Category: Wrongful Dismissal/Termination

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Wrongful Dismissal/Termination

When Is a Temporary Lay-Off Actually Constructive Dismissal?

A recent Ontario case considered an employee’s claim that a temporary lay-off was in fact constructive dismissal, even after he refused a call back to work.

What Happened?

The employer was engaged in emergency restoration and remediation work for residential, commercial, industrial, and municipal clients. The employee, aged 53, began working for the employer in 1992 as a carpenter. He was later promoted and, at the time of the lay-off, his position was a health and safety training specialist.

In 2014, the employer experienced a significant decrease in its business. In January 2015, it permanently laid off 22 employees, with severance packages. The employer stated that it had decided which employees to temporarily lay off based on their years of service, skillsets and experience and it planned on recalling them. The employee knew about the permanent and temporary layoffs.

On October 15, 2015, the employer temporarily laid off the employee. On the same day, the employer’s vice-president of operations met with the employee and told him that because of the decrease in business, he would be temporarily laid off and recalled back to work as soon as possible when business improved.

The employee’s lay-off letter stated that the employer would pay 100% of the employee’s group benefits during the temporary layoff period and asked him to keep the employer informed about his ongoing availability and contact information so that it could recall him as soon as possible. The letter also asked him to return all of the company’s tools and equipment, including the company car which he would not use while on a temporary lay-off.

After the meeting, the employee emailed the vice-president, stating “I am available every day as always”. On October 19, 2015, the employee emailed again stating “I am available for work every day this week.”

On October 27, 2015, the employee, through his counsel, advised the employer that he considered his temporary lay-off to be a constructive dismissal. Counsel for the employer replied that there was a possibility that the employee would be recalled to work and that he would update him by November 9, 2015. The employee’s counsel immediately replied by email advising that the employee felt that the relationship had broken down and that he would not return to work but would start an action against the employer.

On November 10, 2015, the employer’s counsel sent a letter to counsel recalling the employee to “active employment”.

On November 12, 2015, the employer’s counsel emailed asking if the employee would return to work. Counsel replied that he would not. No inquiries with respect to the recall were made.

The employee alleges that the employer’s offer “was a sham made only in response to his litigation and not a bona fide attempt to return him to work.” He believed that it would have been embarrassing and degrading to return to work.

As a result, the employee brought a motion for summary judgment of his action for wrongful dismissal. He claimed he was constructively dismissed by reason of a lay-off after 23 years of employment. He argued that there was no employment term giving the employer the right to temporarily lay him off and that he did not consent to the lay-off. The employee also claimed that the employer failed to provide him with work and compensation in violation of the fundamental terms of employment.

The employer alleged that the employee agreed to his lay-off by providing his availability to work on October 15 and 19, 2015. The employer denied he was wrongfully dismissed and submitted in the alternative that if the employee was constructively dismissed, he failed to mitigate his damages by refusing a recall to his employment.

The Issues

The main issues were whether the employee was constructively dismissed when he was laid off and, if so, whether the employee made reasonable efforts to mitigate his damages.

The Decision

At the outset, the court concluded that the employee had been constructively dismissed. It did not find that, by providing his availability to work, the employee agreed to the lay-off or that it was a term of the employee’s employment that the employer could lay him off temporarily. The court stated:

“[The employee’]s advice to [the employer] on his availability for recall cannot be construed as evidence of his agreement to change such a significant term of employment. Similarly, neither does his knowledge and understanding of [the employer]’s business difficulties have the effect of altering such a significant term of employment.”

The court found that the employee was therefore constructively dismissed on October 15, 2015 and that he was consequently entitled to be paid damages for the employer’s failure to provide him with reasonable notice of his termination of employment, subject to his obligation to mitigate his damages.

The employer did not allege that the employee’s job search efforts were insufficient, but rather that he failed to mitigate his damages when he refused the employer’s offer to be recalled to work. The employee submitted that one reason for refusing the offer of re-employment was because it would be too embarrassing and degrading for him to return to work, but gave no further evidence in this regard.

