An employee wrongfully dismissed is entitled to pay in lieu of notice. In that scenario, employers must pay damages equivalent to having kept the employee on during the notice period. In assessing the reasonable notice period for breach of an employment contract, courts apply a ‘rule of thumb’ that an employee should receive notice of one month for each year of service.

However, the notice period varies from case to case. In two recent Ontario Court of Appeal decisions, John Lynch v Avaya Canada Corporation, and Gregory Milwid v IBM Canada, it was held that in exceptional circumstances, a wrongfully dismissed employee may be entitled to a common law notice period in excess of the usual cap of 24 months’ pay.

In Lynch, Mr. Lynch was a 64-year-old professional engineer who had been employed for 38.5 years. The Court of Appeal upheld an award of pay equaling 30-months of reasonable notice period because Mr. Lynch was employed in a unique and specialized field and his skills were limited by his very specific workplace experience; his age was a factor, and he developed patents for his employers; he was a key performer; and similar and comparable employment was scarce in his city.

Furthermore, in Milwid, Mr. Milwid was a 62-year-old who had worked for IBM Canada Ltd. for 38-years. The Court of Appeal also found exceptional circumstances here because the employee’s skills were tailored towards the defendant’s business. This made it difficult to transfer his skills and find similar employment. As such the court up held the Motion Judge’s award of pay equaling 26-months of reasonable notice.

In some situations, a wrongfully dismissed employee may also be entitled to receive additional damages for mental distress and damages aimed to punish and deter an employer. These damages are called “aggravated damages” and “punitive damages”, and both may be awarded if the facts are sufficient to support both claims.

Employers have a duty of good faith and fair dealing in the course of dismissal. This involves acting in a candid, reasonable, honest and forthright manner. Where the employer’s conduct fails to meet that standard – for instance, where the employer acts in an untruthful, misleading, or unduly insensitive manner – courts will sanction said bad faith conduct with an award of additional damages.

Bad faith conduct may include:

• Where the manner of dismissal caused mental distress;
• Where the employer misrepresents the reason for the decision to terminate the employment;
• Where the employer makes false accusations to damage the employee’s reputation;
• Where the employer makes false reassurances about the employee’s security of employment – i.e., lulls the employee into a false sense of security;

Damages for bad faith are meant to compensate serious and continued distress resulting from the employer’s bad faith conduct upon dismissal – thus, the distress must go beyond the regular distress expected when one loses a job.

At Landy Marr Kats LLP, we will help you to receive monetary compensation as a result of a wrongful dismissal.

Challenging severance entitlements can be a complex process that requires expert legal advice and representation. Our law firm can assess your specific situation, review the relevant documents, and determine your common law severance entitlements. We don’t charge fees unless we get you money.