Suing an employer
or an employee?

By Jonathan Kleiman, Barrister & Solicitor · Published June 2026

"Can I sue my old boss?" — or, from the other side of the desk, "can I sue my former employee?" — is a question I hear more often than people might guess. Something went wrong at the end of a working relationship: wages went unpaid, a commission was withheld, someone was let go without notice, or an employee walked off with company property. The money is real, the frustration is real, and people want to know whether Small Claims Court is the place to deal with it.

The short answer is often yes. Employment disputes that are fundamentally about money — and that fit within the court's monetary limit — can usually be brought in Small Claims Court. Unpaid wages, unpaid vacation pay, earned commissions, and even a modest common-law wrongful-dismissal claim are all things this forum can handle. But there are important catches: a hard dollar limit, a forced choice between suing and going to the Ministry of Labour, and the genuinely tricky business of valuing a dismissal claim.

I want to be upfront about something before we go further. My firm's core work is business, contract, and Small Claims disputes, and that is the lens I bring here. Employment law — and especially wrongful dismissal — is a specialized field with its own case law and its own traps. So while I can give you a clear, practical map of how these claims work in Small Claims Court, you will see me recommend an employment lawyer at several points along the way. That is not me passing the buck; it is me telling you where the right specialist genuinely earns their fee.

What "can you sue an employer or employee" really means

The first thing I do with a question like this is figure out what kind of dispute we are actually in, because "employment" covers a lot of ground and only some of it belongs in Small Claims Court.

When the dispute is essentially a money dispute — someone owes someone a sum that can be put on an invoice or a pay stub — Small Claims Court is usually a fair fit, as long as the amount is within the limit. Unpaid wages, withheld commissions, unpaid vacation pay, and the severance-style damages of a wrongful dismissal are all, at bottom, claims for money. That is the court's bread and butter.

Where it gets more complicated is when the dispute is about something other than money — a human rights complaint, a claim about unionized work, a workplace-safety reprisal, or an Employment Standards entitlement you would rather have a government officer enforce. Those can fall under specialized tribunals or statutes, and they are not always things a civil court handles. I will not pretend to map every one of those here; that is exactly the territory where an employment lawyer belongs.

So when someone asks me "can I sue?", my real first question back is: "what are we actually fighting about, and how much is it worth?" The answer to that tells me whether Small Claims Court is the right room — and it is the same threshold question I apply to almost any dispute, as I explain in can I sue anyone for anything in Small Claims Court.

There is also a timing filter that catches people off guard. Like most civil claims, employment money claims are subject to a two-year limitation period — broadly, two years from when you knew or ought to have known you had a claim. For an unpaid wage or a dismissal, that clock usually starts running around the date the money went unpaid or the termination took effect. It is easy to let months drift by while you decide what to do, so I treat the limitation date as one of the very first things to check, not the last.

Is an employment claim just a regular money claim?

In Small Claims Court, much of the time, yes — it is processed like any other claim for a debt or damages. But employment carries a layer that ordinary contract disputes do not: a web of statutory protections under the Employment Standards Act, and a choice you may have to make about where to enforce them. So while the mechanics feel like a normal lawsuit, the strategy around it is not quite the same as suing over an unpaid invoice. That extra layer is the reason I keep pointing toward specialist advice.

From my experience

From my experience, the cleanest of these cases is the unpaid-wages or unpaid-commission claim where the paper is good. An employee finishes the work, the final cheque never comes, and there is a contract or a commission agreement that spells out what was owed. Those look and feel like any other debt claim — we document the amount, confirm it is within the limit, and the matter proceeds much like a collection file. When the numbers are modest and the records are clean, Small Claims Court does its job well.

Wrongful dismissal is where I slow clients down. Someone comes in convinced they are owed a precise figure, and the honest truth is that nobody can be precise about a reasonable-notice claim until you weigh the factors — age, length of service, the kind of role, how easy it will be to find comparable work. I have seen people badly underestimate and badly overestimate what they were owed, and both errors cost money. This is the point where I tell clients, plainly, that an employment lawyer should value the claim before they decide anything about forum or strategy.

And then there is the employer side, which people forget exists. I have had business owners ask whether they can recover from a former employee who damaged equipment, took inventory, or breached a clear term of their contract. The answer is often yes — but I almost always have to talk them out of the instinct to just claw it back from a final paycheque, because that runs straight into the Employment Standards Act's limits on wage deductions. Suing and self-help are not the same thing, and the difference matters.

