Thursday, February 24, 2011

Ontario Employment Law: Wrongful Dismissal Claims and Limitation Periods

Section 4 of the Limitations Act, sets out the general limitation period that applies to the commencement of proceedings in respect of most claims arising at law. It states:
Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.
While a wrongful dimissal action is subject to this two-year limitation period, it is important not to confuse a dismissal with the triggering of the limitation period since the two may not necessarily coincide. In Webster v. Almore Trading, the Court explained it this way:
Wrongful dismissal, in my view, raises a particularly difficult issue in the limitation context since it is not dismissal per se that is actionable but rather dismissal without reasonable notice or salary in lieu of such notice, that is actionable. Accordingly, the limitation period for an action for wrongful dismissal does not necessarily run from the date of actual dismissal. It is activated when the cause of action is discovered - that is, the date that the terminated employee knew ought to have known that he was discharged without cause and without notice or pay in lieu of notice and that a proceeding would be an appropriate way to get redress. The date of discovery may be later than the date of dismissal.
As this passage makes clear, "discoverability" may be a live issue in cases involving wrongful dimissal since an employee who is terminated may not be able to discover the actionable claims until some time later.

The reasons for this are quite simple. First, often an employee who is terminated is not told by the employer whether (or when) he or she will be receiving salary in lieu of notice, sometimes even where he or she has made the requisite enquiry. Second, without consulting with an employment lawyer, an employee who is wrongfully terminated in a situation where there many facts are in dispute will not be expected know whether he or she had an entitlement to reasonable notice.

If you have been wrongfully dismissed, please consult a lawyer who can advise as to your rights and entitlements both under the Ontario Employment Standards Act and at common law.

- Robert Tanha, Toronto
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