When someone loses their job, it is not hard to imagine they experience a range of emotions, including pain and distress. However, the courts in Ontario have been clear that these feelings are a natural result of being terminated and the dismissed employee will not be compensated financially in addition to any notice period they may be entitled to. However, the Supreme Court of Canada made in clear in Bhasin v Hrynew, 2014 SCC 71, that employers have a duty of honesty in contractual performance. Simply put, this means employers have a duty to be honest and not knowingly mislead an employee during their employment, up to and including termination. If an employer fails to do this and instead engages in bad faith conduct that is harsh, vindictive, reprehensible or malicious in nature, then punitive damages can be awarded.
In Morrison v Ergo-Industrial Seating Systems Inc., 2016 ONSC 6725, Mr. Morison was a 58 year old sales manager when he was terminated for cause by Ergo-Industrial. The company claimed Mr. Morison mismanaged a demo chair account, failed to properly market the sales products, and didn’t co-operate positively with his immediate supervisor.
Mr. Morison brought a claim for wrongful dismissal and won. The court found that Ergo-Industrial’s decision to terminate Mr. Morison for cause was a negotiating strategy with the intention of limiting Morison’s claim for reasonable notice. The court found the “malicious, oppressive and high-handed” behaviour of Ergo-Industrial warranted punitive damages. In the court’s reasons, punitive damages were awarded because:
· Ergo-Industrial did not warn Mr. Morison that his job was in jeopardy;
· They delayed paying Mr. Morison his statutory pay;
· They delayed giving him his record of employment; and
· They attacked Mr. Morison’s reputation by making misrepresentations regarding the reasons for his dismissal for financial gain.
The court awarded Mr. Morison 12 months of reasonable notice in the amount of $211,551.35 and $50,000.00 in punitive damages.
What does this mean for employees?
If you were wrongfully dismissed and was treated unfairly, you may be entitled to compensation in addition to reasonable notice.
What does this mean for employers?
You must treat employees fairly throughout the employment relationship, up to and including termination. If you decide to terminate someone for just cause, ensure that you have reasonable basis to do so and supporting evidence. Otherwise, you can face significant consequences in the form of punitive damages over and above any reasonable notice period awarded by the court.
To reach the authors of this blog, Jean-Francois Lalonde and Marie Kwan, call 613.232.5773.
Jean-Francois Lalonde is an Ottawa, Ontario employment lawyer and wrongful dismissal lawyer practicing with Vice & Hunter LLP. He has extensive experience practicing in the areas of employment law and is a part-time professor at La Cité Collégiale teaching Employment Law for Paralegals.
Marie Kwan is an articling student with Vice & Hunter LLP. She has experience assisting in employment law matters and competed in a labour law moot while in law school.