Category: Wrongful Dismissal/Termination

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Wrongful Dismissal/Termination

Can a Terminated Employee Sue for Damages If They Find a Higher-Paying Job?

A recent Ontario appeal addressed the issue of whether a terminated employee can sue their former employer if they mitigated their damages by finding a higher-paying job?

What Happened?

The employee worked for the employer as a delivery driver from June 2006 to May 30, 2014. His hourly rate was $12. He worked 37.5 hours per week, resulting in weekly remuneration of $450. He did not work overtime for the employer.

On February 21, 2014, the employer gave the employee notice that his employment would terminate effective May 30, 2014; he was given three months’ working notice. The employee was 65 years old at the time of termination. He was terminated without cause.

Two weeks after the end of the working notice, the employee found replacement employment. In this new employment, the employee worked as a driver, with similar responsibilities to those in his former employment.

At his new job, the employee was paid $11 per hour. He also worked some overtime in his new employment, for which he was paid time-and-a-half ($16.50 per hour).

As a result, the employee earned more at his new employment than he had with the employer: in 2014, he earned one to two thousand dollars more and in 2015, he earned more than $3,000 in excess of what he would have made with his former employer.  

The employee filed an action with Small Claims Court for damages for the two weeks of his unemployment between jobs.

Small Claims Court Decision

The trial judge found that the employee was unemployed for two weeks before starting his new job and the employee’s new job was comparable to and replaced his job with the employer. The judge awarded damages for wrongful dismissal for two weeks’ lost wages ($900) for this period of unemployment. 

The employee argued that his overtime wages should not be included in the calculation of his new income, which the trial judge accepted.As a result, the trial judge also made an award of damages of $742 for the reduction of $1 per hour in the employee’s base rate of pay.

The trial judge also found that the employee was required to retire because he reached the age of 65. The trial judge found that this forced retirement was discrimination on the basis of age within the meaning of the Ontario Human Rights Code and awarded general damages for this discrimination fixed at $8,000.  

The employer appealed.

Appeal Decision

The court found that there was no reason to exclude the overtime earnings from the mitigation income; the employee’s opportunity to work the overtime hours arose because of his new employment.

The court explained that it is a general principle that all earnings from replacement employment apply as mitigation of loss of employment earnings from wrongful dismissal. As a result, the court found that the trial judge’s conclusion was an error in principle that fell outside the general principles of mitigation. The court allowed this aspect of the appeal and set aside the trial judge’s award of damages of $742 for the reduction of $1 per hour in the employee’s base rate of pay.

The court then set out the remaining issue as follows: 

“The issue is thus: a wrongfully dismissed employee is out of work for a period of time and then finds replacement employment from which he earns more than he had been earning at his former employment. Do the surplus earnings from the new employment serve to reduce the damages for the period of unemployment?”

Although the court reviewed one case that found that an employee is entitled to no damages if they find a better paying job, it disagreed with this position. Instead, the court explained that where an employer gave adequate working notice for the entire notice period, the worker would have been paid while he continued work up until commencing new employment, with no duty to account back to his old employer for his increased wages. 

As a result,  the appeal was only allowed in part, to reverse the trial judge’s award of damages of $742 for the reduction of $1.00 per hour in the employee’s new employment. The balance of the Small Claims judgment was upheld in the amount of $8,900. Additionally, the employee was awarded $5,000 in costs for the appeal.

Get Advice

At Bader Law, our Mississauga employment lawyers have been representing non-unionized employees in workplace disputes since 1999. We know that such disputes can be very stressful and can get emotional quickly. We seek to simplify the law so that you understand your options and make informed decisions. We leverage our extensive experience advising employers to provide insightful guidance to employees who are facing challenging circumstances at work. We work hard to protect you.

If you have questions about unfair practices in the workplace, wrongful dismissal, or any other employment matter, contact the Mississauga employment lawyers at Bader Law. Our knowledgeable employment lawyers can counsel you on your rights, advise you on your options, and help you create a plan for moving forward. We represent employees in Mississauga and areas west of Toronto. Contact us online or at (289) 652-9092 to learn how we can help.

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Wrongful Dismissal/Termination

Employee Barred from Suing Employer 6 Years After Termination

In a recent Ontario Court of Appeal decision, the court explained the “appropriate means” provision in the Limitations Act in a case where a dismissed employee waited six years before commencing an action for wrongful dismissal against his former employer.

What Happened?

The employee began working as a fuel delivery truck driver for the employer in 1996. In November 2009, the employer received an anonymous tip that one of its drivers was involved in the theft of its fuel. It began an internal investigation that ultimately found that the employee had committed several acts of theft.

On November 9, 2009, the employer terminated the employee for cause. That day, the employee retained a lawyer who requested further details from the employer regarding the termination. 

On May 6, 2010, the employee retained a second lawyer who wrote to the employer in May and June of 2010, asserting that the employee had been wrongfully dismissed and was entitled to damages, though the employee did not commence an action for wrongful dismissal at that time.

The employee was then criminally charged on July 7, 2010, and convicted on August 15, 2011, of three counts of theft and three counts of fraud. He appealed his convictions, and the Court of Appeal acquitted him on all counts on November 26, 2014. 

The employee then commenced an action for wrongful dismissal against the employer on July 24, 2015.

The employer brought a motion for summary judgment on the basis that the Limitations Act barred the employee’s action. The motion hinged on whether the employee knew that it was appropriate, for the purposes of s. 5(1)(a)(iv) of the Limitations Act, to commence a civil proceeding. 

