Bad Faith Dismissal — Ontario Employment Law
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About Bad Faith Dismissal
In Ontario, most people understand that an employer can terminate their employment without a specific reason, as long as they provide proper notice or pay in lieu. However, a crucial and often overlooked aspect of employment law is the manner in which the termination is carried out. This is where the concept of 'bad faith dismissal' comes into play. It isn't about whether the dismissal was legal, but whether the employer's conduct during the process was unfair, untruthful, or unduly insensitive.
The Supreme Court of Canada has established that every employment contract includes an implied duty of good faith and fair dealing in the manner of dismissal. This means your employer cannot be dishonest, misleading, or act in a way that is calculated to humiliate or embarrass you when ending your employment. A breach of this duty can give rise to a separate legal claim for damages, on top of any severance you might be owed for wrongful dismissal.
Examples of bad faith conduct include lying about the reason for termination (e.g., alleging poor performance to avoid paying severance when the real reason is restructuring), publicly shaming an employee during the termination meeting, refusing to provide a Record of Employment (ROE) to pressure them into accepting a low offer, or maintaining unfounded allegations of 'just cause'. The key is that the conduct must be more than just the normal distress and hurt feelings associated with losing a job. It must be something untruthful, misleading, or unduly insensitive. If an employer's actions during dismissal cause foreseeable mental distress, a court may award 'aggravated damages' (also called moral damages) to compensate the employee for that additional harm. Because proving bad faith requires a detailed look at the employer's specific actions and their impact, getting professional guidance is often critical to understanding your rights.
Frequently Asked Questions
What's the difference between wrongful dismissal and bad faith dismissal?
Wrongful dismissal occurs when an employer fails to provide sufficient notice or pay in lieu of notice. Bad faith dismissal relates to the employer's conduct during the termination process, such as being dishonest, humiliating, or misleading, which can lead to additional damages.
My boss was just cold and impersonal when firing me. Is that bad faith?
Not necessarily. While unpleasant, being impersonal or blunt is not typically enough to meet the legal test for bad faith. The conduct must generally be untruthful, misleading, or unduly insensitive, going beyond the normal distress of a termination.
Can I get more money if my employer acted in bad faith?
Yes. If you can prove your employer breached their duty of good faith and it caused you mental distress, an Ontario court can award 'aggravated damages'. These are separate from and in addition to any severance pay you are owed for the dismissal itself.
My employer is refusing to give me my Record of Employment. Is this bad faith?
It can be strong evidence of bad faith, especially if it's part of a pattern of untruthful or obstructive behaviour designed to pressure you. It is also a violation of an employer's obligations under federal rules governed by Service Canada.
How do I prove my employer was dishonest about why I was fired?
Proof often comes from documentation. Collect your termination letter, any emails about performance, and contrast them with the employer's current position. If they alleged cause but have no prior warnings or documentation, it can support a claim of bad faith.
What is the deadline to sue for bad faith dismissal in Ontario?
In Ontario, you generally have two years from the date of the termination or the bad faith conduct to file a lawsuit, as stipulated by the Limitations Act, 2002. It's crucial to act within this timeframe.
When should I talk to a lawyer about how I was fired?
If you believe your employer lied about the reasons for your termination, publicly humiliated you, or made threats to prevent you from getting your entitlements, you should speak with an employment lawyer. They can help assess if the conduct meets the legal standard for a bad faith claim.
Common Scenarios
- An employer terminates a senior manager for 'just cause' based on a flimsy, unproven allegation, forcing the manager to spend months in litigation to clear their name and get their severance.
- During a termination meeting, a manager falsely tells an employee that the company is in financial trouble, only for the employee to see their position advertised online a week later.
- A company deactivates an employee's email and building access and has security escort them from the premises in front of colleagues, despite the employee having a clean record and the termination being without cause.
- An employer tells an employee they will provide a positive letter of reference but then gives a negative review to a prospective new employer, causing a job offer to be rescinded.
What You Should Know
- Keep a detailed, dated journal of all interactions related to your termination, including what was said, who was present, and how it made you feel.
- Do not sign a severance offer or release on the spot, especially if you feel pressured or believe you were treated unfairly. You have the right to have it reviewed.
- Preserve all communications, including your termination letter, emails, and text messages. This documentation is critical evidence in a bad faith claim.
- Understand that aggravated damages are not for the loss of the job itself, but for the distinct mental distress caused by the employer's unfair conduct during the firing process.
- If you were dismissed in a manner that felt dishonest or humiliating, consult with an employment lawyer to determine if you may have a claim for aggravated damages beyond your standard entitlements.
Featured Cases
Churchill v. Aero Auction Sales Inc.
2019 ONSC 4766 (CanLII) · 2019-08-13Wrongful Dismissal: Senior Executive Awarded 12 Months' Notice and $75,000
A wrongful dismissal case involving a senior executive who was wrongfully dismissed after almost seven years of employment. The court awarded 12 months' notice and $75,000 in aggravated damages for bad faith termination, but did not award punitive damages.
