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Employment Laws – What Canadian Employers Must Know About Damages

Employment Laws – What Canadian Employers Must Know About Damages

Programme B
Published by Programme B

When it comes to employment laws, there is a lot that employers need to bear in mind while hiring, firing, and dealing with other workplace issues. If they aren’t on the right side of the law, there is always a risk of the employees resorting to litigation. Wrongful dismissals, harassment, and discrimination are serious issues that can land you in deep trouble as a Canadian employer, so you need to be aware of the implications. Here are the potential damages you will have to pay to the employees if you are responsible for flouting the employment laws. 

Damages for breach of contract

If the employment contract had a clause promising something to the employee and the employer failed to deliver it, the employee has a valid claim for breach of contract. For example, the employment contract may state that you will employ a person for a fixed term or pay them at a certain level. If you breach the clause, you will have to pay them the difference between what was promised in the contract and what the employee got.

Notice damages

This form of litigation comes when you dismiss an employee without reasonable notice of termination unless there is a valid reason for their dismissal. While the employment contract has a notice period clause, things may get tricky if there isn’t a valid contract with the employee. In such cases, you will have to serve notice according to the common law, which is often calculated based on years of service.

Human rights damages 

The Canadian employment laws take a strong stance on human rights, so employees can bring up litigation if they face violation in any form. You can expect such lawsuits if there are cases of workplace discrimination based on grounds like race, ethnicity, gender, color, disability, marital status, and family status. If running your business in Ontario, consulting an employment lawyer Toronto for guidance on these issues is a good idea. It is best to take a preventive approach, and a legal expert can guide you about steering clear of such lawsuits.

Aggravated damages for mental distress

As an employer, you have a duty of good faith when it comes to employee termination. While some degree of mental distress is bound to happen with termination, you will have to bear additional damages if the employee faces aggravated distress due to unfair and insensitive termination behavior. It includes actions like telling others that the dismissed employee is incompetent, giving demeaning or unfounded reasons for the dismissal, attacking their reputation, or dismissing them when they have a major family event or trauma.

Punitive damages 

Canadian employers also need to know that they are at risk of punitive damages, even if these happen rarely. Rather than compensating the employee for some harm, punitive damages punish the employer for harsh, vindictive, or malicious conduct. The awards can be massive because the objective is to set examples with a deterring impact on employers. 

It makes sense for business owners to go the extra mile to steer clear of lawsuits because these damages spell a substantial financial burden for your business. Further, flouting employment laws can affect your reputation as an employer and deprive you of the best talent in the industry. Legal assistance and guidance by a seasoned employment lawyer keep your business on the right track.

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