even the Supreme Court of Canada has recognized that many employees
do not understand their rights:
... the fact that many individual
employees may be unaware of their statutory and common law
rights in the employment context is of fundamental importance.
... the majority of unorganized employees would not even
expect reasonable notice prior to dismissal and many would
be surprised to learn they are not employed at the employer's
discretion. – Excerpt from Machtinger v. HOJ Industries,
1 S.C.R. 986.
Let’s review some very basic principles.
Employment is a Contract
Your employment relationship is a
contractual relationship. When you are terminated without cause,
the employment contract is breached. Even if you don’t have a written
contract, a number of fundamental principles apply including
the right to reasonable notice.
Unless you are dismissed for cause (i.e.
the employer has clear legal justification to terminate you
such as dishonesty, incompetence, conflict of interest and willful
disobedience), you are entitled to reasonable notice. Further,
simply because an employer says they have cause does not mean
they are correct. Cause is difficult to prove and, at times,
What is Notice?
What is notice and what does this mean to
you? “Notice” is an implied contractual term that requires the
employer to give you reasonable time to
obtain employment of a similar quality and remuneration. In
reality, most employees are summoned to a superior’s office,
advised their job is finished and given the very bare minimum
payment under the Employment Standards Act. See this
link to review these base entitlements
In practical terms, if you are terminated without warning, notice
amounts to a payment that you are entitled to for your years
of service. That entitlement often far exceeds the base Employment
Standards Act payments which are commonly made by employers.
Employment Standards Legislation does
NOT provide for your Only Entitlement
Employment standards legislation sets the
bare minimum entitlement based on a formula of one week’s
worth of salary payment per year of service (i.e. five years
service equals five weeks pay). This is, most often, not
your only entitlement. Under the common law (judge made
law), an employee is usually entitled to far more notice,
often four times the amounts paid to you by your employer, based on
employment standards legislation.
The Courts will consider a number of factors, including, the
length of employment, your age, the economy, the character of
your employment and the availability of alternative employment,
given your training and qualifications. Although the Courts
go to great length to say that there is no general rule which
establishes a formula for your entitlement, the employee
entitlement often works out to approximately one month of payment
owing, per year of service at an employer to a maximum of
In other words, your employer often pays only your base Employment Standards Act amounts. Unless
you get a lawyer to assist, your common law rights are usually
It should be noted that if you have signed a written employment
contract which explicitly sets your notice entitlement to the
base requirements under the Employment Standards Act, then your
rights could be limited to this amount. But, if your employment
responsibilities have changed as well as your pay since the
time when you signed that contract, this limitation may no longer
apply to your notice entitlement.
Other factors can increase damages, such as whether an individual
was induced to join a new employer, leaving a position of seniority.
Turnbull v. Juniper Networks, a case I argued in British
Columbia, two employees with only one year of service each,
were each awarded six months notice in light of inducements
made by the new employer causing them to leave their previous
secure long-term employment and join the new employer.
Wallace or Keays v.
If you were treated poorly at the workplace and during the termination
process, the Court may also consider whether you are entitled
to “Wallace” or “Keays v. Honda” damages which
may further increase your award.
Benefits, Commissions, Bonuses and Stock
You are entitled to your benefits during the notice period as
well as any entitlements which may accrue or vest during that
time such as bonuses, commissions and stock option payments
(depending on the wording and requirements of those plans).
Vacation and holiday pay must also be paid. Your entitlements
can add up.
I have litigated ground-breaking
cases in the area of stock option vesting in the British Columbia
Court of Appeal and Ontario Superior Court of Justice. See the
Iacobucci v. WIC appeal and the
Puhl v. Katz Group decision.
Remember though, you must mitigate your damages by seeking alternative
employment. Once that employment is found, damages are reduced.
This concept can be explained to you more fully at a consultation.
Another thing to keep in mind is that you can be “constructively
dismissed”. This area of the law is fairly complex but in
certain circumstances an employee can resign and claim damages
against an employer for unilaterally and fundamentally breaching
the employment terms. Examples of such changes are a change
in your employment to lesser duties and responsibilities, a
substantial reduction in hours or pay or a requirement to relocate.
Before you take the position that you have been constructively
dismissed, get legal advice.
Your Rights and Releases
If you are terminated from your employment, consider your rights.
Do not sign a release without advice. Employers want you to
sign a release quickly so that you waive your legal rights under
the common law. Get proper advice (not from your friends, family
or other armchair experts). Pursue your rights quickly and assertively.
You only have two years in Ontario to pursue your rights in
the Courts after which your legal rights are forever statute-barred
by limitation periods.
Contingency Fee Options
I try to be economical in any case, especially where my client
has no income. My hourly rates are reasonable and I have been
practicing law long enough that I work completely independently.
My fees do not “pile on” through multiple lawyers working on
a file and the resulting duplication of efforts and inefficiencies.
I don’t have junior lawyers spending your money on learning
their skill at your expense or other unnecessary nonsense. Wrongful
dismissal litigation is fact-driven advocacy that can be pursued
without layers of lawyers.
More importantly, people are often unaware that contingency fee arrangements have been legal in Ontario since late 2002.
If you hire my firm, I can consider working on a percentage basis if I determine that your case is strong on liability. You do not pay legal fees until the matter settles or there is judgment. Ninety-five percent of cases in Ontario settle. If I am not successful, you don’t pay me any legal fees. You pay for disbursements only (i.e. photocopies, binding, filing fees etc.).
My contingency rate is competitive and typically falls in the range of 30 to 40 percent of recovery (always subject to the terms of an executed Contingency Fee Retainer Agreement and the requirements of applicable legislation aimed at protecting clients). It’s an option for you to consider and can be attractive when your source of income has been taken unilaterally. Google “Ontario Contingency Fee” and see what I mean.
Feel free to phone my office for a wrongful dismissal consultation. It will be free of charge.