By Jeffrey R. Smith ([email protected])
Employers in Ontario already apprehensive about handling terminations may need to be even more cautious starting next year as the risk of legal action by fired employees may increase with new changes to the province’s judicial system.
While there are several changes scheduled to be made to the Ontario courts on Jan. 1, 2010, perhaps one of the most significant to employers might be the increase in the limit for a claim in Small Claims Court. Currently at $10,000, the limit will be increased in the new year to $25,000. Employers should be concerned about this as a large number wrongful dismissal and breach of contract damages fall within this range.
Being able to file a claim in Small Claims Court would give an employee an increased likelihood of a trial and make it less likely employers could negotiate a favourable settlement. Cost awards are also limited in Small Claims Court, so claims will have less financial risk for employees and the financial advantage of employers would be at least partly nullified.
Legal costs are always a concern for individuals, especially when they take on an organization with access to more legal resources, and may discourage them from pursuing claims against employers in many circumstances. There will be a couple of other major changes that lower the costs of legal actions and could reduce this disincentive.
Jan. 1 will see an increase in the amount of damages allowed for a trial heard under the Rules of Simplified Procedure. Claims heard under these rules are more streamlined and cost-effective, a big plus for individuals who might have a beef against an employer. As things are now, employees could be discouraged from pursuing a big claim because of the potential of it getting bogged down in a lengthy, costly process they couldn’t afford. However, the limit on damages for trials under these rules will be doubling from $50,000 to $100,000, which will likely give individuals more motivation and ability to pursue a larger claim, particularly against an employer.
The court changes will also reduce costs for trials that go to summary judgment, which is another way to streamline a trial and get a quick decision. Under the current system, a party in a trial who requests a summary judgment and loses must pay the costs of the other side. Naturally, individuals taking on organizations would be less likely to push for a summary judgment because they would be less likely to afford the financial risk, even though it could potentially get them a quicker damage award if victorious. Under the new system, judges will have discretion on awarding costs based on the appropriateness of the motion. Therefore, if an individual employee seeks summary judgment the judge deems was reasonable regardless of the outcome, she may not be on the hook for much of the employer’s costs even if she loses the case.
The changes to the Ontario court system scheduled to be in place for 2010 all follow the Ontario government’s stated desire of access to justice for individual Ontario residents through ways to decrease costs and the financial risk of pursuing a claim. Will this greater access to justice mean trouble for employers in the form of increased wrongful dismissal trials and breach of contract claims?
