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Archive for the ‘Termination’ Category

Calling your boss dishonest could amount to just cause termination

March 25th, 2013

Many disgruntled employees have thought about writing angry letters to their “horrible bosses” which could amount to just cause termination. One such employee, Ms. Bennett, a Mississauga lawyer, accused her employer, Ms. Cunningham, of taking credit for work she completed and billing clients for time Ms. Bennett spent on files. Ms. Bennett paid the ultimate price for a letter calling her employer dishonest and negligent; she was fired from her position without notice. In response to the termination, Ms. Bennett brought a lawsuit for wrongful dismissal. Bennett v. Cunningham went through three levels of court, ending unsuccessfully for Ms. Bennett at the Court of Appeal.

The trial judge found just cause for termination based on highly critical comments made against the operation of the law office and the integrity of the employer. As a result, the trial judge held that Ms. Cunningham had just cause for termination without notice. The Divisional Court on appeal reversed the trial judgment for failure to use a contextual approach that considers the circumstances surrounding the conduct as well at the nature and degree of conduct. On a further appeal, the Court of Appeal restored the decision of the trial judge of just cause termination.

just-cause-termination-toronto

The lesson from Bennett v. Cunningham is that employment law and actions for wrongful dismissal are not black and white. Three levels of court were asked to determine if an angry letter to a boss amounted to just cause termination. In addition, this case should be used as a precautionary tale for disgruntled employees to think twice of the consequences of hasty actions.

For further information or assistance in regards to just cause for termination or employment law, please contact any of our Employment Law Lawyers.

Working Overtime – Just Cause for Termination?

March 5th, 2013

Is Working On Break Considered Unauthorized Overtime and Cause For Termination?

The recent decisions of the Human Rights Tribunal in Shettleworth v. GAP (Canada) Inc. have upheld a employer’s right to terminate an employee for not taking mandatory breaks throughout the work day. The Tribunal found that the employer had a legitimate reason to enforce its mandatory break policy, since it could otherwise be liable for overtime pay under the Employment Standards Act, 2000.

working-on-a-break

For the Tribunal’s decisions click Here and click here

For an article about other overtime cases click here.

Notice Period for Termination of Employment

November 16th, 2012

Notice Period for Termination of Employment

A recent Ontario decision, Hussain v. Suzuki Canada Ltd, awarded the plaintiff, a terminated employee, 26 months of reasonable notice for termination of his employment without cause. This is welcome news to terminated employees because the court awarded a notice period in excess of the usual 24 month upper limit. However, before disgruntled employees that have been recently terminated start asking for 26 month notice periods they should be aware that they still need to meet Bardal factors to even reach the assumed cap of 24 months. Furthermore, they should be aware of the exceptional circumstances that justified the increase of notice period in Hussain. The terminated employee in Hussain¸ worked continuously at Suzuki for almost 36 years and had no notice or even inkling of his termination. His last position was an Assistant Warehouse Supervisor in charge of 11 other employees, a position that Suzuki acknowledged was very important and valuable. Another key factor in the decision was the age of the plaintiff, who was almost 65 years old at the time of the termination. Despite the exceptional facts of the case, this decision is a good precedent for employees fighting to get a fair and just award to compensate them for a wrongful dismissal.

Human Rights in the Corporate Setting

August 31st, 2012

A recent article by Siobahn McClelland (Click here) discussed an interesting Divisional Court decision, Ontario Human Rights Commission v Farris (Click here for the decision). The Divisional Court decision set aside a Human Rights Tribunal of Ontario decision and in doing so has made what one would hope will be an important step towards vindicating human rights in the corporate setting. Katherine Farris found herself terminated without cause from her employment with the corporation Saubuch Ontario Inc. in 2003. This occurred after she brought her concerns about her work environment to her managers, Harry McKeague and Michel Leonard, who were also the principals and shareholders of the corporation. Her concerns arose when she learned that there were rumours circulating at her workplace that she was having an affair with McKeague. The Tribunal found these rumours to be directly related to Farris’ gender. Further, it was found by the Tribunal that the employees at Farris’ workplace were calling her names that were based on her sex such as “bitch” and “psycho”.

When Farris spoke with McKeague and Leonard about this issue, they refused to take adequate steps to address it. As such, the Tribunal found that the corporation, Staubuch Ontario Inc., was liable for engaging in sexual discrimination and creating a poisoned work environment and awarded Farris $30,000.

