Wrongful Dismissal in Ontario: Know Your Rights

Losing your job can be a difficult and confusing experience—especially if you’re unsure whether your termination was fair or legal. If you were dismissed without just cause or weren’t given enough notice or severance, you might be dealing with wrongful dismissal. In Ontario, you have strong legal protections under the Employment Standards Act (ESA) and common law. This guide will help you understand your rights, identify wrongful dismissal, and take action confidently.

What Is Wrongful Dismissal?

Wrongful dismissal occurs when an employer:

• Terminates an employee without just cause, and
  
• Fails to provide reasonable notice, termination pay, or severance pay.

This applies not just to layoffs, but also to constructive dismissal—when an employer changes your job significantly or makes your working conditions intolerable.

Key takeaway: If you’re let go without cause and don’t receive the proper compensation, you may be entitled to more than just the ESA minimums—you may qualify for common law severance, which can be significantly higher.

With Cause vs. Without Cause Termination

Termination Without Cause:

Employers in Ontario can terminate employees without cause for any legal reason, but they must provide:

• Notice or termination pay under the ESA
  
• Severance pay, if applicable
  
• Common law entitlements, which can include months of compensation

Termination With Cause:

This is when an employer dismisses an employee for serious misconduct (e.g., theft, violence, repeated insubordination). It’s difficult to prove, and most terminations claimed as “with cause” end up being deemed wrongful in court if not properly justified. At NadiLaw, we frequently assist clients in navigating the complexities of just cause termination, ensuring that both employers and employees understand their rights and obligations under Ontario law.

Your Entitlements After Termination

1. Notice or Termination Pay

• ESA requires 1 week per year of service, up to 8 weeks.
  
• Common law may provide 1 month per year of service, up to 24 months in total.

2. Severance Pay

• Applies if:
  
  • You were employed 5+ years
    
  • Employer’s payroll is $2.5M+ annually
    
• You may receive 1 week per year of service, up to 26 weeks.

3. Benefits Continuation

• During the notice period (whether working or paid in lieu), your health and other benefits must continue.

4. Common Law Damages

• Courts consider age, position, salary, and how long it might take you to find a similar job.
• Often much more generous than ESA entitlements.

What Is Constructive Dismissal?

Constructive dismissal happens when your employer unilaterally makes major changes to your job that breach your employment contract, such as significantly reducing your pay, demoting you, or relocating you without consent. These actions may entitle you to treat the employment relationship as terminated and pursue damages—similar to a termination without cause, where you’re owed notice or severance despite not being at fault.

• Large pay cuts
  
• Changing your title, duties, or location
  
• Creating a toxic work environment
  
• Suspending you without pay

Even if you weren’t technically fired, the law may treat it as a dismissal.

Signs of a Wrongful Dismissal

You may have a case for wrongful dismissal if:

• You were fired without cause and received less than your legal entitlement in notice or severance.
  
• You were told to “resign” under pressure.
  
• You were dismissed after reporting harassment or asserting rights.
  
• Your employer claimed “cause”, but didn’t investigate or provide proof.
  
• You were asked to sign a release immediately after termination without time to seek legal advice.
  

What Should You Do After Being Terminated?

1. Do not sign anything right away (e.g., severance package, release form).
2. Request all documents: termination letter, employment contract, and benefits information.
3. Track your job search efforts—this may be important for your case.
4. Consult an employment lawyer before making decisions.
5. Act quickly: You generally have 2 years to pursue a wrongful dismissal claim.

• 

When to Hire a Wrongful Dismissal Lawyer

A lawyer can help you:

• Understand your full entitlements
  
• Negotiate a better severance package
  
• Challenge a false claim of “cause”
  
• File a claim with the courts or Ministry of Labour
  

Many employment lawyers work on contingency—you don’t pay unless you win or settle.

External Authority Resources

• Ontario Employment Standards Act (ESA)

Frequently Asked Questions (FAQ)

1. What qualifies as wrongful dismissal in Ontario?

Wrongful dismissal occurs when you are terminated without cause and not given the proper notice or severance required by law or your employment contract.

2. Can my employer fire me without a reason?

Yes, but only if they provide proper notice or pay in lieu. If they do not, that’s considered wrongful dismissal.

3. Am I entitled to severance pay?

You may be entitled under the ESA, common law, or both—depending on your service length, salary, contract, and company size.

4. How much severance should I get?

ESA gives up to 8 weeks’ notice and 26 weeks’ severance, but under common law you could receive up to 24 months’ pay depending on your role and circumstances.

5. What is constructive dismissal?

This occurs when your employer makes major negative changes to your job without your agreement—effectively forcing you to resign.

Final Thoughts

Wrongful dismissal laws in Ontario offer strong protection—but only if you act. If your termination felt unfair or financially short-changed, don’t settle for less. Get informed, seek advice, and pursue what you’re legally entitled to.

Need help with your specific situation? Contact an employment law professional or legal clinic near you for personalized guidance.