page contains general information only. It is not intended to
create a solicitor-client relationship. You should not act on this
information without obtaining proper legal advice. It is however,
information that may assist you in determining if your particular
circumstances warrant seeking professional legal advice.
You may contact Stacey Reginald Ball, B.A. LL.B.,
author of the legal treatise Canadian Employment Law
(published by Canada Law Book) at firstname.lastname@example.org
for advice and to determine the strength of your case. Mr. Ball
practices employment and labour law on behalf of both employees and
employers in Toronto, Canada.
ONTARIO EMPLOYMENT LAW (FAQ's):
A. Wrongful Dismissal
B. Cause For Dismissal
C. Constructive Dismissal
D. Unjust Dismissal
E. Bad Faith Discharge
F. Employment Contracts
G. Restraint Of Trade Clauses
H. Non-Competition Agreements
I. Notice Period
J. Severance Pay and Packages
K. Good Faith and Fair Dealing
L. Employee Or Dependent Contractor?
M. Human Rights
N. Sexual Harassment
O. Non-solicitation Agreements and Restrictive Covenants
P. Defamation and Loss of Reputation
Q. Canadian Employment Law - Stacey R. Ball, Author
WRONGFUL DISMISSAL AND CAUSE FOR
Many are not aware that the relationship between an
employer and employee is a type of contract. The dismissal of
non-unionized employees (unionized employees are subject to "labour
law" and their collective agreements), contrary to the rules that
exist in Ontario and Canadian employment law may be a breach of a
condition of the employment contract. Employers must have a legitimate
reason to dismiss their employees for "just cause." If not, this
type of breach may be known as a "wrongful dismissal". Employers
must comply with Canadian employment law requirements concerning how they
deal with their employees during and after dismissal. Employers may be
sued and the former employees may be awarded monies for the failure of the
employer to provide reasonable notice and not having just cause for
Canadian employment law requires a fairly high standard
to dismiss an employee for just cause. An employer or employee may be wise
to contact specialized legal counsel to determine if there is enough
"cause" for the court to consider there to be just cause for
dismissal without notice, or whether the employee will be able to sue for
See: Slater v. Sandwell (1994), 5 C.C.E.L.
(2d) 308 (Ont. Ct. (Gen.Div.); Machinger v. HOJ (1992), 55
D.L.R. (4th) 401 (S.C.C.)
McKinley v. BC Tel (2001),
9 C.C.E.L. (3d) 167 (S.C.C.)
Constructive dismissal is an Ontario and Canadian
employment law concept concerning situations where an employee has not
been dismissed but their employment has changed significantly. The change
may relate to, among other things, compensation, title, the employee’s
position, or the employee’s duties. Recent case law suggests abusive
behavior by an employer may be a constructive dismissal.
Remedies for constructive dismissal are similar to those
found in a wrongful dismissal suit. Employment law treats such a
fundamental change as though the employee has been dismissed.
Constructive dismissal is an extremely complex area of
employment law, and professional advice should be sought.
See Farber v. Royal Trust Co.  1
While there is no generally recognized
common law action for breach of privacy, an employer without cause and
secretly placing a camera in an employee's office was considered a
constructive dismissal. See Colwell v. Cornerstone Properties
Inc.  O.J. NO. 5092 (SC)
Employers working for a federally regulated employer may
seek the extraordinary remedy of re-instatement with back pay. Under the Canada
Labour Code, R.S.C. 1985, employees working for federally regulated
industries such as banks, airlines, cable companies, and railways have
special protections which does not exist at common law.
Employees under both federal and provincial jurisdiction
may still sue their employers in a common law claim for wrongful dismissal
regardless whether the provisions of the Canada Labour Code apply
to them. Whether they file an unjust dismissal complaint, or sue for
wrongful dismissal, employees are best advised to obtain appropriate legal
Employees need to be aware that there is a 90
day limitation period to file an unjust dismissal complaint with HRDC and
therefore they need to be very prompt in pursuing their rights.
Recent case law has noted that the presumptive
remedy is re-instatement with back pay under Federal jurisdiction. See Payne
v. Bank of Montreal 2013 FCA 33
BAD FAITH DISCHARGE, GOOD
FAITH AND FAIR DEALING:
Employers are obligated by law to treat their employees
fairly and to act in good faith. The Supreme Court of Canada in the recent
case of Wallace v. United Grain Growers Ltd. confirmed this
obligation. Mr. Ball of Ball & Alexander was the lawyer acting on
behalf of the winning party in this landmark case. The court stated:
" in the course of dismissal the employers ought to be candid,
reasonable, honest and forthright with their employees and should refrain
from engaging in conduct that is unfair or is in bad faith by being, for
example, untruthful, misleading or unduly insensitive." The case may
be found at 152 D.L.R. (4th) 1, (1997) 3 S.C.R. 701.