Lower Court Decision

The motion judge rejected the argument that the employee did not know it was appropriate to commence his action against the employer before the criminal proceedings had concluded. She found that the employee knew, or with reasonable diligence ought to have known, that he had a claim against the employer at the time of his dismissal on November 9, 2009.

As a result, the motion judge rejected the employee’s argument and dismissed the action.

Issues

The employee appealed and submitted that until the criminal proceedings were completed, he did not know if he had a viable claim. He stated that if he had ultimately been convicted, his claim for wrongful dismissal would have had little chance of success because it would have been proven beyond a reasonable doubt that he had committed multiple thefts against his employer. 

Therefore, according to the employee, it made sense to await the outcome of the criminal proceeding before deciding whether to commence his action. 

Court of Appeal Decision

The court explained that at issue was the interpretation of s. 5(1)(a)(iv) of the Limitations Act, which contains the so-called appropriate means provision. The subsection provides that a claim is not discovered until the day on which a putative plaintiff first knows that a proceeding would be anappropriatemeans to seek to remedy an injury, loss, or damage.

The court explained that the use of the word “appropriate” means whether it is legallyappropriate to bring an action and does not include an evaluation of whether a civil proceeding will succeed. The court explained:

“The [employee]’s principal submission is that he should have been permitted to wait until the criminal proceedings concluded so that he could evaluate his chances of success in litigation. He argues that litigation is an expensive and risky proposition, and he should not have been forced to commence a civil proceeding until he knew that he had a chance of success. This argument, of course, is precisely what this court […] said a plaintiff is not permitted to do.” 

As a result, the court dismissed the employee’s appeal.

Get Advice

At Bader Law, our Mississauga employment lawyers have been representing non-unionized employees in workplace disputes since 1999. We know that such disputes can be very stressful and can get emotional quickly. We seek to simplify the law so that you understand your options and make informed decisions. We leverage our extensive experience advising employers to provide insightful guidance to employees who are facing challenging circumstances at work. We work hard to protect you.

If you have questions about unfair practices in the workplace, wrongful dismissal, or any other employment matter, contact the Mississauga employment lawyers at Bader Law. Our knowledgeable employment lawyers can counsel you on your rights, advise you on your options, and help you create a plan for moving forward. We represent employees in Mississauga and areas west of Toronto. Contact us online or at (289) 652-9092 to learn how we can help.

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Wrongful Dismissal/Termination

Are Wrongfully Dismissed Employees Entitled to Exercise Stock Options and Receive Bonuses?

The Ontario Court of Appeal recently issued a decision concerning an issue that is being litigated with increasing frequency: the entitlement of a wrongfully dismissed employee to exercise stock options, receive bonuses, or take advantage of other aspects of his or her compensation package during the reasonable notice period.

What Happened?

The employee had been employed for 22 years with the employer when he was dismissed from an executive position on January 4, 2016. The termination was to be effective March 31, 2016.

The employee’s compensation package included a base salary, commissions, group benefits, and participation in both a long term incentive plan, which included both restricted share units(“RSUs”) and stock options, and a stock option plan (collectively, the “awards”). 

After unsuccessful attempts to negotiate a severance package, the employer extended the effective termination date from March 31, 2016 to July 8, 2016. It advised the employee that any awards that had already vested could be exercised for up to 30 days after the latter date. Any awards that had not vested as of that date would be “cancelled and forfeited without any consideration.”

The employee brought an action for wrongful dismissal. 

Lower Court Decision

The motion judge found that the employee was entitled to damages, calculated on the basis of 24 months’ reasonable notice, together with all commissions outstanding at the date of termination. The judge also determined the employee’s damages for wrongful dismissal, including the damages for lost opportunity to earn commissions on sales during the reasonable notice period, the pension contributions that would have been made during that period, and the value of benefits lost during the notice period.

Additionally, the motion judge concluded that the employee’s damages for the loss of the awards should be calculated on the basis of what would have probably happened had he remained employed until the end of the notice period. He noted that the employee had exercised his options in the past and that he therefore would likely have done so in this case, had his employment not been terminated.

The motion judge found that the language of the relevant awards was not sufficient to cancel the employee’s entitlement to exercise the awards or to remove his entitlement to damages for their loss. He was therefore entitled to damages for the loss of the right to exercise the RSUs and stock options that would have vested during the reasonable notice period.

The motion judge accepted the employee’s evidence that he would have exercised the options at the “earliest possible opportunity” and calculated damages on the basis that the employee would have sold the shares that vested during the reasonable notice period five months after their vesting date.

The employer appealed.

Court of Appeal Decision

The court stated that the motion judge correctly found as a fact that the awards were an integral part of the employee’s employment, that they would have vested had his employment not been wrongfully terminated, and that he would have exercised the awards, as he had done in the past. 

Ultimately, the court found that the motion judge applied the correct legal principles and arrived at the correct conclusion, stating: 

“[I]n the absence of unambiguous contractual language […], the awards continued to vest during the reasonable notice period. The [employee] was entitled to damages for the loss of his entitlement to exercise his rights.”

As a result, the court dismissed the employer’s appeal.

Get Advice

At Bader Law, our Mississauga employment lawyers have been representing non-unionized employees in workplace disputes since 1999. We know that such disputes can be very stressful and can get emotional quickly. We seek to simplify the law so that you understand your options and make informed decisions. We leverage our extensive experience advising employers to provide insightful guidance to employees who are facing challenging circumstances at work. We work hard to protect you.

