(416) 921 7997 Ext.225
GET A CONSULTATION

Month: October 2021

“Just Cause” Termination Provision Upheld: A Temporary Win for Employers

by Stacey R. Ball| | Employment Law

“CannonDesign maintains the right to terminate your employment at any time and without notice or payment in lieu thereof, if you engage in conduct that constitutes just cause for summary dismissal.”

In Rahman v Cannon Design Architecture, Justice Dunphy was tasked with deciding whether the above termination provision was legal. At issue was the use of the phrase “just cause for summary dismissal”, and the question of whether such a phrase is contrary to the Employment Standards Act (“ESA”). Under the ESA, dismissed employees are not entitled to termination or severance pay if they are “guilty of wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer.”

According to the Ontario Court of Appeal in its Waksdale decision, the common law standard of just cause is actually easier to prove than the standard set out in the ESA. For employers whose contracts contain just cause provisions, this is a problem. Employers and employees in Ontario cannot contract out of the ESA – this means that whatever benefits are provided in employment contracts must be of greater or equal value as the benefits in the ESA. Just Cause termination provisions, by being easier to prove, provide a lesser benefit to employees than the wilful misconduct standard of the ESA and are therefore invalid. Where a contractual termination provision is invalid, the common law will apply, and no employer wants this.

Despite this well-established concept, Justice Dunphy held that the “just cause” provision was nevertheless valid. Respectfully, the reasons he used to arrive at this conclusion – one that is contrary to the Court of Appeal’s guidance – seem irrelevant to the analysis. As a result, his conclusion is likely wrong.

Factors Considered by Justice Dunphy: Irrelevant?

According to the Ontario Court of Appeal, the enforceability of termination clauses depend solely on the wording of the clause itself. It is only the wording of the clause that a judge is supposed to look at. However, Justice Dunphy relied on a number of different considerations in holding the “just cause” termination provision valid, including, among other things:

  • a) That the employee obtained independent legal advice prior to signing the contract;
  • b) That the employee negotiated an improved termination provision and did not object to the “just cause” language, despite having obtained competent legal advice;
  • c) That the employee was a woman of experience and sophistication, working in a senior role with high compensation; and,
  • d) That the agreement represented the mutual intention of the parties and was unambiguous.

Respectfully, these factors should not have been considered. They are not the test. Justice Dunphy should have looked to the language of the provision and decided its legality on that consideration alone. By considering this list of other factors, Justice Dunphy made a decision on irrelevant considerations.

A Temporary Win for Employers

This decision was a win for employers. Their termination clauses are often carefully crafted in order to limit their liability in the event they dismiss an employee, and this decision suggests that such termination clauses may remain enforceable even where the language contained within ought to nullify it. However, because the decision was likely wrongly decided, it may only be a temporary win. The decision is ripe for appeal. If that does happen, many employers may have to worry about the language they have used in their contracts.

Human Rights and Vaccines: The Ontario Human Rights Commission Weighs In

by Stacey R. Ball| | General

As of September 22, 2021, the Ontario government is requiring individuals to prove they are fully vaccinated in order to access certain businesses and public settings. These public settings include concert venues, movie theatres, convention centers, restaurants, nightclubs and casinos, among others. However, not everyone in Ontario has received the vaccination, and for a number of reasons. Some cannot receive the vaccination due to medical or religious reasons. Some simply do not want to take the vaccine and do not believe the government has the right to force them to do so.

Many who have not received the vaccine believe these mandatory vaccination policies are discriminatory or contrary to their human rights. However, they may be out of luck. According to the recent policy statement of the Ontario Human Rights Commission, such policies may not be discriminatory at all.

Generally Permissible: Reasonable Accommodations

According to the Commission, vaccine policies that are implemented to protect people at work or when receiving services are generally permissible as long as those who cannot receive the vaccine for Human Rights Code-related purposes are reasonably accommodated. By “Code-related purposes”, the Commission refers specifically to people who cannot be vaccinated due to medical or disability-related reasons.

The Ontario government has permitted exemptions to those who provide a written document supplied by a physician, registered nurse extended class or nurse practitioner explaining that the individual is exempt for a medical reason. According to the Commission, this is a reasonable accommodation.

