Ontario Severance

Statutory Immunity — Ontario Employment Law

7 casesDecisions from 1996–2023

About Statutory Immunity

In some Ontario workplace disputes, an employee or contractor may believe they have a clear-cut case for damages following a termination, loss of working privileges, or a harmful organizational decision. However, they may find their lawsuit blocked by a concept known as statutory immunity. This is a legal shield written directly into specific provincial legislation that protects certain individuals, government bodies, or organizations from civil lawsuits, provided they were carrying out their mandated duties in good faith.

In the employment context, statutory immunity frequently arises in the public sector, healthcare, and highly regulated industries. For example, under the Municipal Act, 2001, municipal employees are generally protected from personal civil liability for actions taken or decisions made while performing their jobs. If a terminated municipal worker attempts to sue their former supervisor or the town's chief administrative officer personally, those individuals can often rely on statutory immunity to have the claims dismissed, meaning the worker can only pursue the municipality itself.

Similarly, healthcare professionals often encounter this legal doctrine. The Public Hospitals Act contains provisions that can shield hospital boards and administrators from civil damages when making structural decisions, such as closing a department or revoking a physician's hospital privileges. Even if a physician operates as an integrated dependent contractor and loses significant income due to the closure, the hospital's statutory immunity can bar claims for reasonable notice damages. Another prevalent area involves professional regulation; under statues governing regulated professionals, employers who file mandatory reports about a worker's conduct to a regulatory college are typically granted immunity against lawsuits alleging civil wrongs like defamation.

The most important limitation to statutory immunity is the requirement of "good faith." These legislative shields are not meant to protect malicious or deliberately harmful actions. If a decision-maker exercises their statutory power with demonstrable malice, or acts entirely outside the scope of their legal authority, the courts may refuse to apply the immunity. Because challenging these defences hinges entirely on pinpointing exceptions in the exact wording of the law and presenting concrete evidence of bad faith, having an employment law professional investigate the specifics of your situation is a vital step before taking legal action.

Frequently Asked Questions

What does statutory immunity mean in an employment lawsuit?

It means that specific Ontario laws protect certain employers, organizations, or individual managers from being sued for civil damages (like wrongful dismissal or negligence) if they made their workplace decisions in good faith while performing their legislated duties.

Can I sue a municipal manager personally for terminating my employment?

Generally, no. Under the Municipal Act, 2001, individual municipal employees and officials are shielded from civil liability for acts done in good faith during their employment. Your legal claim typically must be directed at the municipality acting as the corporate employer.

Does statutory immunity block doctors from suing if a hospital revokes their privileges?

It often does. The Public Hospitals Act contains specific immunity provisions preventing civil damage claims against hospital boards for decisions like revoking privileges or closing medical departments, provided those decisions were made in good faith.

Can I sue my employer for defaming me in a report to my professional college?

If your employer is legally required or authorized to report you under legislation (such as the Regulated Health Professions Act), they usually have statutory immunity against lawsuits regarding that report. You can only overcome this if you can prove the employer made the report maliciously or in bad faith.

Are there time limits to challenge a decision protected by statutory immunity?

Yes. Even if you believe the employer acted in bad faith and the immunity should not apply, you must initiate your lawsuit within Ontario's standard two-year limitation period, starting from the date the harmful decision or action occurred.

When should someone speak to a lawyer about an employer claiming immunity?

You should seek legal counsel immediately if your employer or their legal team cites a specific Act as a reason your claim is barred. Defeating a statutory immunity defence requires a highly strategic approach to proving exceptions like bad faith, which is difficult to navigate without tailored professional guidance.

Common Scenarios

  • A physician working as an independent contractor loses their ability to practice at a local hospital because the board decides to shut down the urgent care centre; when the physician sues for reasonable notice damages, the hospital invokes immunity under the Public Hospitals Act.
  • A former city planner attempts to sue a town's mayor and chief administrative officer directly for creating a toxic work environment, but the individual defendants successfully move to strike the claim based on the good-faith protections within the Municipal Act.
  • A registered nurse is terminated and the hospital submits a mandatory report of professional misconduct to the College of Nurses of Ontario; when the nurse tries to sue the hospital for defamation, the employer relies on statutory reporting immunities to block the claim.

