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Notice Periods for Long Service Employees

In order to terminate an employee for cause, an employer must demonstrate that the employee engaged in serious misconduct (i.e., theft, physical harassment or sexual harassment) or that the company placed the employee on a progressive disciplinary plan that sets various performance targets that were not met. In a progressive disciplinary plan, the employee is provided with the opportunity to perform in a satisfactory manner that enables him or her to maintain employed. However, if the plan objectives are not met and the employee continues to engage in poor performance, this may constitute grounds for a just cause termination.

In a recent case called Saikaly v. Akman Construction Ltd.an Office Manager was found to have been wrongfully terminated for cause.  It was found that the employee did not commit any wrongdoing that would rise to the level required for a just cause termination; as such, the employee was entitled to notice of termination or payment in lieu thereof.  In awarding severance pay, the employee received over $150,000.00 plus almost $10,000.00 towards legal costs, representing 24 months of pay.

The employee denied that he ever engaged in any wrongdoing or that he was notified by the employer of the reason for the termination of employment.  The Plaintiff commenced a Court Action for wrongful dismissal and the Defendant did not respond. Later, the Defendant was noted in default, the consequences of which is that the defaulting party is deemed to admit all allegations in the Claim.

As a 60-year old employee with managerial duties, the Court found that it would be especially challenging for this individual to obtain new employment. If you are provided with a severance package or terminated from your employment for cause, it is important to obtain legal advice to ensure that you take the proper steps to obtain the compensation you deserve.

At Goldstein Law Firm, we have expertise in obtaining severance packages for wrongfully dismissed employees.

Employee Rights After Wrongful Dismissal in Ontario

As many people experience, losing a job is never easy.  We are called by employees’ on a weekly basis that are terminated from their employment without cause.  Many people believe that they have been ‘wrongfully dismissed’ from their employment, without understanding what actually constitutes a wrongful dismissal in Ontario.  Under the Employment Standards Act (ESA) in Ontario, an employee that is terminated without cause is entitled to certain minimum obligations, including the right to advanced notice of termination of payment in lieu thereof.

Advanced notice of termination, otherwise referred to as working notice, occurs when an employer advises an employee that their employment will terminate at a specific point in time in the future. During a working notice period, the employee has the obligation to continue working until the notice period expires. It is often a challenge for an employee to stay motivated to work for a company that has terminated them but forced to continue working.

Why Would an Employer Give Working Notice Rather than Payment in lieu Thereof?

For employers, it can make financial sense to provide advanced notice of termination instead of payment in lieu thereof, subject to the employee actually completing their work and assisting the company during the working notice period. Given that the working notice period counts towards an employees severance entitlements when the period expires, the employer may have no more severance obligation to the terminated employee.  Accordingly, the employee’s employment will end with no actual cash outlay required by the employer.

Conversely, when payment in lieu of notice is provided by an employer, a large lump sum or salary continuance payment is typically required, which typically can be expensive for the employer, and in exchange for which the employee’s employment will terminate immediately, and no additional value will be provided to the company.  Employers typically try to balance the uncomfortable nature of working notice with the financial constraint associated with paying severance by way of payment in lieu of notice.

What is a Wrongful Dismissal?

A wrongful dismissal does not relate to the fact the employee was terminated from their employment (unless the employee was wrongfully terminated for cause without a justifiable reason). In fact, an employer can terminate your employment at any time, for any reason, so long as it is not a discriminatory ground protected by the Ontario Human Rights Code (i.e., disability, pregnancy, age, gender, sexual discrimination, etc.).  Rather, a wrongful dismissal occurs when an employer does not satisfy its severance obligations to a terminated employee.  An employer must provide advanced notice of termination or payment in lieu thereof in accordance with the ESA and the common law in Ontario (in certain cases); otherwise, the termination will be deemed a wrongful dismissal.

With respect to ESA entitlements, an employee is entitled to, among other things, termination pay equivalent to one-week per year worked, up to a maximum of 8 weeks termination pay.  In addition, if the employee has worked for a period of 5 or more years for an employer with a payroll over $2.5 million, they will also be entitled to severance pay under the ESA, which is calculated at approximately one-week per year worked.

For example, an employee with 10 years of service for a company that is eligible for both termination pay and severance pay under the ESA, would be entitled to a minimum advanced notice of termination or payout in lieu thereof 18 weeks pay (8 weeks of termination pay and 10 weeks of severance pay).  If the minimum entitlements under the ESA are not offered to an employee that has been terminated without cause, then the termination would be deemed a wrongful dismissal.

Employment Standards Act (ESA) Entitlements Are Minimum Obligations

Terminated employees in Ontario are often entitled to common law or reasonable notice in Ontario, which exceeds those entitlements as designated in the ESA.  By default, an employee is entitled to reasonable notice of termination or payment in lieu thereof, unless an enforceable termination clause is contained in a duly executed employment contract that limits the amount of severance to the statutory (ESA) minimum.  If no such enforceable termination clause is contained in the employment contract, the terminated employee would be entitled to reasonable notice of termination, which can often vastly exceed the minimum obligations under the ESA.