While this outcome may seem positive, there was one important issue: By the time the decision was made, the corporation was no longer operating. Further, the Tribunal refused to award joint-and-several liability against McKeague and Leonard, even though they were found to be individually liable by the Tribunal. As such, it would have been nearly impossible for Farris to receive the compensation awarded to her.

Fortunately, the Divisional Court set aside the Tribunal’s decision and held McKeague and Leonard liable for compensation and sent the case back to the Tribunal to apportion liability. The Divisional Court emphasized that it was a finding of the Tribunal that McKeague and Leonard failed to recognize that there was a poisoned work environment. This in itself was a violation of s. 5(1) of the Human Rights Corde. Further, they chose to terminate Farris rather than deal with the poisoned environment.

This decision could be an important step in the right direction of protecting human rights, by possibly ensuring in the words of Barbara Hall, chief commissioner of the Ontario Human Rights Commission that, “corporate liability not act as a shield against individual liability.” Further, it opens up the possibility of ensuring that in the appropriate circumstances, those who have faced human rights violations are adequately compensated by the managers, principals and owners of corporations, especially when compensation would otherwise be nearly impossible.

Wrongfully Terminated? Why You Should Seek Independent Legal Advice

July 24th, 2012

By Lianne Sharvit – Summer Law Student

In a recent blog post titled “Fired at 63, court ups 7-month settlement to 12” (click here), Sheryl Smolkin made an important point very clear: While losing your job without cause can be extremely difficult and stressful, those feelings may be exacerbated if you do not seek independent legal advice to ensure you have been provided with a fair settlement in lieu of notice. That is what happened to Eric Rubin, a former Home Depot Canada employee who was fired after 20 years of working for the company.

In lieu of notice, Rubin accepted 28 weeks pay worth 38,977.81, as well as 28 weeks of life insurance, health insurance and dental benefits that would be terminated when he found a new job. He also received an extension of 8 weeks on his short and long term disability benefits. Rubin accepted this offer on the spot. He also signed a form releasing the company from further obligations, as he was told that the offer exceeded the legal requirements of 27 ¾ weeks of pay and that he had to sign the release within five days in order to secure it.

Realizing later that he had made a mistake, Rubin sued Home Depot, and was awarded one year’s pay by the Ontario Superior Court Justice Lederer (click here). Justice Lederer came to this decision by going through four criteria:

Firstly, Justice Lederer looked at whether the agreement was grossly unfair. The judge was of the opinion that an employee of 20 years that was nearing the end of his working life and was wrongfully dismissed should be entitled to more than 28 weeks notice.

Secondly, the judge looked at whether Rubin had independent legal advice when making the decision. The answer was clearly no, as a lawyer would have advised him that he in fact was entitled to at least 27 ¾ weeks of pay even if he did not sign the release, and that he could sue for more.

Thirdly, Justice Lederer looked at whether there was an imbalance of power. The judge held that there is an inherent power imbalance between an employer and employee, and that there is also an inherent power imbalance created when an employer is terminating the employee. Further, the employee did not mitigate the imbalance in any way, but rather likely exacerbated it by, for example, starting off the conversation by telling Rubin it was his last day.

Finally, Justice Lederer looked at whether Home Depot took advantage of Rubin in his vulnerable state. The judge held that the offer was presented to Rubin in a way which made it seem as if he had no choice but to accept it as he was essentially being given more than he was entitled to.

In the end, Justice Lederer held that the release Rubin had signed could not be enforced and that he was entitled to 1 year of salary and benefits. However, this all could have been avoided if Rubin had sought independent legal advice from the outset, demonstrating the importance of doing so. Fortunately, it also demonstrates that if you have settled for less than you deserve, there may still be legal recourse.

Recently Terminated? Know Your Legal Obligations

July 13th, 2012

The duty of a terminated employee to mitigate their losses by finding alternate employment during the notice period has been hotly debated for some time. It comes as no surprise that employers, who are providing salary continuance in lieu of notice, insist that they be notified if the employee finds new employment during the notice period. The consequences of doing so, however, may mean that the employer will reduce the salary continuance payments or even cut them off completely, as the employee has mitigated their losses.

