Timing matters in employment law. Firing an employee in Ontario on their birthday, right before Christmas, or immediately following a personal tragedy is highly risky. Courts may view this insensitive timing as “bad faith” conduct, forcing your company to pay thousands of dollars in extra moral damages on top of their regular severance package.
When a business in Ontario needs to downsize or terminate a struggling employee, managers usually want to rip the band-aid off quickly. However, human resources decisions do not happen in a vacuum. The specific day you choose to hand over a termination letter can drastically alter the company’s legal exposure.
Ontario courts are incredibly critical of employers who act callously during the dismissal process. While you generally have the right to terminate an employee “without cause” on any day of the year, executing that termination on a highly sensitive day can trigger what are known as Wallace damages, or moral damages. 💰
A termination is already one of the most distressing events in a person’s life. If your company makes it intentionally worse through poor timing, a judge will financially penalize you. Below, we explain the legal risks of bad timing and how employers can execute dismissals professionally to avoid massive lawsuits.
Step-by-Step Process for Assessing Termination Timing in Ontario
Whether you operate a retail chain in Toronto, a logistics hub in Brampton, or a financial firm in London, planning the termination date is a critical HR function. Here is how to avoid bad faith claims.
Step 1: Reviewing the Calendar for Obvious Red Flags
Before scheduling a termination meeting, HR must review the employee’s file and the general calendar. Firing someone on the afternoon of December 23rd, right before the Christmas holidays, is universally frowned upon by Ontario judges.
Similarly, dismissing an employee on their actual birthday, on their work anniversary, or while they are physically away on a pre-planned family vacation is incredibly bad optics. If there is no urgent corporate emergency, simply delaying the termination by a week can save the company thousands in legal penalties.
Step 2: Understanding Bad Faith and Moral Damages
In Ontario, the Supreme Court of Canada has established that employers have a duty of good faith and fair dealing during the manner of dismissal. If an employer is untruthful, misleading, or unduly insensitive, they breach this duty. 🔍
Moral damages are awarded to compensate the employee for the extra mental distress caused by how they were fired, separate from the financial loss of their salary. Poor timing is frequently cited by employment lawyers as prime evidence of an employer acting in bad faith.
Step 3: Handling Terminations Near Bereavement or Medical Leaves
The highest risk category involves personal tragedies. If an employee’s spouse recently passed away, or if they just returned from a short medical leave regarding a severe diagnosis, firing them immediately is an enormous legal risk.
Not only does this invite bad faith damages, but it also opens the door to Human Rights Tribunal complaints. The employee will likely claim they were fired because of their disability or family status. Unless the business is literally closing its doors, you must consult an employment law firm before dismissing someone in a vulnerable state.
Step 4: Executing the Dismissal Professionally
If you have checked the calendar and cleared the date, the execution must remain professional. Choose a neutral day, typically mid-week (Tuesdays or Wednesdays are often recommended over Fridays to allow the employee to contact a lawyer or Service Canada before the weekend).
Keep the meeting short, respectful, and private. Provide a clear, legally compliant termination letter offering a fair common law severance package, and never walk the employee out with a security guard unless absolutely necessary for physical safety.
The Cost of Getting the Timing Wrong
| Timing Scenario | Potential Legal Consequence in Ontario |
|---|---|
| Firing immediately upon return from sick leave. | High risk of Human Rights damages (often $10,000 to $30,000+) plus full severance. |
| Firing the day before Christmas holidays. | High risk of Moral/Bad Faith damages for intentional infliction of mental distress. |
| Firing publicly on a birthday or work anniversary. | Viewed as unduly insensitive; adds leverage to the employee’s lawyer during negotiations. |
How Much Can Bad Faith Damages Cost an Employer?
Ignoring the optics of a termination can severely impact the company’s bottom line. As of May 2026, employers face the following financial risks at the Superior Court of Justice:
- Moral Damages Awards: Judges frequently award an additional $10,000 to $50,000 CAD strictly for bad faith conduct during the dismissal, completely separate from the core severance pay.
- Increased Notice Periods: If the employee is older or vulnerable, insensitive timing might encourage a judge to push their common law notice period closer to the 24-month maximum.
- Legal Fees: If you lose a bad faith claim in court, you will likely be ordered to pay 50% to 70% of the fired employee’s legal fees under Ontario’s “loser pays” system.
How Long Do Wrongful Dismissal Claims Take?
A badly timed termination almost guarantees the employee will hire a lawyer to fight back.
- Early Mediation: To avoid public embarrassment, many companies choose to settle bad faith claims privately during mediation, which takes 6 to 9 months to arrange.
- Public Court Battles: If the company stubbornly refuses to pay moral damages, litigating the case at the Superior Court of Justice can take 1.5 to 2 years, during which the messy details of the termination become public record.
Frequently Asked Questions (FAQ)
Is it illegal to fire someone on a statutory holiday?
It is not strictly illegal, but it is highly impractical and viewed as extremely bad practice. Employees should not be expected to receive career-ending news on days meant for statutory rest, like Canada Day or Thanksgiving.
What if we discover severe misconduct on their birthday?
If the termination is “with just cause” due to immediate and severe misconduct (e.g., catching them stealing company funds), the timing rules are relaxed. You must act immediately to protect the business, regardless of the date.
Does bad timing automatically void a termination?
No. Firing someone on Christmas does not mean they get their job back. The termination remains valid, but the financial penalty (severance and moral damages) attached to that termination will skyrocket.
Should we apologize during the termination meeting?
You can express empathy (e.g., “We understand this is difficult news”), but HR should avoid apologizing in a way that suggests the company did something legally wrong. Keep the messaging firm but compassionate.
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