Personal Preferences Not Protected

Significantly, according to the Commission, those who have refused the vaccine based only on personal preference do not have a right to accommodation under the Code. This is notwithstanding the fact the vaccine remains voluntary. Although the Code prohibits discrimination based on “Creed”, no tribunal or court decision has yet found a singular belief against vaccination or masks to amount to a creed. Even if it did, that would not necessarily grant these people exemptions from vaccine mandates. “The duty to accommodate”, says the Commission, “can be limited if it would significantly compromise health and safety amounting to undue hardship – such as during a pandemic.”

What Could this Mean for Employees?

The Ontario government is not the only one implementing vaccine policies. Many employers are requiring their employees be similarly vaccinated. Employees who refuse the vaccine face the risk of being terminated for their decision. Many of those employees had hoped to challenge such vaccine policies on human rights grounds. That avenue now looks rather gloomy. The Human Rights Commission has plainly said that vaccine mandates are generally permissible, so far as they provide reasonable accommodations to those who cannot get the vaccine for Code-related reasons. Those reasons do not include personal preference. It is likely that this approach, taken by the Commission in relation to the Ontario government’s vaccine policy, will be similarly applicable in the employment context. Simply not wanting to take the vaccine, as a personal choice, will probably be insufficient. Those who hope to challenge their employer’s vaccine policies will likely have to look elsewhere than personal preference. Not wanting to take the vaccine will likely be insufficient without some Code-related purpose, such as a disability, backing you up.

Mandatory Mask Policies – Not a Violation of Human Rights?

by Stacey R. Ball| | General

As of September 2021, our country is continuing to slowly reopen. As part of that slow reopening, we have seen a number of policies enacted that have sparked controversy and have been met with mixed reactions. Among those policies are mandatory mask policies. These policies often require that all people, employees and customers alike, wear face masks when inside the workplace.

At issue is whether or not these mandatory mask policies amount to a violation of human rights. For instance, many provinces including Ontario make it illegal to discriminate against a person on the basis of disability. If somebody were unable to wear a face mask on account of a disability, refusing to service that person due to their lack of a face mask would likely be discrimination contrary to the Ontario Human Rights Code.

This issue recently arose in an Albertan human rights complaint. The Human Rights Tribunal of Alberta held that a mandatory mask policy was not discriminatory and therefore did not violate the complainant’s human rights.

Factual Background: Szeles v Costco Wholesale Canada Ltd.

Mr. Szeles was a customer of Costco. He claimed to have a disability which prevented him from wearing a face mask as required by the company’s mandatory mask policy. An employee at Costco suggested he wear a face shield as opposed to the face mask, which Mr. Szeles refused on the grounds that the use of a face shield was stigmatizing and singled him out as a person with a disability. An altercation ensued and Mr. Szeles was escorted by police out of the store. He subsequently complained that Costco had discriminated against him in the area of goods, services and accommodation on the ground of physical disability.

In response, Costco argued that the mandatory mask policy was implemented to protect their employees and customers from COVID-19. According to Costco, they provided a number of reasonable accommodations for those who could not or would not wear face masks – the option of a face shield, or various online, home delivery or pick up options.

The Tribunal’s Decision

Ultimately, the Tribunal dismissed Mr. Szeles’ complaint. There was no doubt that Costco’s policy did have an adverse impact on persons who, by reason of disability, could not wear face masks. However, the Tribunal noted that there are limitations to the right to be free from discrimination, including where:

  • a) the limitation or rule is instituted for valid reasons;
  • b) it is instituted in the good faith belief that it is necessary; and
  • c) it is impossible to accommodate persons who may be adversely affected, without incurring undue hardship.

There is no doubt that Costco’s mandatory mask policy was instituted for valid reasons. It was consistent with mandatory public health regulations both at the municipal and provincial levels. The accommodations offered, namely, the face shield was held to be reasonable. Various local and international health organizations have suggested that face shields are an alternative to face masks, albeit not as effective. The fact the face shield was not as effective as the face mask did not undermine the reasonableness of the mandatory mask policy. The same could be said for the other accommodations offered – online shopping, pick-up options, etc. In light of this, Mr. Szeles’ complaint was dismissed. The mandatory mask policy was not discriminatory on the grounds of disability.