After reviewing the evidence and testimony, the court stated:

“I must consider the factors set out in the Evan’s case and the inquiry about “whether a reasonably objective individual in his circumstances would not have concluded that returning to work would be too embarrassing, humiliating, and/or degrading”. I am of the view that a reasonably objective individual in his circumstances would not have concluded that returning to work would be too embarrassing, humiliating, and/or degrading. [The employee] has given no evidence as to how or why he would be “humiliated, embarrassed or degraded”. The evidence is that, regardless of any offer that would have been made by [the employer], [the employee] never had any intention of accepting work under any circumstances. He never considered or evaluated the offer to work at [the employer]. He commenced an action against [the employer].”

As a result, the court found that the employee’s refusal to consider the employer’s offer of work was a failure to mitigate his damages. He was therefore only entitled to damages of $4,846 for the period from the date of the layoff to the date of recall (calculated on the basis of his base salary of $72,000 per annum).

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.

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Wrongful Dismissal/Termination

Distinguishing Employment Status: Employee, Independent Contractor or Dependent Contractor?

A recent Ontario case set out the relevant criteria in determining a worker’s employment status in a wrongful dismissal case. While the worker claimed 23 years of employment, the employer argued that she had spent the first 10 years as an independent contractor and was only an employee for 13 years.

What Happened?

The employee was dismissed without cause and claimed over $136,000 in damages for wrongful dismissal. The claim was based on an almost 23-year workplace relationship and she submitted that she was entitled to 24 months of pay and benefits in lieu of reasonable notice.

The employer argued that she was not entitled to any damages for wrongful dismissal. It submitted that she had not been an employee for 23 years. It stated that she had worked as an independent contractor for the first 10 years and that she had only been an employee for 13 years. The employer relied on the termination clauses in the employee’s employment contracts as rebuttals to the common law presumption that she was entitled to pay in lieu of notice. In the alternative, the employer submitted that if she was entitled to pay in lieu of reasonable notice, the appropriate notice period should be 12 months, not 24 months.

Determining Employment Status

The court began by setting out the three types or classes of workplace relationships:

(1) employer-employee (master-servant);

(2) contractor-independent contractor, and

(3) contractor-dependent contractor, which is an intermediate classification where the relationship of master and servant does not exist but where an agreement to terminate the arrangement upon reasonable notice may be implied.

The court stated that the first step in the analysis must be to determine whether or not the worker is an employee or a contractor in accordance with the established methodology and criteria for differentiating an employee from an independent contractor. While there is no specific formula for making this determination, the court should consider:

(a) the intentions of the parties;

(b) how the parties themselves regarded the relationships;

(c) the behaviour of the parties toward each other; and

(d) the manner of conducting their business with one another.

Additional considerations include control of the work, ownership of tools, chance of profit, and risk of loss.

After it has been determined that the worker is a contractor, the court may use a variety of factors to differentiate dependent and independent contractors including:

(1) the extent to which the worker was economically dependent on the particular working relationship;

(2) the permanency of the working relationship;

(3) the exclusivity or high level of exclusivity of the worker’s relationship with the enterprise.

The Decision

After reviewing all the relevant factors to the case, the court concluded:

“While as the above account of the facts reveals, there are some indicia of a genuine independent contractor relationship, the issuance of invoices being one such indicia, and while it is arguable that during the very early years of the relationship there was more independence, nevertheless, within two years, if not earlier, [the employee] was a dependent contractor. She worked exclusively for [the employer] and, practically speaking, it was her boss. In the immediate case, having regard to the nature of her work as a Wardrobe Stylist the indicia of independence or dependency such as tools and control are not very helpful in defining the relationship, and it appears that not much changed in how she carried on work before or after June 3, 2004, when she changed from a Freelance Wardrobe Stylist to a Wardrobe Stylist under an employment contract. In other words, there is little to distinguish between her years as a dependent contractor and her years as an employee. What stands out is that [the employee] had a twenty-three [year] solid workplace relationship with [the employer].”

In essence, the court found that the employee had been a dependent contractor for the period prior to becoming an employee and was therefore entitled to severance based on 23 years of working for the employer, not just the 13 years she worked as an employee. Additionally, the court stated that it would have given the employee the same amount of severance had it found that she had worked as an independent contractor for the first 10 years.