If you have questions about unfair practices in the workplace, wrongful dismissal, or any other employment matter, contact the Mississauga employment lawyers at Bader Law. Our knowledgeable employment lawyers can counsel you on your rights, advise you on your options, and help you create a plan for moving forward. We represent employees in Mississauga and areas west of Toronto. Contact us online or at (289) 652-9092 to learn how we can help.

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Wrongful Dismissal/Termination

Employee Claims He Was Discriminated Against for Not Being Gay

A recent Federal Court decision reviewed an employee’s complaint of discrimination based on sexual orientation and disability against a major Canadian bank. The employee claimed, in part, that a manager told him he would not be promoted unless he was gay.

What Happened?

The employee worked for a major Canadian bank as a financial services representative. His work involved calling sixty to seventy customers every day to sell them products, which required him to read 4-6 pages of product information and legal disclosures.

The employee filed a complaint with the Canadian Human Rights Commission (the “CHRC”) in April 27, alleging discrimination by the bank because of his sexual orientation and disability, resulting in his eventual termination on May 10, 2016.

Regarding his sexual orientation, the employee alleged that he had a one-on-one meeting on September 15, 2015 with his manager to discuss his medical concerns and qualifications. 

During the meeting, the manager advised him that unless the employee joined their “group”, there was “no hope” for him. The manager explained that every male manager in both his office and headquarters was either gay or bisexual and he advised the employee this was why young employees with few qualifications were promoted. He advised that the employee should “be smart and learn”. The manager then allegedly asked the employee what he thought of him. The employee responded, stating that he thought of the manager as just his manager; he was willing to work with anyone at anytime but he was not gay or bisexual. The manager allegedly requested that the employee never discuss their conversation with anyone.

As a result, the employee believed the encounter was the primary reason for his discrimination and explained why, despite his qualifications, experience, and excellent performance, he was denied workplace accommodation for his disability, and not offered any alternative position. He also stated that the encounter added to his mental stress and negatively impacted his self-dignity. 

With regards to his disability, the employee explained that due to several months of continuous outbound calling under a high stress environment, he developed severe throat and vocal cord pain. The employee claimed that his family doctor recommended modified duties, including not speaking on the phone, to help his pain.

The employee alleged that despite his own doctor’s recommendation and his qualifications, experience, and excellent performance, the bank refused to accommodate him by offering him another position. Instead, his senior manager asked him to go on short-term disability. The bank referred him to a specialist, who concluded that the employee suffered from “muscle tension disphonia” and advised that the employee required accommodation, including regular medical breaks, to achieve maximum recovery.

The employee alleged that the bank started to discriminate against him soon after the specialist’s diagnosis. Among other things, his basic pay was cut and he was not given any sales incentives or annual bonuses under this standard evaluation scheme because his disability required he take essential medical breaks, which neither his daily statistics nor his managers properly took into account.

He was eventually terminated.

In his complaint, the employee requested reinstatement in a suitable position that matched his qualifications and experience, full back pay and benefits, and monetary compensation.

CHRC Decision

The CHRC’s investigator dismissed the employee’s complaint, finding, in part, that the employee did not provide sufficient evidence to support his allegations of discrimination due to sexual orientation to justify any additional investigation. The investigator also found that the evidence supported that the bank had accommodated the employee for his disability because he received short-term disability leave and benefits and modified work for as long as it was medically required.

The employee appealed to the Federal Court. The employee claimed that the CHRC investigator failed to consider crucial evidence related to discrimination on the basis of sexual orientation and disability when writing her report. Additionally, the employee alleged that the Commission never examined his evidence. He explained that he raised his concern that the investigator failed to conduct an investigation into his sexual orientation complaint and failure to be interviewed for other positions in his reply submissions, and that the Commission failed to follow up on this and instead erroneously adopted the investigator’s report on its face without justification for doing so.

Federal Court Decision

The court explained that, as part of the entire CHRC complaint process, prior to making a final decision, the Commission reviews not only the investigator’s report, but also parties’ submissions in reply. Therefore, the Commission’s procedural fairness obligations extend to the Commission’s consideration of parties’ reply submissions.

The court found that the investigator had not properly investigated the employee’s claims of discrimination and that the Commission had accepted the investigator’s report without properly reviewing the evidence or reply submissions.

Accordingly, the court found that the CHRC’s investigation and decision were not procedurally fair and ordered that the matter be returned to the Commission to conduct a fresh investigation, with a different investigator.

Get Advice

At Bader Law, our Mississauga employment lawyers have been representing non-unionized employees in workplace disputes since 1999. We know that such disputes can be very stressful and can get emotional quickly. We seek to simplify the law so that you understand your options and make informed decisions. We leverage our extensive experience advising employers to provide insightful guidance to employees who are facing challenging circumstances at work. We work hard to protect you.

If you have questions about unfair practices in the workplace, wrongful dismissal, or any other employment matter, contact the Mississauga employment lawyers at Bader Law. Our knowledgeable employment lawyers can counsel you on your rights, advise you on your options, and help you create a plan for moving forward. We represent employees in Mississauga and areas west of Toronto. Contact us online or at (289) 652-9092 to learn how we can help.

