Ontario Severance

Mental Distress — Ontario Employment Law

45 casesDecisions from 1980–2021

About Mental Distress

Losing a job is almost always a stressful and upsetting experience. However, in Ontario employment law, the normal anxiety and sadness that come with a termination are not, by themselves, grounds for legal compensation. The concept of 'mental distress' in a legal context refers to something more severe—psychological harm caused by an employer's unfair, untruthful, or unduly insensitive conduct during the process of dismissal. These are often called 'moral damages' or 'aggravated damages' by the courts.

Under common law, employers in Ontario have a duty of good faith and fair dealing in the manner of dismissal. This doesn't mean they have to be kind when firing someone, but it does mean they cannot be dishonest, misleading, or engage in conduct that is humiliating or cruel. When an employer breaches this duty, and it causes the employee mental distress beyond the normal hurt of being fired, a court may award additional damages. For example, if an employer makes false accusations of theft to justify a termination, embarrasses an employee by having them escorted out without cause, or terminates someone while they are vulnerable on medical leave in a callous way, a claim for mental distress might arise.

To be successful, a claim for mental distress requires evidence. It's not enough to simply state you were upset. An employee typically needs to show a link between the employer's bad faith conduct and the harm they suffered. This could include medical records from a doctor or therapist, a diagnosis of anxiety or depression, or clear testimony showing how the employer's actions had a profound and negative impact on their life and well-being. Because the specifics of a termination are so crucial in these cases, understanding how the law might apply to your unique situation often requires a detailed review with a legal professional.

Frequently Asked Questions

Can I sue my employer for mental distress just because getting fired was upsetting?

No. Standard feelings of sadness or stress from a job loss are not compensable. To claim damages for mental distress, you must prove that your employer acted in bad faith or was unduly insensitive in the manner of your dismissal, and that this specific conduct caused you harm beyond the normal upset of a termination.

What's the difference between mental distress damages and punitive damages?

Mental distress damages (also called aggravated or moral damages) are compensatory; they are meant to compensate you for the actual psychological harm you suffered. Punitive damages are different; they are intended to punish the employer for malicious or outrageous conduct and deter them from repeating it.

How do I prove I suffered mental distress for a legal claim?

Evidence is key. This can include doctors' notes, therapist reports, prescription records, and your own testimony about the impact on your health and life. The more objective the evidence linking the employer's conduct to your distress, the stronger your claim will be.

Is there a deadline to make a claim for mental distress damages?

Yes. In Ontario, claims for mental distress related to a wrongful dismissal are typically subject to the two-year limitation period under the Limitations Act, 2002. This means you generally have two years from the date of your dismissal to file a lawsuit.

My boss fired me and lied about the reason. Can this support a claim for mental distress?

It potentially can. Being untruthful or dishonest during the termination process is a classic example of bad faith conduct. If you can demonstrate that this dishonesty caused you significant mental harm, you may be entitled to aggravated damages.

Are mental distress damages the same as an award for 'injury to dignity' under the Human Rights Code?

They are similar but arise in different contexts. Mental distress damages in a dismissal case are for the manner of termination. An award for injury to dignity, feelings, and self-respect under the Ontario Human Rights Code is for harm caused by discrimination or harassment, which can happen at any time during employment.

When should I see a lawyer about mental distress caused by my firing?

If your termination involved humiliation, false accusations, or particularly cruel behaviour that has had a tangible negative effect on your mental health, it is wise to consult an employment lawyer. They can assess whether the employer's conduct meets the high threshold for a bad faith claim.

Common Scenarios

  • A long-term employee is terminated via a cold, impersonal email while on approved sick leave for a serious illness.
  • During a team meeting, a manager announces a project manager is 'no longer with the company due to performance issues,' effectively firing them in front of their peers.
  • An employer falsely accuses an accountant of fraud to avoid paying severance, then refuses to provide a Record of Employment, causing significant financial and emotional stress.
  • A retail worker is fired and then subjected to a campaign of bad-mouthing by their former manager, who calls other local stores to prevent them from getting a new job.
  • After being terminated, a senior executive is locked out of their email and company accounts, and security guards watch them pack their personal belongings at their desk in full view of the office.

