It is well understood that when a person is wrongfully terminated from their employment, they are entitled to payment of certain damages to compensate for the losses suffered due to the harm perpetrated upon them. Such damages include compensation for reasonable notice. Assessment of appropriate reasonable notice damages includes consideration of several factors, such as the age of the wrongfully terminated employee at the time of termination, the length of time for which the employee worked for the employer, and the specialization and status of the position filled by the terminated employee, to name just a few.

Assessment of reasonable notice damages also includes consideration of inducement, which arises uncommonly in employment and is thus associated with a lack of common knowledge and insight into what inducement is and when it applies in employment law situations.

In this blog, we explore the doctrine of inducement and how it operates in employment law, including when it is inapplicable and the consequences of a finding of inducement for both employees and employers.

An Employee is Fired One Month After Hiring

The case of Smith v Lyndebrook Golf Inc. involved a plaintiff who responded to a public job posting of the respondent employer for a Golf Superintendent. The plaintiff, who had extensive experience working at golf courses in several capacities, applied for and succeeded in securing the position of Golf Superintendent with the defendant’s employer in May of 2022. Only one month later, in June of 2022, the employer terminated the plaintiff’s employment without notice.

The employee subsequently commenced the within action wherein he claimed he had been wrongfully terminated from his position with the defendant golf course. Moreover, the employee contended that he had been induced to work for the defendant in that the defendant offered him 40 per cent more pay than he had been earning at his previous employment and offered substantially better benefits than those he had enjoyed while working for his previous employer. Given that he had been induced to leave his prior, secure employment, the plaintiff argued that he was entitled to increased reasonable notice damages relative to the termination of his employment.

Defining Inducement and The Circumstances in Which it Applies in the Employment Context

In employment, inducement can be defined as an employer convincing or enticing a certain person to leave secure, gainful employment to work for the employer. Enticements offered may include increased pay and benefits, increased vacation time or better working conditions than those enjoyed by the person in their current employment position, to name a few. It is perfectly legal for an employer to lure or entice a person into employment so long as any noncompetition or non-solicitation clause does not constrict such employee, and generally speaking, inducement is irrelevant in employment unless and until the induced employee suffers early, wrongful termination of their employment.

If an induced employee is wrongfully terminated shortly after beginning to work for their new employer, then inducement is one factor the courts consider in assessing appropriate reasonable notice damages related to the wrongful termination. Generally speaking, any employee induced to leave secure gainful employment, especially if they worked at such employment for a long period, is entitled to increased reasonable notice damages when the employment they were induced to accept is terminated early. This is because, in these circumstances, the employee in question would have been better off had they been left alone to continue in the position in which they had been working before they were induced to leave for a new employer.

The Criteria Considered in Assessing Inducement

In determining whether an employer induced a specific employee to leave their employment, the courts will consider the following criteria:

1. The reasonable expectations of both the employer and the employee in relation to employment
2. Whether the prospective employee sought out of the employee or the employee sought out the prospective employer
3. Whether the employer provided the employee any assurances of long-term employment
4. Whether the employee undertook research or due diligence into the prospective employer before they accepted employment with same
5. The details of the circumstances and discussions surrounding the coming to terms of employment, including whether any measures were taken that could be considered to be beyond the typical ‘courtship’ associated with the hiring process
6. How long the employee remained in their position with the new employer (as noted above, the influence of inducement on the amount of damages ordered lessens as the duration of employment lengthens)

Was the Employee in This Case Induced to Accept Employment with the Defendant Employer?

In this case, the court reviewed the plaintiff’s contention that the defendant’s golf course had induced him into employment in that they had offered him a nearly 40 per cent pay increase compared to what he had been paid at his previous employer and also offered better working conditions. The court also considered the golf course’s argument that it did not induce the plaintiff to do anything but simply posted a job vacancy advertisement, to which the plaintiff responded.

The court noted that inducement requires more than merely offering better pay and working conditions to an already gainfully employed person; rather, as dictated by the criteria delineated above, to substantiate an allegation of inducement, an employer must have engaged in extraordinary efforts to secure a particular person as an employee. In this case, the evidence demonstrated that the golf course had not sought out the plaintiff, nor had they courted his employment throughout an extended period of time, and offered ever-increasing incentives to get him to leave his former employment in favour of the golf course. As such, the court was satisfied that this was a case wherein the plaintiff simply did not enjoy or like working in his former employment, as a result of which he actively sought out alternative employment and was offered an opportunity to work for the defendant that he considered suitable for his needs, and willingly abdicated his former employment to work for the defendant golf course. In these circumstances, the plaintiff’s actions were voluntary and had not been coerced through the employer’s inducement.

As such, the court was satisfied that the plaintiff, in this case, had not been induced to leave his former employer and was, therefore, entitled to increase reasonable notice damages for the wrongful termination of his employment.

