header_people.jpg

Posts tagged: Termination

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.”

How Important Are The Deadlines In Your Severance Package?

By , December 6, 2018 1:43 pm

You are terminated from your job and your employer offers you a severance package. They give you one week to sign the offer and ask that you sign a full and final release confirming that there will be no further payments. Are you obligated to sign and return the offer within a week?

We often receive this question from recently terminated employees who are scrambling to find legal advice within a few days while also dealing with the stress of their termination.

If we are first contacted close to the deadline we often advise employees to simply request an extension from their employer. In our experience, the vast majority of employers will consent to this request. It is important to remember that it is in your employer’s best interest to reach a reasonable deal with you.  Just because you do not sign and accept their severance package before the deadline, does not make their legal obligations to you disappear. Further, the deadline is only important if you are accepting the offer.

You should have your severance package reviewed by a lawyer before accepting it because, in many cases, it is possible to negotiate a better severance package. It is not unusual for employers to offer severance packages that barely meet the minimum standards set out in the Employment Standards Act. You may be entitled to considerably more pay than the minimum standard.  Even if have signed an employment contract with a legally enforceable termination clause, it is possible that you could be entitled to a large severance package because of conduct that occurred during your employment such as harassment and discrimination. Unless you are certain that their severance package is fair you should not sign a severance offer and release until you have consulted with a lawyer.

At least one Ontario judge has unfavourably viewed stringent deadlines requiring an employee to sign a severance package and release.  In Rubin v. Home Depot Canada Inc., 2012 ONSC 3053 the Court found that even though an employee had signed a “release” shortly after his termination, the release was not binding. The Court found that the employee had not been given sufficient time to consider the offer.  Ultimately the Court awarded him significantly more notice than his employer had offered him.

Lessons for Employees:

  1. If you need more time to obtain legal advice ask your employer for an extension to sign the severance package, particularly if you are given less than 5 business days to consider the settlement offer.
  2. Always consider having your severance package reviewed by a lawyer because it is possible you could be entitled to a greater notice period. Especially if you are a long service employee. Remember: you don’t know what you don’t know.

If you would like to speak to an employment lawyer at the 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.

A Change for Employees and Termination Packages: The IBM Example

By , September 7, 2018 3:48 pm

The Basics

Under the Employment Standards Act (ESA), employees who are terminated are entitled to appropriate notice of termination, which is generally a week’s worth of notice, or pay in lieu of notice, for each year worked up to a maximum of eight weeks. Not every employee is also entitled to severance.  Therefore, if you worked for a small company for twenty years, your employer might be required to give you only eight weeks of notice or pay in lieu of notice. Alternatively, the common law entitles employees to up to a month of notice, or pay in lieu of notice, for each year worked.

For this reason, many employment contracts contain a termination clause or a section that attempts to reduce the cost of terminating an employee by either introducing an alternative fixed amount or limiting what the employee can get to the bare minimums under the ESA. While termination clauses may provide you, as an employee, with security about what exactly you are entitled to should you be terminated, they are also dangerous as they can also slash the amount of money you to which you might otherwise be entitled.

Some termination clauses, however, are unenforceable: they may violate the ESA by not specifically mentioning severance pay, or be ambiguous. Because of this, many cases make their way to court.  

While the ESA outlines the minimum compensation for employees who are fired, the amount that an employee can be paid at the time of their termination can be significantly higher.  

Termination clauses have been a fiery area of employment law, and the courts have had mixed opinions on how to determine whether a termination clause is valid and lawful.  In 2017, many court decisions sided with employees because they are typically the weaker bargaining partner in an employer-employee relationship. However, in the recent case of Noah Amberber v. IBM Canada Ltd., however, the Ontario Court of Appeal ruled in favour of the employer.  This ruling sets an important precedent for judges presiding over cases where employees have taken their employer to court over potentially invalid termination clauses, and is relevant to any employee with a termination clause in their employment contract.  

Noah Amberber v. IBM Canada Ltd.

Former IBM-employee Noah Amberber argued that the termination clause in his written employment agreement, which granted him 18 weeks of salary instead of the 16 months he said he was entitled to, was unenforceable because it violated the ESA minimums, because among other things it was ambiguous.

At the first level of court, the judge agreed the termination clause was indeed ambiguously worded.  She decided it had been written unclearly, and therefore ruled in favour of Amberber.

