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Posts tagged: Just Cause

Punitive Damages: Rare But Not Unheard Of

By , January 2, 2019 10:00 am

As we have written before, an employer may generally terminate an employee for any good business reason as long as it provides the employee with adequate notice of termination (or pay in lieu of this notice). Failure to provide adequate notice results in a wrongful dismissal. However, if an employer has ‘just cause’ for the termination, then the employer does not generally need to provide the employee with any notice of termination.

In addition to awarding damages for wrongful dismissal, courts have the authority to award “aggravated” or “moral” damages, and “punitive” damages, in certain circumstances (see here for some examples). Although punitive damages are rare, the courts will not shy away from awarding them if the circumstances merit it. A recent case from the Ontario Court of Appeal provides a good example of when these kind of damages may be awarded by the courts.

In Hampton Securities Limited v Dean, Hampton Securities employed Ms. Dean from March 2008 to April 2009 as a securities trader. Under the terms of the employment contract, Ms. Dean bore partial responsibility for losses resulting from her trades. It is industry practice for securities traders to absorb part of the losses they incur in the ordinary course of their duties. However, a dispute arose as to how much responsibility Ms. Dean had to bear for her losses. In the end, Ms. Dean resigned.

Hampton Securities initiated a claim against Ms. Dean for failure to pay her share of the losses resulting from her trades. Hampton Securities also reported Ms. Dean’s termination to the Investment Industry Regulatory Organisation of Canada (“IIROC”), and in its report, stated that Ms. Dean had been terminated for failing to follow established trading policies and engaging in unauthorised trading.

Ms. Dean then brought a counterclaim for constructive dismissal, alleging that Hampton Securities sought to alter the terms of her employment by unilaterally reinterpreting her contract. She also alleged that Hampton Securities’ report to IIROC constituted defamation. The Superior Court of Justice agreed with Ms. Dean regarding her allegation that her employer had sought to rewrite her employment contract without her consent.

Having found that she was constructively dismissed, the court then asked what damages it should award to Ms. Dean. Ms. Dean claimed $25,000 in aggravated damages, $25,000 in damages for defamation and $25,000 in punitive damages. The court found that although Hampton Securities’ conduct in misstating the reasons for Ms. Dean’s termination to IIROC was reprehensible, aggravated damages were not available, particularly due to concern of overlap between Ms. Dean’s defamation claim and her claim for aggravated damages.

With respect to punitive damages, these damages are awarded to sanction conduct that represents a “marked departure from ordinary standards of decent behaviour.” Whereas most damages at law are meant to compensate the injured party, punitive damages, as their name suggest, are meant to demonstrate retribution, deterrence and denunciation. Although punitive damages are the exception rather than the norm, the court found that this was an exceptional case. Hampton Securities’ conduct in filing a notice of termination containing allegations that went to the heart of Ms. Dean’s integrity represented a marked departure from ordinary standards of decent behaviour. Hampton Securities knew the allegations, which were untrue, would be available to all potential employers of Ms. Dean and would be fatal to the prospect of her obtaining future employment in the securities industry. The court found that such conduct which had potentially lifelong implications for an employee warranted condemnation and punishment.

The court found that Ms. Dean was entitled to $25,000 in punitive damages. The court also awarded Ms. Dean with six months’ pay in lieu of notice, which I will address in my next blog.

Conclusion

If an employer engages in malicious conduct during the termination of an employee, this conduct may be sanctioned by a court.

If your employer engages in similar behaviour to the behaviour described in this blog, such as making frivolous allegations that may impact your ability to gain re-employment, you should consult an employment lawyer to find out about your rights.

“The material and information in this blog and this website are for general information only. They should not be relied on as legal advice or opinion. The authors make no claims, promises, or guarantees about the accuracy, completeness, or adequacy of any information referred to in this blog or its links. No person should act or refrain from acting in reliance on any information found on this website or blog. Readers should obtain appropriate professional advice from a lawyer duly licensed in the relevant jurisdiction. These materials do not create a lawyer-client relationship between you and any of the authors or the MacLeod Law Firm.”

Secretly Recording Your Boss: A Slippery Slope (Part 1)

By , August 10, 2018 11:36 am

Secret recordings at the workplace were at the forefront of the news last year, for example, Omarosa Manigault released surreptitious recordings she took during her stint at the White House. Even before this news broke, I have been asked by clients whether an employee can record a conversation with their supervisor without the supervisor’s knowledge. As technology has advanced to the point that we all have recording devices in our pockets (i.e. our smartphones), this issue will only become more common in the workplace.