Contact Haynes Law Firm Today to Discuss Inducement Related to Your Employment

If you were induced to leave secure, suitable employment only for your new employer and wrongfully terminate your employment after a short time, then you need excellent legal representation to ensure your rights are asserted and protected throughout any attendant legal proceeding. From our offices in downtown Toronto, Ontario, Haynes Law Firm is proud to provide experienced assistance to employers and employees throughout Ontario.

Contact Haynes Law Firm today, either online or via telephone at (416) 593-2731, to schedule a confidential consultation to get you started to resolve your employment law matter.

When a person is wrongfully terminated from their employment and commences a lawsuit, the court will award what are known as ‘reasonable notice’ damages upon determining that the person was wrongfully terminated. Such damages are intended to compensate for the wrong they have suffered and to provide financial support during the notice period, during which they are expected to secure, or at least attempt to secure alternate employment.

Additional damages that may arise in circumstances of wrongful termination include damages for mental distress and/or aggravated and punitive damages and compensation for bonuses and benefits to which the employee would be entitled were they to remain employed, to name a few.

This blog focuses on how the court approaches assessing and calculating the reasonable notice period when a person’s employment has been wrongfully terminated.

Employee Terminated Without Cause After More than 20 Years of Employment

Maximenko v Zim involved a plaintiff who had immigrated to Canada in 2002; shortly after, she began working for the defendant’s ocean freight services corporation. Although the corporation has several Canadian offices, including in Halifax, Toronto and Montreal, it is headquartered in Israel.

The plaintiff continued to work for the defendant in various capacities until March of 2023, when her employment was rather unceremoniously terminated without cause, one month before the plaintiff’s 59th birthday. At the time of her termination, the plaintiff had been working for the shipping company as their General Manager in Canada, a position of senior management in which the plaintiff assumed administrative responsibility for the more than 20 shipping company employees located in the Toronto office.

Commensurate with the termination of her employment, the shipping company offered to pay the plaintiff the equivalent of eight months’ salary, in addition to vacation pay owing to the plaintiff and a $13,000 bonus she had earned by the time of her termination, in exchange for the plaintiff signing a full and final release of all claims against the company. The plaintiff refused to sign the release and instead commenced a lawsuit in which she sought reasonable notice damages, amongst other damages, for the wrongful termination of her employment.

What Constitutes the Reasonable Notice Period?

The reasonable notice period is different in every case because it depends upon several factors. Generally speaking, when assessing what constitutes the reasonable notice period in a given situation, the court will consider the following criteria:

1. the age of the terminated employee at the time of termination
2. the length of service of the terminated employee to the employer and related companies
3. the terminated employee’s level of specialization and status within the company
4. the availability of other, similar employment given the terminated employee’s qualifications, experience, training and education
5. whether the employee was induced to work for the employer from which they were terminated

What Does Age Have to Do With Anything?

Regarding the first criterion, the age of the employee, the older the age of the employee, the longer the period of reasonable notice. This is because the courts recognize that the older a person becomes, the more difficult it is to secure new employment, given that employers often prefer to hire younger employees who may not yet have developed bad habits or who offer longevity to the company, whereas an older employee may be perceived as less valuable. After all, they may not plan to work for the employer for as long as a younger employee.

How Does Length of Service Matter?

Length of service to the employer is considered similarly to age in that the higher the number, the longer the reasonable notice period, as the courts acknowledge that it is often more difficult for an employee who has worked for only one employee and, therefore, has not necessarily had the opportunity to develop a network of contacts outside of that company, or does not demonstrate significant diversity on their resume, to secure a position with a new employer.

How Do Specialization and Status Influence Calculation of Reasonable Notice?

The employee’s level of specialization and status influences the reasonable notice period because the more niche and expert the position occupied by the employee, the more challenging it may be to secure comparable employment, given that such opportunities may be quite scarce. As such, the more specialized or higher in status the position occupied by the terminated employee, the longer the reasonable notice period assessed by the court.

Why Does Inducement Matter?

Similarly, if the employer induced the employee to work for the company, only to turn around and terminate their employment, the courts will view these actions as sufficient to increase the reasonable notice period. This is because it is the actions of the employer, in inducing the employee to leave presumably secure employment to work for an employer, only to terminate their employment, that have created a loss for the employee that they may not otherwise have suffered had they remained at their initial place of employment.

How Does the Availability of Alternative Employment Come into Play?

Regarding the availability of similar employment, courts are inclined to adjust the reasonable notice period by the chance that the terminated employee can easily replace their employment. In other words, the more similar positions of employment that are available in the same vicinity and on the same terms as the employment from which they departed at the time of departure, the shorter the length of the reasonable notice period. Conversely, suppose only very few similar opportunities exist. In that case, the reasonable notice period is assessed as longer because it will likely take the terminated employee more time to secure employment than those enjoyed with the employer from which they were terminated.

