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Employment Law

Disabled Employees Are Not Bound by Duty to Mitigate

In a recent Ontario case, the court found that an employee could not be penalized under a settlement agreement for failing to mitigate his loss of employment after he became disabled.

What Happened?

The employee worked for the employer for 32 years in various roles. The employer is a construction company that specializes in bridge construction.

The employee was dismissed without cause on January 5, 2015, and a settlement agreement was negotiated. At the end of his employment he was making approximately $75,000 per year as his base salary.

The settlement agreement provided for an initial payment of $56,250, and two other payments of $75,000, to be payable on September 30, 2015 and September 30, 2016 respectively. The two payments of $75,000 were subject to the employee seeking reasonable alternate employment, with a corresponding reduction of the payment for that period should he fail to do so, or if he received income from such reasonable alternate employment or any other source. There was an additional $5,000 available for reimbursement of fees incurred towards securing alternate employment.

Shortly following the employee’s termination, he registered with Canada Manpower to seek alternate employment and made one phone call in pursuit of it. 

He claimed that he experienced depression about his termination and that longstanding pre-existing illnesses of diabetes, hypertension and hypercholesterolemia became symptomatic. The employee stated by late February 2015 he was effectively unable to leave his house in search of any employment.

Then, on March 19, 2015, the employee was taken to a hospital by ambulance because of difficulty breathing; he subsequently developed sepsis leading to acute renal failure and septic shock. He underwent emergency surgery and rehabilitation but is on dialysis twice weekly for the remainder of his life. He was initially confined to a wheelchair for several months. He applied for and received Canada Pension Plan Disability Benefits. 

When the employee contacted the employer in advance of the September 30, 2015 payment and communicated that he was extremely ill and unable to seek reasonable alternate employment, the employer suspended payment of the additional $75,000 for 2015 and later similarly refused to make the 2016 payment on the grounds the employee had failed to mitigate, or that the obligation to pay became frustrated or void once he became disabled. 

Parties’ Positions

The employer argued that the employee’s failure to seek alternate employment relieved it of its obligation to pay. 

The employee argued that his inability to seek alternate employment excused him of that obligation and the employer was required to make the payments.

Decision

The court stated that if the employee had been capable of searching for work, and did not do so, that would have been a wilful failure to mitigate; however, that is not what happened. 

The court found that the employee did not wilfully fail to comply; rather, he became unable to do so. The court stated:

“I find that his disability and resulting incapacity was not within the reasonable contemplation of the parties at the time of the agreement. [The employee] would not logically agree to a condition that required him to do that which was physically impossible. Similarly, the [employer] could not, in good faith, have imposed such a condition without clearly stipulating that that was their intent. The only rational inference is that both the employee and the employer contemplated that [the employee] would be required to seek reasonable alternate employment so long as he was capable of doing so. This qualification is an implied term of the agreement, reasonably expected by the parties, and not overridden by the language of the agreement.”

The court found that the employee’s disability relieved him of his duties to seek employment under the contract, but did not extinguish the employer’s obligation to pay.

As a result, the court granted the employee’s claim to enforce the termination agreement and to receive the two outstanding payments of $75,000 each.

Get Advice

At 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 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 (289) 652-9092 to learn how we can help.

Categories
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.

Categories
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.

Categories
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.

 

Categories
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.