The first question I often hear is “is it legal?” Although I am not a criminal lawyer, my understanding is that it is not a crime to secretly record a conversation as long as the individual doing the recording is an “open participant” in that conversation. For example, it is not criminal to place your smartphone on a table and record the conversation you have with a supervisor, whether or not your supervisor is aware of that recording, because you are participating in that conversation. However, if you leave the room and leave your phone behind, and the phone records a conversation between your supervisor and a third party, that is criminal.

The more important question, which I’m not always asked because people tend to be satisfied with the answer above, is “should I record a conversation with my supervisor or manager?” Employees typically want to know because they want to have a record of what was said during a meeting, usually in the context of a disciplinary meeting, or are preparing to file a workplace complaint.

However, although something may be legal, it is not necessarily appropriate to do in the context of an employment relationship. In Hart v Parrish & Heimbecker Ltd., a recent case from Manitoba, Mr. Hart sued for wrongful dismissal damages after the company terminated his employment. Mr. Hart was the subject of four separate complaints from his co-workers. After the third complaint, Mr. Hart began to secretly record meetings with senior management. After the company received a fourth complaint, the decision was made to terminate Mr. Hart’s employment. He was offered a severance package comprising of one year’s salary with benefit continuance. Negotiations broke down and Mr. Hart commenced his wrongful dismissal action.

In addition to the four workplace complaints against Mr. Hart, the employer relied upon acts of Mr. Hart that were unknown at the time of the dismissal, specifically, the fact that he began surreptitiously recording his meetings with senior management. The employer argued that using a company telephone for a purpose for which it was never intended was a deliberate violation of his duty of confidentiality, and a breach of trust and loyalty to the employer. The court found that the for cause termination was reasonable in light of the workplace complaints against Mr. Hart. The court also found that Mr. Hart’s inappropriate use of his cell phone in secretly recording meetings with his superiors amounted to a breach of his confidentiality and privacy obligations to his employer. Ultimately, because the court found the employer had just cause based on the four workplace complaints, the court chose not to answer whether the surreptitious recordings justified a just cause termination as well. However, it is possible that a court would conclude that secret recordings have the effect of eroding the trust that is necessary in the employment relationship, which is a factor the court will take into account in deciding whether just cause exists.

Thus, just because something is legal, does not mean it is advisable. Secretly recording a conversation with your supervisor or manager could backfire. There are definitely more considerations to keep in mind than whether the act itself is criminal.

On the other side of the coin, if you are concerned about your employer secretly recording conversations, you may have a claim for breach of privacy, constructive dismissal, and/or breach of the duty of good faith. As this blog post is already quite long, I’ll be tackling these issues in another blog post.

If you have questions about your rights at works and the advisability of recording a conversation at the workplace, you can contact an employment lawyer at MacLeod Law Firm. You can reach us at [email protected] or 647-204-8107.

The material and information in this blog and this website are for general information only. They should not be relied on as legal advice or opinion. The authors make no claims, promises, or guarantees about the accuracy, completeness, or adequacy of any information referred to in this blog or its links. No person should act or refrain from acting in reliance on any information found on this website or blog. Readers should obtain appropriate professional advice from a lawyer duly licensed in the relevant jurisdiction. These materials do not create a lawyer-client relationship between you and any of the authors or the MacLeod Law Firm.

What kind of damages are you entitled to if your employer makes frivolous allegations about you?

By , August 22, 2017 9:12 pm

As we have written before, an employer may generally terminate an employee for any good business reason as long as it provides the employee with adequate notice of termination (or pay in lieu of this notice). Failure to provide adequate notice results in a wrongful dismissal. However, if an employer has ‘just cause’ for the termination, then the employer does not generally need to provide the employee with any notice of termination.

In addition to awarding damages for wrongful dismissal, courts have the authority to award “aggravated” or “moral” damages, and “punitive” damages, in certain circumstances (see here for some examples). A recent case from Alberta provides a good example of when these kind of damages may be awarded by the courts.

Lalonde v Sena Solid Waste Holdings Inc.

During Mr. Lalonde’s 4-year employment with Sena Solid Waste Holdings (“the Company”), he did not have a disciplinary history. One day, he was summoned for a meeting with his manager where he was accused of lying, being insubordinate, and “putting a life in danger” because a contract worker was working without a permit that day. Mr. Lalonde tried to respond to the allegations but was given little, if any, opportunity to do so. Mr. Lalonde was suspended and escorted out of the workplace by two other employees.

