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Posts tagged: Nadia Halum

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.”

Working Notice: When working more than 9 to 5 makes it hard to find a way to make a living

By , November 19, 2018 10:00 am

Sometimes, rather than receiving a severance package, employees are provided “working notice” that their employment is coming to an end. In other words, your termination date is set to a fixed date in the future and you are expected to work throughout this period.

While there is nothing inherently wrong with providing working notice, there are some circumstances where a court may find the employer should not get credit for this notice period, and therefore should provide pay in lieu of notice instead. The Ontario Court of Appeal has recently decided that there is a qualitative component to reasonable notice. In other words, that the quality of the reasonable notice is important in addition to the quantity of notice an employee receives.

Wood v CTS of Canada Co.

On April 17, 2014, CTS of Canada Co. (“CTS”) gave written notice to employees that it was closing its Streetsville plant and that their employment would terminate on March 27, 2015. It subsequently extended the termination date for most employees to June 26, 2015. A class action was brought on behalf of 74 former employees against CTS of Canada Company. On issue was the adequacy of the notice of termination given by CTS.

The motion judge concluded that CTS was not entitled to credit for working notice for any week in which an employee worked overtime contrary to the ESA, or in which the employee was forced to work overtime that had a significant adverse effect on the employee’s ability to look for new employment.

The motion judge noted that according to the Employment Standards Act, no employer shall require or permit an employee to work more than 48 hours in a work week (unless the employee has agreed in writing and the employer has obtained the approval of the Director of Employment Standards). There was evidence that a group of hourly paid production employees worked approximately 55 hours a week during the notice period, contrary to the Employment Standards Act. The evidence also showed that the employees were not pressured to work and actually wanted to make more money. However, there was also evidence that 18 key employees were forced to work up to 60 hours per week.

The motion judge found that an employer that had employees work 16 hours a day during their notice period could not claim credit for working notice. To do so would be tantamount to saying “You had 8 hours a day to look for new employment and if you frittered it away sleeping, that was your choice.”

CTS had the onus to prove that it provided reasonable advance notice of termination. The motion judge concluded that there is both a quantitative and a qualitative component as to what is reasonable. If the primary objective of reasonable notice is to provide the dismissed employee with an opportunity to obtain alternate employment, to look for work, an employee needs both a reasonable aggregate notice period and a reasonable amount of time in the week.

On appeal, the employer argued that the “quality of the opportunity” is not a relevant factor in the determination of reasonable notice. The Ontario Court of Appeal upheld the motion judge’s determination that credit for working notice is dependent on the quality of the opportunity given to the employee to find new employment. The appellate court noted that the mere fact that the employee is required to work during the notice period does not automatically lead to denying the employer credit for a portion of the working notice period. Although an employee provided working notice period may have less time to look for alternate work, in some circumstances the fact that an employee is employed while job searching can improve the employee’s position when approaching prospective employers.

However, exceptional workplace demands on the employee during the notice period that negatively affect the employee’s ability to seek alternate work may warrant disentitling an employer from credit for some or all of the working notice period provided.

Takeaway for Employees

If you have been terminated and provided working notice and you are not sure whether what is being required of you during the notice period is fair, you should speak to a lawyer. Even if you are not being forced to work overtime, similar considerations with respect to quality could apply if you are not provided with time to attend job interviews. We can be contacted 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 to do when you receive a release from your employer?

By , September 26, 2018 10:00 am

When an employee is terminated and offered a severance package, they are almost always asked to sign a release agreement in exchange. A release agreement, as the name suggests, releases the employer from liabilities for employment-related claims. Thus, after an employee has signed a release agreement, if they attempt to sue their employer later on, the release agreement is typically raised as a bar for the employee to proceed with litigation.

There are certain circumstances in which a court will not enforce a release. The Ontario Superior Court of Justice recently allowed an employee to proceed with claims against his former employer regarding long-term disability (“LTD”) insurance, even though he had signed a release in exchange for the severance package when his employment ended.