The debate is centered on how to best interpret contractual ambiguities. That is, many employment contracts set out the terms of the notice period the employee will be entitled to upon termination, but remains silent on the duty to mitigate. Thus, the question is whether the employer is entitled to still rely on the duty to mitigate to cut off salary continuance payments when the employee becomes re-employed.

Ontario case law has never given a clear answer on this issue. This changed last month with the release of the Ontario Court of Appeal’s decision in Bowes v Goss Power Products Ltd. The employee contract in this case was exactly alike to the one described above. It set out the employee’s entitlement upon termination without cause to a fixed period of notice or payment in lieu of notice. It remained silent on the duty to mitigate. The employee found a new job within two weeks of his termination at the same level of income. When Goss found out, they ceased to make payments claiming they were not responsible to pay any amounts Bowes had mitigated.

The Court of Appeal ruled in the employee’s favour. It concluded that the specified termination payment was either a contractual debt due or a liquidated damages amount. Either way, it does not constitute an award of damages at large under common law, like those that arise when someone breaches a contract, and so is not subject to the common law duty to mitigate damages.

This does not mean, however, that there will never be a duty to mitigate. The Court of Appeal also held that it is indisputable that the parties could have specifically agreed that mitigation did apply. Thus, it is the default position in the absence of the term to the contrary that mitigation does not apply. It remains open to the parties to agree to a term that leaves the employee subject to an obligation to attempt to mitigate his or her damages.

What this means is that employers must protect themselves by carefully drawing up detailed employment contracts and employees must take due care in reading these contracts and knowing their obligations before signing.

Employees Beware: Reasonable Notice is a Double-edged Sword

March 23rd, 2012

A recent Ontario Court of Appeal decision has endorsed the position of the Ontario Superior Court of Justice, that employees may owe their employee a significant amount of notice when planning to leave their employment. In the case of GasTOPS Ltd. v. Forsyth, four former employees of a company left their employment to start their own, competing business. Each of the four former employees provided the employer with two weeks notice, often considered to be a reasonable amount of time to offer when resigning from a job. However, given the importance of the roles that these employees played in the company they left, the trial judge held that they were integral to the direction and guidance of the company.

In upholding the trial judge’s decision, the Court of Appeal has reinforced the position that employees who are aware of their importance to the operations of their employer, and violate their responsibility to the employer by failing to provide adequate notice of resignation, may be financially liable to the resulting damage caused to their employer. In the GasTOPS case, the former employees, and their newly formed company, were found liable for damages to their former employer in the amount of over 12 million dollars, calculated as the amount of profits earned by the former employees through their newly formed company over a 10 year period. As well, an additional 3 million dollars in pre-judgment interest, and over 4 million dollars in legal costs, were awarded to the employer.

With regards to notice period, the trial judge noted the following:

“Failure of an employee to provide adequate notice will entitle the employer to an award of damages. Generally, reasonable notice is meant to give the employer time to hire and train a replacement. In determining the time required to hire and train a new employee, one must look at the nature of the employee’s position and the area of work that the employer was competing in.”

The Court of Appeal upheld the trial judge’s finding that the former employees had owed approximately 10 months notice to their former employer, given their roles and time spent with the company.

Perils of taking on a second job

February 8th, 2012

While many people are forced to work multiple jobs in this tough economy, employees should ensure that they properly consult with their primary employer before taking on any other unrelated work. The recent case of a bank employee, Marilyn Patterson, who worked as a real estate agent part time, serves as a warning for employees contemplating a similar move.

Ms. Patterson had been employed with a bank for 12 years, when she received a real estate license and began working part time with a local realty office. The bank became aware of this arrangement, and requested that Ms. Patterson discontinue her real estate activity or look for a new opportunity within the bank (one where no conflict with her current duties and her real estate activities would exist). After she refused these requests, Ms. Patterson was terminated without notice. Though no other performance issues were claimed by the bank, the judge in Ms. Patterson’s wrongful dismissal suit was forced to dismiss the action. The bank had clearly outlined guidelines regarding secondary employment and conflicts of interest, to which Ms. Patterson had agreed to in her employment contract.

