It is always essential for employers to ensure they are terminating employees within the requirements set out by law. It is worth it to carry out a termination in good faith because it can cost the company later on.
The employee was terminated after a lifelong career with the employer
Pohl v. Hudson’s Bay Company involves an employee, Mr. Pohl, who had been employed at the Hudson’s Bay Company for 28 years. For his final eight years with the company, he worked as a Sales Manager of eight different departments.
In September 2020, his employment was terminated without cause. In the aftermath of his termination, his supervisor escorted him out the door of the establishment. Mr. Pohl sued Hudson’s Bay Company for wrongful dismissal.
The employer did not provide the employee with appropriate notice
In response to the allegation of wrongful termination, Hudson’s Bay Company stated that it had offered Mr. Pohl a “voluntary separation package”. Even though Mr. Pohl did not accept this package, the company argued that it had done its duty to provide notice by offering it. The voluntary separation package included 40 weeks’ pay in lieu of notice and offered Mr. Pohl the minimum entitlements under the Employment Standards Act.
While the employer maintained that the severance package complied with the minimum standards in the province, the Ontario Superior Court of Justice found that it had not. In its legal arguments, Hudson’s Bay Company had not produced any precedent where 40 weeks was deemed reasonable. In its own factum, it asserted that 14 to 18 months was reasonable – far more than what was offered to Mr. Pohl in the voluntary separation package.
“Bardal factors” applied to determine the amount of reasonable notice
The Court assessed the factors set out in the leading case of Bardal v. Globe & Mail Ltd. to determine the proper amount of notice to which Mr. Pohl should have been entitled. These factors are:
- length of employment;
- character of employment;
- age of the employee; and
- availability of similar employment having regard to the experience, training and qualifications of the employee.
Because Mr. Pohl had worked for Hudson’s Bay Company for his entire life, the first factor weighed in favour of a longer notice period. He was also in a senior supervisory position and had significant responsibilities. The Court noted Mr. Pohl’s age, 53 years old, which was not at the end of his working career but was approaching it.
Finally, while Mr. Pohl did not perform a specialized role, he did obtain all of his experience from Hudson’s Bay Company. Although there were similar employment opportunities in his region, he was unsuccessful in all 136 job openings to which he had applied. The Court noted the impact of the COVID-19 pandemic on his efforts due to the economic downturn. As these facts also weighed in favour of a longer notice period, the Court determined that the reasonable notice period Mr. Pohl was entitled to was 24 months.
The employer provided evidence in attempt to reduce the reasonable notice period
Hudson’s Bay Company alleged that Mr. Pohl failed to mitigate his damages after termination. Generally, employees should try to find new employment as soon as possible after being wrongfully dismissed. If they have not done so, it can result in a reduction in the reasonable notice period. This is because employees cannot obtain relief for losses they could have avoided.
Employers must have evidence to support an allegation that an employee failed to mitigate their damages. Based on its evidence, Hudson’s Bay Company sought a reduction of Mr. Pohl’s notice period of six to 10 months.
The employer offered alternative employment
The employer claimed it had offered Mr. Pohl an associate lead position when he was terminated. Because he did not take that offer, Hudson’s Bay Company claimed Mr. Pohl “completely failed to mitigate his losses.”
However, the Court rejected this position. It found that Mr. Pohl had essentially been asked to resign his position to one that paid him significantly less, including fewer benefits and no guaranteed hours of work per week. Additionally, the associate lead position allowed the employer to terminate him anytime without cause. The Court found that no reasonable person would have accepted the employer’s offer, so this evidence did not meet the burden to prove Mr. Pohl failed to mitigate his damages.
The employee did not apply to a specific job suggested by the employer
Hudson’s Bay Company’s second piece of evidence was that he should have applied to his previous role before he was terminated. The Court noted that Mr. Pohl had not worked in this alternate position suggested by the employer. It was entirely different than any job Mr. Pohl had held previously. He was also not qualified for the job. Therefore, this piece of evidence was also not accepted by the Court.
The employee did not make enough effort to get another job
The employer was dissatisfied with the number of positions for which Mr. Pohl had applied. It claimed he had applied to only 23% of the job positions it had sent to him, even though many of the ones it listed were duplicates or were incomparable positions. It was also critical that of the job postings he had applied to, he had only been able to secure nine interviews.
The Court pointed out that the matter of securing interviews was outside of Mr. Pohl’s control. It also acknowledged that Mr. Pohl had been struggling with depression, anxiety, feelings of humiliation and diminished self-worth after his termination. This delayed his ability to apply for jobs until February 2021, six months later. He took steps to improve his mental health, seeing a doctor and completing online counselling.
In light of how his mental health affected his ability to job search and the fact that Mr. Pohl remained unemployed at the time of this summary judgment, the Court found that Mr. Pohl did not fail to mitigate his losses in the period after his termination.
The employer had to pay additional moral and punitive damages for its conduct in terminating the employee
The Court ruled that Mr. Pohl was entitled to 24 months’ salary in lieu of reasonable notice for the termination of his employment. It also found that Hudson’s Bay Company had breached its employment contract with Mr. Pohl between April to June 2020 by unilaterally reducing his wages by 25% with no change to his hours of work. However, because Mr. Pohl continued to work for the employer throughout the period of reduced wages and thereafter, he effectively condoned it and was not entitled to compensation for this reduction.
The Court found that the manner in which Hudson’s Bay Company treated Mr. Pohl in the aftermath of his termination warranted the award of additional damages. Not only had Mr. Pohl been escorted off of the property, but the company had also offered him a position that would allow him to be fired without cause in the future. It also failed to pay Mr. Pohl wages owed within the time period prescribed by the Employment Standards Act. Further, Hudson’s Bay Company did not provide Mr. Pohl with his Record of Employment within the required time, and the copies that were sent contained errors.
The Court found that the employer’s conduct had been “untruthful, misleading, and unduly insensitive”. As Hudson’s Bay Company had not terminated Mr. Pohl’s employment in good faith, their actions could reasonably be contemplated to have caused Mr. Pohl’s mental distress. For this reason, the Court awarded Mr. Pohl an additional $45,000 in moral damages and $10,000 in punitive damages.
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