In a decision of the Ontario Superior Court of Justice, S. v. 2554318 Ontario Ltd. o/a Tax Mechanic, 2025 ONSC 6478, the Court awarded more than $63,000 to a wrongfully dismissed employee after the employer ignored deadlines, failed to defend the claim, and attempted a last-minute delay.
Shane Burton-Stoner and Andrew Monkhouse of Monkhouse Law Employment Lawyers represented the plaintiff, successfully obtaining default judgment and the resulting award.
This decision shows that employees who persist with their claim and follow proper court procedures can succeed even when the employer refuses to participate.
Overview: What Happened
The employee worked as a manager of social media and online content for an Ontario tax consultancy, producing digital and creative marketing content.
The employee was hired in mid-February 2022 and dismissed in early February 2023, just nine days before reaching one full year of service. The Court inferred that the timing was chosen to avoid paying an additional week of minimum notice under the Employment Standards Act, 2000.
At termination, the employer also withheld $3,967.81 in wages that were already earned.
How the Employer’s Delays Backfired
The employee started the lawsuit in May 2023. The employer did not file a defence and was noted in default. After being served with the required default judgment materials, the employer still failed to take the steps needed to defend the claim.
A judge later ordered the employer to bring a motion to set aside the default and to seek permission for the company to be represented by its principal. The judge also warned that failure to do so could prevent the employer from raising any defence. The employer ignored that order as well.
At trial, the employer attempted to request an adjournment. The Court refused because:
- A corporation must be represented by a lawyer unless it obtains leave, and no such leave had been granted.
- Granting another delay would have been “profoundly unfair” to the employee, who had already waited nearly two years for a hearing.
Because the employer failed to participate and ignored court orders, the matter proceeded as an undefended default judgment trial. The allegations in the employee’s claim were treated as admitted, and the Court focused on assessing notice, damages, and costs.
Why the Employee Received Over $63,000
The Court awarded the following amounts to the employee:
- Reasonable notice (4 months): $20,000.00
- Withheld wages: $3,967.81
- Lost benefits: $3,000.00
- Prejudgment interest: $3,589.01
- Substantial indemnity costs: $32,445.38
The employee recovered a total of $63,032.20. The costs award alone exceeded the damages and interest combined, demonstrating that employers who ignore court deadlines and misuse the litigation process can face serious financial consequences.
How the Court Assessed Notice and the Manner of Dismissal
To assess how much notice the employee was owed, the Court applied the usual Bardal factors: age, length of service, character of employment, and availability of similar work. Learn more about reasonable notice in Ontario.
The employee was 25 years old with less than one year of service, which typically supports a shorter notice period. However, several factors supported a longer period:
- the creative and specialized nature of the role,
- difficulties finding comparable work in the post-pandemic market,
- the employee’s efforts to mitigate, including freelance income that did not conflict with the former role.
The Court also considered the manner of dismissal. The termination occurred nine days before the employee’s one-year anniversary, a timing the Court described as a “calculated measure” to avoid an additional week of statutory notice. Combined with withholding nearly $4,000 in earned wages and offering no reference or support, this approach likely set the employee back by at least one month in the job market.
Taking all factors together, the Court awarded four months of reasonable notice, valued at $20,000.
Why the Costs Award Was So High
The Court awarded substantial indemnity costs of $32,445.38 due to the employer’s conduct during the litigation. This elevated level of costs is reserved for exceptional cases and reflects the Court’s concern about the employer’s repeated failure to participate in the process.
The Court found that the employer:
- substantially delayed the proceedings,
- forced the employee to take unnecessary steps, and
- saved money by not hiring defence counsel while increasing the employee’s legal costs.
The judge noted that the matter could have been resolved earlier by written motion rather than requiring an oral hearing had the employer participated appropriately.
This outcome also shows how having experienced employment counsel who follow proper procedures can protect employees when employers disregard their legal obligations.
Key Takeaways for Employees
- Employers cannot delay a case indefinitely. If an employer does not file a defence or comply with court orders, the case can move forward and result in judgment for the employee.
- The manner of dismissal matters. Courts may extend the notice period when an employer handles a termination in an insensitive or strategic way that harms the employee’s ability to find new work.
- Procedure matters. When employees and their counsel follow the rules and employers do not, the Court is more likely to rely on the employee’s evidence.
- Costs can protect employees. The substantial costs award exceeded the damages, showing courts are prepared to penalize employers who misuse the litigation process.
- Legal advice levels the playing field. Using correct procedures and holding the employer to account played a major role in this outcome.
Conclusion
The Court’s decision demonstrates that employers who ignore deadlines, fail to participate in litigation, or mishandle the termination and litigation process may face significant financial consequences, including substantial indemnity costs.
If you have been dismissed unfairly, denied your wages, or your employer is ignoring your claim, you do not have to navigate the process alone. Contact Monkhouse Law for a free 30 minute phone consultation to discuss your rights and potential options.