What ties all three patterns together is that the law treats employment as more than a private contract. There are statutory floors and protections layered on top, and a government enforcement route that runs parallel to the courts. That is why I am careful never to treat one of these like an ordinary debt file on autopilot — the mechanics may look familiar, but the strategy around them is where the real judgment lives, and where the wrong move costs the most.

What the law generally says

Let me lay out the rules that actually shape these claims. None of this is legal advice for your specific situation, and on the employment-specific points I am deliberately keeping it general — but these are the load-bearing concepts.

The $50,000 limit

Ontario Small Claims Court can hear money claims up to $50,000, not counting interest and costs. That ceiling is the first filter for any employment claim. Unpaid wages, vacation pay, and commissions usually sit comfortably under it. Wrongful-dismissal claims are the ones that can blow past it, because reasonable-notice damages climb with seniority and service. If your claim is worth more than $50,000, your real choice is between the Superior Court, where there is no monetary ceiling, and deliberately giving up the excess to stay in the faster, cheaper Small Claims forum.

The ESA-versus-court election — you have to choose

This is the single most important thing for an employee to understand, and it is where I see the most expensive mistakes. Under section 97 of the Employment Standards Act, you generally cannot pursue the same unpaid wages, termination pay, or severance pay through both an Employment Standards complaint with the Ministry of Labour and a civil court lawsuit. You have to choose one path. Filing the complaint typically means giving up the court claim for that same money, and suing typically means giving up the complaint.

There is one narrow escape hatch worth knowing: an employee who files an Employment Standards complaint can generally withdraw it within two weeks of filing to preserve the right to sue instead. That two-week window is short, and the consequences of missing it are permanent for that claim, so this is not a decision to make casually. Because the election turns on facts and timing that are easy to get wrong, I strongly recommend speaking with an employment lawyer before you file anything — whether that is a complaint or a claim.

Wrongful dismissal in plain terms

A common-law wrongful-dismissal claim is, in essence, a claim that you were let go without the reasonable notice (or pay in lieu) the law entitles you to. The dollar value is the pay and benefits over that reasonable-notice period. The hard part — and the part that makes this a specialist's job — is figuring out how long that notice period should be. There is no neat formula; it depends on a cluster of factors and a body of case law. A modest wrongful-dismissal claim can live in Small Claims Court; a larger one cannot. Valuing it correctly is the whole game, and it is why I keep saying: get an employment lawyer to assess the notice period.

When the employer is the one suing

The street runs both ways. An employer can sue an employee — for breach of an employment contract, for conversion or theft of property, or for damage to company property, among other things — provided the claim fits the $50,000 limit. What an employer generally cannot do is simply deduct the disputed amount from the employee's wages; the Employment Standards Act restricts unilateral wage deductions. Recovering money from an employee usually means bringing a proper claim, not engaging in self-help. If you are an employer weighing this, it often overlaps with ordinary contract law, which I cover in what counts as a breach of contract in Ontario.

Common situations I see

Over the years, most of these matters fall into a few recognizable patterns. Here are the ones that come across my desk most often.

Unpaid wages, commissions, or vacation pay. The work was done, the relationship ended, and the final money never arrived. These are the most straightforward employment claims to run in Small Claims Court, because they are really just unpaid-money claims with a contract behind them. The complications are usually about whether a commission was "earned" under the agreement, or how vacation pay accrued — both of which turn on the wording of the documents.

Wrongful dismissal. An employee is let go without adequate notice and seeks reasonable-notice damages. If the claim is modest, it can fit in Small Claims Court; if it is substantial, it does not. This is the category where I most consistently steer people toward an employment lawyer, because the value of the claim — and whether it even belongs in this forum — depends entirely on a specialized valuation of the notice period.

The employer suing for damage or breach. A business wants to recover for an employee who damaged equipment, walked off with property, or broke a clear contractual term. These are real claims, but they live alongside the wage-deduction restrictions of the Employment Standards Act, so the path is "sue properly," not "take it out of the last cheque." For business owners, this frequently sits next to other contract and collections issues I handle through my work as a Toronto business lawyer.

What about a constructive dismissal or a workplace harassment claim?

These come up, and they are exactly where I get cautious. A constructive dismissal — where the employer changes the job so fundamentally that it amounts to a firing — is a wrongful-dismissal claim with an added legal question about whether a dismissal even occurred, and the value still turns on the notice period. Harassment, discrimination, and reprisal claims often live with specialized tribunals or statutes rather than a civil money court. I do not run those, and I would not pretend otherwise; if that is your situation, an employment lawyer is the right first call.

Does it matter if I was an employee or an independent contractor?

