Claims for lost income in a wrongful dismissal action have a cap of damages which has been set recently by our Court of Appeal at 24 months. This will be the most that a court will award for such a claim and, as discussed before, will be subject to the employee’s duty to mitigate their damages by seeking other employment.
Other Types of Claims
In other cases, the concept of “fair notice”, the implied term of a wrongful dismissal case, has no relevance.
In a human rights claim, for example, the lost income claim is based on “what would have happened” had the human rights violation not occurred. This is referred to as the “make whole” concept.
This may lead to a dramatic claim for a very extended period. Some human rights cases have allowed for as long as 10 years’ lost income.
However, sometimes the same concept may lead to a very modest claim. If the employer, for example, can show that the functions of the employee were destined to be terminated due to legitimate business reasons soon after the termination, then the damage claim for lost income will be so limited.
In human rights cases, an employment contract that defines a severance sum will generally have no relevance. However, if the contract sets a defined terminal date, then the damages will very likely be set by this date.
Canada Labour Code Claims
The remedy of “unjust dismissal” under the Code allows for potential reinstatement and also a lost income claim through to the date of the hearing. This again is unrelated to the concept of “fair notice”. One recent case determined that a claim for lost earnings should be presumed to the hearing date. There is still an obligation on the employee to mitigate, but nonetheless the claim can be formidable.
Ontario has certain statutes that provide powerful relief to employees who have been terminated or otherwise adversely treated due to their compliance with the terms of statute. The term often used to describe this is “reprisal”.
One such example is the Occupational Health and Safety Act which creates reporting requirements of unsafe working conditions and physical and sexual abuse amongst other obligations. It applies to all employers in the province.
The framework of the statute not only prohibits such unfair conduct by an employer, but also creates a reverse “onus of proof” upon the employer should the employee chose to challenge such a decision of the employer.
The claim made again is not related at all to “fair notice”. If the case commences due to termination, the claim for lost income will continue to the date of hearing. There are many similar public interest statutes which generally operate in the same manner to protect the interests of whistleblower employees.
Views of Both Sides
It is important to understand the distinctive claims for lost income and when and where to apply these differences.
Get Advice Before You Act
This is an important issue to understand for both employers and employees. For advice on this and similar issues and, indeed, any employment issue, contact the offices of Toronto employment and labour lawyers Mallins Law. We regularly advise employees and employers on legal workplace issues. Contact us online or by phone at 647-792-0310 to schedule a consultation.