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Wrongful Dismissal/Termination

Employee Barred from Pursuing Lawsuit for Chronic Mental Stress Caused by Harassment and Bullying

A recent Ontario Workplace Safety and Insurance Appeals Tribunal decision took away an employee’s right to sue for constructive dismissal because the fundamental nature of her action was a claim for injury resulting from harassment and bullying in the workplace.

What Happened?

The employee began working for the employer in its housekeeping department in May 2015. In May 2016, she was promoted to the position of supervisor. 

The employee resigned her position with the employer in February 2018 claiming constructive dismissal as a result of harassment and bullying in the workplace. In consultation with her doctors, she claimed she was unable to return to work due to the harassment, and her fragile mental state resulting from the harassment and bullying to which she was subjected in the workplace. 

She filed a Statement of Claim in the Ontario Superior Court of Justice on April 2, 2018 claiming damages for constructive dismissal, bullying, harassment and/or a poisoned work environment pursuant to the Occupational Health and Safety Act (the “OHSA”), the tort of harassment, as well as punitive, aggravated and/or moral damages. 

In particular, the employee claimed that she “was forced to resign from her position with [the employer] due to the harassment, bullying and abuse she endured during the course of her employment and the resulting mental distress she experienced and continues to experience.” She pled further that the claim “relates to the harassment and bullying that [she] experienced as a result of a toxic work environment created by [the employer’s] employees and management and her subsequent constructive dismissal.”

The employer filed an application seeking a declaration that the employee’s right of action against it was barred by the Workplace Safety and Insurance Act (the “WSIA”).

Issue

The issue was whether the employee’s right of action was taken away pursuant to the WSIA. 

Parties’ Positions

The employer submitted that the employee’s Statement of Claim was effectively a claim for chronic mental stress under the WSIA and thus her right of action was removed in relation to her action for constructive dismissal, and for damages for mental stress, aggravated, moral and punitive damages, and for breach of the OHSA for bullying, harassment, the creation of a poisoned work environment and/or the tort of harassment. 

The employee submitted that a worker’s right to claim for damages in a civil action is taken away by the WSIA only in respect of the damages that are compensable under the WSIA and one must look at the three causes of action to determine whether they are inextricably linked to a work accident. 

The Decision

The tribunal explained that it was not being asked to make a determination as to whether the employee was subjected to harassment and bullying in the manner she claimed or whether she was injured as a result. It was only to determine whether the circumstances she alleged brought her claim within the scope of the WSIA and thereby removed her right to bring a civil action against the employer.

The tribunal stated that it has generally found that the right to bring an action for wrongful dismissal has not been removed by the WSIA. Rather, it is only in the exceptional case that this is not so, where the circumstances of the wrongful dismissal claim are inextricably linked to the work injury. 

In this case, the tribunal found that the exception applied. It found that the employee’s action against the employer was not for wrongful dismissal in the usual sense, but rather was for constructive dismissal, meaning her employment was effectively terminated by the harassing and bullying conduct of co-workers and management which caused her mental distress to such a degree that she was forced to take sick leave and ultimately to resign. It found that such facts were inextricably linked to a claim for injury governed by the terms of section 13(4) of the WSIA. 

In other words, it found that the employee’s Statement of Claim was, in essence, a claim for injury resulting from alleged workplace harassment and bullying and thus fell within the scope of section 13(4) to provide for entitlement for chronic mental stress arising out of, and in the course of, the employee’s employment. Additionally, the tribunal found that the other remedies sought by the employee were also claimed on the same facts of harassment and bullying in the workplace. 

As a result, the tribunal found the employee’s right of action was taken away by the WSIA. However, pursuant to section 31(4) of the WSIA, the employee could file a claim for benefits within six months of the decision.

Get Advice

At Campbell Bader LLP, our Mississauga employment lawyers have been representing non-unionized employees in workplace disputes since 1999. We know that such disputes can be very stressful and can get emotional quickly. We seek to simplify the law so that you understand your options and make informed decisions. We leverage our extensive experience advising employers to provide insightful guidance to employees who are facing challenging circumstances at work. We work hard to protect you.

If you have questions about unfair practices in the workplace, wrongful dismissal, or any other employment matter, contact the Mississauga employment lawyers at Campbell Bader LLP. Our knowledgeable employment lawyers can counsel you on your rights, advise you on your options, and help you create a plan for moving forward. We represent employees in Mississauga and areas west of Toronto. Contact us online or at 905-828-2247 to learn how we can help.

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Wrongful Dismissal/Termination

Employer’s Sole Director Found Personally Liable to Employee for $75,000 in Aggravated Damages for Wrongful Dismissal

In a recent Ontario case, an employer’s sole director was found personally liable for $75,000 in aggravated damages for the manner in which he treated and dismissed an employee under the oppression remedy.

What Happened?

The employee was employed by the employer corporation (the “employer”) from July 2009 until her termination on March 12, 2016. She earned a salary of $90,000 until her salary was reduced to $60,000 in 2015 as a temporary measure to help the employer through the off-season.

The employer was a company that specialized in conducting vehicle and heavy equipment auction sales. The employer corporation had one sole director (the “director”), who also acted as its president. 

From 2009 until November 26, 2015, the employee and the director were in a common law relationship and have three children together. 

The employee alleged that on March 9, 2016, the director wrongfully terminated her employment and withheld her wages. She claimed that the termination was unrelated to her work, but directly related to their separation. The employee alleged that she was not paid the wages owing to her and, as a result, she became a creditor of the employer. 

