Ten Questions to Determine Whether You Are Wrongfully Dismissed in Canada

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Most people struggle with the concept of wrongful dismissal and how it applies to their circumstances. We pose ten important questions, answers of which will help you determine whether you have been wrongfully dismissed from your employment.

This lecture is taught by Amer Mushtaq, LL.B., M. Engineering , B.Sc. (Hons.), who is the Principal and Founder of the law firm, Formative LLP. Through his YouTube channel, YouCounsel,

Amer shares practical advice from his years of legal experience to help anyone access justice and achieve their goals. Subscribe today to learn more.

Amer also offers in-depth courses (by paid subscription) on various legal topics through http://www.youcounsel.ca/.


Show Notes:


Lecture Slides:

Machine Transcription:

Welcome everyone this is Amer Mushtaq from YouCounsel.

Today we will talk about wrongful dismissal. The issue that we’ll be dealing with today is how do you figure out whether you as an employee are wrongfully dismissed or not. What we have done is pose 10 simple questions that you can ask yourself. Depending upon your answer to those questions, you will be able to understand whether you have been wrongfully dismissed or not. On that basis you can decide to pursue your wrongful dismissal action either yourself or through legal counsel.

We begin with our usual disclaimer that this course is not legal advice and if you have any specific questions you must contact a lawyer or paralegal to get the answers.

We’re going to start with talking about different terms that are used for wrongful dismissal. Some of the terms are wrongful termination/ wrongful discharge /constructive dismissal /dismissal for cause / fired or sometimes people call it a layoff. All these terms are similar or they can be used at times interchangeably but they all represent what is called a wrongful dismissal—which is a blanket term that we use in employment law. What exactly is wrongful dismissal? Is it possible for me to explain wrongful dismissal in one basic concept? The answer is yes.

Wrongful dismissal is fundamentally or basically a breach of an employee’s employment contract—that is the 1st part. The 2nd part is that, that breach of the employment contract must be a breach of one of the fundamental terms of the employment contract. What do I mean by those two things? Let’s take (1) breach of employment contract. Many people (and we’ll have a separate lecture where we’ll talk about what is an employment contract and we’ll get into the nitty-gritty of it but over here I just want you to understand this) think that an employment contract is when there is something in writing, two parties have signed it, there’s a written document confirming that there’s a contract and that’s how an employment contract is created. That is not necessarily the case. Once you have an employment relationship with an employer you have an employment contract whether it’s in writing or not. It doesn’t matter if there is no written document. You have an employment contract—it is just an employment contract that is an unwritten employment contract. That’s number one.

With respect to employment contract, I want you to understand this. If there is a written document, whether it’s a job letter/job offer or it’s called an employment contract—all of these things could be similar or same. If you have a written employment contract or written job offer, the terms and conditions that are specified in that contract are obviously part of your employment contract but those are not all the terms of your employment contract. There are and there will be additional terms that are not written in that employment contract which are called implied terms. “Implied terms” means that those terms are assumed in your employment contract even if they’re not written in there. That is because of centuries of development in the employment law area where the courts have written in certain employment contracts terms which are not in writing but they are there and so they’re called implied terms. Your contract, if it’s in writing has two components: (1) one’s the written component and (2) one is the non- written component which is the implied terms. Breach of your employment contract could be either for the terms that are in writing or could be the terms that are implied or could be both. That’s number (1). Number (2), the breach has to be one of the fundamental terms. What are fundamental terms? Fundamental term is very simply one of the important significant terms in the contract. I’ll give you an example. Let’s say your employment contract says your annual salary is $60,000. When you begin employment you start getting paid on the basis of $30,000. Your salary is a fundamental term and the breach of that term is a breach of the fundamental terms of your employment contract. Another example could be that you were hired as a Manager, Accounts Payable. Once you start working, you realize that your position is actually that of an accounting clerk and not as a manager in the in the accounting. Your ‘position’ is a fundamental term and a breach of that term could be a breach of your employment contract. That is just a broad example. Now, you understand the basic concept of what “wrongful dismissal” essentially is—if there is a breach of your employment contract and the breach is one of the fundamental terms of that employment contract then that breach or those breaches can give rise to an action or a claim for wrongful dismissal so that’s the fundamental concept.

Okay, now jumping right into the kind of questions and these are examples or could be more questions but we have picked the most common ten questions. We’re going to address those. First part of the question is when you’re actually terminated—what I mean by that is your employer comes to you and says your employment is ending. This is your last day or such and such date is your last day and you’re terminated /you’re fired or laid off whatever you want to call it. If the general term is that your employment is ending then that’s a termination. These I believe are six questions when you are actually terminated you know that your employment has been ended by the employer. (1) One scenario could be that you did not receive severance at all or the severance you received was improper or insufficient. (2) the second could be the breach of written contract—I said that your employment contract would be in writing and if it’s in writing and there is a a term in that contract that is being breached by the employer you want to look at that. You want to check that whether there has been a breach of your written contract. (3) question number three is whether there’s a breach of your statutory rights—they have not been fulfilled by the employer. (4) Next question is whether your termination is based on discriminatory grounds. (5) Question five is whether the employer conducted itself in bad faith in deciding to terminate you—that is another question. (6) The last question is that the employer is alleging just cause’ for dismissal, i.e., that you have done something fundamentally wrong and then the employer has a right to terminate you for ‘just cause’. So those are the six questions and we will go into each question one by one and will quickly cover those topics but those are the six questions when you are actually terminated you know that you’re terminated.

