Among the many other important considerations when proceeding with terminations, employers often have questions about what to share with the employee about the reason for their dismissal. It is wise for employers to use caution in the level of detail they choose to offer when it comes to explaining why someone has been terminated, as these conversations can be used in future litigation. However, while being judicious in how much information is shared is important, so is making sure that any reasons being given for the termination are accurate.

In 2024 ONCA 332, the Ontario Court of Appeal recently reaffirmed that employers owe their employees a duty of honesty during their employment and at the time of termination. In their decision, the Court of Appeal once again noted that employers have a duty to be “candid, reasonable, honest, and forthright” when terminating employees.

In 2024 ONCA 332, the employer dismissed an employee who had worked for the company for nearly 30 years, just after his return from a medical leave. The employer told the employee that his termination was due to financial reasons; however, they failed to produce financial statements to support that claim in the course of litigation. In the lower court decision, the trial judge found that while the employer was not directly untruthful with the employee, the judge had “no hesitation” in finding that the employer had not been candid or forthright. The trial judge further found that the employee had been terminated because of his increasing physical restrictions. The Court of Appeal upheld the trial judge’s decision to grant the employee aggravated damages of $50,000 due to the employer’s conduct at termination, in addition to a notice period of 24 months.

While in this decision, the courts addressed the issue of the bad faith behaviour of the employer in not being honest with the employee about the reason for his termination, it is also critical to understand that terminating someone because of a protected ground under the Ontario Human Rights Code (such as disability) can result in further serious legal consequences. It is very important for employers to canvass potential human rights issues when making decisions about ending the employment relationship, as well as planning what will be communicated to the employee during the termination meeting. Consulting an employment lawyer is an important step in ensuring that terminations proceed as smoothly and cost-effectively as possible.