This obligation exists during and after employment. The
amount the courts award depends on the circumstances of the case.
The employer duty of good faith and fair
dealing has now been extended to not merely the termination of employment,
but the existing relationship prior to termination. See Colwell
v. Cornerstone Properties Inc.  O.J. NO. 5092 (SC)
The breach of the implied obligation of good
faith and fair dealing can provide the dismissed employee not only damages for
mental distress and loss of reputation, but also economic losses engendered by
the manner of the dismissal (See discussion in Soost v. Merril Lynch Canada Inc
(2009), 77 C.C.E.L. (3d) 157 (Alta. Q.B.).
Many are not aware that the employment relationship
between an employer and employee is a type of contract. Employment
contracts in Canada and Ontario are often much more complicated than most
contracts since many special employment law imposed rules are grafted upon
them. An employment contract exists between an employee and the employer
even if it has never been placed in writing. Due to the special nature of
employment contracts, not all terms of the agreement are enforceable by
operation of law. Often employment agreements contain clauses that are not
binding on the employee or the employer. Examples include improperly
drafted notice of termination provisions and other unfair or
See Slater v. Sandwell (1994), 5 C.C.E.L.
(2d) 308 (Ont. Ct. (Gen.Div.); Machinger v. HOJ (1992), 91
D.L.R. (4th) 491 (S.C.C.)
Illegal Employment Contracts And
Recent cases have shown that technical
violations of employment standards legislation can render harsh
termination provisions void. The result of this can be
dramatic. Contracts which purport to limit statutory severance to a
few weeks can be declared illegal, with common law reasonable notice of
several months being substituted by the court. Recent cases in
this regard include decisions such as:
Miller v. A,B.M. Canada Inc. 2014 ONSC
4062; Wright v. Young & Rubicam Group of Companies, 2011 ONSC 4720;
and Stevens v. Sifton Properties Ltd., 2012 ONSC 5508
RESTRAINT OF TRADE CLAUSES,
NON-COMPETITION AGREEMENTS, AND RESTRICTIVE COVENANTS:
It is often assumed that if a provision is included in
an employment contract then that contract seals the fate of how an
employee must act in the future. This is not at all true. Employment
contracts may be unenforceable completely or in part. One common
misconception is the restraint of trade agreement or clause,
non-competition agreement or clause, and restrictive covenant. These
clauses attempt to limit the employee’s ability to work in the same area
or industry as the employer or solicit the employer’s customers once
they leave their employment.
Canadian and Ontario employment law heavily regulate
post-employment competition. These types of clauses are often
unenforceable. Many factors contribute to the degree of enforceability.
These types of clauses, as well as others, should not automatically be
considered enforceable even when agreed upon. Employers should be aware
that a great deal of skill is required in drafting an enforceable
See e.g. Terra Engineering Ltd. v. Stewart
(1994), 56 C.P.R. (3rd) 77 (B.C.S.C.); and Lyons v. Multari,
(2000), 50 O.R. (3d) 34 (C.A.)
The Supreme Court of Canada, in yet another
recent case reversing the British Columbia Court of Appeal, has confirmed that
the court will not rewrite an ambiguous or vague restraint (See Sharon v. KRB
Insurance Brokers (Western) Inc.,  S.C.J. No.6). In the
employment context the courts are now sensitive to the generally accepted
imbalance in power between employee and employer which justifies more rigorous
scrutiny of restrictive covenants, as opposed to those contracts which exist for
the sale of a business. The party seeking to enforce a restraint must now
show it is reasonable.
Courts will now classify as illegal restraints of
trade provisions which not only directly through express terms prohibit post
employment competition, but also ones which attempt to do so through indirect
means. See Rhebergen v. Creston Veterinary Clinic Ltd., 2014 BCCA
The amount of notice the employer must give the employee
when dismissing them from employment depends on many factors. The notice
period is important as it will determine the amount of
"severance" owed to the employee. According to the Ontario and
Canadian common law, there are many factors that should be considered when
determining the notice period. Among other things, the courts consider:
the length of employment, the position of the employee, the reason for
their dismissal, the employee’s compensation, how the employee first
became involved with the employer, and whether the employer acted in good
faith and fairly, to name a few.
Employment law cases relevant to this area of law
include: Wallace v. United Grain Growers Ltd. (1997), 152
D.L.R. (4th) 1, (1997) 3 S.C.R. 701; Machtinger v. Hoj Industries
(1992), 91 D.L.R. (4th) 491 (S.C.C.); Bardal v. Globe &
Mail (1960), 24 D.L.R. (2d) 140 (H.C.)
Normally, 24 months is the maximum notice
period, although this amount may be extended in truly exception cases.
