Scroll Top

A wrongful dismissal time warp – When is two years really six?

Perhaps, when an ex-employee takes six years to “discover” that they were wrongfully dismissed.

Thankfully, the Ontario Court of Appeal has confirmed that employees cannot await the conclusion of criminal proceedings to judge the strength of their wrongful dismissal claim before commencing a lawsuit against their former employers.

Limitations Act

Generally, employees have two years after the termination of their employment to sue their ex-employer for wrongful dismissal in civil court. In most cases, employees will be deemed to have “discovered” a cause of action against their employer when they are given notice of termination, and so the two-year limitation clock starts ticking immediately. However, various circumstances may delay the clock’s start.

The purpose of the Limitations Act, a version of which applies to virtually all civil actions and applications in all provinces, is to provide clear guidance to parties, counsel, the courts and the public that there are limits to how far back in time one can reach for civil claims. To ensure certainty and fairness in our system, no claims are generally allowed when the two-year limit is breached no matter how pressing or important they may be.

Section 5(1) of the Limitations Act provides that, with certain defined exceptions, a claim must ordinarily be brought within two years of the “discovery” by the plaintiff, which is defined as the first day on which the plaintiff knew (or ought reasonably to have known):

  • that the injury, loss or damage had occurred,
  • that the injury, loss or damage was caused by or contributed to by an act or omission,
  • that the act or omission was that of the person against whom the claim is made, and
  • that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it… [Emphasis added]

Sosnowski v. MacEwen Petroleum Inc.

The Appellant in Sosnowski v. MacEwen Petroleum Inc. (“MacEwen Petroleum”), was a fuel truck driver (the “Driver”) for the Respondent (the “Employer”). His employment was terminated for cause for allegedly stealing approximately $17,500 in fuel.

The Driver retained an employment lawyer almost immediately, who asserted on his behalf that the termination was without cause and constituted wrongful dismissal – but the Driver did not commence a lawsuit at that time. Instead, he was embroiled in parallel, related criminal proceedings in which he faced theft and fraud charges regarding the fuel.

Initially, the Driver was convicted of all criminal charges in August 2011, only to have the Court of Appeal overturn the convictions three years later. About eight months later, he brought a wrongful dismissal action against the Employer – now some six years after the termination of his employment.

The Employer brought a motion to strike the claim for being beyond the two-year limitation period.

The Driver argued that he did not know whether a wrongful dismissal action would be “an appropriate means” to remedy the cause of action, until he knew whether he would be absolved of criminal responsibility, and so the limitations clock didn’t start to run until his acquittal. He reasoned that if he were found guilty at the criminal standard of “beyond a reasonable doubt,” he had no chance in a civil, wrongful dismissal proceeding. In other words, he wanted to wait until he knew whether he had a chance of success in a wrongful dismissal lawsuit before starting one.

The Superior Court rejected that argument, finding that the Driver’s reasoning conflated the phrase, “appropriate means” with “chance of success”. The Court held that “appropriate” in this context means “legally appropriate”, which will depend on the specific factual and statutory setting of each case. “Appropriate” does not include an evaluation of whether a civil lawsuit is likely to be successful.

Lessons for employers

Unlike in other areas of law, where causes of action and related injuries may take many years to surface, it is usually plain and obvious when someone has been dismissed from their employment. The Ontario Court of Appeal has clearly signalled in MacEwen Petroeum that employees cannot simply delay commencing a wrongful dismissal action while they evaluate and re-evaluate their chances of success.

However, the courts have not closed the door completely. For instance, in the recent case of Iluyomade v. Toronto Community Housing Corp, the employee alleged that he had been the victim of harassment and bullying from his superiors more than two years before starting a lawsuit for, among other things, intentional infliction of mental suffering. The Court in that case found that a lawsuit would not have been the “appropriate means” to seek a remedy for that alleged tort while the employee was still trying to preserve his employment. It only became an appropriate means after he was fired, which happened within the two-year limitation period.

Had the facts been different in MacEwan Petroleum and the courts permitted the Driver’s action to proceed, the Employer would have had to pull together a defence from six- year-old evidence.

Employers would be well-advised to maintain all records (hardcopy and electronic) in respect of all high-risk / high-value terminations for at least two years and, preferably for at least five or more. In today’s digital age, this requires many companies to rethink their document retention policies and procedures to securely capture and archive email, electronic records and to preserve data on digital electronic devices before resetting and reissuing them back into circulation.

This blog was published on First Reference Talks.

Related Posts