What is the Appropriate Reasonable Notice Period for the Plaintiff?

In this case, the court was satisfied that given the plaintiff’s age at the time of termination (59), the length of her service to the shipping company (20 years, 10 months), her position as a senior manager of the shipping company, the fact that the plaintiff’s tenure with the shipping company represented the entirety of her work experience in Canada, and the fact that this work was in a very niche industry in which the skills developed may not be easily transferable to other employers, the court was satisfied that the plaintiff was entitled to 24 months reasonable notice for the wrongful termination of her employment.

Furthermore, the court noted that this reasonable notice period included not only base compensation but also bonus and pension monies earned during the notice period, as well as reimbursement for car allowance for the duration of the 24 months. The shipping company was also directed to continue to pay for the plaintiff’s health benefits and to ensure that her health benefits, as provided by her former employer, were maintained throughout the duration of the notice period.

Toronto Employment Lawyer Advising Clients On Wrongful Terminations

If you have been wrongfully terminated from your employment, you need experienced legal counsel to ensure your rights are protected and asserted throughout any ensuing legal process. Fortunately, the Haynes Law Firm is here to help.

From our offices in downtown Toronto, Ontario, Haynes Law Firm is proud to provide employees from all over Ontario with knowledgeable legal guidance in all employment matters. Contact us online or via telephone at (416) 593-2731, and one of our friendly staff will be pleased to schedule a confidential consultation.

In a wrongful termination, employers must provide reasonable notice or pay in lieu of notice. In addition, employers may be liable for aggravated or punitive damages, depending on the manner of dismissal. In other words, the employment relationship can end on poor terms, so employers need to consider how they are terminating the employee, as it could result in additional damages beyond the reasonable notice period. The aggravated or punitive damages can also be as significant as several thousands of dollars. In particular, bullying and harassment at the time of termination could mean that the employer needs to pay aggravated or punitive damages. However, it can be difficult to pinpoint exactly what kind of behaviour by the employer would warrant punitive damages.

In this post, we will discuss when harassment of an employee may result in aggravated or punitive damages. In particular, we will examine the test for when aggravated or punitive damages may arise in a wrongful dismissal, including its relationship to the manner of dismissal during a termination. We will also discuss what evidence needs to be provided for punitive damages based on harassment or bullying at termination. To illustrate these principles, we will discuss a case example, Chin v Beauty Express Canada Inc., 2022 ONSC 6178, in which the court found that insensitive comments at the time of termination did not rise to the level required to find that aggravated or punitive damages were necessary. This post will provide important takeaways for employers seeking to understand their obligations during the time of termination and for employees seeking to understand their rights for wrongful dismissal.

Manner of Dismissal in Wrongful Termination

Aggravated or punitive damages can arise when an employer breaches their duty of good faith when terminating an employee. These types of damages are often raised in wrongful dismissal cases. The court will examine the way that the employer dismissed the employee. In particular, if the manner of dismissal caused injury to the employee, the employee can be compensated with aggravated or punitive damages on top of the reasonable notice period or amount that they are entitled to upon termination.

This also raises the question of what period of conduct is included in assessing the manner of dismissal in a wrongful termination. In particular, the court can consider conduct beyond the exact moment of termination for aggravated or punitive damages. In other words, pre-termination and post-termination conduct may be relevant for assessing whether the manner of dismissal warrants aggravated or punitive damages.

Mental Distress Required for Punitive Damages Based on Harassment or Bullying

Employers have a duty of good faith to protect employees from bullying, intimidation, and harassment from managers. The employee is responsible for showing that they suffered a loss to be compensated for aggravated damages. Some evidence must demonstrate that they suffered from compensable injuries to prove this. Injuries can include humiliation, embarrassment, and damage to the employee’s self-esteem and sense of self-worth. Providing medical evidence of negative psychiatric impacts is not required to find that aggravated or punitive damages are appropriate.

To find that aggravated or punitive damages are necessary, there must be something more than hurt feelings arising from the termination. This is because hurt feelings are commonly associated with termination, and these are considered to have always been contemplated by the parties at the time that they entered into the contract.

Some examples of when aggravated or punitive damages may be available include situations where:

a)    the employer is attacking the employee’s reputation;

b)    there is misrepresentation over the reason for the dismissal;

c)     the dismissal is meant to deprive the employee of a benefit such as a pension benefit, immigration status, etc.