A Contextual Analysis – Potential for Change

Interestingly, the Tribunal noted at the end of their decision that they reached their decision in light of the status of the pandemic at the time Costco implemented their policy. Public health guidance, they said, along with evidence about the pandemic will inevitably change over time. With that change, it is possible that a different decision could have been made. As such, their decision to dismiss the complaint here does not necessarily mean that no human rights complaint regarding mandatory mask policies will succeed. It may vary on a case-by-case basis.

However, for now, it seems employers can rest easy in implementing mask policies. Until the public health guidelines surrounding COVID-19 and preventative measures change, they likely will not get in trouble for having such policies. As the status of COVID-19 changes, so too should the employer’s policies. It is important to be flexible and continue to adapt to recent developments.

Reference Letters and Employer Risk

by Stacey R. Ball| | Employment Law

It is common for those who are leaving their jobs and seeking new employment to ask their former employer to provide a reference letter. Ideally, these letters will set out their strengths, qualifications and experience in the former position to make it easier for that person to secure new employment. However, not everyone gets the reference letter they want. Some employers might decline to write one. Other employers might write one, but might say less than positive things.

Employers should be careful with what they put in a reference letter. Reference letters do not come without risks.

Obligation to Write Reference Letters?

For the most part, employers are under no obligation to write a departing employee a reference letter. This obligation does not exist at common law. Where a workplace is governed either by a collective agreement or the Canada Labour Code, it is possible that an arbitrator might order an employer to provide a reference letter. Generally this will not be the case.

However, it may be in the employer’s best interests to supply their departing employee with a reference letter. In wrongful dismissal cases, terminated employees have the obligation to mitigate their losses. This means they have to search for new employment. The quicker they find new employment (i.e. the quicker they mitigate their losses), the less the former employer will be liable for as wrongful dismissal damages. Therefore, an employer is incentivized to provide a positive reference letter to enable their terminated employee to find new employment as easily as possible.

The Risk of Defamation

Some employers will be more than happy to provide reference letters to potential new employers. However, not all of these employers will be happy to provide a positive reference. Some employers might provide a negative reference. This can be dangerous. A former employee might bring an action against the former employer for defamation.

To prove defamation, the former employee would have to show, on a balance of probabilities:

  • 1) That the words in the reference were defamatory, such that they would tend to lower the employee’s reputation in the eyes of a reasonable person;
  • 2) That those words in fact referred to the employee; and
  • 3) That the words were published, meaning they were communicated to at least one person other than the employee (i.e., the prospective employer).

If the employee can show these three elements, then the former employer has the burden of justifying their comments by, for example, arguing that the comments are truthful and therefore justified.  If an employer provides a negative reference that they genuinely believe to be true, it will be hard for the employee to prove defamation.

The Risk of Misrepresentation

Aside from the risk of providing negative references, there may also be a risk in providing positive references. That is, positive references that do not accurately reflect the true qualities and capabilities of the employee being discussed. A former employer might be liable for the tort of negligent misrepresentation if they provide a positive but untruthful reference to a prospective employer who ultimately relies on the falsely positive reference to hire the employee. To sue for negligent misrepresentation, the subsequent employer would have to prove:

  1. That the information provided in the reference was inaccurate;
  2. That the former employer knew the information was inaccurate; and
  3. That the inaccurate information motivated the subsequent employer to hire the employee and, thus, it suffered damages.

For this reason, employers providing reference letters must ensure they are being truthful at all times. An untruthful negative reference letter could lead to a defamation action, whereas an untruthful positive reference letter could lead to an action for negligent misrepresentation.

Reference Letters and Termination for Cause

On a final note, employers should be careful when providing letters of reference to employees they say were terminated for cause. It would be hard to argue, for instance, that the employee was incompetent and therefore deserving of summary dismissal while simultaneously suggesting in a letter of reference that the employee is a competent individual.

Your Rights in Ontario: Vacation Time and Vacation Pay

by Stacey R. Ball| | General

I Need a Vacation! What Are My Rights?

Everybody needs a break once in a while. Maybe work is just getting to be too much, or maybe the weather is too great to pass up. Whatever your reason for having one, everybody wants to have a vacation eventually. Luckily, employees in Ontario have a right to vacation time, so we can all get the time in the sun we need.