The bottom line is that, while not all secondary employment will be viewed as posing a conflict with one’s primary employment, employees considering such an arrangement should spend the time reviewing their company’s policy regarding conflicts of interest and exclusivity of employment. Employers are entitled to set reasonable standards, such as prohibiting bank employees (where access to mortgage authorization may exist) from working as realtors. In light of Ms. Patterson’s case, conflicts that are obvious are likely to be upheld by the courts.

The Declining Role of “Character of Employment”….

November 7th, 2011

The Declining Role of “Character of Employment” in Determining the Notice Period

“Character of employment” is one of the four factors that the courts consider in determining the notice period when an employee is wrongfully dismissed (the other 3 are age, length of service, and length of time needed for the employee to find a new comparable job). Typically, an employee who worked in an executive, managerial or skilled position is entitled to a longer notice period than an employee whose job is clerical or administrative in nature. This is an example of how the courts have dealt with the “character of employment” factor. The assumption was that there are more higher level positions available than administrative jobs, which means that an employee seeking a new managerial job would typically take longer to find employment than a recently terminated administrative employee.

In Di Tomaso v. Crown Metal Packaging Canada LP, the Ontario Court of Appeal recently considered what the appropriate role of an employee’s “character of employment” should be in determining the notice period. In this case, the employee worked for 33 years as a mechanic and press maintainer, and admitted that this was an unskilled labourer position. At trial, he was awarded a 22 month notice period. Despite the employee’s many years of service, the employer argued for a reduced notice period on the basis of the “character of employment.”

In upholding the 22 month notice period, the Court of Appeal suggested that character of employment is “a factor of declining relative importance,” especially when an employer “attempts to use character of employment to say that low level unskilled employees deserve less notice because they have an easier time finding alternative employment.” It is a proposition that “cannot simply be taken for granted, particularly in today’s world.” In other words, we cannot simply assume that an employee seeking a new managerial job will take longer to find employment than a recently terminated administrative employee, and that the managerial employee should therefore be entitled to a longer notice period.

Wrongful Dismissal or Frustration of Contract?

October 4th, 2011

If an employee is off work for an extended period of time due to illness or disability, is the employer entitled to terminate the employment contract? Or would this be considered a wrongful dismissal?

A contract is frustrated when it becomes incapable of being performed when new circumstances arise, by no fault of either party, that would turn the contract into something completely different than what was initially contemplated.

To avoid a wrongful dismissal claim, the employer must prove that the employee is no longer able to fulfill the basic obligations associated with the employment relationship for the foreseeable future.

In assessing whether an employment contract has been frustrated, the court will consider the following factors:

1) the terms of the contract;
2) how long the employment was likely to have lasted but for the illness;
3) the nature of the illness/injury;
4) how long the illness/injury had lasted and the prospects of recovery; and
5) the period of past employment.

If an employment contract is found to have been frustrated, the employer would have no common law obligations to the employee. However, the employer must still ensure that they comply with their obligations under the relevant employment standards legislation.

The Importance of Warnings

September 26th, 2011

Employers beware! If you are considering terminating an employee for just cause (to avoid giving the employee a severance package), it is important to give verbal and written warnings, and to document all incidents. The employer should also not condone any inappropriate behaviour by the employee, such as perpetual lateness. In one case, an employee was late for work 57 times in about 5.5 months, but the court found that there was no just cause for the termination because the employer had condoned the behaviour!

What is an Adequate Notice of Employment Termination

August 29th, 2011

There is no hard and fast rule as to what constitutes adequate notice of termination. In the absence of an employment contract dealing with termination, the courts look at employment statutes and cases to determine what is an appropriate amount of notice of termination for each individual. The courts take into consideration such things as: age, length of employment, duties, length of time it would reasonably take to find comparable employment.

On What Grounds can an Employee be Terminated?

August 24th, 2011

An employer is entitled to terminate an employee for virtually any reason so long as the employer provides adequate notice, or pay in lieu of notice, of the termination and so long as the reason for the termination is not related to the employee’s race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex, sexual orientation, age, record of offences, marital status, same-sex-partnership status, family status or disability. If the termination is related to one of those grounds listed, than there has been a contravention of the Ontario Human Rights Code with respect to which a claim may be made to either a Judge of the Court or an arbitrator at the Human Rights Tribunal. The Courts are empowered to make monetary awards to a wronged employee. The Tribunal is empowered to make orders both requiring monetary compensation as well as reinstatement of employment.