Punitive Damages for Wrongful Dismissal Generally Rare

Generally, aggravated or punitive damages in wrongful dismissal cases are rare. In particular, punitive damages exist to punish harsh, reprehensible, and malicious conduct. They are also meant to prevent employers from conducting similar acts in the future, as significant costs are associated. The court has recognized that punitive damages are only available in exceptional cases, and the award of punitive damages is to be treated with restraint. Punitive damages are reserved for wrongful acts that are particularly malicious or outrageous, such that they deserve their own punishment.

Also, for punitive damages, which can be seen as being one level of damages above aggravated damages, the focus shifts so that the employee doesn’t need to prove that there was a compensable loss.

Court Finds No Punitive Damages for Insensitive Comments During Wrongful Dismissal

In the Chin case, the employee claimed wrongful dismissal. She worked as an esthetician for 6 years with her current employer. Before the business was sold to the current employer, she worked for the company for 14 years. The employee argued that she was singled out to be harassed during her termination. As a result of the change, her hours shifted from full-time to part-time, and she expressed dissatisfaction with her supervisor. She claimed she was terminated in retaliation for her negative comments about her reduced hours.

At the time of termination, the employee claimed that the employer breached their duty of good faith by failing to ensure that the employee was protected from bullying, harassment, and intimidation in the workplace.

The court found no evidence that the employee was targeted, as her termination was part of a restructuring that also affected 49 other employees at the time.

The employee also claimed that she should receive aggravated or punitive damages due to a post-termination meeting that occurred. She claimed she was mistreated and faced oppressive conduct at this meeting.

While the court found that the meeting was ill-conceived and involved crude language, this did not rise to the level of requiring aggravated or punitive damages. The court also found that while the employer should not have dissuaded employees from seeking legal advice, this did not warrant aggravated or punitive damages. These actions did not involve more than hurt feelings common in terminations.

No aggravated or punitive damages were awarded in this case. The court reiterated that punitive damages are meant to punish exceptional behaviour and not to police words, which would be more associated with etiquette rather than oppressive conduct.

Contact The Toronto Employment Lawyers for Advice on Termination and Wrongful Dismissal Claims

Employers may be subject to moral damages for bad faith conduct during a termination. Our experienced employment law legal team at Haynes Law Firm in Toronto can assist you with issues that arise from termination. Our goal for employees is to ensure that they understand their rights and receive maximum compensation in wrongful dismissal cases. Haynes Law Firm also assists employers in avoiding liabilities that may arise from terminations that are not permitted by the legislation. We are dedicated to finding the best resolution for you.
To book a consultation, please contact us online or by phone at 416-593-2731.

After an employee is terminated, they may want to pursue a wrongful dismissal claim if they did not receive the expected compensation. For instance, employers must provide terminated employees with reasonable notice or pay in lieu of notice. If the termination occurs right away, then the employer may need to pay for the amount of the reasonable notice period, which can vary at common law, depending on the employee’s length of tenure, their type of role, their age, etc. However, this amount may be reduced if the employee fails to mitigate damages, meaning that they did not make adequate efforts to secure another job and their financial situation has worsened after termination. Employers are not responsible for the damages involved when an employee has failed to mitigate.

This can be a different matter for terminated employees with medical conditions. Their health condition can be considered if it is relevant to their duty to mitigate damages in the wrongful dismissal. In this post, we will discuss an employee’s duty to mitigate and how this applies when the employee faces medical conditions after termination that impact their ability to find a new job. This post will provide important takeaways for employees seeking to understand their duty to mitigate and for employers to understand how it applies to a wrongful dismissal case.

What is the duty to mitigate a wrongful dismissal?

In a wrongful dismissal, employers must give the employee reasonable notice or pay in lieu of notice. In exceptional circumstances, the reasonable notice period can run from a few weeks to two years or more. The reasonable notice period at common law varies depending on the employee’s age, role with their employer, how long they worked with the employer, and more. The notice period can also be modified based on the agreement in the employment contract. 

The notice period can also be shortened if the employee fails in their duty to mitigate damages. After a termination, an employee is expected to make reasonable efforts to secure a new job. An employer is not responsible for additional damages arising from the employee’s lack of effort in searching for a new role during the reasonable notice period. The employee is required to find and accept new employment that is a comparable role. 

There must be evidence that the employee applied for a new position soon after termination. Some evidence of the employees’ efforts can be gathered by gathering additional information on new roles. The court will also consider the frequency of the employees’ applications and the types of roles that they were applying for. For example, if they were applying for roles that were not suited for them based on their work history and could not secure a role, then the court may not find that the employee made reasonable efforts in their duty to mitigate. 

Therefore, if the employee still needs to mitigate their damages in this way, their damages arising from the wrongful dismissal may be less than the full reasonable notice period. 

How is the failure to mitigate damages proven in a wrongful dismissal case?

