Not paying wages called breach of 'most fundamental term of employment relationship'
An auto shop that repeatedly delayed or withheld a long-serving technician's wages has been found to have effectively dismissed him.
In an endorsement dated July 7, 2026, Justice Grant Dow of the Ontario Superior Court of Justice granted default judgment for the worker. He awarded $40,500 in unpaid wages, eight weeks of statutory termination pay set at $8,553 less statutory deductions, and a further $60,000 in bad-faith and punitive damages, along with costs.
The employer had not filed a defence or responded to the motion.
Delayed, failed payment of wages
The worker joined the company as an automotive service technician in 2004 and stayed for about two decades. According to the material before the court, the employer repeatedly delayed or failed to pay his agreed wages.
By the time he decided he had been constructively dismissed in April 2025, $40,500 in net unpaid wages had accrued, and no Record of Employment had been issued as required.
The worker did not sit idle. The evidence showed he found new work within about six weeks. He was 41 when the employment ended, earning $55,600 a year. When the statement of claim was served, the individual controlling the corporate defendants acknowledged receiving it and asked for time to retain counsel, but no defence ever followed.
That silence shaped the proceeding, which went ahead as an uncontested default judgment motion, decided in writing on the worker's affidavit, factum and bill of costs. Justice Dow found the case well suited to summary judgment, noting that wrongful dismissal matters, especially where cause is not in dispute, lend themselves to that route.
'Most fundamental term’
The central question was whether chronically unpaid wages could turn a resignation into a dismissal. Relying on the Court of Appeal in Colistro v. Tbaytel, Justice Dow held that a repeated pattern of not paying the worker's agreed wages was a breach of what he called "the most fundamental term of employment relationship."
The judge also had to decide who was liable. The worker performed his job for the individual owner, and Justice Dow found the corporate entities had blurred the lines between one another. Applying the common employer doctrine, he held all of the defendants jointly liable, rejecting any suggestion that the corporate structure shielded them from the unpaid wages.
With liability settled, Justice Dow awarded the $40,500 in unpaid wages the worker had claimed up to the date of his constructive dismissal. He also confirmed the worker's entitlement to eight weeks of statutory termination pay under the Employment Standards Act, calculated at $8,553 less statutory deductions.
Failure to mitigate?
Mitigation was the next issue, and the onus of proving a failure to mitigate sat with the employer. Justice Dow noted the defendants had offered no evidence on the point. He observed that a without-cause dismissal could have supported a notice claim of 15 to 18 months, yet the worker was back at work in roughly six.
The judge also treated the statutory termination pay as beyond the reach of mitigation, holding that the eight weeks owed under the Employment Standards Act were not to be reduced because the worker had found another job. On whether the overall award should be cut for mitigation, Justice Dow wrote: "I find no basis to reduce the assessment of damages in this regard."
On top of the wages and termination pay, Justice Dow awarded $60,000 for general damages for bad faith, bad-faith damages tied to the irregular payment of wages, and punitive damages for what he described as the defendants' high-handed conduct. He fixed costs at $14,218, noting that any claim for elevated costs was offset by the employer's decision not to defend, which let the worker obtain judgment on a summary basis.