Under the Ontario Employment Standards Act, non-unionized employees who have worked for at least one year have a right to a minimum of two weeks of vacation. For example, if you were hired on June 1, 2021, then you will be entitled to two weeks of vacation after May 31, 2022. You will continue to earn two weeks of vacation after each 12-month period. Your entitlements will increase, however, once you have worked more than five years. At that point you will be entitled to three weeks of vacation after each 12-month period. So, for example, if you are hired on June 1, 2021:

  • June 1, 2021 to May 31, 2022 Two weeks’ vacation
  • June 1, 2022 to May 31, 2023 Two weeks’ vacation
  • June 1, 2023 to May 31, 2024 Two weeks’ vacation
  • June 1, 2024 to May 31, 2025 Two weeks’ vacation
  • June 1, 2025 to May 31, 2026 Three weeks’ vacation
  • June 1, 2026 to May 31, 2027 Three weeks’ vacation
  • Etc.

Vacation time continues to accrue even where employees are away from work due to sickness, injury, temporary lay-off, or any other leave of absence that does not result in a break of service.

In addition to this statutory right to vacation time, non-unionized employees in Ontario also have a statutory right to vacation pay. Under the Employment Standards Act, employees who have worked less than five years are entitled to at least 4% of the gross wages earned in the previous 12-month period. Employees who have worked five years or more are entitled to at least 6% of those wages. The employer has an obligation to provide the employee with their vacation pay as a lump sum prior to them taking the vacation, with a few exceptions.

It is important to note that these are your minimum entitlements. Therefore, your employment contract may provide greater benefits than those guaranteed by the Employment Standards Act. Your employment agreement cannot provide you with less than these minimum entitlements – that would be contracting out of the Employment Standards Act and would be illegal.

Cruising on a Deadline

Although you are legally entitled to vacation time and vacation pay, you cannot necessarily take those vacations whenever you want. There are actually deadlines concerning when you may make use of your vacation time. An employee who has earned their two or three weeks of vacation time must actually take that time within 10 months after completion of the 12-month period. Furthermore, employers have the right to schedule vacation as well as the obligation to ensure the vacation is taken before the end of that 10-month period.

So, rest assured, your employer must allow you some vacation days. Your beach visit doesn’t have to be cancelled, after all!

Wrongful Resignations

by Stacey R. Ball| | General

It is generally well understood that an employer ordinarily cannot fire you without providing you with either reasonable notice or severance pay. But, did you know the law applies a similar obligation on employees? As it turns out, there is a right way for an employee to resign from their job, and there is a wrong way.

In this blog post, we will discuss wrongful resignations – what they are, and what risk employees assume by making such wrongful resignations.

What are Wrongful Resignations?

Employees are required at common law, and often through their employment contracts, to give their employers reasonable notice of their intention to terminate employment. The rationale for this requirement is to provide the employer with a reasonable opportunity to find a replacement. In determining what makes notice of resignation “reasonable”, the courts will look to the responsibilities of the employee, their length of service, their salary, and the amount of time it could be expected for an employer to find a replacement or otherwise adapt to its loss. Where an employee does not provide their employer with this reasonable notice, the resignation is said to be “wrongful”.

However, employees do not have to give notice where they resign for cause. This is analogous to how employers can dismiss employees summarily for cause. Cause for resignation would include situations that would give rise to a constructive dismissal, such as a demotion or some other substantial and unilateral change to the terms of employment. An employment contract itself may contain a provision setting out what amounts to cause for resignation.

Employer Remedy for Wrongful Resignation

If there has been a wrongful resignation, the employer may sue their former employee. An action for wrongful resignation must have the following four components:

  1. The employee has resigned voluntarily (i.e., the employer did not give them an ultimatum along the lines of “quit or be fired”);
  2. No cause exists for the resignation;
  3. The employee did not provide their employer with reasonable notice of their resignation; and
  4. The employer suffered damages as a consequence of the wrongful resignation.

Employers suing for wrongful resignation will only be awarded damages which they can actually show they suffered as a consequence of the employee leaving the company. The employer is required to show they suffered costs, expenses or damages in excess of what they saved by no longer having to pay the employee’s salary. Simply being inconvenienced by the employee’s departure is not enough – there must have been an actual loss. The employer cannot seek an order from the courts compelling the employee to return to work. In the jurisprudence, wrongful resignation damages have included the profits the employer would have received had the employee worked during the required notice period.

