Key Terms

Arbitration

A dispute resolution process in which an arbitrator hears evidence and makes determinations of liability and orders remedies. The process is similar to a court hearing, but less formal and more efficient. Arbitration of disputes is required in all unionized workplaces.

Burden of Proof

The party with the obligation of proving an allegation on a balance of probabilities, in a civil action. Where just cause dismissal is alleged, the employer bears the burden of proof.

Collective Bargaining

Collective Bargaining is the process of negotiating a collective agreement between an employer and a union. The collective agreement reflects all terms of the employment for a unit of employees for a specific term.

Consideration

In contract law, a mutual exchange of promises that creates an enforceable legal agreement. In employment relationships, the employer agrees to pay a wage and the employee agrees to provide certain services in return.

Constructive Dismissal

Where an employer unilaterally changes a substantial term or condition of employment or objectively demonstrates an intention to no longer be bound by the contract of employment. A constructive dismissal may give rise to damages for wrongful dismissal.

Frustration of Contract

An unanticipated event that terminates a legal contract on a no-fault basis, usually without compensation. Disability can frustrate an employment contract, but the employer must comply with statutory minimums for termination and severance pay.

Full and Final Release

A Full and Final Release is a document signed by an employee that releases their former employer from all claims and allegations that the employee had against it, in exchange for compensation.

General Damages

General Damages refer to compensation that may be awarded or agreed to that does not attract income tax or other statutory deductions. Human rights allegations or conduct considered bad faith in the manner of dismissal may ground a payment of general damages.

Just Cause

Where an employer may terminate employment without prior notice of termination. Matters constituting just cause are typically reserved for significant employee misconduct.

Mediation

A dispute resolution process facilitated by a 3rd party to obtain a settlement agreement and avoid litigation proceedings. Mediation may be mandatory in certain forums, but settlement is not compulsory. All discussions at mediation are off-the-record and cannot be used in evidence.

Restrictive Covenant

A Restrictive Covenant is a term of an employment contract that purports to restrict unfair competition by a current or former employee. Restrictive covenants may address confidential information, solicitation of clients and employees or competition, generally. With limited exceptions, non-compete restrictions after employment ends are unlawful.

Seniority

Seniority refers to an employee’s length of service with an employer. Typically only applies in unionized workplaces. In the non-unionized workplace, there is no obligation for an employer to recognize seniority for the purposes of employment benefits, except in limited circumstances like minimum standards for vacation, notice of termination or severance pay.

Severance Pay

Severance Pay can mean different things depending on context. It is used informally to refer to all amounts paid to an employee in lieu of notice of termination.

It is also a technical term under Ontario’s Employment Standard Act, 2000. In that context, employees with 5 or more years of service may be entitled, in addition to termination pay ranging between 1 and 8 weeks, to 1 week of wages per year of service, up to a maximum of 26 weeks. An added condition for severance pay entitlement is that the employer’s payroll must exceed $2.5M in a calendar year.

Union Removal

Union Removal refers to an unlawful employer process of attempting to terminate a union’s bargaining rights with an employer. Union bargaining rights may be terminated by an employee in limited circumstances, without initiation or influential involvement from an employer. Employers may engage in union avoidance measures prior to unionization, provided such actions do not amount to an unfair labour practice under labour relations legislation.

Wilful Misconduct

Wilful Misconduct is conduct by an employee that would disentitle them from termination or severance pay under Ontario’s Employment Standard Act, 2000. Courts have interpreted “wilful” as premeditated and deliberate, with an intent, akin to criminality, to harm the employer. It is, essentially, “being bad on purpose”.

Without Prejudice

Without Prejudice is a category of communications between parties opposed in interest that protects settlement offers (to avoid litigation) from being disclosed.

Wrongful Dismissal

Where an employer dismisses an employee without just cause and provides no or inadequate notice of termination.