It is important to note that it is not the employee’s responsibility to prove that they mitigated damages. However, preparing this evidence may be helpful if the employer alleges that they failed their duty to mitigate. The employer must prove that the employee failed to mitigate damages after termination. In particular, the employer must show that the employee could have found similar employment if they properly searched for a new role. In other words, the employer must show that the employee could have reasonably avoided some or part of the loss coming from termination. 

The employer must show that the employee failed to mitigate damages, as the courts recognize the power dynamic that often exists in the employment relationship. The employee is often in a vulnerable position because they need to secure another job, and they are the ones who suffer from a wrongful dismissal.  

How can employees with medical conditions fulfill their duty to mitigate a wrongful termination?

For employees with medical conditions, the analysis of the duty to mitigate may be different. The court will consider the employee’s circumstances, including their health conditions if they cannot find a new role during the notice period. 

In Krmpotic v. Thunder Bay Electronics Limited, 2024 ONCA 332, the court found that the employee did not fail to mitigate damages when the employee could not find a new role after termination. In this case, the employee worked as a carpenter for the employer. After a year and a half of working with the employer, the employee was promoted to building maintenance supervisor. The parties did not have a written employment agreement. 

After working with the employer for 30 years, the employee was terminated without notice at the age of 59. He was terminated during his medical leave while recovering from back surgery. The back surgery arose from workplace injuries while he was working for the employer. 

The employer offered the employee 16 months’ salary in exchange for signing a release. The employee refused and brought a wrongful dismissal claim. During the 16 months after his termination, the employer paid for 16 months of salary and continued his benefits plan. 

At trial, the court found that the employee was entitled to 24 months of notice or pay in lieu. 

The employer appealed to reduce the damages, claiming that the employee failed in his duty to mitigate as he did not make efforts to secure a new job during the reasonable notice period. However, the Court of Appeal confirmed the trial decision that the employee fulfilled his duty to mitigate damages. The court found that the employee made limited efforts to find a new job because he was recovering from his back surgery and had several lasting effects of his workplace injuries that made it difficult for him to obtain a new job. The court also found that the employee was not required to provide expert medical evidence to show why he could not search for a new job. The employer’s claim to reduce damages was dismissed. 

Toronto Employment Lawyer Advising on Termination and Wrongful Dismissal Claims

In a wrongful dismissal case, employees have a duty to mitigate damages. However, employers are responsible for demonstrating that the employee contributed to the loss by failing to search and obtain comparable employment properly. Our experienced employment law legal team at Haynes Law Firm in Toronto can assist you with issues that arise from termination. Our goal is to ensure that employees understand their rights and receive maximum compensation in wrongful dismissal cases. Haynes Law Firm also assists employers in avoiding liabilities that may arise from terminations that are not permitted by the legislation. We are dedicated to finding the best resolution for you.

To book a consultation, please contact us online, or by phone at 416-593-2731.

People may not always end on the best terms at the end of an employment relationship. There may be concerns over how an employee was terminated, and the employer’s conduct can play an important role in determining the damages owed if there has been a wrongful dismissal. If the employer acted in bad faith, they may owe the terminated employee moral damages on top of what they needed to pay as part of the reasonable notice period. These damages can be significant, as in Teljeur v. Aurora Hotel Group, 2023 ONSC 1324, in which the employer was ordered to pay $15,000 in moral damages to the employee for bad faith conduct during the termination. Whether the employer’s conduct rises to the level of bad faith highly depends on the circumstances of the case.

In this post, we will discuss the factors determining whether an employee can receive moral damages due to bad faith from the employer. We will examine the Teljeur case as an example of where the employer’s conduct resulted in significant moral damages. This post will provide important takeaways for employees seeking to understand their rights from wrongful dismissal and for employers seeking to understand their obligations when terminating an employee.

What additional damages can an employee receive due to the employer’s conduct during termination?

Generally, upon a wrongful termination, the employee can receive pay in lieu of their reasonable notice period, which varies depending on the facts of the case. Employees are entitled to prompt payment of their minimum compensation under the Employment Standards Act.

Beyond these forms of compensation, the employee may also be entitled to moral or aggravated damages on top of these payments. Moral damages may be available if the employer acted in bad faith during termination. In particular, moral damages are only available if the employer engaged in unfair or bad faith conduct, such as being untruthful, misleading, or unduly insensitive. Given the power dynamic between employers and employees, with employees generally in a vulnerable position, the courts have recognized that moral damages may be appropriate if the employer exacerbates the difficulties arising from a termination.

When may an employee receive moral damages for a wrongful termination?

A high standard exists to find that moral or aggravated damages should be awarded in a wrongful dismissal case. For instance, the employer’s conduct must have risen to the level of being unfair and in bad faith, which can include being untruthful, misleading, or unduly insensitive to the employee. While the claim may involve the employee’s mental distress, finding an independent actionable wrong is no longer necessary before moral damages can be awarded to an employee upon termination.

