Losing your job can be a devastating experience, especially if you believe you’ve been unfairly dismissed. In Canada, employment laws offer some protection to employees, but there are legal nuances that could make a wrongful dismissal case more complicated than it seems.
Employment laws can vary between provinces and between provincially- and federally-regulated industries; however, they are generally similar. If you’re dismissed from your job, it’s crucial not to accept any severance offer until you’ve consulted an employment lawyer.
Getting expert legal advice from a specialized employment law firm like Soni Law is crucial in understanding your rights, whether you were wrongfully dismissed, and whether you were offered a fair and legal compensation package.
With that said, here are the basics regarding termination rights in Canada and how they may be used as “loopholes” to end an employment contract.
1. Probationary Period Exemptions
Most employment contracts include a probationary period, often three to six months, during which an employer can terminate an employee without the same obligations they would have once the probation period ends.
This means that if you’re dismissed during this time, you will likely not have the grounds for a wrongful dismissal claim, provided that the employer’s actions aren’t discriminatory.
2. Employers Don’t Need a “Reason” to Terminate an Employment Contract
Despite popular opinion and what we see on TV, there doesn’t have to be a ‘good reason’ for an employer in Canada to dismiss an employee. They are required, however, to provide ‘reasonable notice’ to an employee before the contract is terminated or pay the employee what they would have made during that period.
This is known as “termination pay.” A notice period varies on a case-by-case basis, with the main determining factors being length of service and wording of the employment contract.
Other considerations, such as the age of the employee and the likelihood of finding a similar position, are also sometimes factored into the length of the notice period by the courts. This is one of the reasons why it’s so important to speak to an employment lawyer after termination.
3. Severance Packages and Releases
In addition to termination pay, many employees are entitled to severance pay in Ontario. This generally is the case when stated in the employment contract and/or when an employee has been with an employer for at least 5 years, and that employer has a global payroll exceeding $2.5 million or has laid off 50 or more employees in a 6-month period due to full or partial closure of the business.
Many employers offer severance packages that include a release form, which, if signed, waives your right to pursue further legal action. These packages can be tempting, especially if you need immediate financial support. However, the offer might not reflect your full entitlements under the law.
Before accepting any severance package, consult an employment lawyer to ensure you’ve been made a fair offer. An employer is not allowed to rescind the offer before you speak to a lawyer.
4. The Concept of “For Cause” Termination
Employers can legally fire an employee without notice or severance if they deem it a “for cause” termination. Cause can include serious misconduct, such as theft, insubordination, or consistently poor performance.
However, what constitutes just cause is often debated in court; the burden of proof lies with the employer, and there is a high threshold for proving a termination for cause was warranted.
A for-cause termination generally makes you ineligible to receive Employment Insurance (EI), so you need to speak to an employment lawyer if an employer tells you they are terminating you for cause.
5. Temporary Layoffs That Become Permanent
In some cases, employers may issue temporary layoffs due to economic conditions or operational changes. In Ontario, a temporary layoff can become a permanent dismissal if it exceeds the allowable duration under provincial law of 13 weeks in a 20-consecutive-week period, in most cases, unless agreed upon otherwise in your contract.
There are other exceptions that can prolong the layoff period, such as receiving benefits, unemployment, or substantial pay from your employer, or working elsewhere. If the layoff was not explicitly allowed in your contract, however, you might have grounds for a constructive dismissal claim.
Final Thoughts
Navigating the complexities of wrongful dismissal in Canada requires a keen understanding of the legal landscape, which is why it’s always prudent to consult an employment lawyer after being dismissed from a job, regardless of the reason. Understanding your rights and recourses can help you get the compensation you deserve when you need it most.