If you have been terminated without cause from your employment in Ontario, it is important that you have received your minimum entitlements. In addition, you ought to consult with an employment lawyer in Ontario to determine whether you are also entitled to reasonable notice of termination or payment in lieu thereof and whether the employer has sufficiently accounted for your rights to a severance package.

If you believe that your former employer has violated your rights, you may have been wrongfully dismissed from your employment. Goldstein Law will be able to analyze your case, including the severance package, employment contract, and other relevant documents, to determine whether you have a case for wrongful dismissal.  Call 647-838-6740 to speak to a lawyer to discuss a potential wrongful dismissal suit.

What Termination Notice Period Are You Entitled to in Ontario?

An employee that has been employed in Ontario for more than three months in an indefinite employment relationship (separate from a fixed-term contract), is entitled to a statutory minimum amount of advanced notice of termination or payment in lieu thereof in accordance with the Employment Standards Act in Ontario, should the employer opt to terminate the employment.

The exception to the general rule is when an employer terminates the employee for cause, in which case the employee is not entitled to any notice of termination. The notice is either provided (1) by way of advanced notice by the employer, during which time the employee continues to work for the company until the end of the notice period; (2) by a payment in lieu of notice equivalent to the value of salary and benefits the employee would have received has they continued working through the notice period; or (3) a combination of advanced notice of termination and payment in lieu thereof.

If payment in lieu of notice is provided to the employee, the payout must be made on the employee’s regular pay date or seven days after the termination, whichever is later.

Employment Standards Act – Notice Periods

The Employment Standards Act in Ontario outlines the minimum termination pay and severance pay obligations of employers. Keep in mind, these are minimum obligations and do not represent an employee’s full legal entitlements on termination of employment. The following is a table outlining the statutory minimums under Ontario’s ESA:

Length of Employment Minimum Notice Required
Under 3 months None
3 months to under 1 year 1 week
1 year to under 3 years 2 weeks
3 years to under 4 years 3 weeks
4 years to under 5 years 4 weeks
5 years to under 6 years 5 weeks
6 years to under 7 years 6 weeks
7 years to under 8 years 7 weeks
8 years or more 8 weeks

The statutorily mandated minimum notice period generally does not constitute a reasonable severance package in accordance with the common law in Ontario; accordingly, if you have only been offered the minimum ESA entitlements, you have a wrongful dismissal claim. Please contact an employment lawyer in Toronto at Goldstein Law Firm for a free consultation to discuss your rights.

Termination for Cause

Just cause terminations have been considered the ‘capital punishment’ of employment law.  The employer bears the evidentiary burden to prove that the alleged misconduct satisfies the high threshold of just cause dismissal. The employer must prove that the act(s) or omission(s) of the employee are so significant that the effect was that the employee repudiated the contract of employment; failure to establish such an effect will preclude a Court from finding that the employment has been terminated for cause.

There are several types of misconduct that may be grounds for dismissal for cause. Examples of common grounds for dismissal, discussed in detail below, include the following:

  • dishonesty (e.g. fraud, theft, breach of trust, deception etc.);
  • workplace harassment and violence;
  • insubordination and insolence; and
  • absenteeism and lateness.

A Court will provide a contextual analysis to determine whether, in the totality of circumstances, the misconduct amounts to just cause. In order to satisfy the Court, employers should institute progressive disciplinary and performance improvement plans to provide a guidepost for improvement for the employee.  If the employee continues to perform incompetently or engage in ongoing misconduct, the employers paper-trial and diligence will assist in reaching the just cause threshold.

If you have been terminated for cause by your employer, please contact Goldstein Employment Law to discuss your potential rights and entitlements.

Constructive Dismissal Cases

A constructive dismissal arises in the employment context when an employer alters a fundamental term of the employment contract, which can be treated as a breach of contract by the employee.  Instead of continuing to work under a new employment arrangement, the employee can choose to resign from their employment following a fundamental change so as not to condone the change.  As a result, the resignation will be viewed as involuntary, and, in effect, a termination.  Importantly, if an employee resigns from their employment, and is unable to successfully argue constructive dismissal, they will not be entitled to a termination package and will be found to have voluntarily resigned from their employment.

An employer found to have constructively dismissed an employee is liable to pay the employee a severance package.

In order to successfully argue that you have a case for constructive dismissal, the change to the employment relationship has to go to the heart or be fundamental to the employment relationship. Employers have the right to institute reasonable changes to the terms of employment (i.e., changing some job duties) in response to the realities of business, without such change being considered a constructive dismissal.

The most common types of constructive dismissal cases are as follows:

  • significantly reducing the employee’s compensation;
  • demoting the employee;
  • requiring the employee to move to a different geographic location;
  • requiring the employee to work in a poisoned work environment (i.e. an environment where the employee faces harassment); or
  • laying off the employee.  An employer does not have an automatic right to lay off a non-unionized employee unless the right to layoff is provided for in the employee’s employment contract.

If you think you have been constructively dismissed from your employment for any of the above reasons, please contact an employment lawyer to determine your best next steps to ensure that you secure a full severance package.

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.