“Wrongful dismissal” is an often misunderstood term. Let’s clear up some common misconceptions.
An employer in Ontario is permitted by law to terminate an employee without cause, but only if this employer provides notice of termination ahead of time, or payment in lieu of notice, often referred to as termination pay or severance pay.
A number of factors must be considered when calculating the proper notice period or pay in lieu of notice that an employee is entitled to receive. These include the employee’s position, salary, age, length of service with the employer, and benefits, bonus and other payments earned while employed.
“Wrongful dismissal” occurs when an employer terminates an employee without providing adequate notice of termination or appropriate termination pay in lieu of notice or what is sometimes referred to as severance pay.
The term “wrongful dismissal” does not mean that an employer’s reason for firing an employee broke any employment laws, was wrong or dishonest. An employer has the right to terminate an employee’s employment for any reason, even if it’s as simple as just not liking him. As long as the employer provides the employee with appropriate notice or pay in lieu of notice, the termination is not considered a wrongful dismissal. Of course Human Rights legislation must also be followed.
When an employer has not provided sufficient notice or termination pay in lieu thereof, the terminated employee may file a claim against their employer seeking monetary damages. This is considered a wrongful dismissal action.
To avoid giving notice or termination pay, an employer might claim that there was just cause for dismissal. When an employer can prove just cause for dismissal, such as an employee’s gross misconduct, the employee can be legally terminated without notice or pay in lieu.
If a terminated employee feels that their former employer incorrectly or inappropriately labeled the termination as being “for cause”, a claim may be brought against the employer for wrongful dismissal and demonstrate that a “for cause” dismissal was not justified.
If you are an employee and have been terminated for cause and feel that it was not justified, or if you believe that you were not provided with sufficient notice or termination or severance pay, please contact us for assistance. Employers are also encouraged to seek legal advice before terminating an employee, either for cause or without cause, in to avoid potential claims against them.
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