The employer ceased operation in 2017, and all of its assets were transferred to a related company. 

The employee brought a motion for an order of default judgment and an order imposing personal liability against the director as an oppression remedy pursuant to s. 248 of the Ontario Business Corporations Act(the “OBCA”). Her statement of claim asked for $256,355 for unpaid wages, unpaid vacation pay, damages for wrongful dismissal and aggravated and punitive damages. 

The Decision

After reviewing the relevant legal principles, the court found that it was appropriate to pierce the corporate veil under s. 248 of the OBCA and impose personal liability on the director. 

It found that the employee became a creditor of the employer in March 2016 when the director withheld her wages from the employer’s payroll. The employee brought an action to recover this debt, and the director caused the employer to cease operations and transfer all of its assets to a related company in order to leave it without assets to respond to a possible judgment in this action. The court found that these actions qualified as oppressive conduct under s. 248 of the OBCA.

The court stated that, as the sole director of the employer, the director can be held personally liable for oppressive action. It found that the facts demonstrated that the director acted for reasons of personal animus against the employee and that the reasons were unrelated to her employment or to her entitlement to wages and benefits. 

Ultimately, the court found that the director acted in bad faith, using his control of the employer corporation to advance his personal financial interest, and to punish the employee and gain leverage in their family law dispute. It found such conduct directly attributable to the director and, as the sole director, it found him personally liable.

Damages

At the outset, the court found that the employee was owed basic wages, statutory holiday pay, vacation pay and pay in lieu of notice. It awarded her $2,582 for unpaid past wages, $13,776 for accrued vacation benefits and $90,000 for pay in lieu of reasonable notice.

The court then turned to the employee’s claim for $75,000 for aggravated damages for the manner in which the director terminated her employment.

The court found that the director’s handling of the employee’s termination was unfair and in bad faith. The director had made a false allegation that the employee was “considered having quit” to avoid having to pay her severance for dismissing her without reasonable notice. The court described the director’s conduct as unfair and appeared to be retaliation for the issues raised in the family law dispute. 

The court concluded that it was a proper case for aggravated damages and made an order for $75,000 for aggravated damages against the director.

The court dismissed the employee’s claim for punitive damages, finding that the imposition of personal liability on the director was a sufficient penalty for the oppressive conduct complained of. 

Get Advice

At Campbell Bader LLP, our Mississauga employment lawyers have been representing non-unionized employees in workplace disputes since 1999. We know that such disputes can be very stressful and can get emotional quickly. We seek to simplify the law so that you understand your options and make informed decisions. We leverage our extensive experience advising employers to provide insightful guidance to employees who are facing challenging circumstances at work. We work hard to protect you.

If you have questions about unfair practices in the workplace, wrongful dismissal, or any other employment matter, contact the Mississauga employment lawyers at Campbell Bader LLP. Our knowledgeable employment lawyers can counsel you on your rights, advise you on your options, and help you create a plan for moving forward. We represent employees in Mississauga and areas west of Toronto. Contact us online or at 905-828-2247 to learn how we can help.

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Wrongful Dismissal/Termination

The Enforceability of Arbitration Agreements in Employment Law

In a recent Ontario case, a Canadian employer attempted to stay an employee’s action on the basis of arbitration agreements the employee had signed with its U.S. counterpart.

What Happened?

The employeeis a U.S. citizen who began to work with the employer (the “U.S. employer”) in 2012. The U.S. employer is a company incorporated in the U.S. and operating in California.

The employee entered into four employment agreements with the U.S. employer in the thirteen-month period from then until December 2013 and continued to work with the U.S. employer in California until December 2016.

Each of the employment contracts that the employee entered into contained a term requiring that all disputes arising from his employment be determined by arbitration conducted in California. The employee also executed two separate arbitration agreements to this effect during his employment with the U.S. employer.

In December 2016, the U.S. employer offered the employee the opportunity to move to Ontario, Canada, to work with one of its related entities (the “Canadian employer”), which the employee accepted. On January 2, 2017, the employer began working with the Canadian employer in Ontario.

However, the employee did not, at any time, execute any written employment contract with the Canadian employer. Additionally, the employee did not enter into any written agreement with the Canadian employer requiring that any dispute arising from his employment in Canada would be determined by arbitration.

The employee was terminated from his employment with the Canadian employer on February 6, 2018, effective March 30, 2018. He brought an action against the Canadian employer seeking damages for his dismissal. 

The employee also sued the U.S. employer for the U.S. employer’s role in causing or contributing to the damages that he alleged to have sustained by the termination of his employment in Ontario with the Canadian employer. He claimed that the U.S. employer made misrepresentations to him that caused him to re-locate to Canada, and that he relied on these misrepresentations to his detriment. He also sued two directors of the Canadian employer.

In response, both the U.S. employer and the Canadian employer brought a motion to stay or to dismiss the action as against them on the basis of the arbitration provision contained in the agreements that were executed by the employee with the U.S. employer during the period of his employment in California. The employers relied on section 7(1) of the Arbitration Act, 1991, which states:

If a party to an arbitration agreement commences a proceeding in respect of a matter to be submitted to arbitration under the agreement, the court in which the proceeding is commenced shall, on the motion of another party to the arbitration agreement, stay the proceeding. 

