Losing your job is one of the most stressful experiences a person can go through. If you were recently terminated in Ontario and are wondering whether you were wrongfully dismissed and what you may be owed, this guide will walk you through what wrongful dismissal means under Ontario law, the most common types of wrongful dismissal, what compensation you may be entitled to, and the steps you should take before signing anything.
Understanding your rights after a termination can make a significant difference in the outcome. Many employees in Ontario accept the initial severance offer their employer provides without knowing they may be legally entitled to significantly more.
What Is Wrongful Dismissal in Ontario?
Wrongful dismissal in Ontario does not mean your employer had no right to fire you. In most cases, employers in Ontario can legally terminate employees for almost any reason, as long as the reason is not discriminatory. Wrongful dismissal is about how the termination was handled, not why it happened.
A wrongful dismissal occurs when an employer ends your employment without providing the proper notice of termination or adequate compensation in place of notice. In other words, wrongful dismissal is almost always about money and the correct notice period, not about whether the firing was unfair or unjustified.
This is a critical distinction. A perfectly polite, professionally handled termination with no explanation can still be a wrongful dismissal if the severance package offered does not reflect your full legal entitlement under the Employment Standards Act (ESA) or at common law.
The Employment Standards Act vs. Common Law Entitlements
Ontario employees are protected by two separate legal frameworks when it comes to termination notice, and the difference between them is often where wrongful dismissal claims begin.
The Employment Standards Act (ESA)
The Employment Standards Act sets out the minimum notice or termination pay an employer must provide. ESA minimums are based solely on how long you have been employed and are generally quite low. For example, an employee with five years of service is entitled to five weeks of notice under the ESA minimum.
Many employers present ESA minimums to employees as if they represent the full entitlement. They do not. The ESA is a floor, not a ceiling.
Common Law Reasonable Notice
Ontario courts have long recognized that employees may be entitled to significantly more than ESA minimums under common law. Common law reasonable notice is based on a broader set of factors, including:
- How long you were employed
- Your age at the time of termination
- The nature and seniority of your position
- Your salary and compensation level
- How easy or difficult it is to find comparable employment in your field
- Whether you were induced away from previous secure employment to join this employer
Under common law, reasonable notice can range from one to two months per year of service, up to a maximum of approximately 24 months in Ontario. This is substantially higher than ESA minimums for most employees who have been with an employer for several years. If your employer offered you only the ESA minimum and your employment contract does not validly limit your entitlements to ESA, you may have a wrongful dismissal claim for the difference between what you were offered and what you are owed at common law.
Important: Do not sign anything before understanding your full entitlements.
Many employers include strict signing deadlines on severance packages. You are generally entitled to a reasonable amount of time to review any offer and seek legal advice. Once you sign a release, you typically give up your right to claim any additional compensation. Consulting an employment lawyer before signing costs very little relative to what you may recover.
The Four Types of Wrongful Dismissal in Ontario
1. Termination Without Cause and Inadequate Severance
This is by far the most common type of wrongful dismissal claim in Ontario. Your employer terminates your employment, gives you a reason or no reason at all, and offers a severance package. The dismissal becomes wrongful when the package does not reflect your full legal entitlements under the ESA and at common law.
The gap between what employers offer and what employees are legally owed can be substantial, often ranging from several months to well over a year of additional compensation for longer-tenured employees.
2. Termination for Cause Without Proper Grounds
In Ontario, an employer can terminate an employee without providing any notice or severance if the termination is for cause. However, the legal standard for proving just cause is extremely high. It requires serious misconduct that fundamentally breaches the employment relationship, such as theft, fraud, or deliberate insubordination.
Many employers allege cause to avoid paying severance when the facts do not actually meet this standard. If your employer claimed cause but the conduct alleged does not rise to the level required by law, the termination may be a wrongful dismissal and you may be entitled to full notice and severance.
3. Constructive Dismissal
Constructive dismissal occurs when your employer makes a significant and unilateral change to the fundamental terms of your employment without your agreement. Because the change is so substantial, the law treats it as a termination even though you were not technically fired.