For wrongful dismissal cases, damages arising from an employer’s bad faith conduct should be separate from the damages as part of the reasonable notice period. In other words, the court is not to extend the reasonable notice period if the employer acted in bad faith because the moral damages are to be assessed similarly to other cases that address moral damages.

The court will consider the following factors to determine if moral damages should be awarded:

a)    The employer has breached its duty of good faith and fair dealing in the way that the employee was dismissed;

b)    The employer’s breach of good faith or fairness can include if the employer’s conduct was untruthful, misleading, or unduly insensitive;

c)     The employer failed to act in a way that was candid, reasonable, honest, and forthright with the employee;

d)    The employer could have reasonably known that the manner of dismissal would cause the employee mental distress;

e)    The employer’s wrongful conduct must have caused the employee’s mental distress beyond understandable distress and hurt feelings that are typically associated with a termination;

f)      The grounds for moral damages are to be assessed depending on the unique circumstances of the case.

Notably, not all forms of distress or discomfort arising from a termination will result in moral damages, as the court recognizes that termination will usually be difficult.

Also, it can be difficult to determine when moral damages may apply as it highly depends on the facts of the case. We will discuss an example using the Teljeur case below to illustrate how an employer’s conduct may be considered in bad faith during a termination.

Employer Required to Pay $15,000 for Bad Faith Conduct During Termination

In the Teljeur case, the employee worked as a general manager for a resort. After three years, he was terminated as the employer decided to hire an external management company in place of the employee’s role.

The court found that the employer had acted in bad faith and should pay moral damages to the employee. While the court recognized that the employee secretly recorded the termination, and this was not to be encouraged, the recording revealed some concerns about the employee’s termination.

For instance, the Employment Standards Act requires that terminations be produced in writing to employees. During the termination meeting, the employee asked several times for his termination to be in writing. The employer agreed, but written termination was never provided.

Under the Employment Standards Act, the employer was also required to provide his final pay within 7 days of the termination or the next payday. However, the employer did not mail the final cheque until over a month after the termination meeting. When the employee claimed that he had yet to receive the cheque, a new one was reissued 6 months later in June. Even when accounting for when the first cheque was mailed out, there was a significant delay from when the employer was required to provide the minimum payment to the employee. As a result, the employee also did not have the benefit of pay over the holidays. This was considered to be bad faith conduct.

The employee was also promised 8 weeks severance, but this was never provided. The employer also did not reimburse the employee for out-of-pocket expenses of almost $17,000. This represented a significant portion (almost a quarter) of the employee’s income and was considered a significant financial burden. These actions also contributed to a finding that the employer acted in bad faith.

The court awarded the employee $15,000 in moral damages for the employer’s bad-faith conduct.

Contact Haynes Law Firm in Toronto for Advice on Termination and Wrongful Dismissal Claims

Employers may be subject to moral damages for bad faith conduct during a termination. Our experienced employment law legal team at Haynes Law Firm in Toronto can assist you with issues that arise from termination. We aim to ensure that employees understand their rights and receive maximum compensation in wrongful dismissal cases. Haynes Law Firm also assists employers in avoiding liabilities arising from terminations not permitted by the legislation. We are dedicated to finding the best resolution for you.

To book a consultation, please contact us online or by phone at 416-593-2731.

A layoff can significantly impact an employee and be difficult to navigate, especially if the layoff is temporary or uncertain. During the pandemic, many experienced being laid off, and the court was required to clarify rules surrounding an employee’s rights and an employer’s obligations during a layoff. As businesses evolve, they may not find enough work for a certain role as they once did. Employees will need to look elsewhere for a full-time position. However, is accepting a new job during a layoff considered a resignation?

In this post, we will discuss whether accepting a new role is considered a resignation by the employee. This is important to determine, as it may affect the employee’s rights and the employer’s obligations. In particular, if the employer permanently terminates an employee after they accept a new job elsewhere, they may be liable for wrongful dismissal damages because this may not have meant that the employee resigned during a temporary layoff. We will discuss a case example, Hurlbut v Low & Low Limited, 2024 CanLII 28332 (ON SCSM), in which the court found that the employee did not resign during a temporary layoff when they accepted a new position with a different employer. This post will provide important takeaways for employees and employers to understand their rights and obligations during a layoff. 

What is a temporary layoff under the Ontario Employment Standards Act?

Under the Ontario Employment Standards Act, an employee may be on a temporary layoff if the employer limits or stops the employee’s work but has not ended their employment. For example, this may occur when there is not enough work to sustain a full-time role as the business needs change or due to external circumstances like during the pandemic. Since layoffs often involve some uncertainty, a layoff can still be considered temporary even if there is no specified date when the employee can return. 