In response to both employers’ motion, the employee submitted that his action should not be stayed as against both or either of the employers because he did not enter into an arbitration agreement with the Canadian employer, and because his agreement to arbitrate with the U.S. employer was in relation to his employment in California. Further, he submitted that even if the employers could establish an applicable arbitration agreement, it should not to be enforced on the basis that it was invalid because it was an attempt by the employers to contract out of the provisions of the Employment Standards Act, 2000.

Issue

The sole issue was whether the employee’s action should to be stayed as against both employers, or either of them, on the basis of an arbitration agreement.

The Decision

Citing previous case law, the court began by setting out a five-part analytical framework for conducting its analysis on whether to stay proceedings due to an arbitration agreement:

(a)    Is there an arbitration agreement?

(b)   What is the subject matter of the dispute?

(c)    What is the scope of the arbitration agreement?

(d)   Does the dispute arguably fall within the scope of the arbitration agreement?

(e)    Are there grounds on which the court should refuse to stay the action?

After analyzing each element of the five-part test, the court concluded that neither employer had established an entitlement to a stay on the basis of a valid, applicable arbitration agreement.

The court stated that, while case law is clear that a court must, on motion, stay the court proceeding in favour of arbitration where there is a valid arbitration agreement, there must be proof of a valid and binding arbitration agreement.

In this case, the court determined that not one of the arbitration agreements submitted by the employers were executed with the Canadian employer, and that the applicable arbitration agreement executed between the U.S. employer and the employee did not pertain to the claim brought in Ontario for the termination of the employee’s employment with the Canadian employer in Ontario. 

As a result, the court dismissed the employers’ motion to stay the employee’s actions against them.

Get Advice

At Campbell Bader LLP, our Mississauga employment lawyers have been representing non-unionized employees in workplace disputes since 1999. We know that such disputes can be very stressful and can get emotional quickly. We seek to simplify the law so that you understand your options and make informed decisions. We leverage our extensive experience advising employers to provide insightful guidance to employees who are facing challenging circumstances at work. We work hard to protect you.

If you have questions about unfair practices in the workplace, wrongful dismissal, or any other employment matter, contact the Mississauga employment lawyers at Campbell Bader LLP. Our knowledgeable employment lawyers can counsel you on your rights, advise you on your options, and help you create a plan for moving forward. We represent employees in Mississauga and areas west of Toronto. Contact us online or at 905-828-2247 to learn how we can help.

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Wrongful Dismissal/Termination

Employee Awarded Over $1 Million in Damages for Constructive Dismissal Under Fixed-Term Agreement

In a recent Ontario case, an employee who was constructively dismissed under a fixed-term agreement was awarded over a million dollars in damages.

What Happened?

The employee was a third generation owner of a funeral home when, in 2012, he agreed to sell his shares to the employer corporation, a company controlled by two brothers. 

It was a term of the share purchase agreement that the employee would enter into a transitional consulting services agreement (the “agreement”) by which he would continue in the employ of the funeral home for a fixed-term of ten years. The agreement provided that the employee would work as general manager of the funeral home and be paid $100,000 per year with a salary review on an annual basis to reflect cost of living increases, as well as sales commissions.

However, not long after the transfer of ownership, unhappy differences arose between the employee and the brothers. Within 11 months, the employee had gone on medical leave due to workplace stress he said was induced largely by the actions of one of the brothers. 

Among the main issues, were, firstly, the hours the employee was expected to be spending on funeral-related work as opposed to customer relations. Secondly, was the use of the company vehicle and gas card for personal purposes. The third issue was the length of time over which the employee would be paid the commission of 5% on pre-paid funerals. Fourthly, at issue was whether the commission of 65% of the marketing allowance was only for in-house pre-arranged funeral packages specifically arranged by the employee or for all in-house packages, regardless of who arranged them.

After his leave, he was unable to return to work and claimed to have been constructively dismissed. He sought damages for breach of the agreement, intentional infliction of mental suffering and discrimination prohibited by the Ontario Human Rights Code. Essentially, the employee claimed that the brothers’ conduct was designed to cause him to leave his employment, and that much of the conduct took place when he was on leave for stress-related illness that the brothers knew would be exacerbated by their conduct.

The brothers claimed that none of their conduct was the cause of the employee leaving his employment. They stated that the employee found himself ill-suited to the role of employee and suffered from seller’s remorse. They argued that the employee orchestrated much of the discord in an effort to induce them to breach the agreement and fire him in hopes that he would reap the benefits of the contract without having to work.

The Decision

After reviewing the behaviour of both parties, the court concluded that neither the brothers nor the employee were blameless for the falling out that occurred. However, the court found that over the course of several months before the employee’s leave, one of the brothers:

(1) Improperly terminated the employee’s use of the company vehicle; 

(2) Without notice to the employee, recruited an employee who was subordinate to him to track his time at the funeral home; 

(3) Did not pay the employee commissions to which he was rightfully entitled; 

(4) Removed the employee’s photograph from the funeral home; and 

(5) Without notice to the employee and without seeking any explanation from him, changed the locks to the funeral home. 

The court found that all these actions amounted to a course of conduct which, in light of all the circumstances, would lead a reasonable person in the employee’s position to conclude that the brothers no longer intended to be bound by the terms of the agreement. As a result, the court found that the employee had been constructively dismissed.

The court, however, dismissed the employee’s claim of intentional infliction of mental suffering and discrimination prohibited by the OntarioHuman Rights Code.

