The Basic Rule

Ontario’s Limitations Act requires, in general terms, that a lawsuit be commenced within two years from the date of the wrongdoing. If the action is commenced beyond this set time period, it will likely be dismissed purely on that basis. The employer need not prove any form of actual or potential prejudice.

When the Clock Begins to Run

The statute states that the claim must be commenced within two years from the date of the “discovery” of the issue by the plaintiff. That means the day on which the plaintiff knew or ought to have known:

  1. The loss has occurred, and
  2. Having regard to the nature of the harm suffered, that a proceeding would have been an appropriate means to remedy the loss.

In most employment cases such as wrongful dismissal, the time clock will start to run on the date the employee was dismissed. However, in some circumstances, the date that the clock begins to run may not be as clear. Below, we look at some of these scenarios to provide additional guidance.

Advance Written Notice

Consider a fact situation where the employee has been given considerable advance working notice in advance of his final termination date. Does the clock start on the date the notice was given or the last day of employment?

The Court of Appeal spoke to this issue in 2006 and decided that the time period started ticking when written notice of termination was given.

Defining “Discovered”

It may still be argued in the context of dismissal with advance notice that the employee has not “discovered” his or her claim until they’ve received legal advice as to the propriety of the notice period provided by the employer.

This was indeed the stated view in a 2010 case in which the Ontario Superior Court of Justice said the following:

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.

Severance vs. Wrongful Dismissal

In a 2017 case that cited the preceding paragraph, the motions judge determined that a claim for severance pay was statute-barred, as the employee had been notified of his pending termination more than two years before he commenced his action. However, the action began less than a year after his last day of employment. While the limitation period could reasonably be applied to a claim for wrongful dismissal, it did seem wrong with respect to an action for severance pay. Severance is based on the total years of employment and as such, it seems implicit that all employment days must first be completed before making the claim. The Court of Appeal agreed on this issue and denied the limitation defence, allowing the severance claim to proceed.

Harassment By Superiors

Further, a recent case considered a claim made by a former employee for emotional suffering due to harassment from his superiors. He did not sue for this claim against certain personal defendants until he had been terminated from his employment. The action for this aspect of the case was allowed to continue even though it was beyond the two-year period because the Court concluded a lawsuit would not have been the appropriate avenue for a remedy while he remained employed. To do so, he would have needed to argue that his employment had been constructively dismissed, a position which the Court thought was unreasonable.

Pending Criminal Proceeding

Another case involved an allegation of theft, which resulted in the commencement of a criminal case against the former employee. The terminated individual retained a lawyer who did not commence proceedings with respect to the dismissal until the employee was eventually acquitted of the criminal charges. In this case, the civil claim was not commenced until six years after the employee was dismissed.

At the hearing of the employer’s motion to dismiss, the employee argued that he could not have determined that a lawsuit was an “appropriate means” until he had been acquitted of the criminal charges.

On this issue, the motions Court, as confirmed by the Court of Appeal, disagreed. “Appropriate”, both decisions noted, does not mean an evaluative assessment of success is required.

In this case, the plaintiff ought to have commenced the claim within the two year period. Likely, the employer would have then agreed to a stay pending the disposition of the criminal case.

Take Away to Both Sides

The passing of time is obviously much more significant to the party charged with starting the action. Limitation periods seem straightforward but can actually be quite complex. A plaintiff who is considering bringing an action related to their employment should seek the advice of an experienced employment lawyer as soon as possible to determine their obligations with respect to timing.

Get Advice and Know Your Rights

This is a complicated and fundamental issue. For advice on limitation periods relating to a variety of employment claims, contact the offices of Toronto employment lawyers Grosman Gale Fletcher Hopkins LLP. 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.