Most people struggle with the concept of wrongful dismissal and how it applies to their circumstances. We pose ten important questions, answers of which will help you determine whether you have been wrongfully dismissed from your employment.
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Welcome everyone. This is Amer Mushtaq from you counsel. Today we will talk about wrongful dismissal and the issue that we will be dealing with today is how do you figure out whether you are you as an employee are wrongfully dismissed or not. And so what we have done is we pose ten simple questions that you can ask yourself and depending upon your answer to those questions you will be able to understand whether you're wrongfully dismissed or not and on that basis. You can decide to pursue your wrongful dismissal action either yourself or through legal counsel.
OK So we begin with our usual disclaimer that this course is not legal advice so if you have any specific questions, you must contact a lawyer or paralegal to get the answers.
We're going to start by talking about different terms that are used for wrongful dismissal. And some of these terms are wrongful termination, wrongful discharge, constructive dismissal, dismissal for cause and fired. Sometimes people even call the dismissal a layoff.
All these terms are similar or they can be used at times interchangeably. But they all represent what is called a wrongful dismissal which is sort of a blanket term that we use in employment law. So what is exactly wrongful dismissal in Canada. Is it possible to explain wrongful dismissal in sort of one basic concept, and the answer is yes. So a wrongful dismissal is fundamentally a breach of an employee’s employment contract. That's the first part. And then the second part is that that breach of the employment contract must be the breach of one of the fundamental terms of the employment contract. So what do I mean by those two things. So let's take breach of employment contract. Number one. Many people think, and we'll have a separate lecture where we'll talk about what is an employment contract and we'll get into the nitty gritty of it but over here, I just want you to understand that most people think that an employment contract is something in writing that two parties have signed. There's a written document confirming that there's a contract and that's how an employment contract is created. That's not necessarily the case. Once you have an employment relationship with an employer you have an employment contract whether it's in writing or not. So it doesn't matter if there is no written document, you still have an employment contract. It is just an unwritten employment contract. So that's number one point with respect to employment contract. I want to you to understand this clearly. If there's a written document whether it's a job letter job offer or it's called an employment contract, all of these things could be similar or same. So if you have a written employment contract or written job offer the terms and conditions that are specified in that contract are obviously part of your employment contract but those are not all of the terms of your employment contract. There are and there will be additional terms that are not written in that employment contract which are called implied terms. Implied terms means that those terms are assumed in your employment contract. Even if they're not written in there and, that is because of the centuries of development in the employment law area where courts have sort of written in certain employment contracts will terms which are not in writing but they are there so they're called implied terms. So your contract, if it's in writing, has two components. One's the written component and one is the non written component which are the implied terms. So the breach of your employment contract could be either for the terms that are in writing or, could be the terms that are implied or could be both. So that’s number one. And number two, the breach has to be one of the fundamental terms.
So what is a fundamental term. It's very simply one of the important or significant terms in the contract. I'll give you an example. So let's say your employment contract says your salary annual salary is sixty thousand dollars and once you begin employment you start getting paid on the basis of thirty thousand dollars. In this case, your salary is a fundamental term and the breach of that term is a breach of fundamental terms of employment contract.
So let's say another example could be that you were hired as a manager of accounts payable and once you start working, you realized that your actual position is that of an accounting clerk and not as a manager. And so that's sort of a fundamental term i.e. your position is a fundamental term and then a breach of that term could be a breach of your employment contract, so that's just a broad example.
So you understand the basic concept that a wrongful dismissal essentially you know so if there is a breach off your employment contract and the breach is one of the breach of one of the fundamental terms of that employment contract then that breach, or those breaches can give rise to an action or a claim for wrongful dismissal. So that's the fundamental concept.
OK now jumping right into the kind of questions and, these are sort of examples. There could be more questions but we will pick sort of the most you know ten most common questions and we're going to address those.
So first part of the question is when you're actually terminated and so what I mean by that is your employer comes to you and says, you know, your employment is ending and this is your last day or such and such date is your last day. And you were actually terminated from employment, you're fired or laid off, whatever you want to call it.
If the general term is that your employment is ending then that's a termination. So these first six questions are when you're actually terminated and you know that your employment has been ended by the employer.
One scenario in this situation could be that you did not receive severance or the severance you received was improper or insufficient.
The second scenario could be the breach of written contract. As I said earlier that your employment contract could be in writing and, if it's in writing and there is a specific term in that contract which is breached by the employer. You want to look at that employment contract and check that out. So the second question is whether there's a breach of written contract.
Question number three is whether there's a breach of your statutory rights that are not fulfilled by the employer.
Question four could be whether your terminations is based on discriminatory grounds.
Question five is whether the employer conducted itself in bad faith in deciding to terminate you.
And the last question is that the employer is alleging just cause for dismissal, that you have done something fundamentally wrong and then the employer has a right to terminate you for just caus.