It can matter a great deal. The label on the agreement does not settle it — courts look at the real substance of the relationship, and someone called a "contractor" may legally be an employee (or a "dependent contractor") entitled to notice. That characterization affects whether the Employment Standards Act applies, whether you have a notice claim at all, and how the claim should be framed. It is another spot where a specialized assessment is worth its cost before you file.

A step-by-step look at an employment claim

Here is how I work through one of these from the first conversation. Treat it as a framework, not a substitute for advice on your particular facts.

1. Assess the claim and what it is worth

Before anything else, I pin down what kind of claim it is and what it is realistically worth. A clean unpaid-wages number is easy. A wrongful-dismissal figure is not — and this is the stage where a poor valuation does the most damage. If the claim is a dismissal claim, an employment lawyer should value the notice period here, because that number decides everything downstream, including whether Small Claims Court is even the right forum.

2. Choose the right forum

With a value in hand, the forum usually picks itself. Under $50,000 and Small Claims Court is the efficient choice; over it, you are looking at the Superior Court or a deliberate decision to abandon the excess. For employees, this is also the moment the ESA-versus-court election bites — going to the Ministry of Labour is a separate road from suing, and you generally cannot travel both for the same money. Choose deliberately, with advice.

3. Send a demand letter

Many of these resolve before a claim is ever filed. A clear demand letter that sets out the amount owed, the basis for it, and a deadline can prompt payment or a settlement conversation — and it costs far less than litigation. You can put one together quickly with the Ontario demand letter generator. For straightforward unpaid-wage or invoice-style claims, this is often the fastest route to a result.

4. File the claim

If a demand does not work, you prepare and issue the Plaintiff's Claim in Small Claims Court, name the correct legal party, and serve it. The mechanics are the same as any other Small Claims action, which I walk through in detail in how to sue in Small Claims Court in Ontario. From there the ordinary rhythm of the court takes over — a defence window, a settlement conference, and, if needed, a trial.

The evidence that actually matters

Employment claims are won and lost on documents, and the good news is that most of the important ones already exist — you just need to gather them before you file. Something I tell clients constantly is that an organized file does more to move a case than almost anything else.

• The employment contract or offer letter. This is the first document I want to see. It defines the relationship, the pay, the notice terms, and — for commission disputes — when money was actually earned.
• Pay records. Pay stubs, T4s, records of hours worked, and anything showing the gap between what was earned and what was paid. This is the spine of an unpaid-wages claim.
• Emails and messages. The contemporaneous correspondence around the dispute — promises made, instructions given, the back-and-forth before the relationship ended — is often where the case is decided.
• The termination letter. For a dismissal claim, the termination letter and the record of employment matter, along with how and when the firing happened.
• Mitigation evidence. If you are claiming reasonable notice, evidence of your efforts to find comparable work becomes relevant, because what you earn (or could have earned) elsewhere can affect the claim.

When clients bring me a tidy, complete package of these, the path is clear and the case moves. When the documents are scattered or missing, half the early work is just reconstructing what happened — and that is time and cost you can avoid by gathering everything up front.

Common mistakes I see

A few errors come up again and again in employment claims, and each one can be costly. Here are the ones I most want you to avoid.

Filing an ESA complaint and a lawsuit for the same money. This is the big one. Under section 97 of the Employment Standards Act, you generally have to choose between an Employment Standards complaint and a court claim for the same unpaid wages, termination pay, or severance — you cannot pursue both. People file a complaint to get the ball rolling, then later decide they want to sue for more, and discover they may have given up that right. If you have already filed a complaint, remember the two-week withdrawal window — and get advice immediately.

Suing for more than $50,000 in Small Claims Court. The court cannot award more than its limit. If your real claim is worth more — as wrongful-dismissal claims often are — you either accept the ceiling and knowingly abandon the excess, or you take the case to the Superior Court. What you should not do is file in Small Claims without understanding that you are capping your own recovery.

Misjudging the notice period. The most common wrongful-dismissal error is putting a confident number on a claim that nobody can value confidently without doing the analysis. Overestimate and you waste money chasing damages you will never get; underestimate and you leave money on the table or file in the wrong forum. This is the mistake an employment lawyer is built to prevent, and it is why I keep recommending one for dismissal claims.

Self-help wage deductions. On the employer side, the instinct to just hold back a final paycheque to cover an employee's debt or damage runs into the Employment Standards Act's restrictions on deductions. Recover through a proper claim, not by clawing it back from wages.

What happens in court

Once an employment claim is filed in Small Claims Court, it follows the same procedure as any other action, and the rhythm is worth knowing.