As a result, the court awarded the employee over $112,000 in damages based on a reasonable notice period of twenty-one months.

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.

 

 

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Wrongful Dismissal/Termination

62-Year Old Employee Awarded Longer Notice Period Due to Age and Lack of Employment Opportunities

A recent Ontario case shows that, in the case of employees who are terminated near the age of retirement, a court will take into account an employee’s age and employment prospects when deciding the appropriate notice period.

The Facts

The employee began his employment with the employer, a life insurance company, in 1978. He originally began as a vice president in sales and marketing. A number of promotions followed and by 2015, he became senior vice president in group insurance.

The event leading up to the employee’s termination was a minor disagreement concerning the purchase of tickets to sporting events for business promotion, which occurred in September 2015. After the event, the president of the company ordered an audit of entertainment or promotion expenses; he delivered a verbal reprimand to the employee, but not others.

Afterwards, matters escalated and the employee consulted a lawyer. The employee presented complaints of harassment by the president that were summarily dismissed by management.

Then, in October 2015, the Board of Directors decided to terminate his employment. At that time, he had 37 years of service and was 62 years old. The company admitted the termination was without cause.

Issues and Position of Parties

The amount of bonuses the employee was entitled to was raised, but the other issue centred on the amount of notice he was entitled to.

The employee claimed entitlement to 30 months’ notice, while the employer said the notice period should be 24 months.

The Decision

At the outset, the court reprimanded the employer for its behaviour and stated:

“There can be no dispute, an employer owes a duty to the employee to act fairly and reasonably. […] In this regard, it is difficult to understand how management allowed such a minor dispute to escalate and result in termination. […] The triggering event did not warrant a verbal reprimand. Management could have done better.”

Turning to the issue of notice, the court stated that, as a general principle, 24 months has been identified as the maximum notice period in most cases. However, the court took note of the employee’s circumstances, his age in particular, by explaining:

“Whether it is exceptional circumstances or recognizing a change in society’s attitude regarding retirement, the particular circumstances of the former employee must be considered. For many years, the usual retirement age was considered to be 65. Pension plans improved as a result of the labour movement, introducing, for example, an 80 factor for most employees in the public sector and many in large companies in the private sector. That lead to some individuals retiring between the age of 50 and 60. But many were not ready to fully retire. They sought out additional employment or simply continued to work in their existing position. Further, mandatory retirement was abolished in 2006 in Ontario to protect against age discrimination. Many employees have continued past 65. In result, it is important to recognize that each case is unique. Presumptive standards no longer apply.”

The court then set out the principles applicable to reasonable notice, which include:

  1. the age of the employee;
  2. the character or nature of the employment;
  3. the length of service to the employer; and
  4. the availability of similar employment, having regard to the experience, training and qualifications of the employee.

The court noted that the employee was 62 at the time his employment was terminated and that he had devoted his entire working career to the employer, 37 years in total. It found that the employee’s age was a significant factor and that his mitigation efforts demonstrated a lack of other employment opportunities.

The court stated that reasonable notice is normally referred to as the period of time it should reasonably take the terminated employee to find comparable employment. It then stated:

“When there is no comparable employment available, termination without cause is tantamount to a forced retirement.”

The court acknowledged that the employee had commenced the process of retirement planning, but he had made no decision as to when retirement would occur. In fact, the employee stated that he had committed to continue working for the employer until at least the age of 65.

As a result, the court concluded:

“[The employee] should have been allowed to retire on his own terms. With no comparable employment opportunities, in particular, I would have felt this case warranted a minimum 36 month notice period.”

However, the court decided that the employee’s submission of a 30 month notice period was more reasonable and so ordered.

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.

 

 

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Wrongful Dismissal/Termination

Employer Must Pay Dismissed Employee’s Relocation and Moving Expenses for New Job

An Ontario court ordered a former employer to pay a dismissed employee’s mitigation and moving expenses of just over $45,000 after she was forced to relocate to take a new job.

