McGuinty v. 1845035 Ontario Inc. (McGuinty Funeral Home) is a case unlike many others, in the sense that it involved a particularly large award of wrongful dismissal damages: $1,274,173.83. There are not many scenarios in the context of employment law which could support such an immense award of damages. So alarmingly high was the award that the defendants actually appealed the ruling on the grounds that there had been an error in calculating the damages (among other grounds of appeal). 

Ultimately, the Ontario Court of Appeal upheld the trial judge’s decision and the high award of damages. 

 

Factual Background

The employee in this case was formerly the owner of the McGuinty Funeral Home – a family business that had originated with his grandfather. This was the only business the employee had ever known. At the age of 55, he made the difficult decision to sell the business. The sale agreement provided that the employee would remain with the funeral home for an addition ten years as a General Manager. Thus, the former owner became an employee of the company that bought the business. 

Despite this agreement, there was a serious lack of trust between the new employer and the employee. The new employer changed the locks to the funeral home under the belief that the employee was throwing away funeral home files without authorization. Furthermore, the employer took away the employee’s use of the company vehicle, which had been a term of their agreement. 

Eventually, the employee commenced a medical leave as set out in a doctor’s note. The employee was clear that during this medical leave, he would not be stepping down from his posiiton. During that leave, the employer removed the employee’s desk and pictures of the employee’s family.  The employee also identified a number of unresolved concerns: unpaid commissions and wrongful deductions from his pay.

In analyzing these facts, the trial judge found that the employee had been constructively dismissed. The trial judge made five findings of fact, holding that the employer:

  1. Improperly terminated the employee’s use of his company vehicle; 
  2. Recruited a subordinate to track the employee’s time at work, without notifying him; 
  3. Failed to pay the employee commissions to which he was entitled; 
  4. Removed the employee’s photograph from the funeral home; and, 
  5. Changed the locks to the funeral home without notice or explanation.

As a consequence, the trial judge found the employee was constructively dismissed. The employee was awarded the controversial amount of $1,274,173.83.

 

No Error in Calculating Damages

The employer subsequently took the position that the trial judge had erred in their calculation of damages. The employer proposed three arguments, all of which were ultimately rejected by the Ontario Court of Appeal. There was, in their opinion, no basis upon which to interfere with the trial judge’s decision. As a result, the large award of damages was upheld. 

This, obviously, was a very welcome decision for the employee – and a very costly lesson for the employer.