We have previously explored the issue of constructive dismissal, but we have yet to look at wrongful dismissal. This form of dismissal is far more commonplace and is a significant area of practice for employment lawyers. Wrongful dismissal can happen at all levels of employment and anyone who has been wrongfully dismissed can bring a claim. But what is wrongful dismissal?
What is Wrongful Dismissal?
Wrongful dismissal is a situation where an employee’s employment contract is terminated by the employer, but the termination itself breaches one of the following: the terms of the employment contract, a section of legislation or rules of employment law. Some common examples of wrongful dismissal include:
- An employer terminates the employment of an individual without giving termination notice, reasonable notice or pay in lieu of notice;
- An employer falsely claims that they have just cause to terminate the employment of someone and refuses to pay them severance;
- An employer terminates an employee without giving them their final pay, vacation pay or other entitlements found in the Employment Standards Code; and
- An employer changes the terms of your employment contract without your agreement.
There are some important terms in these examples that are worth discussing.
According to the Code, an employer is required to give an employee written notice that their employment is being terminated. The extent of notice is dependent on how long the employee has been working for the employer. For example: if the employee has been working for the employer for at least 6 years but less than 8 years, the employer must give 5 weeks’ notice. The maximum notice an employer is required to give is 8 weeks and that is for employees who have been working for 10 or more years.
Termination notice is not required by the Code in some cases, specifically for employees who:
- Have been terminated for just cause;
- Have been employed for 3 months or less;
- Are employed for a definite term or specific task of less than 12 months;
- Are employed on a seasonal basis and when the season is over the employment is terminated; and
- Are employed in the construction industry.
Pay in lieu of Notice
Also known as termination pay, an employer can pay an employee what they would have earned during the termination notice period instead of having them work throughout the termination notice period. An employer can also give a combination of termination notice and termination pay, in which case the termination pay must be equal to the wages the employee would have earned for the period that is not covered by the notice. For example, if an employee is supposed to get 5 weeks’ notice, and they are given 3 weeks’ notice, the employer must pay the employee for the 2 remaining weeks at their regular wages.
This differs from termination notice. Reasonable notice is the common law (law developed by the courts) obligation that in the absence of an employment agreement, an employee is entitled to reasonable notice of their termination. This occurs when there is termination without cause and failure to provide this reasonable notice would give rise to an action of wrongful dismissal.
Reasonable notice is usually a lot greater than the minimum notice and severance required by the Code. Reasonable notice is determined on a case-by-case basis and is very fact dependent. The courts will look at several factors, including:
- The employee’s age;
- The position and responsibilities the employee held;
- The length of the employee’s employment;
- The availability of similar replacement employment;
- How much the employee was paid;
- Other circumstances in the employee’s life.
Managerial and professional employees will have different entitlements of notice than non-managerial and non-professional employees. There is a general rule of thumb that often applies to managerial or professional employees: they are entitled to 1 month of notice (or pay in lieu of notice) for each year of employment. There is a generally acknowledged maximum of 24 months, and while this is a general rule, some courts have expressed disapproval of the use of such a rule.
What are Your Options if You Think You Have Been Wrongfully Dismissed?
If you have been wrongfully dismissed, you do have legal options. If you sue for wrongful dismissal, there is the possibility of 3 types of compensation:
- The amount you were entitled to based on the notice period;
- Special Compensation – if you were terminated in a cruel or humiliating manner and as a result suffered some kind of mental distress, you can request special compensation;
- Punitive Damages – damages that are meant to punish the employer. Punitive damages may be awarded if, for example, your employer fired you because of a personal vendetta or had the intention of causing you harm. This type of compensation is rare and only happens in extreme cases.
In the event that you do not have an employment contract, you may be entitled to reasonable notice depending on certain factors. The award for damages in a case of failing to give reasonable notice is all the compensation which would have been given to the employee during the period of notice had it been given, minus any income earned from alternative employment during the notice period. This differs from awards for lack of termination notice or pay in lieu of termination notice. The Code requires the minimum termination notice or termination pay in lieu of notice regardless of whether the employee earned any income from alternate employment, and the courts do not deduct from the amount.
A skilled employment lawyer can often negotiate a settlement for you without heading to court. Sometimes mediation or arbitration are also options for wrongful dismissal disputes. At HMC Lawyers, our Employment team has the knowledge and experience to help you through this stressful period of your life. We regularly assist employees with wrongful dismissal claims and have successfully recovered compensation four clients. To book a consultation, call us at 1-800-480-3534 or contact us online today. With offices in Calgary, we represent professionals in Calgary, throughout Alberta, and across Western Canada.