Now the next 4 questions are when you’re not terminated the employer has not come to you and said that your employment is terminated but you believe the breaches are such that you can claim termination. This is called constructive dismissal. You are constructing it based upon the employer’s conduct that your employment has ended. Questions relating to that one is (1) a change in duties: if there is a fundamental change in your duties it may give rise to constructive dismissal and therefore wrongful dismissal; (2) there may be a change in your remuneration—especially a decrease in your remuneration; (3) change in working environment—the environment includes harassment or is poisonous; or (4) there could be a breach of your written contract. These are four questions that you want to ask yourself to determine that even though the employer has not terminated you, do you have a right or grounds to claim constructive dismissal and wrongful dismissal?

Let’s get into each item one by one. No proper severance or improper severance. This is the most common reason for claiming wrongful dismissal. In fact, 60 to 70% of my employment law practice is really based upon clients coming to us and asking questions whether they received proper severance because they have been terminated. If not, then can we commence a court action and in over 90% percent of those cases the severance that they received is actually not correct—it is improper and so there is usually a good case to commence a wrongful dismissal action so. That is the most common reason—that the employers refused or failed to provide the employee proper severance and so we go after that.

With respect to your severance, we want to talk about 3 things: (1) the severance you may have contractual rights in the severance. What I mean by contractual rights is we’re talking about the written contract that you have. Your written contract may say that Mr. Smith when your employment is terminated and we decide to terminate your employment without cause, you will be entitled to six months of pay or something like that. That’s your contractual right in your written employment contract. For whatever reason, the employer fails to abide by that contractual term and that gives rise to a wrongful dismissal action. (2) Common law rights. Even if there’s no contractual rights or the contractual rights are improperly drafted—unlawfully written—you have common law rights in terminations. In most cases this is what happens that employee has common law rights and the employer either doesn’t know about it or refuses to pick on the right so that gives rise to a wrongful dismissal. Then the number three (3) statutory rights. Remember in a previous lectures, if you have been listening to us, we talked about certain statutes that are relevant to employment law so for instance the Employment Standards Act 2000 of Ontario. Other provinces have similar legislation that contain rights that describe that if you as an employer are terminated you are entitled to termination or severance pay and what those amounts are. If you are not receiving proper severance or no severance at all then that’s one ground that will give rise to a wrongful dismissal action.

A wrongful dismissal action: how do you determine? And this is one area where you will be best served if you consult me, do your Google search and listen to our lectures. That will give you a very good sense of whether you got your proper severance or not. You may be better served if you contact an employment lawyer and get a consultation and find out whether your rights have been violated or not because this is one area that is too complicated and a lot is at stake. You could get significant rights without doubt and if you have no knowledge that your rights are violated you may end up losing those rights. This is one area which is a bit complicated and something to be looked into deeply. Now breach of written contract, like I said you have a written contract and it may have clauses about severance termination rights. If the employer does not follow those rights then, that is a breach which will give rise to wrongful dismissal.

What about commissions? If you are in a position where you are entitled to commissions, you got your severance and termination pay but you haven’t been paid commissions—did not get your commissions that you should have received even after your terminations and you’re not getting those—that may give rise to wrongful dismissal.

Similarly, if you’re entitled to significant bonus and you don’t get that. There could be other rights and it depends upon the contract. There could be all kinds of rights that are in the employment contract that state what will be done, what things you will receive upon termination and you don’t get those and you have a claim for wrongful dismissal.

Breach of statutory rights: as I said briefly, that if you look at Employment Standards Act It talks about terminations and it has a specific formula. Let’s say, you didn’t get those rights, e.g., overtime pay—if you’re entitled to that and you didn’t get it. Then what about severance pay, which is a separate pay category from termination pay. There are specific requirements for that in Employment Standard Act in Ontario (similarly, in other provinces) or any other rights that are stated in the statute and you are denied those rights at termination, then you may have a claim for wrongful dismissal.

Discrimination: this is based upon a breach of the Ontario Human Rights Code. That’s the human rights legislation in Ontario. There is similar legislation in the other provinces. If you believe that you are terminated because of certain discriminatory grounds, for instance, you ended up having some sort of disability and that was the reason or one of the reasons why the employer decided to terminate you. Or because of your gender; because of your sexual orientation; pregnancy; creed; religion; ethnicity—all these grounds are listed in the Human Rights Code—and if it’s a breach of one of those grounds and that’s the reason or one of the reasons or one of the factors in your dismissal then you have grounds for wrongful dismissal.