During Mr. Lalonde’s suspension, he attempted to contact his employer to communicate his side of the story. He did not hear anything from the employer for several weeks. The period of time during which he was suspended was difficult, and his doctor sent him on stress leave.

The employer did not respond to Mr. Lalonde’s request for more information, despite the fact that they were aware the Plaintiff was under stress. Approximately five weeks after he was suspended, Mr. Lalonde received a letter advising that his employment had been terminated for cause due to his failure to follow safety procedures and failure to follow his supervisor’s instructions.

As a last resort, Mr. Lalonde sent a letter to the employer providing his response to all of the allegations. In response, the Human Resources Manager sent Mr. Lalonde an email with a list of policy violations, which was copied to a number of senior employees.

Mr. Lalonde brought a wrongful dismissal action for pay in lieu of notice and aggravated damages. On the first day of trial, the employer withdrew the frivolous allegations of clause.

Decision

Taking account Mr. Lalonde’s age at dismissal (56), the nature of his employment (a tradesman doing fairly technical work) and the availability of similar employment, the judge awarded 6 months’ pay in lieu of notice.

The judge was very critical of the employer’s approach, which he described as “shoot first and ask questions later.” Although the employer tried to rely on the fact that it undertook an investigation to show that its actions were appropriate, the judge noted that Mr. Lalonde’s side of the story was never properly considered. The judge was satisfied that the employer’s actions amounted to a breach of the duty of good faith, which supported an award of $75,000 in aggravated damages in addition to pay in lieu of notice.

Lessons to be Learned

  1. An employer cannot simply claim it has just cause to terminate an employee and make frivolous allegations. It is the employer that has the burden of proving just cause.
  2. It is good practice for an employer to present an employee with, and allow them to respond to the alleged misconduct. Failure to do so could be found to be a breach of the duty of good faith.
  3. An employer’s breach of the duty of good faith in the manner of dismissal may lead to an award for aggravated damages in addition to damages for wrongful dismissal.

If you have been recently terminated, with or without cause, you should speak to an employment lawyer. If you would like to speak to a lawyer at MacLeod Law Firm, you can reach us at [email protected] or 647-204-8107.

The material and information in this blog and this website are for general information only. They should not be relied on as legal advice or opinion. The authors make no claims, promises, or guarantees about the accuracy, completeness, or adequacy of any information referred to in this blog or its links. No person should act or refrain from acting in reliance on any information found on this website or blog. Readers should obtain appropriate professional advice from a lawyer duly licensed in the relevant jurisdiction. These materials do not create a lawyer-client relationship between you and any of the authors or the MacLeod Law Firm.

Can you be terminated for poor performance?

By , July 10, 2017 12:36 pm

Sometimes, an employer will claim an employee’s poor performance is just cause for termination to avoid paying termination pay. It is generally difficult for an employer to prove that poor performance is just cause. If the employer does not have just cause, then the employee is entitled to termination pay.

In addition, claiming just cause when none exists can result in a judge ordering the employer to pay termination pay and aggravated damages in certain circumstances. This blog discusses a case where a judge did just that.

Facts

In Cottrill v Utopia Day Spas and Salons Ltd., Ms. Cottrill worked as a skincare therapist. When Ms. Cottrill’s supervisor left the company, the company reviewed Ms. Cottrill’s personnel file and discovered that Ms. Cottrill was underperforming. The employer asked Ms. Cottrill to attend a meeting where they pointed out her performance deficiencies and told her she had three months to improve or she would be terminated. Over the next 3 months, Ms. Cottrill significantly increased her sales revenue, retail sales and new client base. Despite this improvement, she was terminated for cause at the end of the 3-month period because she had not met all of the required performance standards and the employer felt she had a bad attitude.

Decision

The employer argued that Ms. Cottrill’s failure to meet the required performance standards, despite being given an opportunity to do so, which provided just cause to terminate her employment. Ms. Cottrill argued that she was set up to fail, and was not given a meaningful opportunity to improve.

The court commented that a failure to meet minimum performance standards does not necessarily justify dismissal with cause. The court then found that the employer had not established just cause to dismiss Ms. Cottrill:

● It was unreasonable to hold her to performance standards which it had not previously required of her.

