174 Davenport Road, Toronto, Ontario, M5R 1J2

Compensation and pay in lieu of notice

If you have been wrongfully dismissed then you are entitled to compensation for the wages and benefits. This compensation includes short-term and long-term disability coverage, that you did not receive as a result of your dismissal. Your employer has a duty to provide you with reasonable notice of your termination. Alternatively, your employer can pay you in lieu of notice.

The period of reasonable notice to which you are entitled will depend on various factors, such as your age, length of service and the nature of your work. Some of the factors to be considered as outlined in Bardal v Globe & Mail Ltd (1960) 24 DLR (2d) 140 (HCJ) include:

  • the character of your employment;
  • the length of service;
  • your age; and
  • the availability of similar employment while having regard to your experience, training and qualifications.

There is no clear-cut formula to determine notice. If your employer has terminated you in an unduly harsh manner you may be able to sue for more damages. You may also be entitled to remedies prescribed by provincial legislation, including the Ontario Employment Standards Act and the Human Rights Code of Ontario.

Potential compensation depends on the size of your employer. Compensation also depends on the number of employees working at the time of your dismissal. Your entitlement changes when your employer has 50 or more employees. It is important to note that you cannot contract out of Employment Standards Act minimums in relation to notice, severance pay, and vacation pay.

Other factors influencing compensation and pay in lieu of notice

Your employer can lay you off and later ask you to return to work. Employers then attempt to treat your return date as a new starting date. The employer will try to use your new starting date to calculate compensation. The purpose of this is to decrease the pay in lieu of notice you should be paid. In many instances your employee cannot use the lay-off in order to shorten your tenure with the company. If your employment is continuous, your compensation will be larger. The employer will try to say that your employment was not continuous. If this happens to you, be sure to contact an employment lawyer. Do not make any rash decisions.

If your employer has undergone a change in ownership, the new owner may attempt to disqualify the duration of your employment with the previous owner in order to attempt to reduce your entitlement to notice, severance, and vacation pay. Nonetheless, your successor employer may have to pay you more compensation.

Bonuses and commission pay

As a general principle, a terminated employee is entitled to their total compensation for the period of reasonable notice. This would include bonuses and commissions. Commission income can be a large portion of a person’s total income. The employee may be entitled to the average commission earned in the prior year of employment. In cases where commission fluctuates dramatically Courts tend to take the average of the last three years. With respect to bonus pay similar principles apply, however Courts have also ruled that clear and specific contractual language could prohibit an employee from receiving a bonus during the period of reasonable notice.

Therefore, you should have the facts of your case carefully analyzed. If you are not certain what compensation you are entitled to you should call a wrongful dismissal lawyer. A lawyer can help identify the main issues of your case. He can assist you in forming a strategy to deal with your former employer.

The information on this website is for informative purposes only. It is not legal advice. You can retain a lawyer only after a consultation. If you need a wrongful dismissal lawyer or if you have any other employment law issues, call me at: 416 323 3614