So those are the six questions and will go into each question one by one and will quickly cover those topics but those are the six questions when you are actually terminated you know that you're terminated.
Now the next four questions are when you're not terminated, the employer has not come to you and said your employment is terminated. But you believe that the breaches are such that you can claim termination. It’s called constructive dismissal. so you are constructive dismissal claim is based upon the employer's conduct that your employment has ended.
The questions relating to this issue could be for example change in duties. If there's a fundamental change in your duties, it may give rise to constructive dismissal and therefore wrongful dismissal. There may be change in your remuneration you know especially a decrease in your remuneration, change in working environment, the environment has become harassing or poisonous, or there could be a breach of your written contract.
So these are sort of four questions that you want to ask yourself to determine that even though the employer has not terminated you do you have a right, or grounds to claim constructive dismissal and wrongful dismissal. So let's get into each item one by one.
First, no severance or improper severance. Remember, this is sort of the most common reason for claiming wrongful dismissal. In fact, you know sixty to seventy percent of my employment law practice is really based upon clients coming to us and asking questions whether they received proper severance because they're terminated. and if not, then can we commence a court action. And in ninety over ninety percent of those cases, what they received is actually not correct. It's improper severance pay, and so there is usually a case to commence a wrongful dismissal action. So that's one of the most common reason, that the employer refused or failed to provide the employee proper severance and so we go after that.
Now with respect to your severance. We want to talk about three things the severance. First, you may have contractual rights for severance. What I mean by contractual rights: as we're talking about the written contract which may say that Mr. Smith when your employment is terminated, or we decide to terminate your employment without cause, you will be entitled to six months of pay or something like that. So that's your contractual right in your written employment contract. And for whatever reason, the employer fails to abide by that contractual term. And so that may gives what gives rise to a wrongful dismissal action.
Second is common law rights. So even if there's no contractual rights or the contractual rights are improperly drafted, or unlawfully written, you have common law rights on termination. And in most cases this is what happens that employee has common law rights and, the employer either doesn't know about it or refuses to pay based on common law rights which gives rise to a wrongful dismissal action.
And then the number three are the statutory rights. Remember, if you had listened to one of our previous lectures, we talked about statutory rights and certain statutes that are relevant to employment law. For instance, Employment Standards Act, 2000 in Ontario. Other provinces have similar legislation that contain rights that describe your entitlement on termination. Or are you entitled to any terminations a severance pay. And what those amounts are, so if you are not receiving proper severance are no severance at all, then that's another ground that may give rise to a wrongful dismissal action.
In light of these questions, how do you determine whether your rights have been violated. This is sort one area where you will be best served if you consult a lawyer, do your Google search and listen to our lectures and that will give you a very good sense of whether you got your proper severance or not. But you may be better served if you contact an employment lawyer and get a consultation and find out whether your rights have been violated or not. Because this is one area which is too complicated and a lot is at the stake. You could get significant rights and if you have no knowledge that your rights are violated, you may end up losing those rights. So that's one area which is a bit complicated and, something to be looked into deeply.
Now, moving on to the breach of written contract. Like I said, you have written contract and it may have clauses about termination rights. If the employer doesn't follow those rights then that's a breach which will give rise to claim for wrongful dismissal. Another example is unpaid commissions. What about commissions? You know if you are in a position where you are entitled to commissions, you got your severance and termination pay, but you haven't been paid commissions that you should have received even after your termination, that may give rise to wrongful dismissal claim.
Similarly if you're entitled to significant bonus and you don't get that and, there could be other rights on termination that are violated. It depends upon the contract. There could be all kinds of rights that are in the employment contract which state what will be done, what things you will receive upon terminations and, you don't get those. In that case too, you have a claim for wrongful dismissal.
Let’s talk about a breach of statutory rights. If you look at employment Standards Act, 2000, It talks about termination pay and it has a specific formula to calculate it. Let's say you didn't get those rights. Or overtime pay, for instance. If you're entitled to overtime pay, but you didn’t get it. What about severance pay? Severance pay is a separate category than termination pay. There are specific requirements for that in the Employment Standards Act, 2000 in Ontario and, similarly in other provinces, there are other rights that are stated in the statute and, you are denied those rights at termination, then you may have a claim for wrongful dismissal. Another example could be a claim for discrimination. This is based upon a breach of human rights code in Ontario that's the human rights legislation in Ontario. There are similar legislation in the other provinces. In this example, if you believe you were terminated because of certain discriminatory grounds, so for instance, you ended up having some sort of disability and that was the reason or one of the reason why employer decided to terminate you, or because of your gender, because of your sexual orientation, pregnancy, creed religion, ethnicity, all these grounds are listed in human rights code. And if it's a breach of one of those grounds and that's the reason or one of the reasons or one of the factors in your dismissal, then you have grounds for wrongful dismissal.