The Facts

 The employee began her career with the employer in 1999. She holds the professional designations of Certified General Accountant, Certified Public Accountant and Certified Payroll Manager. She also has an MBA.By the time she left her employment in 2015, she had received a series of promotions and held positions of increasing seniority and responsibility. However, after a major corporate merger and re-organization, she found herself with what she perceived to be a vastly diminished job and an uncertain future. She concluded she had been constructively dismissed and resigned her employment with the defendant.

The employee was able to find a new job. However, her income was reduced and she had to relocate to take the new job, incurring expenses to do so. She sued her former employer to recover her losses arising from her reduced income and her relocation costs.

 The Issues

At issue were whether the employee was constructively dismissed and what damages she may be entitled to under the Employment Standards Act (“ESA”). Additionally, the court had to assess what damages were recoverable by the employee on account of mitigation expenses.

 The Decision

On the first issue, after reviewing the evidence, the court found that the employer’s actions amounted to constructive dismissal. Additionally, the court found that, as a result, the employee was entitled to termination pay and severance payment under the ESA. She was also entitled to a common law damage award based on a calculation that subtracted her replacement income from her projected income with the former employer.

The court then turned to the issue of mitigation expenses. It noted thatin the case of an employee who has been wrongfully dismissed, the terminated employee is required to mitigate their damages by seeking and accepting reasonable alternative or replacement employment. It found that in this case, the employee mitigated her damages by accepting a job in southwestern Ontario at a reduced income.

The court noted that, in addition to her lost income claim, the employee was seeking reimbursement for various expenses that she says she incurred in order to transition to her new employment, or “costs of mitigation”. The court cited experts on this subject, who explain:

“A dismissed employee may be entitled to claim from the employer reasonable out-of-pocket expenses incurred while fulfilling the duty to mitigate and seeking out and accepting alternate employment. These costs are considered to be expenses incurred in the mitigation of damages and are the responsibility of the employer.”

Part of these recoverable expenses may include: real estate commission, moving expenses and legal fees incurred by an employee as a result of wrongful dismissal.

The court stated:

“By accepting the new job as she did, the [employee] substantially mitigated her damages. She reduced the [employer]’s exposure to a significant damage claim founded on lost income. To do so, however, she was forced to relocate. In my view, it would be inequitable to allow the [employer] to benefit from the [employee]’s mitigation efforts while at the same time denying her reimbursement for all costs she incurred to achieve that positive outcome. I therefore conclude that the [employer] should reimburse her for all reasonable expenses incurred in mitigating.”

Turning to the specific mitigation expenses incurred, the court summarized them as follows:

(1) expenses on the sale of the house in Mississauga;

(2) expenses on purchasing the house in southwestern Ontario; and

(3) expenses incurred during the transitional period while the employee was employed and staying in southwestern Ontario, before she sold the house in Mississauga and purchased the new house in southwestern Ontario and moving costs.

The court awarded the employee total mitigation expenses arising from the sale of the Mississauga house of just over $34,000. It awarded her mitigation expenses in the total amount of $3,500 for land transfer taxes, legal fees and related expenses incurred on the acquisition of the new house and $7,500 in moving and transitional expenses.

All totalled, the court ordered the employer to pay the employee mitigation expenses of just over $45,000.

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.

 

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Wrongful Dismissal/Termination

Employer Was Right to Fire Disabled Employee for Frustration of Employment Contract

An Ontario court found that an employer who terminated a disabled employee had the right to do so, based on frustration of contract. It found that because there was no reasonable likelihood that the employee would be able to return to work within a reasonable period of time, the contract of employment had been frustrated.

The Facts

The employee worked for the employer from 2002 until 2012, when he began a leave of absence for a medical condition. Under the terms of an insured employment benefit plan (the “plan”), the employee was provided with short-term disability (“STD”) and long-term disability (“LTD”) benefits.

The plan was administered on behalf of the employer by an insurance company which made all decisions and payments with respect to employee claims. The employer had no involvement in the insurance company’s decision process and could not legally challenge its decisions.

The insurance company approved the employee’s claim for STD benefits and then LTD benefits as a result of his disability and inability to work.

In 2014, the employee completed a return to work form which stated that he was unable to work and that his return to work date was “N/A”.  The form was stamped by his general practitioner.