Takeaway for Departing Employees

If you are an employee who is considering resigning from your job, you likely will find it difficult to give notice. It can be awkward and uncomfortable. But, it is important. You do not want to find yourself on the wrong end of a wrongful resignation lawsuit. Always review your employment contract to see if it provides a specific reasonable notice period. Otherwise, play it safe. Give your employer notice of your resignation and you can be sure you will be protected from such lawsuits later on.

Age Discrimination at Work

by Stacey R. Ball| | General

Age discrimination, otherwise referred to as ageism, can arise in a number of ways in the workplace. Ageism arises wherever an employee or potential employee is treated differently or unfairly because of their age. For younger persons, this may arise through an employer’s intention on hiring a more “mature” employee. For older persons, the same could arise through an employer’s intention to maintain a “youthful culture” in the workplace. These attitudes are grounded in negative stereotypical beliefs about aging – the young are inexperienced, immature, unreliable, while the old are slow, inefficient, and out of teach. This is discrimination. Notably, workplace discrimination against younger persons is just as objectionable as discrimination against older workers.

Thankfully, discrimination of this kind is actually illegal in Ontario pursuant to the Ontario Human Rights Code. No person over the age of 18 can be discriminated against in relation to their employment on the basis of their age.

The Human Rights Code

According to Section 5 of the Ontario Human Rights Code:

“Every person who is an employee has a right to freedom from harassment in the workplace by the employer … or by another employee because of race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sexual orientation, gender identity, gender expression, age, record of offences, marital status, family status or disability” (emphasis added).

This section provides a fairly comprehensive list of grounds upon which an employee cannot be discriminated against. Clearly, age is included. Under the Human Rights Code, an employer cannot, among other things:

  • Refuse to hire, train or promote an employee because of their age;
  • Target certain employees because of their age in making reorganizing decisions; or,
  • Mandate retirement after a certain age.

Proving Age Discrimination

An employee who believes they have been discriminated against on the basis of their age must first start by establishing a prima facie case of discrimination. A prima facie case requires the employee to show that the employee’s case, if believed, and without additional evidence, would support the inference that it is more likely than not that the employer’s actions were discriminatory. In establishing such a case, age need only be a factor, not the only factor. Age discrimination is not an easy case to make. It is difficult to prove on a balance of probabilities, and results have been very mixed.

A Successful Age Discrimination Case: Perk v. Seel, 2004 BCHRT 277

In this case, Ms. Perk filed a representative complaint on behalf of her mother, Ms. Flemminks. Ms. Flemminks was fired from her job as a restaurant server when she was 56 years old. Notably, the restaurant had recently switched ownership and the new owner was hiring many employees much younger than Ms. Flemminks and was reducing the hours of the somewhat older employees who were already employed. Supposedly, the new ownership felt they needed to hire younger servers to increase business.

In reviewing Ms. Flemminks case, the British Columbia Human Rights Tribunal was satisfied that Ms. Flemminks’ age played a role in her termination. The new ownership was hiring younger servers and was preferential towards these younger servers in the allocation of hours. There was, therefore, a prima facie case of discrimination on these facts. Unfortunately for the employer, they provided no evidence at the hearing and were consequently unable to rebut the prima facie case against them. As a result, the employer was found to have breached the Human Rights Code by refusing to employ Ms. Flemminks on the basis of her age.

Workplace Romance: Cause for Dismissal?

by Stacey R. Ball| | Cause For Dismissal

Commonly, our workplaces become the places where we spend most of our time. The majority of our day is spent working alongside our various co-workers. Inevitably, this time together creates bonds between you and your co-workers. Sometimes, those bonds extend further than friendship. Sometimes, those bonds become romances and relationships.

At first glance this sounds like a great, happy thing – but, do these romances carry risks? Could these romances jeopardize your employment? This concern is especially pressing when the romance is between an employee and a supervisor or manager. In this blog post, we will discuss what the Federal Court of Appeal said about such relationships in their 2013 decision Payne v Bank of Montreal.

Payne v Bank of Montreal: The Basic Facts

Mr. Payne was Branch Manager for the Bank of Montreal. He had a romantic relationship with his subordinate, the assistant manager Ms. Carter. This power dynamic between subordinate and superior is very notable. They also made little effort to keep their relationship separate from their work. It was known that they were intimate both outside work and during work hours. According to the adjudicator, Mr. Payne’s conduct was “reckless in the extreme.”

