Wrongful dismissal

Wrongful dismissal

Wrongful dismissal, also called wrongful termination or wrongful discharge, is an idiom and legal phrase, describing a situation in which an employee's contract of employment has been terminated by the employer in circumstances where the termination breaches one or more terms of the contract of employment, or a statute provision in employment law. It follows that the scope for wrongful dismissal varies according to the terms of the employment contract, and varies by jurisdiction. Note that the absence of a formal contract of employment does not preclude wrongful dismissal in jurisdictions in which a "de facto" contract is taken to exist by virtue of the employment relationship. Terms of such a contract may include obligations and rights outlined in an employee handbook.

In Canadian law, absent a written contract which addresses how to end the employment relationship, the law implies into the employment relationship a term that it will not be ended without "reasonable notice" of its termination. The length of reasonable notice depends on a number of factors, best described by the Ontario Court in the 1960 decision of Bardal v. Globe & Mail: [(1960), 24 D.L.R. (2d) 140]

There could be no catalogue laid down as to what was reasonable notice in particular classes of cases. The reasonableness of the notice must be decided with reference to each particular case, having regard to the character of the employment, the length of the service of the servant, the age of the servant and the availability of similar employment, having regard to the experience, training and qualifications of the servant.

Thus (in Canadian law), a dismissal is not wrongful unless the employer alleges cause for dismissal without proper grounds. Most dismissals are not "wrongful". Rather, the question is "Did the employer provide proper notice of the termination of employment?" If the employer did not provide proper notice of the termination, then a breach of contract occurred. Damages will be awarded in an amount that compensates the employee for the wages and benefits the employee would have earned during the implied notice period (usually measured in a number of months), less the money the fired employee earned if a new job is found during the implied notice period (known as "mitigation"). In Canadian employment law, it has long been the rule that reinstatement is not a remedy available to either the employer or the employee - damages must be paid instead.

Examples of wrongful dismissal might include:

* dismissal without going through a contractually mandated dismissal process, which might involve an escalating series of warning letters, &c, where grounds for dismissal are not such as to meet the test for summary dismissal.
* dismissal for a wrongful cause, for instance in a circumstance in which a dismissible action is falsely attributed to an employee.
* discrimination based on race, sex, age, or any other legally protected class.
* retaliation for filing a workers' compensation claim or for reporting illegal employer activity (a.k.a. whistleblowing).

Wrongful dismissal will tend to arise first as a claim by the employee so dismissed. Many jurisdictions provide tribunals or courts which will hear actions for wrongful dismissal. A proven wrongful dismissal will tend to lead to two main remedies: reinstatement of the dismissed employee, and/or monetary compensation for the wrongfully dismissed.

A related situation is constructive dismissal, in which an employee feels no choice but to resign from employment for reasons imposed by the employer.

One way to avoid potential liability for wrongful dismissal is to institute an employment probation period after which a new employee is automatically terminated unless there is sufficient justification not to do so. The dismissed employee may still assert a claim, but proof will be more difficult, as the employer may have broad discretion with retaining such a temporary employee.

In United Kingdom law, the concept of "wrongful dismissal" refers exclusively to dismissal contrary to the contract of employment, in other words, without contractual notice. Dismissal for a reason contrary to statute or contrary to a stautory procedure is described as "unfair dismissal".


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