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How A Wrongful Dismissal Case Works In Canada 

Employees who are terminated without cause in Canada are entitled to severance. The amount of severance a terminated employee is entitled to is discussed hereWrongful dismissal is when an employer terminates an employee without providing them with enough severance. 

Therefore, a wrongful dismissal case is about getting more severance.

When an employee is wrongfully dismissed, they have a choice to make. Accept their employer’s offer or take steps to fight for more severance.  

Fighting a wrongful dismissal case seems complicated, but it isn’t. Essentially, as discussed above, the only issue in wrongful dismissal is calculating severance. Pure wrongful dismissal is not concerned with any other issue like how or why the employee was terminated. In most pure wrongful dismissal cases, the judge’s decision (if the matter gets that far) is just a short document that summarizes the employee’s circumstances (i.e. age and years of experience, etc.), similar wrongful dismissal cases in the past, and a brief calculation of how much severance the particular employee should get based on their circumstances and the past case law. 

In some wrongful dismissal cases, the employee may have to first argue, for example, that his termination clause is unenforceable or that he was wrongly fired for cause, which makes the matter more complicated. In these cases, these issues will have to be resolved before a determination of wrongful dismissal can be made.

Not to mention, wrongful dismissal cases tend to settle before trial. Thus, not only are pure wrongful dismissals generally uncomplicated, but they are also comparatively less expensive and time-consuming than many other legal issues.

✔ When an employee is wrongfully dismissed, and they choose to fight for more, here are the steps they generally take to resolve their case: 

1. First Consultation

The employee will have a first consultation with an employment lawyer (many employment law firms offer this service for free).

The lawyer will advise how much severance the employee ought to have received and whether making a claim for more severance makes sense. In some cases, the lawyer will have to take a few days to conduct research or gather certain documents like employment contracts from the other side before they can properly advise the employee. 

In many cases, the lawyer will advise the employee they received a reasonable severance package and that fighting for more is not worth the time and expense. 

If the lawyer suggests the employee was wrongfully dismissed and it makes sense to spend time and money to move forward, they proceed to the next step. 🔽

2. Demand Letter 

After the lawyer is retained, he or she takes a week or less to write a demand letter addressed to the employer. The demand letter will request more severance and explain why the employee is entitled to such more severance.  

Sometimes the parties will exchange a couple of letters and settle the matter within one or two months. If not, the employee proceeds to the next step. 🔽

3. Pleadings

If the demand letter stage does not settle the matter, the lawyer launches a lawsuit by filing and serving a Statement of Claim. This does not mean the matter will proceed to a full trial in front of a judge. It often just means that the lawyer is moving it forward to put more pressure on the other side. 

The Statement of Claim explains the circumstances of the employee and requests for the court to award the employee a certain amount of severance based on these circumstances. 

The employer must then complete a Statement of Defense within a month, generally. The Statement of Defense agrees to, refutes or adds to the facts of the Statement of Claim and pleads that the employee is entitled to a specific, lesser amount of severance than the employee pleaded. 

If the employee sees it necessary, they are permitted to file a Reply that deals with any new facts that emerged in the Statement of Defense. 🔽

4. Mediation

Typically after the pleadings are done, the parties’ lawyers make an appointment with a mediator to resolve the matter within a few months. Mediation is mandatory in many jurisdictions, including Toronto, and it is usually best to have a mediation in pure wrongful dismissal cases before all the other remaining steps of a lawsuit because the remaining steps are increasingly time-consuming. 

Moreover, wrongful dismissal cases typically involve sparse evidence other than a few documents like contracts and mitigation efforts, so mediation can often be done before discoveries or affidavits. 

The parties create a mediation brief and prepare for and finally attend mediation. Mediation is usually half a day at an office or on Zoom. The mediator’s job is to convince both parties to settle. The parties all attend mediation with their lawyer and representatives. However, the employee and their team are separated in different rooms from the employer and their team and the mediator goes from room to room making inroads toward an amicable settlement. 

