In Ontario, employers have a strict legal duty to act honestly and in good faith when terminating you. If they lie, manufacture fake causes, or fire you in a cruel manner, you may be entitled to extra “bad faith” or “moral” damages on top of your standard severance. Filing a civil claim at the Superior Court of Justice costs $339 CAD.
Being fired is inherently stressful, but the way an employer handles the termination can either soften the blow or cause immense psychological damage. 📍 In Canadian contract law, deeply influenced by landmark Supreme Court cases like Bhasin v. Hrynew, there is an absolute duty of honest performance. This means that while an employer has the right to fire you “without cause” at any time, they are legally forbidden from lying to you, misleading you, or acting ruthlessly during the dismissal process.
When an Ontario employer breaches this duty of good faith, the courts can severely punish them. If HR fabricates a fake reason to fire you “for cause” just to save money, or if a manager publicly humiliates you while escorting you out of the building, this constitutes bad faith. Employees subjected to this toxic behaviour are often awarded additional financial compensation, known as moral damages or Wallace damages, entirely separate from their regular severance pay.
Step-by-Step Process in Ontario
Whether you work in downtown Toronto, Ottawa, or Hamilton, holding a deceitful employer accountable requires a strategic, evidence-based approach. 📚 Do not let anger dictate your next moves.
Step 1: Documenting the Deceit or Cruelty
To win bad faith damages, you must prove the employer acted maliciously or dishonestly. Write down every detail of the termination meeting. Did they lie about your position being eliminated, only to immediately hire someone else? Did they falsely accuse you of theft without any investigation? Preserve all emails, performance reviews, and witness statements.
Step 2: Maintaining Professionalism
No matter how poorly your employer treats you, do not retaliate. ⚠️ Do not send angry emails, do not steal company property, and do not badmouth the company publicly on social media. If you behave unprofessionally, the judge may reduce your severance payout or dismiss your claim for bad faith damages.
Step 3: Assessing the Psychological Impact
Moral damages are often tied to the mental distress caused by the employer’s brutal conduct. If the termination was so traumatic that it caused severe depression, anxiety, or insomnia, visit your doctor immediately. Medical records documenting your psychological suffering are critical evidence for your lawyer.
Step 4: Differentiating the Damages
| Type of Damages | What it Covers | Legal Requirement |
|---|---|---|
| Common Law Severance | Lost wages while you look for a new job. | Standard in almost all without-cause terminations. |
| Moral / Bad Faith Damages | Compensation for mental distress caused by cruel firing. | Proof of untruthful, misleading, or unduly insensitive conduct. |
| Punitive Damages | Strictly to punish the employer for outrageous behaviour. | Exceptionally rare; requires highly malicious, high-handed acts. |
Step 5: Consulting an Employment Law Firm
You must consult an Ontario employment lawyer to evaluate your claim. Proving bad faith is legally complex, and merely feeling upset about losing your job is not enough. The lawyer will draft a powerful demand letter outlining the employer’s dishonest performance and demanding comprehensive compensation.
Step 6: Issuing a Statement of Claim
If the employer refuses to offer a fair settlement and apologize through financial compensation, your lawyer will issue a formal Statement of Claim at the Superior Court of Justice. 💼 Employers desperately want to avoid public trials that expose their toxic HR practices.
How Much Does it Cost in Ontario?
Pursuing a bad faith wrongful dismissal claim involves predictable civil litigation costs:
- Court Filing Fees: To initiate a lawsuit at the Superior Court of Justice, the filing fee is currently $339 CAD.
- Law Firm Fees: Most lawyers accept strong bad faith claims on a contingency fee basis, charging roughly 25% to 35% of the total settlement. Hourly representation usually costs between $300 and $650 CAD.
- Medical Reports: To prove mental distress, you may need to pay your family doctor or a psychologist for detailed medical reports, generally costing $200 to $600 CAD.
How Long Does the Process Take?
Fighting for moral damages follows the standard civil litigation timelines in Ontario. ⌛
- The Limitation Period: You have 2 years from the date of the bad faith termination to officially file your lawsuit.
- Early Resolution: Sending a demand letter and engaging in initial settlement negotiations typically takes 1 to 3 months.
- Full Litigation: Because employers fight bad faith allegations aggressively to protect their public reputation, these cases often go to mandatory mediation and discoveries, taking 12 to 24 months.
Frequently Asked Questions (FAQ)
Does lying about a corporate restructuring count as bad faith?
Yes. If your employer tells you that your role is being eliminated due to “financial restructuring,” but then immediately posts your exact job title online the next day, they have breached their duty of honest performance, which may trigger moral damages.
Can I get bad faith damages if I was fired in front of my coworkers?
Potentially. Ontario courts have routinely ruled that firing an employee in a highly public, humiliating manner, or unnecessarily having them escorted out by security guards without any justification, constitutes unduly insensitive conduct warranting additional compensation.
How much money are moral damages usually worth?
Moral damages are awarded as a lump sum based on the severity of the employer’s conduct and your distress. In Ontario, standard awards typically range from $10,000 to $50,000 CAD, completely separate from your regular severance pay.
What if they withhold my final paycheque to force me to sign a release?
This is a major violation of the Employment Standards Act (ESA) and a classic example of bad faith. Employers must pay your minimum statutory entitlements regardless of whether you sign a release. Withholding it to apply pressure is highly penalized by judges.
Leave a Reply