In a letter from the insurance company dated December 5, 2014, the employer was advised that the employee could not return to work and that the insurance company had concluded that he was “permanently” totally disabled in relation to both his own occupation and any occupation.

In September of 2015, the employer reviewed the employee’s file and decided that on the basis of the letter, and in the absence of any other documentation to the contrary, the employee was “permanently” totally disabled from employment in any occupation and that it was unlikely that he would be able to return to work within a reasonable time.

As a result, on September 15, 2015, the employee was advised that he was terminated from employment for frustration of the contract. He was also told that he would continue to receive LTD benefits provided he remained totally disabled as defined in his insurance plan and that the employer would pay him his minimum entitlements pursuant to the Employment Standards Act.

Position of the Parties

The employee commenced a wrongful dismissal action, in which he denied that his 13 year employment contract was frustrated. He argued that the employer had not properly considered the possibility of his return to work. He submitted that, at the time of his termination from employment, it was not known if he would be returning back to work within a reasonable time-frame and the employer did not make any inquiries about his condition.

The employer brought a motion for summary judgment dismissing the employee’s action. It argued that at the time of his termination, the information provided by the employee and the insurance company led it to believe that he was permanently totally disabled and that there was no reasonable likelihood that he would be returning to work within a reasonable period of time.

The Issues

The court had to decide whether, at the time of the employee’s termination of employment, there was no reasonable likelihood that he would be able to return to work within a reasonable period of time and the contract of employment was frustrated.

The Decision

The court stated that the doctrine of frustration applied because the employee’s permanent disability made his performance of the employment contract impossible and the obligations of the parties were therefore discharged without penalty.

After reviewing the totality of the evidence, the court concluded that there was enough evidence at the time of the termination of employment that the employee was sufficiently disabled to qualify for his LTD benefits. As a result, the court found that it was reasonable for the employer to conclude at the time of termination of employment that there was no likelihood of the employee returning to work within a reasonable period of time.

The court therefore granted the employer’s motion and the employee’s claim was dismissed.

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.

 

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Wrongful Dismissal/Termination

Court Decides that Working Notice Does Not Apply to Employees on Medical Leave

Generally, an employer who dismisses an employee without cause will give them pay in lieu of notice of termination. However, some employers may choose to provide what is called “working notice”, which means that the employee will continue to work until their date of termination.

However, a recent Ontario appeal decision demonstrates that the working notice option is not available to employers in all circumstances. It confirmed a lower court’s determination that working notice does not apply to an employee who is on leave for medical reasons.

The Facts

The employee worked as a driver/mover for the employer for approximately 17 years. The employee suffered a non-work related injury in a motor vehicle accident in September 2015. As a result of his injuries, he went on an unpaid leave of absence. He provided the employer with a medical certificate to this effect.

On January 31, 2016, the employer provided six months’ notice to all of its employees that it would be ceasing operations on July 31, 2016. The employer stated in its letter to the employee on medical leave that it considered the six month period to be “working notice”, despite the employee not being able to work. After receiving the notice, the employee continued to be on unpaid medical leave, but was able to return to work for a few hours at the end of July, 2016, just before the employer ceased operations.

The employee started an action for wrongful dismissal. The motion judge found that the employee was entitled to 12 months’ pay in lieu of reasonable notice of termination. He awarded nine months’ salary and benefits, subject to deduction for amounts already paid, as the employee had commenced work with another employer on October 31, 2016.

The employer appealed to the Divisional Court.

The Issues

The employer argued that the motion judge erred in two ways:

1) First, he erred in failing to draw an adverse inference from the employee’s failure to provide adequate medical evidence to establish that the employee could not reasonably mitigate his damages due to his medical condition.

2) Second, the motion judge erred by applying an incorrect legal standard on the employer with respect to establishing that the employee failed to take reasonable steps to mitigate.

The Decision

The appeal was rejected on both grounds.

First, the court found that the motion judge had made no error when he found that the employee’s medical condition was such that he could not be expected to undertake a serious job search until he was able to return to work on July 27, 2016. There was considerable medical evidence to support this finding and evidence setting out the nature of the employee’s medical condition and the further treatment needed. The medical documents specifically stated that he was unable to work until he received more treatment.