What You Should Know

  • As soon as possible after your termination, write down a detailed, dated account of everything that was said and done during the dismissal meeting.
  • If you seek medical attention for anxiety, depression, or stress following a difficult termination, ensure you tell your doctor what caused it and keep a record of your visits.
  • Do not assume that mental distress damages are automatic. The legal bar is high and requires proving both bad faith conduct by the employer and genuine harm to you.
  • Understand that damages for mental distress are awarded in addition to, not instead of, your entitlements to reasonable notice or severance pay for the wrongful dismissal itself.
  • Before accepting a severance package, especially after a distressing termination, have an employment lawyer review the circumstances to see if you may have a claim for additional damages.

Featured Cases

N. v. Canadian Tire Corporation et al.

2021 ONSC 3404 (CanLII) · 2021-05-07

A wrongful dismissal case involving allegations of just cause for dismissal and claims for damages, including mental distress. The court addressed the employer's justification for termination and claims for compensation.

damages just cause mental distress wrongful dismissal

M. v. Sterling Renovations & Development Corp

2021 ONSC 2396 (CanLII) · 2021-03-18

This is a damages ruling in an employment law dispute involving claims for punitive damages, mental distress, and lost income. The court addressed the calculation of damages and costs.

damages mental distress punitive damages wrongful dismissal

B. v. S.

2019 ONSC 4914 (CanLII) · 2019-08-26

Workplace Harassment Damages: Emotional Distress & PTSD

This is a merits decision regarding a claim for damages arising from sexual harassment and attempted drugging by an employer. The court found the employer's conduct abhorrent and awarded $50,000 in general damages for emotional distress and $50,000 for loss of competitive advantage due to PTSD, while declining punitive damages due to a prior criminal sentence. The plaintiff was also awarded $30,000 in substantial indemnity costs.

damages employer liability mental distress sexual harassment workplace discrimination

Colistro v. Tbaytel

2019 ONCA 197 (CanLII) · 2019-03-13

Colistro v. Tbaytel: Constructive Dismissal & Honda Damages

This is an appeal to the Court of Appeal from a trial judge's decision regarding constructive dismissal and intentional infliction of mental suffering. The employee, an executive assistant with nearly twenty years of service, went on stress leave and objected after her employer rehired a former supervisor who had previously been fired for sexually harassing her. The trial judge dismissed the employee's claim for intentional infliction of mental suffering but found she was constructively dismissed, awarding 12 months' notice and $100,000 in Honda damages for bad faith. The Court of Appeal dismissed the employee's appeal and the employer's cross-appeal. The Court upheld the trial judge's findings that a single egregious act can make employment intolerable, leaving the 12 months' notice and $100,000 Honda damages awards in place.

constructive dismissal honda damages manner of dismissal mental distress workplace harassment

G. v. Habitat for Humanity Greater Toronto Area Inc.

2018 ONSC 2725 (CanLII) · 2018-05-10

Wrongful Dismissal: Summary Judgment on Damages

This is a wrongful dismissal case proceeding via a motion for summary judgment under Rule 20.04(2.2). The dispute involves claims for damages, mental distress, and defamation arising from the termination of employment, with the court addressing the burden of proof under the Employment Standards Act, 2000 and the Human Rights Code.

damages mental distress summary judgment wrongful dismissal

T. v. Labrash Security Services Ltd.

2017 ONSC 6072 (CanLII) · 2017-12-13

Wrongful Dismissal: Notice Range and Mental Distress Damages

This is an appeal from a summary judgment decision in a wrongful dismissal action involving an employee of Labrash Security Services Ltd. The Divisional Court affirmed the trial judge's award of a notice period within the ten to twelve months range and damages for wrongful dismissal, while setting aside an award for mental distress due to lack of bad faith conduct. The appeal also addressed procedural complaints regarding the refusal to transfer to Small Claims Court and the calculation of costs, which were dismissed.