What about bad faith? Bad faith could be a variety of things—where the employer is acting in bad faith towards you, the employee. One example, is actually coming from a case that I’m dealing with now—is really unrealistic demands—an employee goes away on maternity leave, comes back and her duties are changed to the extent that she’s now required to work for three jobs as opposed to one—which is impossible for her and gives rise to a situation where she may see constructive dismissal. Another example which is not uncommon is unfair performance evaluations—(unfair appraisals) employers sometimes try (specially for long service employees) to build certain grounds so that they can build a case for the dismissal of employee for cause. Then all of a sudden, without any wrongdoing on your part you get to see a series of unfair evaluations/performance evaluations which may lead to a claim for wrongful dismissal.

Surreptitious change in contract. This is something that’s not too uncommon either and this happens to long service employees with 20/25/30 years of service. When the employer is coming to a point where they want to terminate their employment and realizes that they have a significant amount of severance to pay they try to sort of bring in a new employment contract. And do it surreptitiously, so that the employee doesn’t know what he or she is getting into and does not get an opportunity to talk to a lawyer and then signs a contract which was completely unfavorable to him or her without realizing what she has gotten herself into. Those could be sort of some of the grounds that may give rise to bad faith conduct and may give rise to wrongful dismissal.

Now coming to just cause dismissal which is usually the employer saying that you, the employee have conducted yourself in such a bad manner (Performance) that we should not give you any severance at all. You just get paid up to the last day and then you’re gone. You’re not entitled to E.I. or anything and that’s called “just cause dismissal”. Sometimes the employer, though not often, try to use an employee’s performance as grounds for just cause dismissal. Most of the time, performance does not amount to just cause dismissal but that’s what it is claimed. Allegations about conduct. Some of the legitimate examples of just cause dismissal are that an employee has a physical fight with another coworker at the workplace; harassed another employee; conducted violently; used abusive language; stole money from the employer; stole employer’s property: these are some of the legitimate causes for just cause dismissal. Any allegations about misconduct which the employer uses to say that you, the employee, are terminated for just cause and if you believe that those grounds are not valid—those allegations are not fair then, you have a wrongful dismissal case against the employer. One thing that you want to keep in mind and this is the most important part is that ‘just cause’ dismissal is really the capital punishment of employment law world. That is how you want to understand it. Small infractions here and there, like a bad performance review, etc, things like that usually do not amount to ‘just cause’ dismissal. Your conduct should be so bad, for instance, if absenteeism is the ground for just cause dismissal—it has to be repeated. Offences, you’re constantly ignoring the policies, there’s accumulative conduct that shows that there’s just cause or the conduct is so bad—so severe (you defrauded the employer—you breach the trust of the employer) by breaching the confidentiality agreement and things like that are sort of the valid grounds for just cause dismissal. Lack of performance or the inability to perform—sometimes the employers will argue that “you were supposed to sell as a salesperson, you were supposed to sell one hundred widgets per month and you sold only eighty. We have just cause against you”. Not really. If you are terminated on just cause basis then you must ideally talk to a lawyer (employment lawyer) and see if there is a valid just cause under employment law.

Let’s quickly touch upon constructive dismissal. I mentioned 4 scenarios for questions (1) change in duties; (2) change in remuneration; (3) change in work environment and (4) breach of contract. (1) a change in duties: I gave an example that you were hired as a Manager. The employer decides to demote you unilaterally by it’s own decision and makes you a clerk. Now that’s a fundamental change of your terms of employment. Even though you’re not terminated by the employer, the employer has changed the fundamental nature of your duties. So you have grounds to walk out and seek constructive dismissal. (2) Similarly, change in remuneration: if your remuneration is reduced by ten percent or more then that safely can be considered grounds for constructive dismissal. There are ways how you pursue constructive dismissal and that’s a separate topic. Change in remuneration, which is significant enough, can give rise to a claim for constructive dismissal. (3) change in work environment: In the environment you are now you got a new manager who has a harassing behavior towards you, is a bully, who acts and breaches and is in violation of the fundamental code of conduct and that may give rise to a claim for constructive dismissal. (4) and obviously breach of contract: an example could be that you’re still working and you’re showing up to work and you are given being given tasks but you’re not getting paid and you haven’t received pay for the last two months and that could be another reason why you can claim constructive dismissal.

We have gone through ten questions. Pose these questions to yourself and see if you fit into one or more of these categories. If you believe that the employer did not have the appropriate grounds to terminate you or has changed your duties in such a way that you can claim constructive dismissal. Then, that’s the avenue that you can pursue.

Hopefully this was helpful. Please post your questions, comments and anything that you want clarification on and we’ll be happy to cover that in the next lecture. Thanks for listening.

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