It is also necessary to have terms in the employment contract that allow an employer to lay off an employee. Otherwise, it could be seen as a fundamental change to the employment contract and, therefore, a constructive dismissal. If this is the case, the employer may be liable for damages for constructive dismissal. 

How long can a temporary layoff be?

A layoff is considered temporary if it is less than 13 weeks for 20 continuous weeks. If the layoff is more than 13 weeks, it can still be considered a temporary layoff if it is less than 35 weeks in 52 weeks, if one or more of the following apply:

1. The employer continues making substantial payments to the employee; 
2. The employer continues to pay for the employee’s benefits under a group or employee insurance plan, or retirement or pension plan; 
3. The employer pays the employee additional unemployment benefits; 
4. The employee would have been entitled to receive additional unemployment benefits, but is not receiving them because they work elsewhere; 
5. The employer recalls the employee within a time period that is approved by the Director of Employment Standards (ie. for a period longer than set out in the legislation);
6. The employer recalls the employee within a time period as specified in an agreement with the employee (and union, if applicable).

If the employee is not recalled for longer than the period specified above, unless the Director otherwise approves it of Employment Standards, then the employee is considered to be terminated by the employer. In these cases, the employee would be entitled to termination pay from the employer. 

What are an employer’s obligations during a layoff?

Employers are not required to provide notice to employees of a temporary layoff. The employer is also not required to provide a reason for the layoff unless it is otherwise required in the employment contract. 

If the layoff is not considered a temporary layoff under the ESA, or the layoff is not permissible under the employment contract, then the employer may need to pay termination pay or damages for a constructive dismissal. 

What happens when an employee accepts a new job during a layoff?

When an employee accepts a new job during a temporary layoff, the employer may consider this as the end of their employment relationship. However, this is not always true, as seen in the Hurlbut case, where the employee’s acceptance of a new job after a layoff was not considered a resignation. 

Employee Accepting New Job Not Considered Resignation

In the Hurlbut case, the employee worked as a full-time funeral director for a funeral home since 2018. The parties did not have a written employment contract. The employee was laid off shortly after the pandemic began in March 2020. 

Initially, the employee requested the layoff so that she could care for her children at home. Later on, layoffs were required as the health protocols in the province restricted funeral services. This led to the employer closing one of their locations, and there needed to be more work for the employee. During the layoff, the parties were in communication, and while the employee had wanted to return, there was not enough work to sustain a full-time role. At this point, there was also uncertainty about the state of the pandemic that would affect funeral services. 

During the layoff, the employee accepted a new role with another employer. The funeral home owner was notified of this and claimed that this meant that the employee resigned. He issued an ROE in November 2020. Before issuing the ROE, the employer had continually paid the employee’s benefit premiums. 

However, the employee claimed she was wrongfully dismissed because she had not resigned. 

The court found that she could legally do so without resigning from her original position unless the contract restricted the employee from working for multiple employers. The court stated that the employer could have reached out to clarify whether the employee was resigning. There was also evidence that the employee advised her former employer that she wanted to return, given that her new role also paid significantly less and was not the same type of role that she held before.

Ultimately, the court found that the employee did not resign, and she was wrongfully dismissed. The employer was required to pay damages for wrongful dismissal. 

Key Takeaways 

During a temporary layoff, it is important to clarify if the employee intends to return, as securing a new role is not considered a resignation. Otherwise, the employer may be liable for damages caused by wrongful dismissal.

Contact Haynes Law Firm in Toronto for Advice on Termination and Wrongful Dismissal Claims

If an employee has not resigned and they are terminated, the employer may be liable for wrongful dismissal damages. Our experienced employment law legal team at Haynes Law Firm in Toronto can assist you with issues that arise from termination. Our goal is to ensure that employees understand their rights and receive maximum compensation in wrongful dismissal cases. Haynes Law Firm also assists employers in avoiding liabilities that may arise from terminations that are not permitted by the legislation. We are dedicated to finding the best resolution for you.

To book a consultation, please contact us online or by phone at 416-593-2731.

When employees are terminated, they are to receive reasonable notice of their termination or pay in lieu of notice. If the employer provides neither, the employee may be able to recover damages in a wrongful dismissal claim. However, after termination, there are obligations on the employee also to fulfill their duty to mitigate damages. Generally, this means that the employee is expected to make efforts to secure a new role. If the employee refuses to accept a comparable offer, the court may find that they failed to mitigate damages, and the employer may be subject to a lower amount of damages. 

This post will discuss the employee’s duty to mitigate and how this can affect damages in a wrongful dismissal case. We will examine a case example, Gannon v. Kinsdale Carriers, 2024 ONSC 1060, in which the court found that the employee failed to mitigate their damages after being terminated by their employer because they refused to accept an offer for a comparable role, as they wanted to head in a different career direction. This post will also provide important takeaways for employees and employers to understand the employees’ obligations to mitigate after termination. 