costs mental distress reasonable notice summary judgment wrongful dismissal

B. v. Benson Group Inc.

2017 ONSC 5896 (CanLII) · 2017-10-03

This is a wrongful dismissal case involving allegations of disability discrimination and mental distress. The court addressed the burden of proof regarding the employer's actions and the resulting damages for mental distress.

burden of proof disability discrimination mental distress wrongful dismissal

Colistro v Tbaytel

2017 ONSC 2731 (CanLII) · 2017-06-16

Constructive Dismissal: Poisoned Work Environment & Harassment

This case addresses whether a plaintiff was constructively dismissed due to the employer's failure to address concerns regarding the hiring of an individual with a history of sexual harassment, creating a poisoned work environment. The court also examined whether the employer's conduct constituted intentional infliction of mental suffering and assessed damages, including the deduction of collateral benefits.

constructive dismissal damages mental distress sexual harassment workplace discrimination

M. v. Regional Municipality of Peel

2017 ONSC 3378 (CanLII) · 2017-06-14

Workplace Harassment Claim Dismissed for Lack of Evidence

This is a merits decision in a workplace harassment and tort claim brought by a plaintiff against her municipal employer. The plaintiff alleged harassment, adverse treatment, surveillance, and intentional infliction of mental suffering by management, seeking $5 million in damages. The court found no evidence of harassment or flagrant conduct by the employer, determining that the plaintiff's claims were based on subjective perceptions and lacked credible evidentiary support.

damages intentional infliction of mental suffering mental distress municipal employer workplace harassment

B. v Milo-Food & Agricultural Infrastructure & Services Inc.

2017 ONSC 1789 (CanLII) · 2017-04-10

Wrongful Dismissal: Limitation Periods & Working Notice

This is a merits decision addressing the limitation periods for wrongful dismissal, intentional infliction of mental distress, and human rights claims following a termination where the plaintiff was given two years' working notice. The court held that the wrongful dismissal and severance pay claims were statute-barred because the action was commenced more than two years after the notice of termination, whereas the tort and human rights claims were not statute-barred as the alleged discriminatory and harassing conduct continued throughout the notice period.

human rights limitation periods mental distress working notice wrongful dismissal

Kingston Road Animal Hospital Professional Corporation v P.

2016 ONSC 5940 (CanLII) · 2016-10-06

Workplace Misconduct: Intentional Infliction of Mental Suffering Appeal

This is an appeal from a Small Claims Court decision regarding a claim for intentional infliction of mental suffering arising from workplace misconduct. The Divisional Court dismissed the appeal, finding no palpable and overriding error in the trial judge's credibility findings and inferences of targeting and intended emotional harm.

appeal dismissed intentional infliction of mental suffering mental distress workplace misconduct

T. v Labrash Security Services Ltd.

2016 ONSC 6068 (CanLII) · 2016-09-27

Wrongful Dismissal: 72-Year-Old Employee with 12 Years Service

This is a summary judgment decision regarding a wrongful dismissal claim where a 72-year-old employee with 12 years of service was terminated without proper notice. The court found the employer breached the Employment Standards Act and the employment contract by failing to provide clear notice, awarding damages for breach of contract and mental distress due to the unfair manner of dismissal.

damages mental distress notice summary judgment termination

Strudwick v. Applied Consumer & Clinical Evaluations Inc.