Examples of changes that may constitute constructive dismissal include:
- A significant reduction in salary or compensation
- A demotion or material reduction in your responsibilities or authority
- A forced transfer to a different city or location
- A significant change in your reporting structure or role
- A poisoned work environment or sustained harassment
If you resigned in response to such changes, you may still be entitled to wrongful dismissal compensation. Constructive dismissal claims can be complex, and timing matters. Consulting an employment lawyer as soon as a significant change is imposed on your employment is strongly recommended.
4. Termination for Discriminatory or Retaliatory Reasons
Terminating an employee because of a protected characteristic under the Ontario Human Rights Code is both wrongful dismissal and a human rights violation. Protected grounds include race, ancestry, place of origin, colour, ethnic origin, citizenship, religion, sex, sexual orientation, gender identity, age, marital status, family status, and disability.
Similarly, terminating an employee in retaliation for exercising a legal right, such as filing a workplace safety complaint, taking protected leave, or reporting illegal conduct, may also be wrongful and can give rise to additional damages beyond notice and severance.
What Compensation Can You Receive for Wrongful Dismissal?
If you have been wrongfully dismissed in Ontario, you may be entitled to several types of compensation depending on the circumstances of your termination.
Pay in Lieu of Notice
The most common form of compensation in wrongful dismissal cases is pay in lieu of notice. This represents the salary, benefits, bonuses, and commissions you would have earned during the reasonable notice period you were entitled to receive. It is calculated based on your full compensation package, not just your base salary.
Continuation of Benefits
During the notice period, you are generally entitled to continue receiving your employee benefits, including health and dental coverage, life insurance, and pension contributions. If these were cut off at the time of termination, the value of those benefits may be included in your damages.
Bonus and Commission Entitlements
If your employment included a bonus or commission component, you may be entitled to the amounts you would have earned during the notice period. Courts in Ontario have consistently held that bonus and commission entitlements do not simply disappear upon termination.
Bad Faith Damages
If your employer handled the termination in a manner that was dishonest, misleading, or unnecessarily harmful to your dignity, you may be entitled to additional damages beyond reasonable notice. This can include situations where an employer fabricated cause, humiliated the employee during the termination, or made false public statements about the reasons for the dismissal.
Human Rights Damages
Where discrimination played a role in the termination, you may be entitled to additional compensation under the Ontario Human Rights Code, including general damages for injury to dignity, feelings, and self-respect.
How Long Do You Have to File a Wrongful Dismissal Claim in Ontario?
In Ontario, the general limitation period for a civil wrongful dismissal claim is two years from the date of termination. While this may seem like a long time, there are important reasons to act quickly:
- Severance packages often include deadlines of just a few weeks to sign. Once signed, a release is very difficult to set aside.
- Evidence and documentation can become harder to gather over time.
- Your duty to mitigate your losses begins immediately. Courts expect you to begin looking for comparable employment right away, and a delay can affect the damages you recover.
- An employment lawyer can often assess your situation quickly and advise whether you have a claim worth pursuing.
What is the duty to mitigate?
Ontario law requires wrongfully dismissed employees to make reasonable efforts to find new, comparable employment after termination. This is called the duty to mitigate.
If you fail to make reasonable efforts to find new work, a court may reduce the damages you are owed. Keep detailed records of every job application, interview, and networking effort you make after being terminated.
Importantly, taking a lower-paying or lower-status job does not necessarily mean you have mitigated your losses. Courts look at whether you made reasonable efforts, not whether you immediately found an equivalent position.
Steps to Take After a Wrongful Dismissal in Ontario
Step 1: Do Not Sign Anything Immediately
The most important step after receiving a termination notice and severance package is to resist the pressure to sign quickly. Employers routinely include deadlines on severance offers. You are entitled to a reasonable amount of time to review the offer and obtain legal advice before signing.
Step 2: Gather Your Documents
Before leaving the workplace, gather copies of any documents relevant to your employment, including:
- Your employment contract and any amendments
- Your most recent performance reviews
- Any written communications relevant to your termination
- Your pay stubs and records of your full compensation package
- Any documentation of the events leading up to your termination
Step 3: Begin Your Job Search and Keep Records
Start your job search as soon as possible and document every application, interview, and job-related contact you make. This record will be important if your case proceeds to negotiation or court, as it demonstrates that you have fulfilled your duty to mitigate.