Damages 

When assessing damages, the court stated:

“In the absence of an enforceable contractual provision stipulating a fixed term of notice, or any other provision to the contrary, a fixed term employment contract obligates an employer to pay an employee to the end of the term, and that obligation will not be subject to mitigation […]. Accordingly, the [employee] is entitled to the compensation and benefits he would have received had the contract been honoured. […] It is appropriate to […] simply calculate the loss per year and multiply it by the 9 years remaining on the contract when the [employee] ceased work.”

After reviewing the loss of salary, which came to $100,000 per year for nine years, or $900,000, and other lost benefits over the course of nine years under the agreement, the court awarded damages to the employee in the amount of just over $1,274,000.

Get Advice

At Campbell Bader LLP, our Mississauga employment lawyers have been representing non-unionized employees in workplace disputes since 1999. We know that such disputes can be very stressful and can get emotional quickly. We seek to simplify the law so that you understand your options and make informed decisions. We leverage our extensive experience advising employers to provide insightful guidance to employees who are facing challenging circumstances at work. We work hard to protect you.

If you have questions about unfair practices in the workplace, wrongful dismissal, or any other employment matter, contact the Mississauga employment lawyers at Campbell Bader LLP. Our knowledgeable employment lawyers can counsel you on your rights, advise you on your options, and help you create a plan for moving forward. We represent employees in Mississauga and areas west of Toronto. Contact us online or at 905-828-2247 to learn how we can help.

Categories
Wrongful Dismissal/Termination

Employer Loses Human Rights Tribunal Case For Failing to Accommodate an Employee’s Childcare Needs

The Ontario Human Rights Tribunal recently decided a case in which the employee alleged that the employer had failed to accommodate her special needs related to childcare and her termination was discrimination based on her family status.

What Happened?

The employee worked as a personal support worker for the employer from at least 2013 until the date of her termination, May 23, 2017. The employee was married with two children. At the time of the termination, the children were two and five years old. The eldest has autism. It was essential that a caregiver meet the eldest at the employee’s home where the school bus delivered him each weekday. Because her other family members were unavailable, the employee wasthe only one in a position to meet the eldest child’s bus at her home, because her shift at work ended at 3:00 p.m. 

At all relevant times, the employer was aware of the employee’s children and her child’s special needs.

In March 2017, the administration began discussing moving the employee from her usual 7:00 a.m. – 3:00 p.m. day shift to the later afternoon shift: 3:00 p.m. – 11:00 p.m. The employee informed them that she was unable to work the later shift because of her children’s schedule and problems she was having finding more flexible daycare. The employer initially offered her a midnight shift to accommodate her childcare needs.

However, in May 2017, the employer told the employee that it could not longer offer her the midnight shift because she had called in sick the month before without giving adequate notice. The employee then informed the employer she could not work the later afternoon shift because of her childcare needs.

Two days later, the employer informed the employee she had been terminated. The termination letter stated that the reasons for the termination were because of: attendance, failure to follow instructions, conduct, creating disturbance, performance and work quality.

The Issues

The employee alleged that the employer failed to accommodate her special needs related to childcare, and terminated her employment, at least in part, because she was unable to work more flexible hours given her duties as a mother. When it was filed, the application alleged discrimination with respect to employment because of family status and also reprisal contrary to the Human Rights Code (the “Code”).

The Law

The tribunal stated that the following Code provisions were relevant to the case:

5(1)Every person has a right to equal treatment with respect to employment without discrimination because of ….family status.

11(1)A right of a person under Part I is infringed where a requirement, qualification or factor exists that is not discrimination on a prohibited ground but that results in the exclusion, restriction or preference of a group of persons who are identified by a prohibited ground of discrimination and of whom the member is a member, except where,

(a)  the requirement, qualification or factor is reasonable and bona fide in the circumstances; or

(b)  it is declared in this Act, other than in section 17, that to discriminate because of such ground is not an infringement of a right.

(2)The Tribunal or a court shall not find that a requirement, qualification or factor is reasonable and bona fide in the circumstances unless it is satisfied that the needs of the group of which the person is a member cannot be accommodated without undue hardship on the person responsible for accommodating those needs, considering the cost, outside sources of funding, if any, and health and safety requirements, if any.

Additionally,in s. 10(1) of the Code, “family status” is defined as “the status of being in a parent and child relationship”.

The Human Rights Tribunal Decision

The tribunal began by setting out the test for establishing family status discrimination in the context of childcare, stating that a claimant must prove:

a.  The child is under his or her care and supervision;

b.  The childcare obligation at issue engages the individual’s legal responsibility for that child, as opposed to personal choice;

c.  The individual has made reasonable efforts to meet those childcare obligations through reasonable alternative solutions, and that no such alternative solution is reasonably accessible; and

d.  The impugned workplace rule interferes in a manner that is more than trivial or insubstantial with the fulfillment of the childcare obligation.

Applying the law and legal test to the facts of the case, the tribunal concluded:

“I find that the [employer]’s stated reasons for the termination were not based in fact. The [employee]’s performance was fine. The [employer]’s reasons were pretextual, and by inference, I find that at least one of the real reasons for the termination, if not the only reason, was the [employee]’s unavailability for certain shifts caused by her need to provide care to her children. Her request regarding her shifts was the only issue that arose during the time immediately prior to the termination, and the issue was unresolved between the [employer] and the [employee] at the time of the termination. 

