Can a wrongful dismissal claim be dismissed for delay?

After pandemic changes, Ontario announces dismissals for delay will resume in May

Can a wrongful dismissal claim be dismissed for delay?
Alex Minkin

Exclusive to Canadian HR Reporter from Rudner Law.

Suppose your company is sued by a former employee who claims that they were wrongfully dismissed. After filing the claim, two years have passed and the plaintiff has not taken any steps to move their lawsuit forward.

Is there a limit to how long this can go on for, and can you get the case dismissed for delay?

Surprisingly, this is a scenario that is somewhat common. Our firm has had several cases in which an employee commences a lawsuit and then seemingly loses interest.

Unfortunately, there is no easy way to have a case dismissed for delay, and many cases are allowed to go on for long periods of time, even when the defendant is not responsible for any of the delay.

The five-year limit

In Ontario, the document which commences a lawsuit in the Superior Court of Justice contains the following warning:

“TAKE NOTICE: THIS ACTION WILL AUTOMATICALLY BE DISMISSED if it has not been set down for trial or terminated by any means within five years after the action was commenced unless otherwise ordered by the court.”

Therefore, many will assume that a lawsuit can last a maximum of five years. However, the rules about dismissal for delay are more complicated, and the court’s deadlines are not “hard deadlines” that cannot be extended.

Rather, the court will regularly grant extensions of time where it determines that doing so is in the interests of justice and will allow lawsuits to be determined based on their merits.

Dismissal for delay

Each province has its own distinct rules; in Ontario, the Rules of Civil Procedure describe when a lawsuit will be dismissed for delay, and the two primary ways are as follows:

  1. When the action has not been “set down for trial” within five 5 years of it being commenced; or
  2. The action has been “set down for trial”, but is subsequently struck off the trial list, and it has not been restored to the trial list within two years.

Setting the action down for trial means that a party to the lawsuit (normally the plaintiff) has determined that they have completed the discovery process, and files documents with the court indicating that they are ready to proceed to trial. In certain jurisdictions, including Toronto, a lawsuit cannot be set down for trial until mediation has been completed.

Once the action has been set down for trial, it will be placed on the trial list, and the parties will eventually receive dates for a pre-trial conference and the trial. However, these steps could still remain many months or years away.

Therefore, a party can set the action down for trial just before the five-year deadline, and there could still be a considerable wait before the trial is completed.

Pandemic-era suspension of dismissals for delay

During the COVID-19 pandemic, procedural timelines, including dismissal for delay timelines, were suspended from March 16 to Sept. 13, 2020 pursuant to Ontario Regulation 73/20.

After Sept. 13, 2020, the Superior Court of Justice provided direction for court staff to continue refraining from dismissing civil lawsuits for delay, including employment law matters.

The court recently announced that dismissals for delay will finally resume as of May 13, 2024.

Court decision extending deadlines despite considerable delay

In the recent court decision of Martellacci v. Pitney Bowes of Canada Ltd., the court considered a motion for an order extending the time to set the action down for trial and setting a timetable for the remaining pre-trial steps.

In that case, the plaintiff was a former employee of the defendant who commenced a wrongful dismissal action on May 16, 2016. Taking into account the approximately six-month pause arising from the COVID-19 pandemic (i.e. from March 16 to Sept. 13, 2020), the five-year deadline for setting the action down for trial expired on Nov. 13, 2021. However, the court had not dismissed the action for delay, as such dismissals had not yet resumed.

The plaintiff commenced its motion for an extension of time on July 27, 2022, more than eight months after the five-year deadline had passed. The defendant company opposed the motion, and asked the court to dismiss the action for delay. The motion was heard on Aug. 29, 2023, and the decision was released on Jan. 15, 2024. In its decision, the court applied the following two-part test:

The plaintiff must demonstrate:

(i) that there is an acceptable explanation for the delay; and

(ii) that if the action is allowed to proceed, the defendant would suffer no non-compensable prejudice because of the plaintiff’s delay.

In analyzing the delay that occurred in the lawsuit, the court found that there were 23 months of delay, for which the plaintiff’s lawyer was responsible. The court found that this was due to:

  • the lawyer’s personal health issues
  • the strains on the lawyer's legal practice arising from the pandemic
  • The lawyer’s inadvertence and self-confessed lack of diligence.

The court was satisfied that the plaintiff provided an acceptable explanation for the 23-month delay and that the delay was caused by the conduct of her lawyer and not by any lack of intention or failure on the plaintiff’s part to move with reasonable diligence. The court further found that the defendant did not suffer any prejudice as a result of the delay.

Accordingly, the court granted the motion, imposed a timetable on the parties for the remaining steps, and extended the deadline to set the action down for trial until July 15, 2024. Moreover, the court ordered the defendant company to pay the plaintiff her costs of the motion in the amount of $15,000.

Conclusion on dismissal delays

Despite the deadlines contained in the court’s rules, lawsuits will not always be dismissed for delay, even when there are considerable periods of delay that are not the fault of the defendant.

If your company is sued for wrongful dismissal, the process will be exceptionally long if the parties are not willing to reach a negotiated resolution.

If you are facing a lawsuit that has been subject to lengthy delays, you should not assume that the lawsuit will automatically go away. It is best to get advice from a lawyer about how you can prevent further delays and push the matter forward to a conclusion.

Alex Minkin is a senior associate at Rudner Law in Toronto. He can be reached at (416) 864-8500 or [email protected].

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