Wrongful Dismissal

Wrongful dismissal simply means that an employer has dismissed an employee and they do not have cause for such dismissal. Therefore the employee is entitled to reasonable pay in lieu of notice of dismissal. Of course the employer wants the notice period to be shorter and the employee wants it to be longer.

The Supreme Court of Canada has reinforced the concept that employment is a contract and a breach of that contract is to be treated like the breach of any other contract. This means that the damages flowing from the breach must be measured as discussed above. But, a very significant feature is that the person suffering the breach of the contract, namely the employee who has lost their employment, is obliged to do his or her best to minimize the damages flowing from that breach (commonly referred to as “mitigation”). This means that they must look for new employment and must be able to prove their effort at finding new employment. It also means that their earnings in any new employment will be deducted from the pay in lieu of notice payable by their former employer. In short, every dollar earned in the new job, is a dollar that the former employer does not have to pay, aside from the minimum notice period set out in the Employment Standards Act. We all must understand that a failure to make a diligent search for work will result in a reduction in the notice period and therefore a reduction in the damages payable by the employer.

We must also consider the entitlements of a departed employee and the obligations of the employer throughout the notice period. Often this includes continuation of most benefits to which the employee was entitled including pension contributions and benefit plans.