Further, the court agreed with the motion judge’s finding that the employee was on an agreed medical leave of absence and his finding that:

“When asked for more medical information, [the employee] provided it. The information must have satisfied [the employer] each time it was provided because [the employer] chose not to terminate [the employee] for cause.”

The court also rejected the second ground of appeal, finding that the motion judge made no error in finding that the employee had met his duty to mitigate based on the evidence.

Further Implications

By rejecting the appeal, the court is confirming the motion judge’s determination that a “working notice” does not apply to an employee who is unable to work while on medical leave or disability. The purpose of notice is to provide employees time to find new employment while receiving a salary or pay in lieu of notice. Therefore, this case demonstrates that a court will not consider that the period during which an employee is unable to work for medical reasons counts towards “working notice”; if an employee is unable to work, they are also unable to look for other employment.

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.

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Wrongful Dismissal/Termination

Employee Wins Defamation Suit Against Former Employer for Making False Statements About Her Work Performance

What happens if you find out your former employer is spreading misinformation about you? Earlier this year, an Ontario court had to decide on this exact issue and made a rare award of both punitive and defamation damages against a former employer.

The Facts

The employer carries on business as a full-service, fully registered investment firm. The employee in this case had worked for the employer as a securities trader. She joined the firm in 2008 and signed an employment agreement that set out the terms of her employment.

Part of her contract of employment required her to maintain a certain amount of money in a reserve account to absorb losses which commonly occur in trading. During a meeting on April 2, 2009, the employer asked her to increase her contribution to the reserve above what she believed her contract had set out. The employee said she would have to think about it.

The employment relationship ended the next day. The employee claims she was constructively dismissed and resigned by delivering a letter to this effect shortly before noon on April 3, 2009. The employer claims it terminated her employment for cause and delivered a letter to this effect late in the day on April 3, 2009.

In addition, on April 4, 2009, the employer filed a Notice of Termination on the National Research Database maintained by its regulator, the Investment Industry Regulatory Organization of Canada (“IIROC”).  The notice stated that the employee was terminated for cause for failing to follow trading policies and engaging in unauthorized trading.

The Issues

The employer commenced an action claiming that the employee owed monies arising out of losses she incurred as a trader. The employee counterclaimed for damages for constructive dismissal and defamation.

The Decision

First, the court had to decide whether the employee was constructive dismissed or whether she was terminated for cause. After reviewing the contents of the contract, the court found that the increase to the reserve amount requested by the employer was not in accordance with the terms of the employee’s contract. The court found that her failure to pay the sums demanded did not constitute grounds to terminate her employment for cause and amounted to constructive dismissal. Constructive dismissal occurs where an employer makes a unilateral and fundamental change to a term or condition of an employment contract without providing reasonable notice.

The court awarded the employee just over $60,000 in pay in lieu of notice, representing six months of income and vacation pay.

The court then turned to the question of defamation. The employee was claiming $25,000 for damages for defamation arising out of the notice that the employer provided to IIROC concerning her departure. The employer denied that the notice was defamatory and asserted the defence of justification; in other words, it asserted that the statements were true. In the alternative, it argued that, if the statements were defamatory and untrue, the defence of qualified privilege applied.

The court began by stating that a “statement is defamatory if it tends to lower the reputation of a claimant in the eyes of a reasonable person” and that it is “defamatory to suggest that a person has been guilty of dishonest or disreputable conduct in a profession or calling.” Based on the evidence, the court found that the information included in the notice was defamatory.

The court then considered the employer’s first defence of justification. It stated that this defence is established if the statement made is substantially true. Additionally, the statement must be substantially true at the time that it is published. The court rejected this defence. It found that the employer failed to produce any documents to support its allegation of unauthorized trading.

Finally, the court considered the employer’s defence of qualified privilege. The court explained that this defence provides that, in some circumstances, the maker of a statement should have immunity from defamation and that qualified privilege arises where the maker of the statement has an interest in making the statement and those to whom the statement is made have an interest in receiving it.

