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The law protects your reputation against defamation so, if someone defames you, you can sue the person for money to compensate you for your damage to your reputation.
But it's important to understand that the law doesn't protect you from a personal insult or a remark that injures only your pride; it protects reputation, not feelings.
For example, if someone says that you are a sleazy person then that's not damaging to your reputation as it's really just a mean insult. But if the person is saying that you are dishonest in business, you probably do have a good reason to sue.
Defamation can be a crime under the Criminal Code, but only rarely. You may also be able to sue for a violation of your privacy under the provincial Privacy Act. You may also have a complaint under your province's Human Right Protection Legislation.
In your case because the defamation is happening verbally the actual legal term for what you would sue for is "slander".
If you can prove that someone libeled you (that's when the defamation happens in written form) and that person does not have a good defence, then a court will presume that you suffered damages and award you money to compensate for your damaged reputation.
The law treats slander differently than libel: with slander, you have to prove you suffered damages, in the form of financial loss, to get compensation. It can be very difficult to prove this sort of financial loss. That's why most slander cases never go to court.
But in the following four examples, a slander lawsuit may succeed without you proving financial loss. Even though there's no permanent record of the slander, the law will presume damages, as if there were libel, if someone:
But going to Court is expensive and even if you win, you may not get as much as it costs you to sue. In deciding on assumed damages, the Court will consider your position in the community. For example, if you are a professional, damages may be higher.
Ultimately, therefore, in your case you may not have to prove damages. But, it's exceedingly expensive to sue in Canada and it's not likely that a lawyer would take your case on a contingency basis.
However, it's not the type of lawsuit this person or your former employer would likely want to defend either. For this reason it would make the most sense to retain a lawyer with a view to having that lawyer write a very strongly worded letter demanding that this person cease and desist and possibly even demanding a written apology that you can then use if necessary to undue damage caused by this slander.
What you can do to find a lawyer is one of the following things. You can contact the Law Society and use their Lawyer Referral Service. You will be given the name of a lawyer and can consult with the lawyer and the first half hour will be free. Or you can check on a site called lexpert. This is a legal directory of leading lawyers and law firms throughout Canada and is well-respected by the legal community. Here's the link to their website: http://www.lexpert.ca/Directory/DirectoryContent/FindLawyersOrFirm.aspx
I hope that helps as a starting point.