Bad Faith Discharge

Stacey Ball of Ball Professional Corporation was the lawyer acting on behalf of the winning party in the landmark case, Wallace v. United Grain Growers Ltd.. It was in this decision, with the help of top Toronto employment lawyer Stacey Ball, that the employer’s obligation of good faith and fair dealing in the manner of dismissal was created. The court stated, at paragraph 98, that although the obligation of good faith and fair dealing is incapable of precise definition, at a minimum, it should require: “in the course of dismissal employers ought to be candid, reasonable, honest and forthright with their employees and should refrain from engaging in conduct that is unfair or is in bad faith by being, for example, untruthful, misleading or unduly insensitive.” [Emphasis added]

Thanks to the obligation of good faith and fair dealing, an employer in violation of the obligation could be liable for a separate quantum of damages, entirely independent of damages for reasonable notice. Bad faith discharge or discharge for bad faith can therefore create an actionable wrong in its own right. However, it is noteworthy that bad faith discharges or breaches of the implied obligation of good faith and fair dealing in the manner of dismissal are not all equally injurious. A trial judge must, in each case, examine the nature of the bad faith conduct and its impact.

The employer’s duty of good faith and fair dealing has now been extended to not merely the termination of employment, but the existing relationship prior to termination. See Colwell v. Cornerstone Properties Inc. [2008] O.J. NO. 5092 (SC). The breach of the implied obligation of good faith and fair dealing can provide the dismissed employee not only damages for mental distress and loss of reputation, but also economic losses engendered by the manner of the dismissal.

Following the Wallace decision, the Supreme Court of Canada decided Honda Canada Inc. v. Keays. Here, it was decided that bad faith discharges or breaches of the implied obligation of good faith and fair dealing should not result in an extended notice period (as was the conclusion in Wallace) but should instead lead to foreseeable compensable damages not subject to mitigation. Notwithstanding this, it is possible that a reasonable notice period could be extended where the manner of dismissal renders one unemployed or unemployable for a longer period of time than they otherwise would have been.

Arguments regarding bad faith discharges are not always successful. The employee has the burden of showing that their employer engaged in bad faith conduct or unfair dealings in the manner of dismissal, and that their injuries flow not from the dismissal itself but from the manner in which it was effected. Employees are not always successful in discharging this burden. Examples of circumstances in which a bad faith discharge was not found include:

• In Gaudio v. Banca Commerciale Italiana of Canada, there was no award of extended damages where the mental distress experienced by the employee stemmed from the fact they had been terminated and not from the manner in which they were terminated;
• In Clendenning v. Lowndes Lambert (B.C.) Ltd., an it did not necessarily follow that there would be a breach of the implied obligation of good faith and fair dealing where an employer makes unsuccessful cause allegations with a solid foundation in the evidence; and
• In Blondeau v. Holiday Ford Sales (1980) Ltd., extended damages were denied where an employer failed to communicate their intention of returning the employee to her job on a gradual basis, causing her to reasonably believe she had been constructively dismissed.

Having an experienced employment law counsel, such as Stacey Ball of Ball Professional Corporation, will make it far more likely that your claim of bad faith discharge is successful.

At Ball Professional Corporation we take the legal issues around Bad Faith Discharge very seriously and are committed to making sure your employment and Human rights are represented at the highest level and addressed in the most professional manner. We will work to minimize the cost to you by using our vast experience in negotiations while making sure you receive what you are legally entitled to according to Canadian employment law. Stacey Ball is one of the top employment lawyers in Toronto and represents clients across Canada. If you are not getting what you deserve, contact Stacey Ball to begin fighting for your rights, all the way to the Supreme Court of Canada if necessary, where Stacey Ball has fought and won protecting the interests of his clients on many occasions.