When the Bank found out about this relationship, Mr. Payne was terminated for cause. Undoubtedly Mr. Payne’s conduct was reckless, dangerous and foolish, but was it so serious that it amounted to cause?

Power, Threats and Promises

One very important factor going towards cause in cases such as this is the power imbalance between the superior and their subordinate. What matters is whether or not the superior has taken advantage of that power imbalance to coerce the subordinate into the romantic relationship either through duress or exploitation of some sort. It could be threats of discipline or reprisal, or promises of opportunity and preferential treatment. In brief, the issue is whether or not the superior’s conduct is unwelcome. In this case, Mr. Payne knew that Ms. Carter was vulnerable. He was responsible for writing her performance reviews, and her most recent was anything but positive. Ms. Carter claimed to have felt pressured to continue the relationship. Knowing this, and being aware of the power imbalance between the two, was it right for the Bank to terminate Mr. Payne for cause?

According to the adjudicator, and as upheld by the Federal Court of Appeal, it was not. Despite the power imbalance that existed between the two, the evidence revealed that everything was fully consensual. There was no evidence that Mr. Payne made any threats or promises related to work, and in the absence of such evidence, romantic relationships between superiors and their subordinates do not necessarily constitute cause for dismissal. Indeed, an inequality of bargaining power does not necessarily mean that such relationships are involuntary. Consent is vitiated by duress, unconscionability or exploitation, not by power imbalances necessarily.

As there was nothing to show that the romantic relationship between Mr. Payne and Ms. Carter was anything but consensual, there was nothing to show that Mr. Payne’s conduct was unwelcome. As such, the Bank was mistaken to terminate Mr. Payne for cause on these grounds. Termination was held to be excessive.

Can Romance Exist at Work?

As Payne v Bank of Montreal demonstrated, consensual romantic relationships between co-workers, on its own, will not be sufficient to justify termination, even when there is an inequality of bargaining power between the two parties. However, as noted by the adjudicator, it was certainly “dangerous, foolish and reckless”, especially because the couple was intimate during working hours.

What can you take away from this decision? It is okay to fall in love with your co-workers, but it is likely best to keep the love separate from the work.

What’s the Difference: Aggravated and Punitive Damages

by Stacey R. Ball| | General

Apart from receiving damages for wrongful dismissal, a dismissed employee also stands to benefit where aggravated and punitive damages are awarded against the employer. This is relatively rare, but it does happen.

In a recent decision by the British Columbia Court of Appeal, Acumen Law Corp. v. Ojanen, we saw an employer attempt the argument that punitive damages should not be awarded because they would be based on the same conduct that had already been compensated for through an award of aggravated damages. The Court of Appeal held otherwise. Aggravated and punitive damages are discrete sets of damages in wrongful dismissal proceedings and can indeed be awarded based on the same exact conduct. The fact that aggravated damages had already been awarded did not preclude the court from awarding punitive damages based on the same conduct. This is because aggravated and punitive damages are not the same – they serve different purposes.

So, what are those purposes? What is the difference between aggravated and punitive damages?

Aggravated Damages

Aggravated damages (sometimes referred to as “moral damages”) are compensatory. This means that aggravated damages are awarded to compensate a dismissed employee for a loss they have suffered. This must be a loss that extends beyond the feelings of disappointment, shock or anger that would be typical following an unexpected and without cause dismissal. For an award of aggravated damages, there must be actual loss or damage flowing from the unfair or bad faith conduct of the employer in the manner of dismissal. If an employee is dismissed in a manner that is abusive or unfair, they might have a claim for aggravated damages as compensation in addition to damages for wrongful dismissal.

In Acumen Law Corp v. Ojanen, aggravated damages were awarded to the employee due to the manner of dismissal. The employer’s actions were unfair, unduly insensitive and in bad faith. The employer had, among other things:

  • Dismissed the employee without allowing her to explain her actions and without telling her that her actions were prohibited;
  • Publicly dismissed her in front of her classmates and lied about the reasons for doing so; and
  • Accused the employee of deceit and dishonesty based on nothing but unfounded suspicions.

Based on these actions, the dismissed employee was awarded $50,000 in aggravated damages.