After you serve the Plaintiff's Claim, the defendant — whether that is a former employer or a former employee — has a flat 20 days to file a Defence under rule 9.01. That is the Small Claims deadline; do not confuse it with the longer Superior Court timelines. If no Defence comes, you can move toward default judgment.

If the case is defended, a mandatory settlement conference under rule 13 happens before any trial. A deputy judge reviews the dispute, gives both sides a candid read on how it might go, and tries to broker a resolution. A large share of cases — employment claims included — end here. If the matter does not settle, you request a trial date, and eventually a deputy judge hears evidence and decides. Small Claims trials are streamlined and usually wrap in a single day.

One more thing worth flagging on the back end: winning is not the same as getting paid. If you obtain a judgment and the other side will not pay, you have to enforce it, which is a separate process I walk through in how to enforce a Small Claims Court judgment in Ontario.

Settlement considerations

Most defended cases settle, and employment matters are no exception. Settlement is often the smartest outcome on both sides, and there are reasons specific to employment that make it especially worth considering.

For an employee, settlement converts an uncertain wrongful-dismissal valuation — which could come in higher or lower at trial — into a known number now, and it sidesteps the time and stress of fighting. For an employer, settlement caps exposure and ends the disruption of litigation. A settlement can also be structured in ways a judgment cannot: confidentiality, an agreed reference, payment terms. Those non-monetary terms sometimes matter as much as the dollars.

Where there is a genuine dispute about the value of a notice period — which is most wrongful-dismissal cases — the settlement conference is the natural place to bridge the gap, because both sides are looking at the same risk. The costs rules also nudge toward reasonableness: in Small Claims Court, costs are generally capped at 15% of the claim under rule 19.04 (absent unreasonable behaviour), which keeps the stakes of fighting in proportion. When the gap is about valuation rather than principle, a fair settlement is usually the better trade.

Key takeaways

• Yes, employment money disputes can go to Small Claims Court. Unpaid wages, vacation pay, commissions, and a modest wrongful-dismissal claim all fit — as long as the amount is within the $50,000 limit.
• The ESA-versus-court election forces a choice. Under section 97 of the Employment Standards Act you generally cannot pursue both an Employment Standards complaint and a lawsuit for the same money — and if you filed a complaint, you have only two weeks to withdraw it to keep the right to sue.
• Wrongful dismissal needs a specialist. Valuing the reasonable-notice period is the whole game, and it determines both the worth of the claim and whether Small Claims Court is even the right forum — see an employment lawyer.
• Employers can sue too — but not by self-help. A business can sue an employee for breach, theft, or damage, but the Employment Standards Act restricts deducting it from wages.
• Documents decide these cases. The contract, pay records, emails, and termination letter do more to move an employment claim than anything else — gather them before you file.

Frequently asked questions

Can I sue my employer for unpaid wages in Small Claims Court?

Yes, as long as the amount falls within the $50,000 Small Claims limit. Unpaid wages, overtime, vacation pay, and earned commissions are money claims, and a money claim that fits the limit can be brought in Small Claims Court. The wrinkle is the election of remedies: under the Employment Standards Act you generally cannot file a complaint with the Ministry of Labour and sue in court over the same unpaid wages — you have to choose one. Because that choice has consequences, I would speak with an employment lawyer before deciding which road to take.

Can I sue for wrongful dismissal in Small Claims Court?

You can, if the value of your reasonable-notice claim fits within the $50,000 limit. Common-law wrongful dismissal is about the pay you were owed for a reasonable notice period, and where that figure is modest, Small Claims Court is a legitimate forum. The catch is that wrongful-dismissal claims are notoriously hard to value — the notice period depends on factors like age, length of service, and position. If the claim could be worth more than $50,000, it likely belongs in the Superior Court. Wrongful dismissal is a specialized area, so I would have an employment lawyer assess the notice period before you file anywhere.

Can my employer sue me in Small Claims Court?

Yes. An employer can sue an employee for things like breach of an employment contract, conversion or theft of property, or damage to company property, provided the claim fits within the $50,000 limit. What an employer generally cannot do is simply deduct the amount from your wages — the Employment Standards Act restricts unilateral wage deductions, which is a different thing from suing. If you have been served by an employer, you have a flat 20 days to file a Defence, and you should get advice quickly rather than ignoring the claim.

Should I go to the Ministry of Labour or to court?

It depends on what you are claiming and how much it is worth. The Ministry of Labour route — an Employment Standards complaint — is free and does not require you to hire anyone, but it is limited to your statutory entitlements. A court claim can capture common-law amounts like reasonable-notice damages, which can be much larger, but it costs more and takes longer. Crucially, for the same unpaid wages or termination pay you generally have to choose one path, not both. This is exactly the kind of fork where a short conversation with an employment lawyer pays for itself.

