Every lawsuit is subject to a “limitation period” within which the case must be commenced. If this time period is not met, the case will be dismissed. The employer need not show prejudice or some inability to defend due to the passing of time. Human rights cases in Ontario have a different test as it is theoretically possible to obtain an extension of the time clock.

General Guide

The fundamental rule for wrongful dismissal claims or human rights claims is that the time clock starts when the claim is “discovered”. For most employment cases, that event will be clear when the employer delivers a termination letter.

Wrongful Dismissal as Opposed to Severance Pay

In one recent case, the employer advised the employee that he was to be terminated 2 years into the future.[1] As the notice of termination was clear cut, the limitation clock began on that date for the wrongful dismissal claim based on the obligation to give fair notice of termination.

However, the Court of Appeal determined that the claim for severance pay under the Employment Standards Act[2] did not arise until the employment relationship was concluded and not on the date the termination letter was delivered.

Workplace Abuse

The same case also presented a claim for damages for emotional distress due to an abusive work environment. This claim was allowed to proceed as it was not based on the event of termination but rather was based on a continuum of facts through to the final date of employment.

Human Rights Conundrum

On the same subject, but not raised in this case, the limitation clock for a human rights violation under the Human Rights Code is 12 months. However, the employee can also sue civilly for a human rights violation with a companion action in which case the limitation period is 2 years.

Although not argued in this case, if the companion action is struck as out of time on a preliminary motion, it is uncertain as to whether the human rights case would also fail, given there would no longer be a “tag-along” action to support this claim as is required.

Human Rights Extension

It is possible to obtain an extension of the one year period for filing. The applicant must, however, present affirmative evidence of good faith. This means something more than asserting “no bad faith”. In one recent case, in which the Tribunal repeatedly asked the applicant to justify the claim being filed late, in this instance by one day. The lack of such positive evidence of good faith caused the case to be dismissed, a decision upheld on review.[3]

Lessons to Each Side

The passing of a time period for filing may indeed lead to an absolute defence to an employer. The company must pay close attention to the timing of the claim for this reason. This issue is obviously more critical to employees as they control the process by which an action is commenced. Legal advice will assist each side to understand when this tricky issue will or will not lead to the dismissal of a claim.

Get Advice and Know Your Rights

Whether you be employer or employee, it is important to know the law and your rights and remedies. This issue is particularly complicated. For advice on this issue from either side, contact the offices of Toronto employment lawyers Grosman Gale Fletcher Hopkins. We regularly advise workplace parties on a wide range of legal workplace issues. Contact us online or by phone at 416 364 9599 to schedule a consultation.



[1] Bailey v Milo-Food

[2] One week for each year of employment to a cap of 26 weeks where the employment is longer than 5 years and the payroll exceeds $2.5 million.

[3] James v HTRO