Employers beware: delay tactics in wrongful dismissal suits can be costly

By: Jessica Donen

When an employee is terminated, an employer has a choice to make. The employer can make a fair and timely offer that allows both parties to move on, or they can delay or make an unreasonable offer, forcing a former employee to bring a lawsuit to get what they are owed.

In the past, there were few consequences for employers who dragged out legal proceedings, hoping that employees would give up or settle for less than their legal entitlements. More recently, courts have started using costs awards to penalize employers in these circumstances.

Delay tactics in employment litigation can take many forms, including failing to produce relevant documents, requesting unnecessary adjournments, taking aggressive or untenable legal positions, and filing frivolous motions. Lengthy legal proceedings take a toll on an employee’s finances, mental health, and job prospects. delays can also discourage other employees from pursuing legitimate claims against their employers, as they may see the process as too daunting or costly.

The courts understand this and are increasingly awarding costs to plaintiffs as a means of deterring employers from using delay tactics in litigation. This is a welcome development, as it more fairly compensates plaintiffs for the costs of litigating against a party that engages delay tactics and also deters employers from drawing out litigation.

Costs are a monetary award given by the court to the successful party in a lawsuit to partially cover their legal fees and other expenses incurred during the legal proceeding. Traditionally, costs awards in wrongful dismissal cases have been relatively small. However, courts are increasingly willing to award larger cost awards relative to the overall judgment, to deter employers from using delay tactics and to compensate plaintiffs for the added costs of lengthy litigation. For example, in Summers v OZ Optics Limited, the court awarded the plaintiff $25,000 in costs on a judgment of $35,743.13, in part because the employer refused to admit the relevance of applicable caselaw, and unnecessarily lengthened the proceedings. Similarly, last year, in Janmohamed v Dr. M. Zia Medicine Professional Corporation, the court made the following comment about delay tactics in wrongful dismissal matters in the course of affixing a large costs award:

Employers should not be incentivized to low-ball and then force a plaintiff to sue to obtain what everyone knows is justly due. Costs and delay are horrible risks to a plaintiff who finds herself sitting at home having to spend thousands of dollars, while unemployed and vulnerable, to chase money that is obviously due from a well funded employer. In my view a plaintiff should reasonably expect to be paid her costs on a partial indemnity basis in a wrongful dismissal action. The quantum is an issue and I deal with it below. But it would be fundamentally unjust to leave the plaintiff under water as a result of bringing her employer to a position that it ought to have arrived at or near and offered fairly at the time it terminated her employment…. (para. 12)

Ultimately, both employers and employees benefit when an employment dispute is resolved quickly and fairly. Employers who continue to engage in these tactics to avoid providing employees with their legal entitlements risk facing significant cost awards, which can be a financial burden and a reputational risk. This not only helps to level the playing field for employees, but also serves to promote a culture of fairness and accountability in the workplace.

Both employers and employees who consult knowledgeable employment law counsel will get advice about what is reasonable in the circumstances and can effectively move forward to resolve any dispute. Avoiding unnecessary litigation and conducting litigation in an efficient way reduces costs for both parties.