Facts

In Swampillai v Royal & Sun Alliance Insurance Company of Canada, Mr. Swampillai worked for the employer for several years before he became disabled from working and began receiving LTD benefits. After two years, the insurance company advised he was no longer qualified for benefits. Mr. Swampillai retained a law firm to appeal the LTD denial, and while that appeal was ongoing, the employer advised him that his employment was being terminated. His employer offered him an amount that exceeded his minimum entitlements under the Employment Standards Act, 2000 (“the ESA”) for pay in lieu of notice, and an additional lump sum amount for loss of benefits. Mr. Swampillai was told that if he did not accept the offer and sign the release, the offer would be revoked and he would only receive his ESA entitlements. After some negotiation regarding the amount for pay in lieu of notice, Mr. Swampillai signed the release, which purported to release the employer and insurance company from claims regarding his LTD benefits.

As a result, both the employer and the insurance company brought a motion for summary judgment asserting that the employee was not entitled to make any claim against the employer for disability benefits, or against the insurance company for the administration of those benefits.

Decision

The court found that the release was unconscionable as it related to Mr. Swampillai’s LTD claim, and that Mr. Swampillai was allowed to proceed with the LTD claim despite the language in the release that precluded him from doing so. In other words, although the court found the release was legally binding with respect to the pay in lieu of notice, the court declined to enforce the benefits aspect of the release because it was too unfair to Mr. Swampillai, a vulnerable employee.

The test for unconscionability has four elements:

  1. A grossly unfair and improvident transaction;
  2. The victim’s lack of independent legal advice or other suitable advice;
  3. An overwhelming imbalance in bargaining power caused by the victim’s ignorance of business, illiteracy, ignorance of the language of the bargain, blindness, deafness, illness, senility, or other similar disability; and
  4. The other party’s knowingly taking advantage of this vulnerability.

The court noted that there had not been money specifically allocated towards releasing the LTD claim, that the employer knew Mr. Swampillai was in the process of appealing the denial, and neither the employer nor the insurance company drew Mr. Swampillai’s attention to the fact that the release would bar him continuing in that process.

Lessons to be Learned

Although this story had a happy ending for Mr. Swampillai, it is important to highlight that generally speaking, courts do not take it upon themselves to intervene when people have been handed a raw deal. Therefore, when presented with a release, it is always recommended that you speak to a lawyer so you understand the true nature of the deal you have struck.

However, as this case illustrates, there may be instances where a court does intervene, particularly when dealing with a vulnerable employee.

If you have received a release and want to review it with a lawyer, or if you have cold feet after signing a release and want to know if there is any way around it, you can contact an employment lawyer at MacLeod Law Firm 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.

Secret Recordings at the Workplace (Part 2)

By , August 21, 2018 9:24 pm

Last week, I posted a blog about the advisability of recording conversations at the workplace. However, that’s not the only consideration to keep in mind given the advent of technology. I often receive calls from clients who suspect they are being monitored by their employers.

One thing that is important to know is that secret recordings could capture personal information and infringe on privacy rights, which may lead to a claim for breach of privacy. In 2012, the Ontario Court of Appeal established a new tort called “intrusion upon seclusion” and awarded damages for the breach of privacy in a case where an employee of a major bank accessed the personal financial records of her ex-husband’s new girlfriend on at least 174 occasions. This tort could arise in a situation where an employee’s expectation of privacy is violated by being surreptitiously recorded.

Another problem is that secret recordings can erode the trust that is necessary in the employment relationship and potentially lead to constructive dismissal claims. The case law around constructive dismissal is quite complicated, but generally speaking, a constructive dismissal occurs when an employer makes a significant change to an employee’s employment that shows the employer no longer wants to be bound by the contract. Furthermore, employers are subject to a duty of good faith both during a person’s employment, and at the time of termination. If employees have never been subjected to surveillance, suddenly introducing surveillance could be seen as a significant change that shows the employer is not willing to be bound by the original employment contract. Introducing new surveillance could also be seen as a breach of the duty of good faith. Judges have found that a breach of the duty of good faith can lead to aggravated and punitive damages in addition to wrongful dismissal damages.

If you believe you are being monitored by your employer, you should consult a lawyer. You can contact me at [email protected] or 647-985-9894.

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.

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