While the court accepted the fact that the employer had an obligation to inform IIROC of the reasons for the employee’s departure, it noted that the defence of qualified privilege requires that the statements made are reasonably appropriate to the circumstances and that they are made honestly and in good faith. It found that the employer was “either being untruthful in its filing or was reckless with regard to the truth when making the filing.” As a result, the court rejected the defence and awarded the employee $25,000 for defamation damages.

In addition, the court considered whether the employee was entitled to punitive damages. The court stated that punitive damages are intended to punish the wrongful actor, not to compensate the complainant. In this case, it found that punitive damages should be awarded for several reasons, including deterrence, finding that “[this] is a case of indefensible, reprehensible conduct steadfastly maintained for eight and a half years.”

The court made an additional award of $25,000 in punitive damages.

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.

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Employment Law Wrongful Dismissal/Termination

Intervener Status Granted in Wrongful Dismissal Trial of Harasser

In what appears to be a first in Canada, a female employee who was allegedly sexually harassed by a co-worker (who was terminated as a result of her allegations and who then filed a wrongful dismissal claim) was granted intervener status in the upcoming trial in the matter.

What Happened?

The terminated employee worked for employer, an elevator company, for more than 30 years until he was terminated for cause in March 2014.

The employer claimed that the termination was a result of the employee’s actions towards a female co-worker, who had told the employer that the employee had slapped her buttocks and “placed his face in the areas of [her] breasts and pretended to nuzzle into them.”

The employee admitted that the alleged incident took place while he and the female co-worker were “bantering” but argued that when he “went to swipe her on her right hip” to “please get going” she turned without warning and while he was swinging his arm he accidentally hit her in the buttock.

Following the female co-worker’s complaint, the employer launched a full investigation into the incident and determined that the employee’s conduct warranted a just cause termination.

After the termination, the employee filed a wrongful dismissal claim.

Request for Intervener Status

The female co-worker continued to work for the employer after the employee was fired. After the employee filed his wrongful dismissal claim, she filed a motion seeking an order granting her intervener status on the basis that she had an interest in the proceedings and could be adversely affected by the outcome. The employer supported the female co-worker’s position.

The Law on Requesting Intervener Status

Rule 13.01(1) of the Rules of Civil Procedure provides that:

13.01(1) A person who is not a party to a proceeding may move for leave to intervene as an added party if the person claims,

(a) an interest in the subject matter of the proceeding;

(b)that the person may be adversely affected by a judgment in the proceeding; or

(c) that there exists between the person and one or more of the parties to the proceeding a question of law or fact in common with one or more of the questions in issue in the proceeding.

(2) On the motion, the court shall consider whether the intervention will unduly delay or prejudice the determination of the rights of the parties to the proceeding and the court may add the person as a party to the proceeding and may make such order as is just.

Courts have interpreted rule 13.01(1) in the past, noting, among other things that:

Although much has been written as to the proper matters to be considered in determining whether an application for intervention should be granted, in the end, in my opinion, the matters to be considered are the nature of the case, the issues which arise and the likelihood of the applicant being able to make a useful contribution to the resolution of the appeal without causing injustice to the immediate parties.

Courts have also warned that this is an area into which it is best to tread lightly:

In contrast [to constitutional cases], Ontario courts have interpreted Rule 13 more narrowly in conventional, non-constitutional litigation. …Intervention of third parties into essentially private disputes should be carefully considered as any intervention can add to the costs and complexity of litigation, regardless of an agreement to restrict submissions.

Many appeals will fall somewhere in between the constitutional and strictly private litigation continuum, depending on the nature of the case and the issues to be adjudicated.  In my view, the burden on the moving party should be a heavier one in cases that are closer to the “private dispute” end of the spectrum.

Issues the Court Considered

In making its decision as to whether or not to grant intervener status, the court considered:

  1. Whether the female co-worker met at least one of the threshold criteria in rule 13.01(1);
  2. If the female co-worker did meet the threshold for bringing her motion, would an order allowing her to intervene unduly delay or prejudice the determination of rights of the parties?
  3. If a leave to intervene would not unduly delay or prejudice the determination of rights of the parties, should the court exercise its discretion to grant leave to intervene, considering all relevant factors including the nature of the case, the issues in the action, the fact that the proceeding is a private dispute, and the likelihood of the female co-worker making “a useful contribution to the resolution of the proceeding” without causing injustice to the parties.

