Wrongful Dismissal

One of the most stressful times in anyone’s life is to be  fired from your employer.  During this time, you will be making one of the most important decisions, from a legal point of view, next to buying a house.  Some employers, instead of asking for “working notice,” where you know well in advance when your last day of work will be, will offer you a package that include some or all of these things:

  • a lump sum of money right away or salary continuation for a period of time;
  • continuation of benefits, including use of company vehicle
  • payment of bonuses during the time when your salary continues;
  • the offer of job placement resources to help with the transition.

Employers that are concerned with the legal aspects of job termination usually make an offer that is either the minimum under the Province of Ontario’s legislation, the Employment Standards Act, or something slightly less than would be acceptable in the common law.

Terms of Settlement often contain general releases.  The general release is an attempt to reduce the liability of a lawsuit by having the terminated employee sign away their right to sue.  It is generally unwise to sign these agreements without getting Independent Legal Advice.

Terms of Settlement also often contain clauses that state that you cannot look for relief from the Employment Standards Act or the Ontario Human Rights Code.  It is important to know that neither the employer nor the terminated employee can contract out of either of these pieces of legislation.

Employers who make employees redundant are usually in a great hurry to resolve these termination packages as soon as possible.  However, again from a legal point of view, you need to have your options explained to you from a lawyer or a paralegal.  Being the most stressful time in your life, this is the time to slow things down and, if possible, negotiate a better deal with the help of a lawyer/paralegal.

What if I signed a Termination Agreement with a General Release and I’m not happy with the agreement?

Every case is different, but you do have some options.

In regards to the General Release, the courts are unlikely to interfere with it unless the contract itself is unconscionable, that you were not given the opportunity to get Independent Legal Advice, or some other wrong that the employer has committed.  The courts have sometimes decided to override general releases when the only way to properly resolve the dispute is through the courts.

However, the laws of contract construction do apply to employment contracts, even salary continuations when you are let go.  Again, talk to a paralegal or a lawyer to discuss your options.

Can I get more money from my employer because of the way they fired me?

In some cases, when there is proof of a “separate and actionable claim”, the courts will assess aggravated and/or punitive damages against the employer for the way they fire someone.  There have been cases where the employer defames the reputation of the employee (libel or slander), or has had the employee charged with a crime that was later withdrawn by the Crown or acquitted at trial (malicious prosecution).  The employee could possibly get more money as a result, but the courts will only do so in the clearest of cases.

My employment contract says that if I find another job, my salary continuation pay is reduced by 50%.  Can they do that?

That depends on how you approach wrongful dismissal.

If you are asking for damages in common law, then a former employee must find a way to reduce the pain of being fired, or, in legal-speak, “mitigate their damages.”  That could mean finding another job, or going back to school to upgrade your skills.

If you are asking for damages in contract, where there is a signed agreement for how much you are getting when you are let go, you do not have to mitigate your damages.  

The employer’s point of view is that the 50% reduction of the former employee’s benefits and salary after being fired and then re-hired by another company, it is really a “bonus”.  The employee is considered to be getting two salaries if they find another job.

The employee’s point of view is that the 50% reduction is really a “penalty clause” where the reduction is unfair, given the economic climate of the area, the age of the fired employee, or whether they can find “similar” employment.

Since both of these approaches to wrongful dismissal affect how much money you get and is subject to how the court will interpret the clause, it is in your best interest to seek independent legal advice.

I believe that I was wrongfully dismissed.  Can you help me?

Contact me here to set up an appointment with me.  The first half-hour of consultation is free.