Wrongful Dismissal & ADR: 2023 Caselaw in Review

  • 05 mars 2024
  • Mitchell Rose, LL.B., C. Med, Q. Arb

In 2023, the delay in obtaining Court dates in Ontario’s civil justice system became notably worse. Where once wrongful dismissal litigants enjoyed relatively speedy trials and summary judgment motions, their actions now languished. On the bright side, Alternative Dispute Resolution (ADR) mechanisms like mediation and arbitration helped to avoid Court backlogs – provided they were used.

Mediation helps by increasing early settlement opportunities, especially in jurisdictions where mediation is mandatory under R. 24.1 of the Rules of Civil Procedure. Arbitration removes cases from the public courts, or ensures litigation is avoided altogether, thereby freeing up judicial resources. For the parties, arbitration usually results in an earlier (and private) hearing on the merits, with fewer procedural steps along the way, and restricted appeal rights. Mediation-arbitration (“med-arb”), a hybrid process, has the best of both worlds. 

However, it’s rare that an employment contract provides for mediation before litigation or arbitration. Otherwise, mediation is not mandatory until after the commencement of an action. Even then, it is not mandatory outside of Toronto, Ottawa and Essex County (Windsor). Despite this, voluntary mediation in wrongful dismissal actions is still common in parts of southern Ontario, but uptake is far from universal.

And while voluntary (or “ad hoc”) arbitration - including med-arb - of wrongful dismissal disputes is slowly on the rise for many reasons, arbitration resulting from a contractual arbitration clause is far more common. Further, in many cases, the clause is not discovered until after the start of litigation.

Given the limitations above, a way to encourage voluntary mediation is to penalize parties by way of costs orders, following trial, for failure to participate in one.

Courts can also stay an action where there is an arbitration agreement, and they can leave the issue of the enforceability of the agreement to the arbitrator to determine.

So, how did our Courts fare in 2023 in terms of promoting mediation and arbitration?