● The employer failed to provide her with a fair and reasonable assessment of her performance.

● The employer could not rely on vague allegations that Ms. Cottrill had a bad attitude.

● The employer’s assertion that she was complacent and had a poor attitude was inconsistent with objective factors such as the fact that she met her performance criteria and increased her sales and services.

● Ms. Cottrill did not have a reasonable opportunity to respond to the conclusions reached by the employer before it dismissed her.

Given that the employer had no just cause, Ms. Cottrill was entitled to damages in lieu of notice and aggravated damages. The court found that the company was in breach of their duty of good faith in the manner they dismissed Ms. Cottrill. In not fairly considering her performance in the three month period, the employer breached its promise to Ms. Cottrill. The court also found that the events had a profound effect on Ms. Cottrill. The court awarded $15,000 in aggravated damages.

Lessons to be Learned

1. An employer cannot simply claim it has just cause to terminate an employee. The employer has the burden of proving just cause.

2. When the just cause termination is for inadequate performance, an employee has to be presented with an opportunity to improve.

3. Engaging in bad faith conduct while terminating an employee may lead to an award for aggravated damages in addition to damages for wrongful dismissal.

If you have been recently terminated, with or without cause, you should speak to an employment lawyer. If you would like to speak to a lawyer at MacLeod Law Firm, you can reach us at [email protected] or 647-204-8107.

Also, if you’re curious as to the wrongful dismissal damages Ms. Cottrill was awarded, stay tuned for next week’s blog!

 

The material and information in this blog and this website are for general information only. They should not be relied on as legal advice or opinion. The authors make no claims, promises, or guarantees about the accuracy, completeness, or adequacy of any information referred to in this blog or its links. No person should act or refrain from acting in reliance on any information found on this website or blog. Readers should obtain appropriate professional advice from a lawyer duly licensed in the relevant jurisdiction. These materials do not create a lawyer-client relationship between you and any of the authors or the MacLeod Law Firm.

Failing to provide a doctor’s note is not necessarily “just cause”

By , March 8, 2017 3:20 pm

Generally speaking, an employer may terminate an employee as long as it provides the employee with notice of termination. However, if an employer has ‘just cause’ for the termination, the employer does not need to provide any notice. One of the grounds employers try to rely on to prove just cause for dismissal is the breach of a company rule or policy. In a recent case, the employer tried to argue that the employee’s failure to comply with the employer’s sick leave policy by failing to provide a doctor’s note constituted just cause for dismissal.

Sinnathamby v The Chesterfield Shop Limited

Ms. Sinnathamby, a 14-year employee, called in sick one morning in September 2010. Despite three requests from the employer for a doctor’s note, Ms. Sinnathamby did not send any medical notes until after she was terminated a month after she went on her sick leave. The employer argued that she was terminated because of her failure to provide medical notes to support her absence from work, as was required by an employer policy. The judge found that Ms. Sinnathamby was warned that if she did not provide a doctor’s note or return to work she would be fired.

The judge found that it was reasonable, and within an employer’s right, to request a doctor’s note. However, there was no evidence as to why the medical note was required before October 4, 2010 (the day she was terminated), or the consequences to this employer of receiving the note after that date.

The judge also found that there were clearly alternatives to dismissal in these circumstances. Therefore, dismissing Ms. Sinnathamby for her failure to provide a doctor’s note was a disproportionate response, particularly given her long service.

Therefore, although Ms. Sinnathamby’s behaviour was inappropriate, her immediate termination was disproportionate to her misconduct, i.e. breaching company policy. Therefore, Ms. Sinnathamby was owed reasonable notice of her termination.

Lessons to be Learned

An employer cannot simply claim it has just cause to terminate an employee. It is the employer that has the burden of proving just cause. In deciding whether just cause existed, judges will look at a variety of factors and take a proportional approach. If you have recently been terminated for cause, you should speak to an employment lawyer. If you would like to speak to a lawyer at MacLeod Law Firm, you can reach us at [email protected] or 647-204-8107.

The material and information in this blog and this website are for general information only. They should not be relied on as legal advice or opinion. The authors make no claims, promises, or guarantees about the accuracy, completeness, or adequacy of any information referred to in this blog or its links. No person should act or refrain from acting in reliance on any information found on this website or blog. Readers should obtain appropriate professional advice from a lawyer duly licensed in the relevant jurisdiction. These materials do not create a lawyer-client relationship between you and any of the authors or the MacLeod Law Firm.

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