Step 4: Consult an Employment Lawyer
An employment lawyer who understands Ontario’s employment law framework can review your severance offer, assess whether your employer has met their legal obligations, calculate what you may actually be entitled to, and advise you on whether to negotiate, accept, or pursue a claim.
Many employment lawyers in Ontario offer free initial consultations and work on contingency for wrongful dismissal cases, meaning you pay nothing unless you recover additional compensation.
Step 5: Consider Negotiation Before Litigation
The majority of wrongful dismissal cases in Ontario are resolved through negotiation rather than court proceedings. With the assistance of an employment lawyer, many employees are able to recover significantly more compensation than what was initially offered, often without ever filing a claim in court.
Finding a Wrongful Dismissal Lawyer Who Speaks Your Language
Navigating a wrongful dismissal claim requires clear and precise communication with your lawyer. If English is not your first language, working with an employment lawyer who speaks your language fluently can make a significant difference in how well your situation is understood and how effectively your case is presented.
Lawyers Who Speak is a multilingual legal directory that connects clients across Canada with verified employment lawyers who provide legal services in their preferred language. Whether you need a wrongful dismissal lawyer who speaks Spanish, Mandarin, Punjabi, Hindi, Farsi, French, Cantonese, Arabic, or another language, our directory makes it easier to find qualified legal representation without the barrier of language.
Browse employment lawyers in our multilingual directory to find a wrongful dismissal lawyer who speaks your language in Toronto, the GTA, Vancouver, and across Canada.
Frequently Asked Questions About Wrongful Dismissal in Ontario
Is wrongful dismissal the same as being fired unfairly?
Not exactly. In Ontario, an employer can legally fire you for almost any reason, or no reason at all, as long as the reason is not discriminatory. Wrongful dismissal is about whether your employer provided the proper notice and severance you are legally entitled to, not whether the reason for firing you was fair or justified.
My employer said the termination was without cause. Can I still have a wrongful dismissal claim?
Yes. A without-cause termination is not wrongful in itself. It becomes wrongful when the severance package offered does not reflect your full legal entitlement under the ESA and at common law. This is the most common type of wrongful dismissal claim in Ontario.
I was offered only the ESA minimum. Is that enough?
For most employees, the ESA minimum is not the full entitlement. Common law reasonable notice can be significantly higher than the ESA minimum, depending on your age, years of service, position, and other factors. If your employment contract does not validly limit your entitlements to the ESA minimum, you may be owed more.
What if I resigned because my working conditions became unbearable?
You may have a constructive dismissal claim. If your employer made significant and fundamental changes to your employment without your consent, or created a poisoned work environment, the law may treat your resignation as a termination. Constructive dismissal claims are fact-specific and time-sensitive, so consult an employment lawyer as soon as possible.
I signed the severance agreement. Can I still make a claim?
In most cases, signing a release ends your ability to claim additional compensation. However, in limited circumstances a release can be set aside, for example if you were not given adequate time to consider it or were not told about your right to seek legal advice. This is a complex area and requires advice from an employment lawyer.
Does it cost anything to consult an employment lawyer about wrongful dismissal?
Many employment lawyers in Ontario offer free initial consultations for wrongful dismissal matters. In addition, many work on a contingency basis, meaning they only get paid if you recover additional compensation. This makes getting legal advice accessible even if you are currently without income after a termination.
Find a Wrongful Dismissal Lawyer Who Speaks Your Language
Lawyers Who Speak is Canada’s multilingual legal directory. Browse employment lawyers by language and location to find a wrongful dismissal lawyer who can represent you clearly and confidently in the language you are most comfortable speaking.
Browse lawyers who speak Spanish, Mandarin, Punjabi, Hindi, Farsi, French, Cantonese, Arabic, and many more. Visit lawyerswhospeak.ca/lawyers to start your search.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Employment law situations are fact-specific and the law can change. If you have been terminated and believe you may have a wrongful dismissal claim, please consult a qualified employment lawyer licensed in Ontario for advice specific to your situation.