Punitive Damages

In Acumen Law Corp v. Ojanen, the employer attempted to argue that punitive damages should not be awarded because they would be based on the same conduct that led to the award of aggravated damages. However, punitive damages, in contrast to aggravated damages, are not compensatory. They serve an entirely different purpose. The focus of punitive damages is retribution, deterrence and denunciation. Punitive damages are intended to punish the employer, the deter the employer and others like them from engaging in similar behavior in the future, and to demonstrate the community’s collective condemnation of what the employer has done. The Supreme Court of Canada has said that punitive damages are only to be imposed where “there has been high-handed, malicious, arbitrary or highly reprehensible misconduct that departs to a marked degree from ordinary standards of decent behaviour” (Whiten v. Pilot Insurance Co., [2002] 1 S.C.R. 595). It is not about compensating the employee – rather, it is about punishing the employer.

Where, as is the case here, there have already been aggravated damages awarded to the employee, the question becomes whether those damages are sufficient to meet the objectives of punitive damages. Where they are insufficient, punitive damages can be awarded even on the same conduct.

In Acumen Law Corp v. Ojanen, the British Columbia Court of Appeal felt that the $50,000 award of aggravated damages was insufficient to punish the employer, to deter the employer, and to reflect society’s condemnation of the employer’s behavior. As a result, the Court of Appeal awarded a further $25,000 in punitive damages.

Conclusion

Employees who have been treated unfairly in the manner of their dismissal may therefore be able to recover greater damages than what wrongful dismissal alone could provide. Employers must therefore be mindful of how they treat their employees, even at the point of termination.

Workplace Investigations Prior to Dismissal

by Stacey R. Ball| | Cause For Dismissal| | Constructive Dismissal| | Wrongful Dismissal

At common law, employers do not have a duty to investigate allegations of misconduct prior to dismissing an employee. However, having no duty to conduct investigations at common law does not necessarily mean that courts do not want to see those investigations taking place. In fact, if an employer is required to establish just cause for dismissing an employee, they may very well wish that they had conducted such an investigation anyway. Not conducting an investigation and not affording the employee a reasonable opportunity to respond to allegations of misconduct could make it much more difficult for an employer to discharge the burden of establishing cause for dismissal.

When to Conduct an Investigation: Mazanek v. Bill & Son Towing

The recent Ontario Superior Court decision Mazanek v. Bill & Son Towing provides an instructive example of when an employer should conduct an investigation prior to dismissal despite not having a duty under common law to do so.

At issue in this case was the summary dismissal of an employee who worked as a tow truck operator. The employer argued that there was cause for dismissal on the grounds that the employee was stealing gas. The employee was given no warnings and was not given an explanation at the time of his dismissal.

There were four drivers working for the company and each driver shared one company gas card to refill their trucks. In reviewing the fuel consumption for the company’s main truck, it was discovered that the fuel consumption was unusually high. The employee was terminated as a result of this high fuel consumption. A co-worker and fellow driver was also terminated, for the same reason.

The company possessed the burden of proving that there was just cause for the employee’s termination on a balance of probabilities. They failed to discharge this burden. One important reason why they failed to discharge this burden was because the investigation they performed was inadequate. The company’s investigation and internal review revealed that either the employee or the co-worker who was fired alongside him were the ones operating the truck at the time of the irregularly high fuel consumption. The company could not determine which of the two was responsible, so the company terminated both. The company did not bring the allegations of theft to the employee’s attention. They did not give the employee the opportunity to respond. They could have but did not take steps to obtain better evidence of the alleged theft before proceeding with the termination.

The Court found that the employer should have given the employee the opportunity to respond to the allegations, particularly where the allegations are serious. Allegations of theft, fraud, and sexual harassment were noted by the Court as being serious allegations deserving of such an opportunity to respond.

The investigation failed to establish just cause not only because it did not afford the employee with the chance to respond, but because it only revealed that the employee or his co-worker might have been the ones involved. This uncertainty was not enough to establish cause for termination. As such, the Court found there was no cause. Had the employer conducted a thorough investigation, they may have been able to show that the employee was the one stealing the gas and they may have been successful in demonstrating cause for dismissal.

Takeaway for Employers

Although employers generally do not have a duty at common law to investigate allegations of misconduct prior to the dismissal of an employee, the above case demonstrates that it may be pragmatic to conduct such an investigation in any event. If an employer were to find themselves having to defend their decision to terminate an employee in the context of a wrongful dismissal suit, they may benefit greatly from the support of a thorough investigation proving the misconduct alleged.