THE EMPLOYERS' EDGE
Timing Is Everything: Court Strikes Wrongful Dismissal Action for Delay – Action Brought Only Nine Months after Employee’s Last Day
Pursuant to Ontario’s Limitations Act, the limitation period, or time limit, for bringing a wrongful dismissal action in Ontario is two years. This is commonly understood to mean an employee has two years from the date of termination to bring a wrongful dismissal action against their former employer.
Ontario’s Superior Court recently provided guidance as to when exactly the “date of termination” is, for the purposes of computing limitation periods. In a favourable decision for employers, the Court confirmed that the date of termination is the day an employee is first provided notice of termination. This means the “clock starts ticking” when the employee receives notice and not on their final day of employment.
In this case, the plaintiff, Dan Bailey, was employed with Milo-FAIS for 43 years, most recently in the role of General Manager. On March 18, 2013, Bailey was given two years’ working notice of termination. He worked for the entire notice period and his last day of employment with the Company was March 22, 2015. Approximately nine months after his last day with the Company, Bailey commenced a wrongful dismissal action alleging, among other things, he was entitled to additional termination and severance pay. Bailey was 64 years of age when his action was filed.
The Company brought a motion to have the action dismissed on the basis that it was filed outside of the two-year limitation period. The Company argued that since Bailey was provided with notice of termination in March of 2013, the action, brought two years and nine months after that date, ought to be dismissed for delay. Bailey took the position that the action was not untimely as the limitation period only started to run on his last day of work for the Company.
After a thorough analysis of existing case law, the Court held that the limitation period for wrongful dismissal cases rightfully commences on the date an employee is provided notice of termination. Accordingly, the plaintiff’s claims for termination and severance pay were dismissed. Given the plaintiff’s 43 years of service, his age, and the managerial nature of his role, the Company’s legal exposure could have been substantial had this case proceeded to trial.
Of note, in addition to the claims for termination and severance pay discussed above, the plaintiff’s action included a tort claim for intentional infliction of mental distress and a human rights claim for discrimination. These specific claims were not dismissed by the Court because the action contained allegations of incidents directly related to both claims that occurred well after Bailey was provided notice of termination. Accordingly, these claims were not outside of their respective limitation periods.
The lawyers at CCPartners are well versed in all aspects of employment litigation and can help employers reduce legal exposure with strategic advice for all employee terminations. Click here for a list of experienced lawyers as CCPartners who can help.