Wrongful Dismissal Claims

Non-unionized employees who are dismissed without proper notice or compensation may have a claim for wrongful dismissal. This means that they can sue their former employer in Court to force the employer to provide appropriate compensation. Employers may defend against these claims in a number of ways. First, they may say that the employee was properly dismissed for “just cause.” If this can be proven successfully, the employee loses and may even have to pay some of the employer’s legal costs. It is very difficult for employers to prove just cause. In reality, most wrongful dismissal cases settle well before a trial.

Employers may also defend against these cases by relying on a written employment contract to pay only the minimum amount called for in the contract. This can be a valid defence if the employee signed an enforceable contract when first hired.

Another available defence for employers is the argument that the employee has “mitigated his or her damages” or has “failed to mitigate.” This means that employees are under an obligation to look for work after being dismissed and to accept a reasonable job offer if one comes along. Once they accept a new job, any money that they earn during the reasonable notice period reduces the amount that the employer must pay.

Wrongful dismissal claims in Ontario may be brought in three different ways:

i.               Wrongful dismissal claims over $100,000:

In Ontario, all cases that have a value of more than $100,000 are considered regular Superior Court claims.  The case is started by filing a Statement of Claim in the Ontario Superior Court.  All cases are required to go through a process of mandatory mediation.  This is supposed to occur within 150 days after the parties have served all of their court documents.  In some cases, mediation will only be held after the parties have had “examinations for discovery.”  This is often the case is “just cause” has been alleged.  In most cases, the parties would prefer to save the costs of examinations by first conducting the mediation.

Mediation has become an accepted and important part of the litigation process since it became mandatory in the mid 1990s, particularly in employment law cases.  The idea is to see if the parties can resolve their dispute before running up extensive legal fees by proceeding through the litigation process. Parties prepare short mediation briefs with an overview of their case and any particular documents that they are relying on. They then attend at a mediation session with a neutral mediator who tries to help the parties resolve their dispute.

If parties have a genuine interest in resolving the dispute, they will often agree on a mediator and a date fairly quickly. The mediator will usually be someone who is knowledgeable about employment law and wrongful dismissal cases. If the parties cannot agree to a mediator or date, then they may apply to the Court to appoint one. The appointed mediator may not have any particular knowledge about employment law and may also have little experience mediating disputes. Nevertheless, the parties are required to attend and pay for mediation.

IF the claim cannot be resolved during mediation, it proceeds to examinations for discovery, if this step has not yet been conducted.  This is a process whereby each side gets to question the other side about all aspects of the other side’s case. The process is designed to allow the parties to fully understand each other’s position, the evidence that each side has, to obtain additional documents or information that has not yet been provided. Often there are disputes over the propriety of questions that are asked during examinations and sometimes these disputes have to be resolved in court.  As a result of recent changes to the Ontario rules, examinations are now limited to a maximum of 6 hours per side unless the parties agree otherwise.  This change makes it much more difficult for parties to run up costs by conducting lengthy, frivolous examinations.

ii.             Wrongful dismissal claims between $25,000 and $100,000:

For cases that are likely to have a value of between $25,000 and $100,000, Ontario Courts use a “simplified procedure.” Essentially, this procedure reduces the maximum time for examinations for discovery to only two hours per side.  It also allows for simplified trials, if agreed upon by the parties.  It streamlines some of the other parts of the process.  Just like in ordinary procedure cases, parties file Statements of Claim and Defence to begin the process.  The parties then exchange sworn affidavits of documents which include lists of potential witnesses and contact information for the witnesses.

After that, the parties will usually try to schedule their mediation.  All cases must be mediated before they can be set down for trial.  If the parties cannot resolve their dispute, a “Readiness for Pre-Trial” is filed and a pre-trial is scheduled.

Unlike the pre-trials in the ordinary procedure, the parties are required to attend these pre-trials along with their lawyers. Judges are usually more pro-active at these pre-trials and often push the parties to try to resolve their disputes.

If the dispute cannot be resolved at the pre-trial, a trial is scheduled within a few months and the case goes to trial.

The Simplified Procedure also includes a few other technical differences, including the way that the parties resolve outstanding issues that come up before the trial.

iii.           Wrongful dismissal claims under $25,000:

Employees with a claim under $25,000 may file a claim in Small Claims Court. There is a small filing fee and the employee may proceed to court with or without legal representation. Until recently, the Small Claims Court limit was $10,000.  With that limit, it was usually considered too expensive to use a lawyer to assist with a Small Claims Court matter. However, with the increase to $25,000, lawyers have become increasingly involved in those cases which are near the upper end of the limit.

Some individuals may only want to spend an hour or two with a lawyer to review their claim and discuss what type of evidence will be needed at the trial and what arguments can be made.  Others will want some help with the Court documents.  It does not always make economic sense to hire a lawyer to go to Small Claims Court, particularly since the Court cannot adequately compensate the winner with a proper award of legal fees.

Employers however, often prefer to have outside counsel appear on their behalf at Small Claims Court trials. They are concerned about the precedent that may come from a negative decision or they simply wish to ensure that their interests are properly represented in Court.

In most cases, there is a pre-trial with a Small Claims Court judge at which the judge will try to convince the parties to resolve the matter. If the matter does not settle, it will proceed to a trial.

Small Claims court proceedings are much less formal than other court proceedings. It is easier to introduce evidence, including written witness statements and the judge may take an active role in questioning both sides to better understand the issue.

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