Can I do both an ESA complaint and a lawsuit?

Generally no — not for the same money. Under section 97 of the Employment Standards Act, if you file an Employment Standards complaint over unpaid wages, termination pay, or severance pay, you give up the right to sue in court for that same matter, and vice versa. You must choose. There is one important escape hatch: an employee who files an ESA complaint can withdraw it within two weeks of filing to preserve the right to sue. Because this election is easy to get wrong and the deadlines are tight, I strongly recommend getting advice from an employment lawyer before you file anything.

What is the most I can claim in Small Claims Court?

The monetary limit in Ontario Small Claims Court is $50,000, not counting interest and costs. If your employment claim — unpaid wages, vacation pay, commissions, or wrongful-dismissal notice — fits at or under that figure, Small Claims is an option. If it is worth more, you either have to sue in the Superior Court or formally give up the portion above $50,000 to stay in Small Claims, which is sometimes a reasonable trade-off and sometimes a costly one. Whether abandoning the excess makes sense is a judgment call worth talking through with a lawyer first.

What if my wrongful-dismissal claim is worth more than $50,000?

Then Small Claims Court is probably not the right forum. Reasonable-notice damages can climb well past $50,000, especially for long-service, senior, or older employees, and you cannot recover more than the $50,000 limit in Small Claims. Your options are to sue in the Superior Court of Justice, where there is no monetary ceiling, or to deliberately abandon the amount over $50,000 to keep the case in the faster, cheaper Small Claims forum. That is a real strategic decision with real money attached, and it is one I would not make without an employment lawyer valuing the notice period first.

Do I need an employment lawyer?

For a clean unpaid-wages claim that is well documented and modest, many people manage in Small Claims Court on their own or with general litigation help. But wrongful dismissal is a different beast — valuing the notice period, navigating the ESA-versus-court election, and weighing settlement all turn on specialized knowledge. My firm focuses on business, contract, and Small Claims disputes, and where a matter is genuinely about wrongful dismissal or your statutory entitlements, I will tell you honestly that you are better served by an employment lawyer. Getting the right specialist early usually costs less than fixing a misstep later.

Can I sue for unpaid commissions or vacation pay?

Yes. Earned commissions and accrued vacation pay are money you are owed, and an unpaid-money claim within the $50,000 limit can be pursued in Small Claims Court. Commissions can get complicated, because whether and when a commission was "earned" usually turns on the wording of your employment or commission agreement — which is why the contract is the first document I want to see. As with any unpaid-wages claim, watch the election of remedies: pursuing the same amount through both an ESA complaint and a court action is generally not allowed, so pick your forum deliberately.

What evidence do I need for an employment claim?

Start with the paper that defines the relationship: your employment contract or offer letter, and any commission or bonus plan. Then the money trail — pay stubs, T4s, records of hours, and anything showing what was earned versus paid. For a dismissal, the termination letter and the record of employment matter, along with emails or messages around the firing. If you are claiming reasonable notice, evidence of your efforts to find new work (mitigation) becomes relevant too. Organized, complete documents do more to move an employment case than almost anything else, so gather them before you file.

Final thoughts

So — can you sue an employer or an employee in Small Claims Court? Usually yes, when the dispute is really about money and the amount fits within the $50,000 limit. Unpaid wages, withheld commissions, vacation pay, a modest wrongful-dismissal claim, and an employer's claim for breach or damage are all things this forum can handle. The mechanics are the same as any other Small Claims action, and for a clean, well-documented money claim, it is an efficient and affordable place to be.

But employment law carries a layer that ordinary disputes do not. The election between an Employment Standards complaint and a court action is a one-way door for the same money, with a tight two-week window to reverse course. And wrongful dismissal turns on a specialized valuation of the notice period that decides both the worth of the claim and the forum. On those points I will keep saying it plainly: talk to an employment lawyer before you commit. My firm's strength is business, contract, and Small Claims work, and part of doing that job well is telling you when a specialist should weigh in.

If your dispute is fundamentally a money claim — an unpaid invoice, a withheld commission, a clear contractual debt — that is squarely in my wheelhouse, whether it overlaps with my work recovering unpaid invoices and loans or my contract law practice. And if you are still weighing whether a claim is even worth pursuing, it helps to understand what it actually costs to sue someone in Ontario before you commit. For a straightforward read on your situation, call 416-554-1639 or book a free consultation — a short conversation will usually tell you whether Small Claims Court fits, or whether you need a specialist in your corner.