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What is “Wrongful Dismissal”?

Many laypeople talk about being ‘wrongfully dismissed’ from their employment – without understanding what the legal concept of wrongful dismissal really is.

Employers have the right to terminate an employee, at any time, for any reason whatsoever if they are not alleging just cause for dismissal, so long as the employer provides the terminated employee with sufficient notice of termination, or payment in lieu thereof.

The Employment Standards Act sets out the statutory minimum requirements that an employer must comply with upon the termination of an employee in Ontario. There is a presumption at law, absent an express clause in an employment contract restricting the amount of termination pay, that an employee is entitled to ‘common law’ notice pay, in addition to the statutory minimums as governed by the ESA.

Reasonable notice at common law is governed by precedent cases and requires a fact-specific inquiry – there are no hard-and-fast rules to determine the length of reasonable notice; however, one-month per year worked is a rule-of-thumb often employed in Ontario. Accordingly, a claim for ‘wrongful dismissal’ is the basis for an allegation that the employer has not provided sufficient severance upon termination, and the employee is seeking damages a result.