A wrongful dismissal occurs when an employee is dismissed and not provided reasonable notice or proper pay in lieu of notice. What most employees are not aware of is that employers are obligated to pay termination pay under the Employment Standards Act but if certain factors are met, the employee could be entitled to enhanced termination pay dictated by the common law. The difference in the Employment Standards Act minimums and the common law is often described as the difference between 1 week per year of service versus 1 month per year of service. 

The ESA minimums are governed by legislation and include statutory termination pay of 1 week per year of service up to a maximum of 8 weeks and statutory severance pay if the employee meets two legislated requirements. To be entitled to statutory severance pay, an employee must have worked with the same employer for 5 years or more and the employer must have an annual payroll of $2.5 million dollars. 

However, an employee should not settle for the ESA minimums as the common law entitlements typically lead to substantially higher payments by the employer. If there is no employment contract or there is no enforceable termination clause in the employment contract, the common law applies and takes the place of the ESA minimums. Factors determining the common law notice period include: age of the employee, length of the employment and the likelihood of finding a comparable job. As a rule of thumb, common law notice is often determined by applying 1 month per year of service. To illustrate the significant difference between the ESA minimums and the common law, an employee with 4 years of service who is 54 years old is entitled to 4 weeks of pay under the ESA and could be entitled to 4 months of common law reasonable notice. 

Don’t settle for a few weeks when you could potentially be entitled to a few months. If you believe you have been wrongfully dismissed, contact one of the lawyers at OWL LAW to review your matter to determine your proper financial entitlements and next steps.