Wednesday, December 01, 2010

Ontario Employment Law: Maximum Recovery of $10,000.00 under Employment Standards Act

The Ontario Employment Standards Act (ESA) provides many benefits to the Province's employees. It also lays a few traps for those who do not fully consider the Act's complexities and limits.

As discussed in previous posts, under the Act, when an employer dismisses an employee of more than three months' duration without cause, it is required to provide termination pay (or notice of termination) and in certain circumstances, severance pay to the departing employee.

Unfortunately, subsection 103(4) of the Act sets a maximum of $10,000.00 for recovery by a single employee. Consequently, where an employee's claims and entitlements exceed the statutory maximum, recovery under the Act is nonetheless limited to the global sum of $10,000.

A court proceeding may not subsequently be initiated to recover any remainder owed, where recovery has been capped by the ESA's $10,000.00 statutory limit. In fact, sections 97 and 98 of the ESA provide that once an Employment Standards claim for termination pay or severance pay has been filed, no civil action whatsoever for wrongful dismissal may be brought by the dismissed employee, unless the ESA complaint has been withdrawn within two weeks of its filing.

In other words, you must pick your forum - the Courts or the ESA. You cannot proceed in both if you are wrongfully dismissed. Once you've chosen Employment Standards, there's no turning back (at least not after two weeks following the filing of your complaint).

The ESA's $10,000.00 limit, of course, does not apply in a court proceeding. Accordingly, a civil action for damages is often a preferable option for employees who have been terminated without cause or reasonable notice.

Great care should therefore be taken before filing any complaint under the ESA, if you have been wrongfully dismissed. In some circumstances, it could be a costly mistake.

Consult a lawyer to determine the best means and forum for pursuing your claims for compensation upon wrongful termination of employment.

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