Most cases settle at mediation. If the case does not settle, the parties proceed to the next step. 🔽

5. Exchange of Evidence

Parties have to give the other side all the evidence they possess that is relevant to the matter. 

As I mentioned, most wrongful dismissal cases don’t have much evidence. Oftentimes, the only evidence in a wrongful dismissal case is a book of workplace documents like contracts and policies plus some evidence about how easy/difficult it is to find a new job. Remember, wrongful dismissal is generally not concerned with how or why the employee was terminated. Rather, all that matters in pure wrongful dismissal is the calculation of severance, and severance is calculated with uncontestable characteristics of employment like years of service and compensation. 

Some cases settle here because the matter becomes increasingly time-consuming afterwards. If not, the parties proceed to the next step. 🔽

6. Civil Practice Court 

In pure wrongful dismissal cases where nothing but the amount of severance is contested, the parties usually agree to a motion to resolve the case summarily. Wrongful dismissal is an area of the law that generally uses summary judgments to resolve cases instead of trials. Summary judgments are perfect for wrongful dismissal because generally in wrongful dismissal the only issue to be resolved by the judge is simply how much severance the employee should get. 

Summary judgment is even used, generally, when the parties contest whether there is an enforceable termination clause in the employment contract. 

The parties attend civil practice court to choose a date for the summary judgment, usually several months later. Many cases settle around civil practice court because of the increasing time and money to be spent the rest of the way through. If there is no settlement here, the parties proceed to the next step. 🔽

7. Motion for Summary Judgment

The parties prepare for the summary judgment motion and have to send the other side their motion materials, including a written legal argument and affidavit of evidence. This is where the matter gets expensive for both sides, so settlements occur at this motion preparation stage often. Sometimes the employer realizes when they finally draft their written legal argument for the first time that they have a losing case and try to settle for better terms than what a judge would clearly order them to do. 

The parties spend days/weeks practising for and finally attend the motion for summary judgment. This is a short “mini-trial” and the judge makes a final decision about how much severance the employee should get. Still, it is rare to get this far. Most cases settle before summary judgment. Some cases even settle just moments before the motion is set to begin. 🔽

8. Setting the Matter Down for Trial. 

Trials are reserved usually for wrongful dismissal matters instead of summary judgment when they have interconnected, evidence-heavy issues like whether the employee was guilty of just cause. In short, trials are for the more complicated wrongful dismissal cases that have genuine issues that need to be sorted out with more formal evidence procedures before a simple calculation of severance can be made by the judge.

If the parties go to trial instead of summary judgment, the parties must first take steps to set the matter down for trial. It could be a year or longer to get a trial date. 

The parties must also later attend a pre-trial conference with a judge before the trial can be held. The pre-trial conference is another chance to discuss a settlement. 🔽

9. Trial

The parties spend months preparing a trial record, submissions, witnesses and documents for trial and then finally attend the trial, which could take days or weeks of court time. 

If you have made it this far, you are in the 1% of all wrongful dismissals. In my belief, 99% of all Ontario pure wrongful dismissals matters settle before a formal trial. Generally, getting to trial only happens when there are novel arguments about contractual language or allegations of serious misconduct or when the employee is extraordinarily long-tenured/well paid and/or there is an issue in regards to bonus compensation. 🔽

10. Costs and Appeals

For both trials and summary judgments with a decision, parties prepare costs submissions for the court (the loser of the case pays a portion of the winner’s costs) and both sides consider an appeal. However, keep in mind that exhausting all appeals could take years. Prudent parties only appeal a trial/summary judgment when the decision essentially makes new law or veers broadly from a reasonable range of severance or another precedent. ⏹

*Keep in mind that all cases are different and this article is a summary. There are other mini steps for a wrongful dismissal case that must or may be completed that are not covered in this article. Refer to the Rules of Civil Procedure in your province to know the law of moving a wrongful dismissal case forward in your jurisdiction. Ontario’s Rules are linked here.