What about bad faith conduct? A bad conduct could be a variety of things where employer is acting in bad faith. One example that is actually coming from a case that I’m dealing with now is imposing unrealistic demands on an employee. In this case, the employee goes away on maternity leave, comes back and then there are changes to her work to the extent that she's now required to work for three jobs as opposed to one, which is impossible for her and gives rise to a situation where she may seek constructive dismissal.
Another example of bad faith which is not uncommon is unfair performance evaluations, and unfair appraisals. Sometimes, employers are trying, especially against long service employees, to build a case so that they could terminated the employee for cause and not pay them their severance. A series of these wrongful, unfair evaluations, performance evaluations may lead to a claim for wrongful dismissal or constructive dismissal.
Surreptitiously changing employee contracts is something that's not too uncommon either. For example, a long Service employees - twenty years, twenty five years or thirty years of service, where when the employer is coming to a point where they want to terminate their employment and realize that they have a significant amount of severance to pay. They try to sort of bring in a new employment contract. You know and do it surreptitiously so that the employee doesn't know what he or she is getting into, does not get an opportunity to talk to a lawyer, and then ends up signing a contract which was completely unfavorable to him or her. Without realizing you know what she has gotten herself into. So those could be sort of some of the grounds that may give rise to a claim for bad faith conduct and may give rise to wrongful dismissal.
Now coming to just cause dismissal which is usually when the employer is saying that you, the employee has conducted yourself in such a bad manner that we should not give you any severance at all and you just get your pay up to the last day and then you're gone, you're not entitled to E.I. or anything. And that's called Just cause dismissal. Sometimes employers, not often, try to use an employee's performance as grounds for just cause dismissal. Most of the time performance does not amount to just cause dismissal, but that's what the employer may have claimed as allegations about conduct.
I mean some of the legitimate examples of just cause dismissal are, an employee has a physical fight with another coworker at the workplace, or harassed another employee or, conducted violently or used abusive language. These kind of things, or stole money from the employer, stole employer’s property. These are sort of the some of the legitimate causes for just cause dismissal. But any allegations about misconduct which the employer uses to say that the employee is terminated for just cause and if you believe that those grounds are not valid, those allegations are not fair, then you have a wrongful dismissal case against the employer.
One thing that you want to keep in mind and, this is the most important part is that just-cause dismissal is really the capital punishment of employment law world. That's how you want to understand it. So small infractions here and there you know, minor performance issues, things like that, they usually do not amount to just cause dismissal. Your conduct should be so bad that you deserve the worst punishment. So for instance, if absenteeism is the ground for just cause dismissal, you know, it has to be repeated. The notices to you say you're constantly ignoring the policies and so on and so forth. So there's cumulative conduct that shows that there's just cause.
Or, the conduct is so bad, so severe, for example, you defrauded the employer or you breached the trust of the employer by breaching the confidentiality agreement - things like that. Those are sort of the valid grounds for just cause dismissal. But a lack of performance is usually not just cause. Sometimes the employers will argue, for example, that you were supposed to, as a salesperson, you were supposed to sell one hundred widgets per month and you only sold eighty. We have just cause against you. Not not really.
So if you if you are terminated on just cause basis then you must ideally talk to a lawyer employment lawyer and see if there is a valid just cause under employment law.
Let's quickly touch upon constructive dismissal and I mentioned four scenarios for questions: change in duties, change in remuneration, change in work environment and, a breach of contract.
Change in duties. I gave an example that you were hired as a manager by the employer. The employer decides to demote you unilaterally by its own decision and makes you a clerk. Now that's a fundamental change of your terms of employment. Even though you're not terminated by he employer, the employer has changed the fundamental nature of your duties and so you have grounds to walk out and seek constructive dismissal.
Similarly change in remuneration. If your remuneration is reduced by ten percent or more, then that sort of safely can be considered grounds for constructive dismissal. There are ways how you pursue constructive dismissal and that's a separate topic but changing remuneration which is significant enough can give rise to a claim for constructive dismissal.
Change in work environment. Let’s say you have a new manager who has a harassing behavior towards you. He is a bully who acts in breach or in violation of the fundamental code of conduct and so that may give rise to a claim for constructive dismissal and obviously breach of contract.
Another example could be that you're still working and you're showing up to work and you're being given tasks but you're not getting paid and you haven't received pay for the last two months and that could be another reason why you can claim constructive dismissal.
So we have gone through ten questions and now you pose yourself these questions and see if you fit into one or more of these categories and if you believe that the employer did not have the appropriate grounds to terminate you are has changed your duties in such a way that you can claim constructive dismissal then that's the avenue that you can pursue. OK Hopefully this was helpful. Please post your questions comments anything that you want us to explain more and we'll be happy to cover that in the next lecture.