Unless they have a written employment contract that says otherwise, every employer in Ontario must give “reasonable notice” of their intention to terminate an employee when it is ‘without cause’.
Employers can terminate employees in one of two ways: for cause or without cause. A for cause termination is very rare, and generally only stands up if an employer can never trust the employee again. Employees terminated for cause are not entitled to reasonable notice. Still, just because an employee was ostensibly terminated for cause does not mean that a judge would agree. Many alleged just cause terminations are actually without cause terminations in law, and the employee may be provided damages in lieu of reasonable notice in court.
If an employer fails to give ‘reasonable notice’ of their intention to terminate an employee without cause, then it is a ‘wrongful termination’. The employee can sue their employer for damages for failure to give reasonable notice.
It is important to stress, a ‘wrongful termination’ is not concerned with the wrongness or rightness of the termination itself. An employer can terminate an employee for any reason it wants or no reason at all. It is only a wrongful termination if the employer fails to give the terminated employee reasonable notice of termination.
“The general rule has long been that no damages are available to [an] employee for the actual loss of his or her job and/or pain and distress that may have been suffered as a consequence of being terminated, including “wounded feelings or the prejudicial effect upon reputation and the chances of finding other employment””.Honda Canada Inc. v. Keays, at paragraph 50
Nevertheless, in rare cases, an employee can also sue their employer for the stress caused by especially harsh or ‘bad faith’ conduct at the time of termination. Punitive damages may also be awarded in exceptional wrongful termination cases.
The Test To Determine If There Is A Wrongful Termination
01. The first step to check if a termination was wrongful is to determine if there is a contract that ousts the employer’s common law obligation to give “reasonable notice” of their intention to terminate an employee.
If there is a contract, it must have a valid and enforceable termination clause that provides at least minimum statutory notice.
There is a myriad of reasons why an employment contract or termination clause may or may not be valid or enforceable. This particular article will not discuss how employment contracts or termination clauses in employment contracts are or are not valid or enforceable, but this earlier article does.
Litigating the validity or enforcement of employment contracts is the bread and butter of employment lawyers.
Call our firm for a free consultation to determine if the employment contract in your case is valid and enforceable.
Nevertheless, it is worth pointing out that if there nothing wrong with the contract, and there is a formula for providing notice in that document, and the employer meets that formula in its severance package, it is not a wrongful termination even if the formula provided less than reasonable notice would have.
02. The next step to check if a termination was wrongful is to determine how much reasonable notice ought to have been provided to the specific employee.
If the employer gave the employee enough notice, it is said to be reasonable, and there is no wrongful termination. However, if the employer failed to provide enough notice, then it is a wrongful termination.
The amount of ‘reasonable notice’ an employer owes an employee depends on the specific circumstances of each case. The appropriate amount of reasonable notice is determined, generally, in consideration of these factors specific to each case:
- the character of the employment
- the length of service
- the age of the employee, and
- the availability of other employment
This particular article will not further discuss how reasonable notice is calculated, but this earlier article does.
However, it is important to note to readers that reasonable notice differs from statutory notice.
Statutory notice is the minimum notice an employer must provide an employee. It exists so employers do not make contracts or termination clauses that provide any less notice than statutory minimum notice. Statutory notice is a formula of one week of notice per year of service. On the other hand, reasonable notice is a common law concept, and there is no formula. Each case is different. One thing is clear, however. Reasonable notice is generally far greater than statutory notice.
Jeff is a lawyer in Toronto who works for a technology startup. Jeff is a frequent lecturer on employment law and is the author of an employment law textbook and various trade journal articles. Jeff is interested in Canadian business, technology and law, and this blog is his platform to share his views and tips in those areas.