What You Should Know

  • Before naming individual supervisors, managers, or board members in a lawsuit involving a public or heavily regulated entity, check if a specific provincial statute shields them from personal civil liability.
  • Do not assume that an immunity clause leaves you with no options; you may still be able to sue the corporate entity (such as the town or hospital corporately) even if the individual actors are protected.
  • To defeat a statutory immunity defence in a pleading, you cannot just make vague claims of unfairness; you must plead specific, material facts that demonstrate the decision was made with malice or bad faith.
  • Always have an employment lawyer review the specific statute your employer is relying on, as minor details in the legislation dictate exactly who is protected and under what circumstances.

Featured Cases

K. v. Corporation of the Town of St Marys et al.

2023 ONSC 4543 (CanLII) · 2023-08-04

Municipal Officer Immunity: Scope of Employment

This is a procedural ruling on a motion to strike claims against individual municipal defendants. The court determined that the claims were barred by statutory immunity under the Municipal Act, 2001, and that the defendants acted within the scope of their duties in good faith. The court also refused leave to amend the pleadings due to the plaintiff's failure to provide sufficient material facts.

costs motion to strike municipal liability scope of employment statutory immunity

B. v. Women's College Hospital

2018 ONCA 872 (CanLII) · 2018-10-31

Physician Privileges: Dependent Contractor Status vs. Statutory Immunity

This appeal concerns whether physicians whose privileges were terminated following the closure of an urgent care centre are barred from claiming damages by section 44(5) of the Public Hospitals Act. The physicians argued they were 'dependent contractors' exempt from the statutory immunity, but the Court of Appeal held that the statutory bar applies regardless of the legal characterization of the relationship.

dependent contractor public hospitals act statutory immunity termination of privileges

B. v. Women’s College Hospital

2018 ONSC 1852 (CanLII) · 2018-03-01

Physician Employment Status & Statutory Immunity

This case addresses whether physicians holding hospital privileges are employees, dependent contractors, or independent contractors entitled to reasonable notice damages upon the closure of an urgent care centre. The court determined that the plaintiffs were not entitled to reasonable notice damages because the statutory immunity provision in the Public Hospitals Act applied to the hospital board's good faith decisions. Additionally, the court ruled that a voluntary retention bonus paid to the plaintiffs was deductible from damages to avoid double recovery, while long-term disability benefits funded by the plaintiffs were not deductible.

deductibility employment status reasonable notice statutory immunity wrongful dismissal

P. v. Saint Elizabeth Health Care

2012 ONCA 461 (CanLII) · 2012-06-29

Wrongful Dismissal: Statutory Immunity & Admissibility

This is an appeal concerning a wrongful dismissal action where the appellant sought leave to amend pleadings to comply with evidentiary rules regarding statutory reporting obligations. The central issue was whether claims of bad faith and wrongful dismissal could proceed given the interaction between the employer's duty to report the termination of a regulated health professional and the immunity provisions for good faith reports.

admissibility of evidence bad faith pleadings statutory immunity wrongful dismissal

V. v. S.

2005 CanLII 13777 (ON CA) · 2005-04-28

This is an appeal to the Court of Appeal for Ontario regarding whether an employer retains 'protected defendant' status under the Insurance Act when sued for vicarious liability for an employee's negligence. The court held that statutory immunity for vehicle owners does not extend to vicarious liability as an employer, meaning the employer is liable for the employee's negligence despite protections for vehicle owners.

employer liability insurance act statutory immunity vicarious liability

Y. v. M.

2001 CanLII 4456 (ON CA) · 2001-04-11

Y. v. M. - Crown Servant Immunity Appeal

This is an appeal to the Court of Appeal from a motion judge's decision dismissing the plaintiff's action. The plaintiff, an employee of Correctional Services Canada, sued her subordinates for defamation and malicious prosecution after they filed harassment complaints against her. The motion judge dismissed the action, ruling that section 9 of the Crown Liability and Proceedings Act barred the claim because the plaintiff received disability pensions. The Court of Appeal allowed the appeal, finding that the motion judge erred by applying the statutory bar without regard to the capacity in which the defendants were acting, ordering the action to proceed.

crown liability employment law malicious prosecution statutory immunity workplace harassment

M. Estate v. Frappier Group Inc.

1996 CanLII 8047 (ON SC) · 1996-12-20

Employer Liability vs. Insurance Act Immunity

This is a procedural ruling on a motion to strike a statement of claim in an action where plaintiffs sued an employer for damages arising from a motor vehicle accident caused by an employee. The court determined that section 267.1 of the Ontario Insurance Act, which provides statutory immunity to the 'owner' of a vehicle, does not explicitly extend to employers, and thus the issues of vicarious and direct employer liability must be determined at trial.

employer liability insurance act motion to strike statutory immunity vicarious liability