The Ontario Employment Standards Act (“ESA”) is remedial legislation that provides a minimum set of standards applicable to employment practices in Ontario for the protection of employees. There is no contracting out of the ESA. However, if your employment contract provides a greater benefit, your contract will apply.
If you are immediately terminated without cause after three months of continuous employment, and offered no notice, pay in lieu of notice or severance, if applicable (these are your minimum entitlements under the ESA), and offered no reasonable notice (your entitlements if your employment contract does not limit you to your minimum entitlements), you have been wrongfully terminated (unless you fall within an exception). If you are wrongfully terminated from your employment, you generally have two options for recovering the money you are owed from your employer: (1) filing a complaint or (2) starting a civil claim. Below you will find some of the main differences between the two options.
Under the ESA, an employee can file a complaint with the Ministry of Labour alleging a contravention of the ESA.
You cannot file a complaint for wages that became due more than six months prior to your complaint. Wages include both termination and severance pay. This means that you have six months from the date of your termination to file a complaint seeking your termination and severance pay. You cannot, however, start a complaint seeking reasonable notice as this only exists at common law.
Your minimum entitlements are based on your years of service, and whether your employer has a 2.5 million dollar payroll. Therefore, if you are entitled to more than $10,000.00 in wages under the ESA, you may not want to file a complaint, as $10,000.00 is the maximum amount of money you can recover for wages owed. However, whatever amount you are awarded after filing a complaint will not be deducted by your mitigation efforts, such as your wages from that new job you just started, because these are your minimum entitlements.
Also, you will only be disentitled from your statutory minimums when you act in a way that is considered ‘wilful misconduct, disobedience or wilful neglect of duty’, which is a much higher threshold than that of just cause for termination at common law. Therefore, if your employer is trying to avoid paying you your ESA minimums, they will have a high hill to climb.
Absent an express or implied binding agreement to the contrary, an employee with an indefinite term contract may only be dismissed without cause if their employer provides them with sufficient advanced notice or compensation in lieu thereof. This is called reasonable notice.
Reasonable notice is generally a longer period than someone’s statutory minimum entitlements.
Whereas you have six months to file a complaint with the Ministry of Labour for your statutory minimums, you have two years to start a wrongful termination action through the court system.
There is no cap in the court system, and so if you are owed more than $10,000.00 in wages, it is likely more worthwhile for you to go the civil claim route. However, any award of damages you receive will be deducted by your mitigation efforts (you will, nevertheless, always be awarded at least your minimum entitlements).
Just cause for dismissal at common law is not the same issue as wilful misconduct, disobedience or wilful neglect of duty under the ESA. The common law threshold for just cause is much lower than the ESA threshold of wilful misconduct, disobedience or wilful neglect of duty. That is, an employer can prove just cause without rising to the level required under the ESA and if your employer is able to prove just cause for termination, you will be disentitled from reasonable notice at common law.
A wrongfully terminated employee is generally always at least entitled to receive their minimum statutory entitlements. Which system is best for you will be based on how long it has been since you were terminated, how much money you are seeking to recover, how long you expect it to take you to mitigate your losses, and whether your employer is claiming they had a reason for terminating your employment.
Regardless of which option you choose, it is always best to start with a letter to your employer demanding what you are owed. With respect to the complaint, the Ministry of Labour will generally not entertain your complaint unless you have made such efforts. With respect to court proceedings, you could save yourself a lot of time and money by starting with a demand letter.
It is important to know that you cannot file a complaint and start a civil claim to recuperate the same sums of money – you can only do one or the other, so picking the right system from the beginning is important.