Persaud v Telus Corporation
2016 ONSC 1577 (CanLII) · 2016-04-05Constructive Dismissal and Bad Faith Termination in Persaud v Telus
A constructive dismissal case where an employee resigned due to unilateral changes in employment terms and a poisoned work environment. The court must determine if the employer's actions established constructive dismissal under the Potter principles and whether the employer acted in bad faith or intentionally inflicted mental suffering.
Ciszkowski v. Canac Kitchens
2015 ONSC 73 (CanLII) · 2015-01-07Constructive Dismissal: Demotion and Unilateral Changes to Employment Terms
A constructive dismissal case involving an employee who was demoted and had their responsibilities altered upon return from medical leave. The court determined an 18-month notice period and considered whether the employer's conduct during dismissal was in bad faith, applying relevant legal principles.
Michela v. St. Thomas of Villanova Catholic School
2015 ONSC 15 (CanLII) · 2015-01-07Termination of Employment: Reasonable Notice, Mitigation, and Bad Faith
A case involving the termination of employment for teachers at a private school due to low enrollment. The court determined the reasonable notice period, considered the teachers' efforts to mitigate damages, and found no evidence of bad faith termination. The case also addressed the interpretation of employment contracts, particularly regarding fixed-term versus indefinite-term contracts.
Love v. Acuity Investment Management Inc.
2009 CanLII 28211 (ON SC) · 2009-06-02Wrongful Dismissal: Senior VP Awarded 5 Months Notice After 2.5 Years of Service
A wrongful dismissal case involving a senior vice president who was dismissed after 2.53 years of service. The court awarded five months’ notice based on the Bardal factors, and determined that the employer did not fulfill their obligations under the employment contract by offering only three months’ salary in lieu of notice. The case also addressed the retention of equity shares during the notice period and dismissed claims of misrepresentation.
Laszczewski v. Aluminart Products Limited
2007 CanLII 56493 (ON SC) · 2007-12-14Wrongful Dismissal: Senior Employee Awarded Four Months Notice After Six Months of Employment
A wrongful dismissal case involving a senior employee with limited tenure who was dismissed after six months of employment. The court addressed whether the employer established just cause for dismissal, determined the reasonable notice period, and considered claims of bad faith and inducement. Four months’ notice was awarded based on contextual approach and proportionality.
Reid v. Stratford General Hospital
2007 CanLII 58483 (ON SC) · 2007-01-30Wrongful Dismissal: Resignation Withdrawal and Constructive Dismissal Claims
A wrongful dismissal case where the plaintiff resigned due to stress but later withdrew the resignation before the employer acted on it. The court examined whether the withdrawal was bona fide and whether the employer’s refusal to reinstate constituted wrongful dismissal. The case also involved allegations of constructive dismissal due to a toxic work environment and excessive workload, as well as issues of mitigation of damages and bad faith dismissal.
Schnitzler v. Sears Canada Inc.
2006 CanLII 33677 (ON SC) · 2006-10-04Wrongful Dismissal: 30-Year Employee Awarded 18 Months Notice
A wrongful dismissal case involving a long-term employee who was terminated after 30 years of service. The court assessed whether the employer had just cause for termination based on repeated policy violations and breach of trust, and if not, determined the reasonable notice period. The employee secured part-time employment, and the court found their mitigation efforts reasonable. The employer was acquitted of bad faith termination, and punitive damages were not awarded.
Stone v. Sybron Canada Ltd.
2006 CanLII 21073 (ON SC) · 2006-06-22Wrongful Dismissal: Factory Worker with 16 Years Service Awarded 13 Months Notice
A wrongful dismissal case involving a factory worker with sixteen years of service who was terminated for alleged harassment and drinking on the job. The court applied Bardal factors to determine a thirteen-month notice period and found the employer failed to establish just cause or follow its own progressive discipline policies. The employer's conduct was deemed unfair, leading to an extended notice period, though claims for mental distress and punitive damages were dismissed.
Harris v. Yorkville Sound Ltd.
2005 CanLII 46394 (ON SC) · 2005-12-13Wrongful Dismissal: Pregnant Employee Awarded 16 Months Notice
A wrongful dismissal case involving an employee with eight years of service who was dismissed after allegations of loudness, disruptive behaviour, and insubordination. The employer failed to establish just cause for dismissal, and the employee was pregnant at the time. The court assessed a reasonable notice period of 14 months, with an additional two months due to the employer’s bad faith and knowledge of the employee’s pregnancy. The case also addressed pregnancy discrimination under the Employment Standards Act, though no punitive damages were awarded.
Keays v. Honda Canada Inc.