The Decision

Were the threshold criteria met?

The court noted that in its view, a consideration of whether someone meets the criteria in rule 13.01(1) should include a consideration of the person’s integrity.

In this case, the female co-worker had filed an affidavit in support of her position, stating, among other things, that she had been deeply humiliated and degraded by the incident, and that she feared that a decision in favour of the employee in the wrongful dismissal case would result in her feeling fear in the workplace since “there are many long-service male employees who would be aware that non-consensual sexual contact with me would not constitute just cause for dismissal”. She further noted that she wanted to protect her reputation and tell her side of the story. She repeated this in cross-examination at discovery.

The court concluded that the female co-worker did have an interest in the subject matter of the proceeding, noting:

I accept that [the female co-worker’s] affidavit and cross-examination evidence supports her contention that her moral integrity will be in issue at trial and that, in the context of her ongoing employment with [the employer], both her moral and possibly physical integrity could be affected by the outcome of the trial.  The substance of plaintiff’s counsel’s cross-examination of [the female co-worker] on her affidavit reinforces my view in this regard.  Based on [the female co-worker’s] interest in protecting her moral and physical integrity, she clearly has an interest in the subject matter of the proceeding.

The court went on to further say that there was a common question of fact among the female co-worker and both the employee and the employer as to what exactly had transpired during the incident. The female co-worker also has an interest in the legal issue of whether the employee’s alleged conduct was sufficient to warrant the termination of his employment for cause.

The court concluded, on the basis of the above, that the female co-worker had met the threshold criteria in rules 13.01(1)(a) and (c).

Would intervention unduly delay or prejudice the determination of rights of the parties?

The female co-worker sought an order that would allow her to participate in the trial on a limited basis. She proposed that her lawyer have a limited right to cross-examine the employee about issues concerning the female co-worker. She also proposed that her lawyer be permitted a brief opening statement, have the right to object to questions during her cross-examination, and the right to advance her position during closing arguments.

Her lawyer argued that his participation would not lengthen the trial significantly.

The court noted that the true issue here was whether the female co-worker’s intervention on the limited basis proposed would delay the resolution of the action as a whole.

The court concluded that the involvement of the female co-worker and her lawyer would not lengthen the trial by more than half a day, and this additional time did not constitute an undue delay in the determination of rights of the parties.

Other relevant factors

The court noted that the fact that this action is a private dispute between an employee and an employer placed a higher burden on the female co-worker, but did not preclude the granting of intervenor status.

The court found it necessary to go beyond the character of the dispute and to consider whether allowing the female co-worker her own lawyer at trial was a reasonable measure to enable her to protect her integrity in the context of her continued employment with the employer.

The fact that the dispute was a private one did not diminish the importance of the female co-worker’s need or ability to do so.

Likelihood of intervener’s useful contribution to the resolution of the proceeding

The court noted that this is generally a relevant question on most motions to intervene because the proposed intervener typically would not otherwise be involved in the trial. In this case, however, the female co-worker would be a witness whether or not she was granted intervener status.

Since her evidence is essential to the determination of the main issue at trial, and the legal and factual issues of what happened during the incident, the court found that it was “obvious that her contribution will not merely be useful but will be critical to the just resolution of the action.”

Intervener Status Granted, With a Caution

The court granted the female co-worker her requested intervenor status, but was careful to caution that:

This decision to allow [the female co-worker] to intervene in the action is intended to enable her to protect her integrity primarily in the context of her continued employment at [the employer].  My decision is therefore not to be interpreted as providing trial witnesses generally with the right to intervene and have their own counsel at trial.  If [the female co-worker] did not still work for [the employer], where she is required to continue to interact with the [employee’s] former colleagues on a daily basis, I would not have ruled that her integrity was under sufficient threat to warrant her having her own counsel at trial.

If you have questions about harassment 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.