Damages for Reasonable Notice of Termination

When an employer is terminating an employee, they must provide reasonable notice or pay in lieu of notice. The reasonable notice period would include the minimum standard under the Employment Standards Act and common law notice, which can extend beyond the minimum standard. Under the Employment Standards Act, the amount of notice depends on how long the employee worked for the employer. However, there may be terms in the contract that limit damages under common law. 

The common law standard for reasonable notice depends on several factors, including the employee’s age at termination, the nature of the employment, the length of employment, and the likelihood that the employee will find similar employment, given the employee’s skills, experience, and qualifications. Generally, the employee would be entitled to a longer notice period and, therefore, more pay in lieu for this period if they had worked for the employer for a long time, worked in a management role, and were relatively older at the time of termination. This is meant to recognize that it is difficult to secure similar employment for older employees and those who have worked for the employer for many years, as they tend to be viewed as being set in their ways after working for the employer for such a long period. 

In addition to termination pay, the employee may be entitled to benefits, bonuses, or commissions during the notice period, even if they were not provided sufficient notice. These entitlements can also depend on the terms of the employment contract, which may exclude or limit these benefits. Therefore it is very important to determine the length of the reasonable notice period as it significantly impacts the amount of damages an employee could receive as a result of termination. 

What is an employee’s duty to mitigate damages after termination?

Employees also have a duty to mitigate damages after being terminated. They are obligated to seek similar employment, which includes a role with similar status, hours, and remuneration to their previous role. 

The employer holds the responsibility of proving that the employee failed to mitigate, which includes showing the following:

1. The employee did not take reasonable steps to find comparable employment; and
2. If the employee had adequately searched, they could have found comparable employment.       

An employee’s duty to mitigate would involve finding a new role, such as submitting applications to relevant or comparable postings. Also, if the employee is offered a similar position and refuses to accept it, they may fail to mitigate damages. 

If the employee is found to fail to mitigate damages, their damages for wrongful dismissal will be reduced because they had exacerbated the issue. 

What is a comparable position after an employee is terminated?

Comparable employment includes a comparable position in terms of its status, hours, and level of compensation. It is not required for this new role to be the same as the previous position as long as it is a comparable position that is reasonably adapted to the employee’s abilities. 

In the Gannon case, the court found that the employee did not fulfill her duty to mitigate damages, as she refused to accept an offer for a comparable position. In this case, the employee worked for the employer, a trucking company, for 22 years from 1998 to 2020. She held the roles of dispatcher, accounts receivable, and office clerk. When she was terminated, she was 57 years old. Her salary was approximately $43,000. 

When the employee started, she was hired for an accounts receivable and office clerk role. In 2015, the company’s dispatcher resigned, and the employee took on some dispatch duties. The employee denied doing so. However, she received a wage increase, recognizing that she had accepted new dispatch duties. She claimed that less than half her duties involved dispatch tasks. 

The company was set to shut down by the end of 2020, and the employer sent out a letter to all employees two weeks before the closure to announce the closure. The employee claimed she learned about the company closure when she received the letter.

After the announcement, the employer provided the employee with contact information for another local trucking company. Soon after, the employee contacted this company to inquire about a job. She claimed that the role available was for a full-time dispatcher, even though she had specified that dispatch tasks were not her primary role. She claimed she was not provided any information about the start date and was never extended a formal offer.

However, the court found she was offered a role with the new company. During the interview, the new company clarified that the employee’s salary and hours would remain the same and that the tasks would involve both dispatch and administrative duties. The court found that a verbal offer was made, which was acknowledged by the employee, as she had texted the new company, stating that she had given “this” (i.e. the offer) a lot of thought.

After refusing the offer, the court found that the employee failed to mitigate her damages. The court found that the employer went out of their way to assist the employee in finding new employment, such as referring her to the new company. While the employee wanted to explore other roles and education to move away from her dispatch duties, it was not the employer’s responsibility to fund those pursuits. 

Contact Haynes Law Firm in Toronto for Advice on Termination and Wrongful Dismissal Claims

In a wrongful dismissal case, employees have a duty to mitigate damages. However, employers are responsible for demonstrating that the employee contributed to the loss by failing to search and obtain comparable employment properly. Our experienced employment law legal team at Haynes Law Firm in Toronto can assist you with issues that arise from termination. We aim to ensure employees understand their rights and receive maximum compensation in wrongful dismissal cases. Haynes Law Firm also assists employers in avoiding liabilities arising from terminations not permitted by the legislation. We are dedicated to finding the best resolution for you. To book a consultation, please contact us online or by phone at 416-593-2731.