Misconceptions Surrounding The Term Wrongful Dismissal.

The term “wrongful dismissal” is something of a misnomer. There is a perception that wrongful dismissal means that there is no justification for the decision or the person feels that the employer did not consider appropriate factors in making the decision to terminate.

In fact, wrongful dismissal means that the employer failed to give the employee reasonable notice of their termination of employment.

There may be aspects to the dismissal process that give rise to other damages. These are referred to as punitive damages or damages for mental distress, but they are rare. Those are unique circumstances and our courts do not readily hand out those additional damages. At the core of a wrongful dismissal action is simply the question of what is the period of reasonable notice based on the following four factors: length of employment, age of employee, and level or position held, and the availability of similar employment.

The other important factor in a wrongful dismissal case that I find a lot of clients are not aware of is that, unlike the Employment Standards Act, where you have a fixed entitlement, in a wrongful dismissal case, the employee has a duty to mitigate their damages by going out and finding another job. The extent to which they are able to find another job actually impacts upon the employer’s ultimate liability to them. For example, let’s assume for a moment that you do not accept the package that you have been offered. The employer pays out your Employment Standard Act minimum entitlement because they must do that, whether you sign a release or not, and you begin a wrongful dismissal action.

You start looking for your next job. Your case goes to court. This is how a judge will calculate your damages. First, a judge will assess the notice period. Let’s say a judge accesses a notice period of 6 months. The judge will quantify what 6 months lost earnings or compensation looks like, including your salary, commission, bonus, RSP, or whatever else was part of your compensation package. The judge will then subtract the Employment Standards Act payments already made, and then a further deduction will be made for any subsequent earnings from employment generated by that individual after the last date of work with their employer. This is referred to as the employee’s duty to mitigate his/her damages. If you do not find a job, then your losses are going to be much greater. But the purpose is really to compensate the individual for the wage loss that they sustain during the period in which they are unemployed.

People need to understand that they are more likely to have a significant case if they have been employed for some period of time, if they are in their 40s or 50s, and if they are in a more senior managerial level. These employees may have more difficulty finding new work at the same level of responsibility and compensation as their previous jobs. The concept of wrongful dismissal is not to punish the employer; it is to make sure that the employee has ongoing income while looking for a new job.

If you, or someone you care about, is dealing with employment law issues in the Ottawa, Ontario Region, contact Law Office of Melanie-reist.

This article is taken from an April 17, 2008 interview with Melanie Reist, Employment Lawyer at Morrison Reist Barristers & Solicitors, an Kitchener, Ontario Employment Law Firm. Note that laws vary from province to province. Please consult with a lawyer in your own area to be sure of the laws and specific issues in your own jurisdiction.