The limitation period for Ontario Employment Law disputes is governed by the Limitations Act, 2002. Under the Limitations Act all wrongful dismissal claims must be brought with in 2 years of the date the claim was discovered. Discovery has a very specific meaning:
5 (1) A claim is discovered on the earlier of,
(a) the day on which the person with the claim first knew,
(i) that the injury, loss or damage had occurred,
(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,
(iii) that the act or omission was that of the person against whom the claim is made, and
(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and
(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).
If a claim is not brought within the limitation period than in almost all circumstances the employee forever loses the opportunity to sue for wrongful dismissal or termination pay.
Limitation Period for Wrongful Dismissal Claims
In the employment law contact, the recent case of Bailey v Milo-Food & Agricultural Infrastructure & Services Inc., 2017 ONSC 1789, states:
 The leading case in Ontario on the commencement of the limitation period in a wrongful dismissal action is Jones v. Friedman, 2006 CanLII 580 (ON CA) (“Jones (CA)”). In that decision, the Ontario Court of Appeal held at para. 4 as follows:
A limitation period commences when the cause of action arises. In a breach of contract, the cause of action arises when the contract was breached. For the purposes of a wrongful dismissal action, the employment contract is breached when the employer dismisses the employee without reasonable notice
In ordinary circumstances this means that a wrongful termination claim is discovered on the date the employee first receives notice of termination. Not the date that the employee’s employment ended.
While there are some dissenting cases, such as the decision of Justice Pitt in Webster v Almore Trading & Manufacturing Co, 2010 ONSC 3854, it would be prudent for any lawyer or plaintiff to ensure that their wrongful dismissal lawsuits are started within two years of notice of termination.
Although there is an argument to be made that the limitation period should not start until after notice is given, you do not want to be in a position where you have to make that argument before a Judge.
Contact Justin W. Anisman
Justin W. Anisman is an Employment Lawyer at the Toronto law firm Brauti Thorning Zibarras LLP. Justin advises both companies and individuals in all aspects of employment law including wrongful dismissal, human rights and discrimination.