That decision was successfully overturned in the Court of Appeal, where the judge sided with IBM that the termination clause was clear. The Appeal judge decided that, when read as a whole, the clause was decisively written. The Court of Appeal stated that the first judge “strained to find an ambiguity where none reasonably exists.”

What it All Means for You

This is an incredibly dynamic area of law that is continually changing based on the decisions of judges.  The best course of action is to try and change a termination clause before you sign it. That means seeing a lawyer once you have a new offer but before you start the job.  It also means getting advice if your employer gives you a new contract during your employment. When an employer does this, they have likely made changes to the contract try and make the termination clause better.  If you have already been terminated, with Noah Amberber v. IBM Canada Ltd. in mind, it is definitely in your best interest to figure out whether a termination clause is enforceable before signing off on a severance package by seeking advice.

While in the past, judges were more likely to rule in favour of employees because of their disadvantages in drafting the termination clause, it is likely that future rulings will be more critical of employees arguing against the validity of their contracts.  We at MacLeod Law Firm specialize in dealing with these types of situations. If you are an employee who has a termination clause in your employment contract, come and see us.

To read more about termination clauses, read on here:

If you have questions about your rights regarding termination clauses and would like more information, 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.

Fired? What to Know Before You Sign

By , July 20, 2018 11:55 am

At face value, anything under official letterhead seems legal and final.  However, the conditions of your termination may well be negotiable. So, while being fired can be a confusing and stressful time, it is absolutely crucial that you read and consider the information contained in the severance package that was presented to you by your employer before signing anything.  Contrary to how you may be feeling, you may still have a great amount of power in negotiating the very best severance package possible. With the help of an experienced employment lawyer, your termination could actually be transformed into increased compensation and future opportunities.

Severance packages are contracts created by employers and their lawyers that dictate the conditions of your termination.  Like the employment contract you signed upon accepting your job offer, severance packages can alter and change your rights, and are created in the interest of the employer.  

Your employer may think you have a valid termination clause when you in fact do not.  Or your employer could be offering you much less than you could receive in court. Your employer may be asking you to “release” possible future claims.  Do you know what claims you could have? You may be able to receive more money, longer lasting benefits, a more favourable reference letter, or other conditions that will allow you to move forward gracefully.  These conditions are often difficult to spot and understand, but can be extremely important for you.

At MacLeod Law Firm, we are experts in employment, labour, and human rights law.  We can review your severance package to ensure that your interests are being protected.  If you have questions after being fired or about your severance package, you can contact 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.”

Reviewing a Severance Package: What to Expect from an Employment Lawyer

By , March 7, 2018 12:26 pm

You have just been terminated. You have been given a week or so to accept a severance package but you don’t know if it is fair. That is where we come in.

We Tell You Whether Your Termination Package is Fair

We only do employment law and we review 100s of severance packages each year.

Before telling you whether we think your termination package is fair we will speak with you for about an hour to find out about the background to your termination so we can provide you with an informed opinion.

What Happens When You Meet with Us?

We ask you a lot of questions.

If you have been terminated without just cause then we will want to know all of the information a judge would take into account when deciding how much termination pay you are owed. If you were terminated with cause we need to discuss the alleged misconduct to assess whether the employer would likely prove just cause.

If you have signed an employment contract with a termination clause we will want to discuss the circumstances surrounding the contract. Recently judges have refused to enforce some termination clauses so we carefully review the termination clause to assess whether it is legally enforceable.

You Don’t Know What You Don’t Know

You may have additional legal claims against your former employer that you did not even consider. We understand you are not an employment lawyer and you don’t know what information is important. We do.

For example, your former employer may owe you more money as of your last day of employment than you thought possible.

Or you may be owed more money because the employer discriminated against you. Did you know that there are 16 personal characteristics that an employer cannot take into account when terminating your employment? Like your age, your gender or the fact you have a disability or a perceived disability.

If an employer treats you poorly during your employment, at the time of your termination, or after your termination then you may be entitled to additional compensation.

We Provide Peace of Mind

At the end of your consultation, we will tell you whether your severance package is fair and if not what we think would be fair. Some people find that going through this process gives them peace of mind and helps them move on with their lives.

For over 30 years, Doug MacLeod of the MacLeod Law Firm has been advising emploeers on all aspects of the employment relationship. If you have any questions, you can contact him directly at 416 317-9894 or at [email protected]

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.

Panorama Theme by Themocracy