2016 ONCA 520 (CanLII) · 2016-06-30

This is an appeal to the Court of Appeal for Ontario regarding a wrongful dismissal action. The appeal addressed the trial judge's assessment of damages, including the notice period, aggravated damages for bad faith conduct, punitive damages, and damages for human rights violations and intentional infliction of mental distress. The court also reviewed procedural issues regarding damages exceeding the claim and costs.

aggravated damages human rights mental distress punitive damages wrongful dismissal

O. v Recyclenet Corporation

2015 ONSC 4717 (CanLII) · 2015-07-27

Wrongful Dismissal: 7.5-Year Employee Awarded Damages

This wrongful dismissal case involved a plaintiff employed for 7 ½ years who was terminated without cause. The court applied the Bardal factors, considering the plaintiff's age, length of service, and medical condition, to determine the reasonable notice period. Damages were calculated based on pre-termination income, with deductions for severance payments and mitigation earnings, and damages for mental distress were awarded due to the insensitive manner of dismissal.

damages mental distress reasonable notice wrongful dismissal

D. v. KPMG LLP

2014 ONSC 1038 (CanLII) · 2014-06-02

Wrongful Dismissal: 10-Year Employee Awarded 10 Months Notice

This wrongful dismissal case involved a senior staff accountant with approximately 10 years of service who was terminated by KPMG LLP. The court awarded 10 months' notice or salary in lieu thereof, applying principles from Bardal and Sylvester, while dismissing claims for harassment, breach of contract, and intentional infliction of mental distress.

employment contract mental distress reasonable notice termination wrongful dismissal

S. v. IPC (Investment Planning Counsel)

2011 ONCA 827 (CanLII) · 2011-12-22

Defamation Appeal: Termination & Regulatory Reporting

This is an appeal to the Court of Appeal from a trial decision concerning a former employee's counterclaims for defamation and mental distress. The employee alleged that the employer acted improperly by terminating his employment and reporting his conduct to regulators. The trial judge dismissed the employee's counterclaims as well as his third-party claim against an insurer. The Court of Appeal dismissed the appeal, finding the employer's actions were justified by an investigation into the employee's business practices. The court also upheld the dismissal of the insurance claim due to the employee's failure to provide adequate notice under the policy.

defamation employer liability mental distress regulatory reporting wrongful dismissal

Q. v. Reprodux Ltd.

2011 ONCA 651 (CanLII) · 2011-10-13

Constructive Dismissal Appeal: Mental Distress Damages

This is an appeal to the Court of Appeal from a trial judge's decision in an action for constructive dismissal. The employee appealed the trial judge's refusal to award aggravated damages, punitive damages, and damages for intentional infliction of mental distress, while the employer cross-appealed a costs award. The trial judge had awarded $9,462.00 for constructive dismissal due to a poisoned work environment, but found the verbal abuse did not justify additional damages. The Court of Appeal dismissed the appeal, finding no palpable and overriding error in the trial judge's assessment of the evidence. The employer's cross-appeal on costs was also dismissed, leaving the award of $9,462.00 and trial costs undisturbed.

appeal constructive dismissal damages mental distress

B.L. v. F. et al

2011 ONSC 214 (CanLII) · 2011-01-11

This is a summary judgment motion in an employment law case involving vicarious liability for sexual assault and intentional infliction of mental distress.

mental distress sexual assault summary judgment vicarious liability

Colistro v. TBaytel

2010 ONSC 2306 (CanLII) · 2010-04-27

Wrongful Dismissal: Aggravated Damages and Mental Distress Claims

A wrongful dismissal case where the plaintiff sought aggravated and punitive damages, as well as damages for mental distress and loss of reputation. The court considered whether such damages require an independent actionable wrong and whether the Statement of Claim disclosed a reasonable cause of action under the 'plain and obvious' standard. The case also involved claims related to workplace safety legislation and intentional infliction of emotional harm.

aggravated damages intentional infliction of mental suffering mental distress motion to strike wrongful dismissal

Transport Training Centres of Canada v. W.

2010 ONSC 2099 (CanLII) · 2010-04-13

This is an appeal to the Divisional Court concerning damages awarded for wrongful dismissal without cause and mental distress. The court reviewed the underlying employment dispute regarding the employee's termination and the resulting compensation.

appeal damages mental distress wrongful dismissal