Labor & Employment Law

Limitation Periods in Wrongful Dismissal Cases

By Michael Fitzgibbon

The Ontario Superior Court provides a good overview of the Ontario Limitation Act in wrongful dismissal cases.  

Section 4 of the Act provides that:

Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered

Section 5(1) of that Act identifies the criteria to apply in ascertaining when a claim is discovered, and section 5(2) presumes that a person with a claim knew of the matters referred to in s. 5(1)(a) on the day the act on which the claim is based took place, unless the contrary is proved.

The Court observed that:

In wrongful dismissal claims the cause of action usually arises when the contract was breached ? i.e. when the employer dismissed the employee without reasonable notice: Jones v. Friedman, 2006 CanLII 580 (ON C.A.), 2006 CanLII 580 (ON C.A.), paras. 3 and 4.  Facts unique to a case may call into question that general principle and point to a later date as the one on which the claim was discovered:  Webster v. Almore Trading & Manufacturing Company Ltd., 2010 ONSC 3854 (CanLII), 2010 ONSC 3854 (CanLII).

The Court in Webster made a number of points:

• Ignorance of the limitation period does not relieve the plaintiff from its operation (Paragraph 9)
• The limitation period starts running the moment the plaintiff ?discovered? the potential claim (i.e., knew or by reasonable diligence could have known of the material facts upon which to found suit), not when the plaintiff had assessed the probability of its success (Paragraph 9)
• Discoverability is largely a question of fact that hinges on the circumstances of the case as to when the plaintiff actually or ought to have found out about the material facts to ground a cause of action. (Paragraph 11)

The Court in Webster noted:

Wrongful dismissal, in my view, raises a particularly difficult issue in the limitation context since it is not a dismissal per se that is actionable but rather dismissal without reasonable notice or salary in lieu of such notice, that is actionable. Accordingly, the limitation period for an action for wrongful dismissal does not necessarily run from the date of actual dismissal. It is activated when the cause of action is discovered ? that is, the date that the terminated employee knew or ought to have known that he was discharged without cause and without notice or pay in lieu of notice and that a proceeding would be an appropriate way to get redress. The date of discovery may be later than the date of dismissal. [Emphasis added]    

The facts are of course critical in these cases.  

In the case, the Court in the most recent case concluded that the plaintiff's action was statute barred as it had been commenced more than 2 years after she discovered her claims.

Full post as published by Thoughts from a Management Lawyer on January 04, 2011 (boomark / email).