SEVERANCE PAY AND PACKAGES:
"Severance" at common law is tied to the
amount of notice the employee should have been given. The amount of a
severance package that an employer should pay to a terminated employee
depends on a number of factors. Relevant factors include, among other
things: length of service, age, the true reason for dismissal, the
position the employee held within the company, the employee’s
compensation, whether the employee was recruited, and the general economy.
Severance exists under provincial legislation in Ontario
(see Employment Standards Act, R.S.O. 1990, as amended, but common
law remedies tend to be much greater for most employees in Ontario. To
obtain a common law remedy it is normally best to see legal counsel.
Relevant common law cases include Wallace v.
United Grain Growers Ltd. (1997), 152 D.L.R. (4th) 1,
(1997) 3 S.C.R. 701; Suttie v. Metro Transit Operating Co.,
(1983), 1 C.C.E.L. 123; Kreager v. Davidson (1992), 44
EMPLOYEE OR AN
The determination whether or not an individual is an
employee or an dependent contractor may make a difference as to what law
applies to their situation. Often people are considered employees in the
eyes of Ontario and Canadian employment law when they felt they where an
independent contractor. Even when a written contract states that one of
the parties is an independent contractor, they may in fact be an employee
in Ontario employment law. Relevant employment law cases include Jaremko
v. A.E. LaPage Real Estate Services Ltd. (1989), 60 D.L.R. (4th)
762 at p. 763; Ready Mix Concrete (South East) Ltd. V. Minister of
Pensions and National Insurance, (1968) 2 Q.B. 497 at pp. 512-13.
Even if an individual is not found to be an
employee by the court, he or she may be entitled to damages is he or she is
considered to be an "independent contractor" (See Moseley-Williams
v. Hansler Industries Ltd.  O.J. No. 4457 at para 27 (S.C.).
Individuals such as , for example, sales agents who are not necessarily
employees may benefit from the protections associated in this third legal
Ontario (the Ontario Human Rights Code,
R.S.O 1990, as amended) and Canadian legislation (The Canadian Human Rights
Act, R.S.C. 1985, as amended) prohibits discrimination on the basis of sex,
gender, age, national origin, sexual orientation, and medical handicaps
(conditions). Human rights cases relating to the workplace most often fall
into two broad categories: sexual harassment and discrimination.
common law may also indirectly provide additional remedies for discrimination,
human rights abuses and sexual harassment. Remedies may include wrongful dismissal, constructive dismissal, assault,
and the tort of the intentional infliction of nervous shock or suffering.
determination of whether or not the legal elements for a human rights,
discrimination or sexual harassment case are present depends on the
circumstances surrounding the incident.
The existence of sexual harassment in the workplace is still quite
common despite social unacceptability. It can range from verbal comments to
unreasonable solicitations and touching to forcible intercourse. Human rights legislation in Ontario and in Canada exists to
prevent sexual harassment. There are also common law employment law remedies in
Ontario to deal with sexual harassment. These remedies may range from torts such as assault, and the infliction of nervous
shock and mental suffering, to actions for wrongful dismissal, constructive
dismissal and breach of the implied obligation of good faith and fair dealing.
The determination of
whether or not the legal elements for a “sexual harassment” case are present
depends on the circumstances surrounding the incident.
DEFAMATION AND LOSS OF REPUTATION
In an employer makes an intentional misstatement, a reckless misstatement, the former employee can sue for loss of reputation.
If the former employer gives a negligent reference or makes a negligent misstatement which causes the employee damages, the employee
can sue in a separate action for negligent misstatement. (See e.g. Spring v. Guardian Assurance (1994), 16 C.C.E.L. (2d) 147 (H.L.).
See also Young v. Bella (2006), 261 DLR (4th) 516 (S.C.C.)
CANADIAN EMPLOYMENT LAW
Information of interest to the legal community is addressed in Mr. Ball's
excellent legal text Canadian
Employment Law From Carswell Store (Published by Canada Law Book).
The Canadian Bar Review, Vol. 77, 1998 states: "Ball's text
is the most comprehensive text on employment law in Canada. It is
carefully constructed and accurate."
Citing over 6500 cases, this one-stop reference provides you with a
thorough survey of the law. It clearly analyzes current law and
developing trends, suggests potential avenues of attack, as well as
identifies potential weaknesses in the law.
Updated 3 times per year, Mr. Ball's text is designed to keep you
up-to-date on this rapidly changing area of law.
The text covers:
- wrongful dismissal
- human rights
- fiduciary obligations
- tort law and vicarious liability issues
- restraint of trade
- developing causes of action
- employment contracts
- constitutional issues
- occupational health.... and much more.
Click on the following title Canadian
Employment Law (Canada Law Book) to order.