I also find that the [employer] could easily have given the [employee] the midnight shift to accommodate her childcare schedule. The [employer]’s decision not to give the [employee] the midnight shift was based upon an unreasonable expectation that she should have provided 48 hours of notice that she would be ill, or that she should have found a replacement for herself even though she became ill the night before a morning shift. The withdrawal of its offer to provide the [employee] with the midnight shift was arbitrary, unreasonable and unfair. In conclusion, the [employer] made no allowance for the [employee]’s childcare responsibilities in their determination that her scheduling requirements justified termination.”

As a result, the tribunal awarded the employee $30,000 in compensation for injury to dignity, feelings and self-respect.

Get Advice

If you have questions about unfair practices in the workplace, wrongful dismissal, or any other employment matter, contact the Mississauga employment lawyersat Campbell Bader LLP. We regularly advise both employers and employees on a wide range of issues that arise at work. Contact us online or by phone at 905-828-2247 to schedule a consultation.

Categories
Wrongful Dismissal/Termination

Employer Loses Appeal After Court Finds Its Counter-Claim Was Intended to Intimidate Employee

A recent Ontario Court of Appeal upheld a wrongful dismissal claim in which the trial judge had awarded the employee punitive and moral damages and costs after the finding that the employer had counter-claimed in an attempt to intimidate the employee.

What Happened?

The employee was terminated from his employment in June 2015. At that time, the employee was 54 years old. He had been hired as a sales representative by the employer in 2004 and was promoted over time, eventually becoming president and division manager.

At the time of his termination, he was told that he was being terminated for cause and that he had committed fraud, but no specifics were given.

When he indicated that he would be hiring a lawyer, the employer told him that if he did, it would counter-claim and that it would be very expensive.

About a month later, the employee filed a statement of claim seeking damages for wrongful dismissal. The employer responded with a statement of defence and counter-claim which alleged cause and claimed damages of $1.7 million for unjust enrichment, breach of fiduciary duty and fraud, as well as $50,000 in punitive damages.

Lower Court Decision

After an 11 day trial, the trial judge found that the employer had failed to prove cause against the employee and had failed to prove any of its allegations against him.

The trial judge also found that the employer’s counter-claim for damages in the amount of $1.7 million had been a tactic to intimidate the employee and that it had breached its obligation of good faith and fair dealing in the manner of his dismissal.

As a result, the judge dismissed the employer’s counterclaim in its entirety and awarded the employee significant damages, including: damages in lieu of reasonable notice based on a 19 month notice period, including bonus and benefits; punitive damages in the amount of $100,000; and moral damages in the amount of $25,000.

In total, the employee’s award amounted to $604,627. In addition, the trial judge ordered costs against the employer in the amount of $546,684 to indemnify the employee for his costs in the action.

The employer appealed the trial judge’s trial awards, alleging reversible errors in law.

The Appeal Decision

The Court of Appeal rejected the employer’s arguments regarding the 19 month notice period award and the bonus award. On both issues, the court found that the trial judge had considered the evidence and the awards were appropriate.

The court also rejected the employer’s submission that the trial judge erred in awarding aggravated and moral damages because the evidentiary record provided ample support for the trial judge’s finding that the manner of dismissal warranted an award of aggravated damages. The trial judge had found that the employer’s conduct in threatening the employee to not make a claim was calculated to cause the employee stress. The manner of dismissal was devastating and had caused him stress. The court therefore found no error of law or principle or palpable or overriding error of fact that would justify interfering with the trial judge’s award of $25,000 for aggravated damages.

The court then addressed the employer’s submission that the trial judge erred in making a punitive damages award against it in the amount of $100,000. The employer argued that the judge erred in failing to consider the punitive aspects of a substantial costs award and compensatory damages, and in awarding an amount exceeding what is rationally required to punish the misconduct and to achieve the accepted purposes of a punitive damages award.

The court rejected the employer’s argument. It found that the trial judge had carefully reviewed all of the appropriate factors, including the fact that a court “must consider the overall damages award when selecting an appropriate punitive quantum” and that it must be careful to avoid double compensation or double punishment.

The court stated that, in reaching her conclusion, the trial judge had referred to the threat by the employer during the termination meeting that if the employee sued, the employer would counter-claim – a threat which it carried out with its counter-claim alleging fraud. The trial judge had also referenced the fact that the employer had, on the seventh day of trial, reduced its damages claim from $1.7 million to $1 dollar, which led the trial judge to conclude that “it did not appear as though the [employer] had any intention of proving damages but rather was using the claim of $1,700,000 strategically to intimidate [the employee]”. These facts supported her finding of misconduct justifying a punitive damages award.

The court concluded by stating:

“There can be no question that the employer’s conduct […] rose to the level of conduct deserving of denunciation for all the reasons cited by the trial judge. The trial judge was alive to the concerns about double compensation, and to the need to consider the entire compensatory package as a whole.”

As a result, the court found that the employer has not shown any basis for this court to interfere with the punitive damages award.

Finally, the court rejected the employer’s leave to appeal the costs award of $546,684, which it argued was unfair and unreasonable. While the court recognized that the costs award was unusually high, it was not satisfied that it was unfair or unreasonable in the circumstances of this case.

The appeal was dismissed and the court awarded the employee costs of the appeal in the amount of $35,000.

Get Advice

If you have questions about unfair practices in the workplace, wrongful dismissal, or any other employment matter, contact the Mississauga employment lawyers at Campbell Bader LLP. We regularly advise both employers and employees on a wide range of issues that arise at work. Contact us online or by phone at 905-828-2247 to schedule a consultation.