How Does a Wrongful Dismissal Case Work in Canada?

When your employer terminates your contract, you should always be given proper notice or pay in lieu of notice. A blatant refusal or failure to do so on their part subjects them to a claim for wrongful dismissal.

Wrongful termination cases happen more often than you might think. There are a lot of employees getting fired from their jobs without receiving proper compensation.

This is why it’s important to know your rights as an employee. Let’s have a look into what wrongful dismissal really means and how these cases work in Canada.

What is a Wrongful Dismissal?

A wrongful dismissal occurs when an employee has been laid off from work without reason and without being given proper notice or compensation.

It can also happen when an employee is inappropriately terminated for just cause without being given any compensation.

And lastly, it can be considered wrongful dismissal when an employee is constructively dismissed. This usually happens when an employer makes the work environment toxic enough for the employee to force them to quit.

These are the only times when an employee can file for wrongful termination. Being inappropriately terminated isn’t always a case for wrongful dismissal.

There are times when an employer lies about their reasons for terminating your contract. But as long as you have been properly compensated, you cannot file a wrongful dismissal case against them.

In wrongful dismissal cases, employees can only ask for proper compensation and nothing more.

Wrongful dismissal shouldn’t be confused with unjust dismissal. Only federally-regulated employees can file for unjust dismissal. In an unjust dismissal case, employees can also ask for reinstatement in addition to proper compensation.

How Wrongful Dismissal Cases Work in Canada

Each wrongful dismissal case is different, but here are the general steps that people take in resolving a wrongful dismissal. It’s rare for a wrongful dismissal case to develop into a full-blown trial. Most parties end up settling before the case ends up in court.


The first step is consulting with an employment law specialist. While all lawyers can deal with a wrongful dismissal case, it’s better to ask for assistance from someone who specializes in employment law. They will be able to help you with your concern better.

In a consultation, your lawyer will advise you on the amount of compensation you should have been given. They will also tell you whether it’s worth it to claim more compensation.

Most of the time, you might find your lawyer telling you to settle with the compensation you got as it would be more costly to pursue a wrongful dismissal case. But if you have a strong case against your employer, your lawyer will be more than willing to assist you in taking the next step,

Demand Letter

If your lawyer deems it worthy to make a claim for more compensation, they’ll have to draft up a demand letter.

A demand letter should be addressed to your employer. In it, you’ll have to state that you’re requesting more severance. And of course, you’ll also need to explain your reasons for doing so.

You may state provisions in your employment contract or any relevant documents to prove that you have the right to demand more compensation.

Expect a couple of months where you and your employer exchange a number of letters in hopes of settling the case.

Statement of Claim

If the matter still cannot be solved, your lawyer will write up a Statement of Claim and file it in court. This doesn’t mean that the case will have to undergo trial. It’s more of a way to put pressure on the other party and make them consider granting your request.

Your employer should answer with a Statement of Defense within a month. They can either agree to your request or contest it by giving additional facts about the case.

A Statement of Claim pleads that the court grants your request for more compensation. A Statement of Defense, on the other hand, pleads that you should be given less compensation than what you requested.


If the case isn’t settled, you can seek the help of a mediator. This is mandatory, but it could help settle the case before you take it to court.

Both parties are required to attend the mediation. You stay in one room with your lawyer and representatives while the other party stays in another room. The mediator would then go back and forth between the rooms and discuss the case further.

Most cases are solved through mediation. It serves as some sort of a last resort in settling a wrongful dismissal case before a trial happens.

Court Trials and Appeals

If the parties still don’t reach an agreement after mediation, the case goes to court. This usually only happens with more severe cases of wrongful dismissal.

Only a small percentage of wrongful dismissal cases actually undergo trials. Why? Because the whole process is time-consuming and costly. As a general rule, if it’s not worth all the hassle, it’s better to just settle. The same goes for the other party.

Appeals are even rarer. Since you’re taking the case to a higher court, you should have a good reason for doing so. Usually, appeals only happen when the decision on your case makes a new law. Or it could be because a lower court’s decision significantly differs from the decision made on a similar precedent case.

Employment Law in Canada

A lot of issues can arise in any workplace. As much as possible, run your employment contract by your lawyer even before signing it. Some employers include a termination clause in your contract to try and reduce the pay they’re required to give you upon termination.

Also, don’t sign any severance offers your employer might give you. They might give you a deadline on signing it, but you’re not required to comply with it. Signing a severance offer essentially means you’re giving up your right to receive more compensation or file a wrongful dismissal case against your employer.

If you ever find yourself stuck in a ditch, contact an employment lawyer immediately.

To recap, here’s how a wrongful dismissal case works in Canada:
- Consult with your lawyer and tell them about your case. They’ll advise you whether or not it’s worth it to pursue a wrongful dismissal case against your employer.
- Send a demand letter to your employer detailing your request for more compensation and your reasons for claiming such.
- File a Statement of Claim in court and plead with them to grant you more compensation. Wait for the Statement of Defense from your employer’s camp. If you must, you can also file a Reply, especially if new facts have been presented.
- Contact a mediator to help settle the case. Your camp stays in one room while your employer’s camp stays in the other. The mediator will go back and forth to discuss the case with you.
- As a last resort, the case is taken to court and scheduled for trial. This is a costly and time-consuming process. So, make sure it’s worth the fight.

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Posted - 06/21/2022