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Chapter 15

Chapter #15-Dismissal Without Cause.docx

Law and Business
Course Code
LAW 529
Pnina Alon- Shenker

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-pUnless and ER is able to prove that an EE fundamentally breached the terms of employment contract, any dismissal
must proceed on a without-just-cause basis
-pER does not need just cause to dismiss a non-unionized EE. There is no right of reinstatement for wrongful dismissal
under the common law
-pIs an employment contract lacks a provision that governs notice of termination or if such a provision is
unenforceable, and ER has an implied duty to provide reasonable notice of termination or pay in lieu of
reasonable notice under the common law
-pOnly exception to and ERs obligation to give reasonable notice of termination in the absence of just cause under
the common law is frustration of contract
-pIn unusual circumstances, and employment contract comes to an end w/out notice because the contract has become
impossible to perform for reasons such as floods, fires, or explosions that prevent work from being performed
-pA contract cannot become frustrated as a result of foreseeable problems, such as strike or breakdown of
-pFrustration of employment may also occur if an EE does to jail or loses professional credentials.
-pMore complex situation is where ER alleges frustration of contract bc of an EEs prolonged illness, and EE who is
absent from work bc of disability is protected under the OHRC, and ER must accommodate that EE unless this
creates undue hardship
-pGeneral rule of thumb, and ER should wait 2 years before considering severance of an employment relationship on
the basis of frustration caused by an EEs absence
-pDismissal without cause in when employment contract is oral or does not contain an enforceable termination
-pIn these circumstances, ERs must comply with the common-law requirements to provide reasonable notice or pay in
lieu of reasonable notice³if they DO NOT then they have wrongfully dismissed the EE
-pIn determining the necessary notice period, the 1st consideration is the minimum statutory requirements in the
Ontario ESA
-pThe ER must ensure that its separation package at least meets the statutory minimum requirements, OTHERWISE the
EE will sue for wrongful dismissal
-pFactors that affect the length of the reasonable notice period:
opThe EE·s age
opThe EE·s position
opThe EE·s length of Service
opThe EE·s level of compensation, and
opThe availability of similar employment, given the EE·s experience, training, and qualifications
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-pAn ER is entitled to choose whether to pay an EE while they work during the reasonable notice period (working
notice) or to pay them a sum that is equal to the amount they would of earned during the reasonable notice
period, including both wages and benefits, and to ask the EE to leave immediately
-pProviding working notice by giving EEs notice and requiring them to work through the notice period may seem more
cost effective than providing pay in lieu of notice
-pThere are situations in which it is inappropriate for and ER to require and EE to work throughout the notice period,
it is likely that the EEs efforts will deteriorate further and their attitude will affect the morale of the remaining staff
-pProviding pay in lieu of notice is even stronger where the EE works with sensitive business information
-pInstead of working notice ER must consider how to best structure the package, one option is to offer an EE a lump
sum that reflects both minimum employment standards and common-law requirements
-pDisadvantage to this for the ER is that it must pay the EE a large sum of money at once³and if the EE finds a new
job quickly then the ER receives to benefit
-pMay EEs prefer to receive-lump sum payments, and may be willing to settle for smaller total amount that if the ER
paid the parting settlement over time

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-pAn ER could also continue an EEs salary and benefits during the notice period, there should be a written statement
specifically indicating that these payments include statutory requirements under ESA (also once EE finds new
employment, benefits will end) ERs are required to continue to may benefit payments throughout the statutory
notice period
-pEEs who are entitled to statutory termination and severance pay under the ESA cannot be required to sign a
release before receiving their minimum statutory entitlements
-pIn such a release, an EE expressly forfeits her right to bring any legal action against the ER that is related to her
employment or dismissal on exchange for the monetary settlement they receive
-pEEs who are entitles to statutory severance pay have the right to receive a lump-sum payment within 7 days of
termination or on the EEs next payday
-pER should not give working notice to an EE who is unable to use the notice period to look for a new job, example
an E who is on sickness, pregnancy or parental leave
J 
-pUnder the COMMON LAW, but NOT ESA, an EE who has been wrongful dismissed has a DUTY TO MITIGATE their
-pThis means that the EE must take ALL reasonable steps to find a comparable alternative employment during the
reasonable notice period
-pThe duty flow from principle that the wrongful dismissal damages are meant to compensate the EE of the ERs
failure to provide the required notice, not to penalize the ER for the dismissal itself
-pEEs who have been dismissed w/out notice are entitled to a period of time to accustom themselves to the new
situation before beginning their job search (they are not expected to start job searching the morning after)
-pAn ER that alleges that an EE failed to adequately mitigate her damages bears the onus of proofÎ it must provide
2 things: (1) that there were comparable jobs available during the notice period that were suitable for the form ER
and (2) that they did not make reasonable efforts to obtain one of those suitable jobs
-pThe courts view using only one job search approach was not ´taking all reasonable stepsµ to mitigate damages
-pDismissed EEs are expected to look for an accept only wok that is comparable to their former job
-pOn occasion discharged, EE decide to make a career change, if jobs in the new industry are lower paying than
available jobs in previous industry the ER could argue that it should not be required to compensate EE for salary
difference during notice period
-pERs are legally liable for a former EEs out-of-pocket job search expenses, which include, long distance telephone
calls, resume preparation, postage, and travelling to job interviews
-pConstructive dismissal is a type o dismissal without cause, in this situation, an ER does not explicitly dismiss and EE
-pConstructive dismissal occurs under the common law when and ER unilaterally makes a fundamental (and
unfavourable) change to the employment agreement without providing reasonable notice and explaining the
consequences of rejecting the change
-pSometimes and ER constructively dismisses an EE bc it wants the EE to resign and believes that its actions will
eliminate the need to formally terminate EE and provide reasonable notice or pay in lieu
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-pA minor change to an EE·s compensation package probable does not result in constructive dismissal
-pIf changes are extreme they would need to be examined by a court to determine whether, given all circumstances,
they constitute a fundamental breach of employment contract
-pProposed changes to an EEs duties constitute constructive dismissal if they are so significant that they represent a
fundamental change to employment contract (example, increased job duties)
-pClaims of constructive dismissal arise where the change in duties represent a demotion³a downgrade in
responsibilities, authority, or status
-pGeographic locations must be significant to constitute constructive dismissal³A minor geographic change, such as
moving an office or plant from one part of a city to another part, does not qualify
-pIf an original workplace was accessible by public transit and a new workplace is not, an ER may be found to have
constructively dismissed EEs who are dependent on public transit
-pSignificantly increasing the time than an EE has to travel in the course of a job may be considered a fundamental
change in the employment contract
-pA significant reduction (or increase) in hours can be considered constructive dismissal
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