Ontario Small Claims Court could take on more “employment lay cases”

Starting October 1, 2025, Ontario’s Small Claims Court (SCC) will increase its monetary limit from $35,000 to $50,000. This change means that claims—including those for wrongful dismissal—where the amount sought is $50,000 or less can now be filed in the SCC rather than the Superior Court of Justice.

How the Process Might Work in Wrongful Dismissal Cases:

• Eligibility: If an employee’s wrongful dismissal claim (including damages for pay in lieu of notice, severance, and potentially related benefits) is $50,000 or less, it can be filed in the SCC.

• Streamlined Procedures: The SCC offers simplified and user-friendly procedures compared to the Superior Court. This typically results in lower legal fees, reduced administrative costs, and faster resolution times.

• Self-Representation: Many litigants represent themselves in SCC, and paralegals are permitted to assist, making the process more accessible and cost-effective for both employees and employers.

• Types of Claims: Wrongful dismissal claims often include unpaid wages, termination pay, and damages for failure to provide reasonable notice, all of which are eligible if the total claim does not exceed $50,000.

• Filing and Resolution: Claims are initiated by filing a Plaintiff’s Claim form with the SCC. The defendant (employer) files a Defence. The process involves mandatory settlement conferences, and if unresolved, proceeds to trial. The SCC’s streamlined process is designed to resolve disputes more quickly than the Superior Court.

• Enforcement: Once a judgment is obtained, enforcement mechanisms—such as garnishment or examination in aid of execution—are available, though some delays in enforcement have been reported due to court backlogs.

Strategic Considerations:

• Limitation Periods: Most wrongful dismissal claims must be filed within two years of the date of dismissal. If the claim is close to the limitation period, it is important not to delay filing in anticipation of the new limit.

• Amending Claims: If a claim is filed before October 1, 2025, for less than $35,000, it may be possible to amend and increase the amount claimed up to the new $50,000 limit once the change takes effect, subject to court approval and procedural rules.

• Superior Court vs. SCC: Claims exceeding $50,000 must still be filed in the Superior Court of Justice, which involves more complex procedures and higher costs.

Summary Table: Wrongful Dismissal Claims—Superior Court vs. Small Claims Court