2005 CanLII 8730 (ON SC) · 2005-03-17Wrongful Dismissal: 14-Year Employee Awarded 24 Months Notice for Bad Faith Conduct
A wrongful dismissal case where an employee with 14 years of service was terminated without cause. The employer failed to establish just cause, and the dismissal was deemed disproportionate under the McKinley v. BC Tel framework. The notice period was extended to 24 months due to the employer’s bad faith conduct, including misrepresentation of medical opinions and failure to accommodate the employee’s chronic fatigue syndrome under the Ontario Human Rights Code.
Courchesne v. INCO Ltd.
2005 CanLII 20802 (ON SC) · 2005-02-25Wrongful Dismissal: Employee Dismissed for Misappropriation of Company Property
A wrongful dismissal case involving an employee dismissed for misappropriation of company property, including tiles and a water pump. The court upheld the dismissal as justified under the proportionality standard, but also considered whether the employer acted in bad faith during the process. The plaintiff’s hypothetical notice period was 15 months, but no award was given due to the dismissal being for cause.
Portugal v. Car Park Management Services Ltd.
2004 CanLII 34308 (ON SC) · 2004-10-21Wrongful Dismissal: 11-Year Parking Attendant Awarded 12 Months Notice
A wrongful dismissal case involving a parking lot attendant employed for 11 years, aged 59, with limited transferable skills and poor English proficiency. The employer dismissed the employee after alleging theft and unsatisfactory lot check, but failed to prove the allegations. The court awarded 12 months’ notice, applying the Bardal factors, and found no bad faith in the dismissal. The case also addressed whether disability payments should reduce wrongful dismissal damages, with the court ruling they should not.
Lloyd v. Oracle Corp. Canada Inc.
2004 CanLII 18084 (ON SC) · 2004-04-30Wrongful Dismissal: Termination Clause Enforceability and Reasonable Notice
A wrongful dismissal case where the plaintiff was terminated without cause after nearly four years of service. The court examined whether the termination clause in the employment contract limited the plaintiff’s entitlement to statutory minimum notice under the Employment Standards Act. The court held the termination clause was enforceable and rebutted the presumption of reasonable notice. Bardal factors were applied to determine the notice period, and no mental distress damages were awarded due to lack of bad faith.
Buchanan v. Geotel Communications Corp.
2002 CanLII 49616 (ON SC) · 2002-05-14Wrongful Dismissal: Notice Period Extended for Bad Faith and Inducement
A wrongful dismissal case where the employer terminated the plaintiff without establishing cause, leading to a determination that the plaintiff was entitled to reasonable notice. The notice period was extended due to inducement and bad faith, and the plaintiff was awarded unpaid commissions and salary for the notice period.
Zesta Engineering Ltd. v. Cloutier
2001 CanLII 28294 (ON SC) · 2001-02-22Wrongful Dismissal Case: Aggravated Damages Awarded for Bad Faith Termination
A wrongful dismissal case where the court found the employer acted in bad faith during the termination process, awarding aggravated damages. The case also involved allegations of breach of fiduciary duties by former employees and the application of Wallace damages for bad faith conduct.
Pioro v. Calian Technology Services Ltd.
2000 CanLII 22362 (ON SC) · 2000-05-16Wrongful Dismissal: 19-Year Management Employee Awarded 22 Months Notice
A wrongful dismissal case involving a management-level employee with 19 years of service who was aged 45 at the time of termination. The employer offered 30 weeks’ severance, which the court found inadequate, determining a 22-month notice period was reasonable. The case also addressed bad faith dismissal, mitigation of damages, and issues related to long-term disability and life insurance benefits.
S.S. v. Huang & Danczkay Property Management Inc.
1999 CanLII 14865 (ON SC) · 1999-12-08Wrongful Dismissal: Receptionist Awarded Two Months Notice After Two Years of Employment
A wrongful dismissal case where a receptionist was dismissed after two years of employment. The employer alleged cause for dismissal due to lateness and performance issues, but the court found the dismissal without cause and awarded two months’ notice, less two weeks’ pay already received. The court also rejected claims of bad faith dismissal and retaliation.
Garvey v. A.T. Kearney Ltd.
1999 CanLII 14876 (ON SC) · 1999-11-30Wrongful Dismissal: Bad Faith Discharge and Fiduciary Duty Claims
A wrongful dismissal case where the plaintiff alleged bad faith discharge as a distinct cause of action. The court examined whether bad faith discharge is recognized as a standalone claim under Canadian law, applying the Supreme Court of Canada’s decision in Wallace v. United Grain Growers Ltd. The case also involved claims of intentional interference with economic interests and fiduciary duty during the recruitment process.
Monti v. Hamilton-Wentworth (Regional Municipality)
1999 CanLII 14858 (ON SC) · 1999-05-31Part-Time Employee Awarded 20 Months Notice in Wrongful Dismissal Case
A wrongful dismissal case involving a long-term part-time employee who was terminated after 21 years of service. The court held that part-time employees are entitled to the same notice period as full-time employees, with compensation reflecting hours worked, and awarded 20 months’ notice. The court also rejected claims of bad faith dismissal and punitive damages, and found no failure to mitigate damages.