“My boss just fired me for no reason! They shouldn’t be allowed to do that. It’s not fair!”
Now, that’s not a direct quote from anywhere. But it is the general sentiment I have gotten any number of times from people who have lost their jobs. Our office handles wrongful dismissal matters for employees as well as employers, but it is almost invariably the case that the employees who we work with are simply unaware of what rights employees have. This observation applies to people from all walks of life who visit our office. Whether they are a labourer or a manager at a large corporation, many employees simply don’t understand what happens when they get fired.
Of course, the observations and comments which follow are all anecdotal. Many employees are acutely aware of their entitlements and what an employer is and is not allowed to do. Unfortunately, for that large share of the population that is unaware, this lack of knowledge can make a sudden job termination even more devastating. Here are some of the most common misunderstandings our office has noticed:
1. They’re not allowed to fire me
With very few exceptions, everyone is allowed to be fired. No one is entitled to their job forever. Mrs. Reynolds, the President of ACME Industries can wake up one morning and think to herself, “You know what? I feel like firing Jim today” – and she can do so. There is usually nothing that requires any employer to keep a particular employee on. Unfortunately, employment is not a protective sphere where no one can forcibly push you out unless you make a serious mistake. Employers are free to dismiss employees without cause if they wish to do so.
The real consideration is what an employee is entitled to if they are fired. That is where the distinction between termination for cause and termination without cause (or wrongful dismissal) comes into play. The question is not, “Are they allowed to fire me?” but should instead be, “What do they have to do now that I’m fired?”
2. I’m only entitled to the amounts set out in the Employment Standards Act
It is often the case that at the end of an employment relationship, the former employer will tell the ex-employee that the Employment Standards Act (ESA) only requires a certain amount of pay in lieu of notice (or termination pay) be made upon dismissal. The ESA mandates termination pay of anywhere from 1-8 weeks’ pay, depending on the length of employment, and employees often accept the offer and go on their way without a second thought. However, the ESA is not necessarily the only authority which determines how much an employee should get when they are fired. It is true that an employer cannot give any less than the ESA entitlement but employees are also often permitted to seek further entitlements with the Court. On many occasions, an employee’s entitlements under the common law tests applied by the Courts are vastly higher than the statutory minimum under the ESA – sometimes measured in multiple months rather than the weeks which the ESA provides. Particularly for long-serving employees, this can make a huge difference.
3. They told me if I didn’t accept the offer on the table, I wouldn’t get anything
This is a difficult situation and one which I’ve seen more times than would be expected. Employers sometimes give employees an offer which is somewhat enticing but attach a time limit to the offer, failing which the employee will only receive the ESA minimums (or nothing). As stated above, an employer is obligated to pay the ESA minimums upon a wrongful dismissal. But for a vulnerable employee who has just lost her job, the prospect of a slightly larger, immediate payout can be very tempting. There is nothing wrong about an employer negotiating in this fashion (other than offering nothing), and if the employee considers all her options and makes an informed financial decision to accept the immediate payout, then all the better. Unfortunately, many employees are under the honest belief that the employer holds all the cards and can refuse to pay any more if the offer is not immediately accepted.
An employee’s entitlement crystallizes as soon as they are fired. While they are free to negotiate a termination package with their employer, they are also usually free to reject any offer on the table and proceed to the Court to seek their true entitlement. Deciding on the proper way of proceeding is something that requires a good deal of consideration.
4. I want my severance pay
This is a minor issue but one which comes up a lot. Usually it is just confusion over terminology. “Severance pay” is not the same as “pay in lieu of notice” or “termination pay” and it only applies in limited circumstances – usually when very large companies are involved. Most of the time, a client who says “severance pay” means “termination pay”.
5. They’ve given me working notice and I don’t want to go back
The pay in lieu of notice referred to throughout this article means that an employer is giving the pay that an employee would have earned had he been given the required notice under the ESA or the common law, in order to terminate the employment immediately. They are, however, allowed to give an employee the required notice in advance and ask him to continue working until the notice period is up, at which point his employment will be at an end. Obviously, a comment like – “Frank, you’re going to be fired in 6 months. Please make sure you are at work every day as usual until then” – can make an employee less than interested in continuing to come to work. Nevertheless, working notice is a permissible practice. An employee who then refuses to continue working because, in their mind, they have already been fired, can raise certain risks which may disentitle them from their termination pay.
6. I’m going to sue the pants off my boss
To paraphrase the bard, here’s the rub. Despite everything listed above, there still remain many obstacles which can arise which prevent a former employee from obtaining or even seeking their actual entitlements. For example, oftentimes employees have signed contracts at the start of the employment relationship which precludes certain rights. In other occasions, an employee may have signed a release after termination that absolves their employer from making certain payments. Issues like the duty to mitigate damages, how to measure the appropriate entitlement, and determining whether there was cause for the termination typically arise in wrongful dismissal proceedings and serve to complicate things. Other considerations, like the applicability of Human Rights legislation or the presence of a union can also factor in. Every case is different and there are never any guarantees about an employee’s chance of success against her former employer. There are endless items to take into account which can hurt or help a prospective wrongful dismissal lawsuit and a lawyer is best equipped to help identify and understand each one.
This article has dealt in a number of generalities based on my own experience and other lawyers at my office. Its intention is to identify some of the more common misconceptions which seem to permeate among employee-litigants before the lawsuit even begins. It is not designed to serve as a primer for wrongful dismissal lawsuits or as any sort of legal advice. Every case is different and there are no hard and fast rules to approaching employment related litigation. The only universal truth in these circumstances is the importance of obtaining proper and considered legal advice with respect to the end of an employment relationship. Pitfalls can occur to even the most educated and savvy employee and the best way to ensure that their legal rights are protected is to seek out a lawyer.
Eric Turkienicz is a lawyer practicing at the Toronto firm of Feldman Lawyers. He maintains a broad civil and commercial litigation practice. The opinions contained herein are his own and do not necessarily reflect the opinions of other members of Feldman Lawyers. Nothing in this article should be construed as legal advice and are for information purposes only. Any questions or comments on the article should be made directly to the author.