Category: Uncategorized
Secret Recording By Employee Not Just Cause in Certain Circumstances:
In Rooney v GSL Chevrolet Cadillac ( 2022 ABKB 813 ) Justice Feasby had situation where an employee who believed that he was being subject to unfair disciplinary suspensions decided to secretly record conversations with his supervisor.
The Court noted that generally speaking:
” Recording conversations in the workplace will often cause irreparable damage to the relationship of trust between employee and employer and be just cause for termination.”
However in this case, the actions of the employee did not constitute just cause for two reasons:
1) The employer did not have an express policy prohibiting such conduct that was brought to the attention of the employee, and
2) ” [91] Perhaps a more significant difference from Shalagin is that by the time of the first recording by Mr. Rooney, the employer-employee relationship was already frayed by tensions between Mr. Rooney and his supervisors, Mr. Rooney had an emerging appreciation that there. had been a fundamental change in his terms of employment, and a suspension without pay had been imposed on Mr. Rooney without any basis in the terms of employment. Mr. Rooney resorted to what, in ordinary times, is rightly viewed as an unethical tactic to deal with what the arbitrator described in British Columbia Government and Service Employees’ Union as a “relationship power imbalance.” Mr. Rooney’s actions in recording conversations with his supervisors were justified because GSL exerted its power over Mr. Rooney by imposing unilateral changes on his employment terms and disciplined him contrary to his terms of employment.
My Comments :
This case seems to say that if the Court finds that you did not have a valid reason to secretly record your employer or co-worker, then you can be fired for just cause but if you had a good reason then it is not just cause.
This creates a real problem for the Plaintiff’s lawyer. Your client tells you they have a secret recording of a conversation with the boss which is relevant to the lawsuit. You listen to it and determine that although it is relevant, it probably not that helpful to your case. However, you must include this document in your clients’ Affidavit of Documents as it is relevant, but to do so you run the real risk that the employer will now allege after acquired just cause.
Possible solution: Settle the case before you have to file your Affidavit of Documents.
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Court Criticizes Employers’ Failure to Assist Employee’s Job Search:
In Summers v. Oz Optics Limited, 2022 ONSC 6225, Justice Hackland awarded 6 months notice to a 61 year old draftsperson with only 3.5 years service.
The defendant argued that there was was a failure to mitigate. They relied on the fact that he had not applied to a number of jobs that were only presented to him at the trial.
The Judge was not impressed. The judge commented on the Defendants’ tactic as follows:
“On the other hand, the record does make clear, as
noted previously, that the Respondent has been of no assistance to the Applicant in his reemployment efforts.”
“As there is anissue concerning an alleged failure to mitigate, discussed below, I would note that the employer seems to have done nothing to assist the Applicant in transitioning to new employment. In particular, he was terminated summarily and escorted off the premises in front of other employees. This did not allow the Applicant an opportunity two preplan his job search or to investigate alternative employment in advance of termination. The employer has not provided a letter of reference nor was any assistance offered by way of career transition counseling. The employer has not offered to waive the non-solicitation provision in the employment agreement.”
My Comments:
In my mediations I sometimes find that the employers who do the most to criticize the Plaintiff’s job search efforts do the least to help the Plaintiff find a new job.
The best way for an employer to lessen the cost of termination is to help the Plaintiff get a job. These are some of the things that will impress a court that the employer is a mensch and not a jerk:
1) Don’t allege just cause solely as a litigation tactic .
2) Provide as positive a letter of reference as you can at the time of termination.
3) Provide appropriate relocation counselling without having it tied to a release.
4) Pay out the ESA minimums immediately.
5) Send job leads to the plaintiff in a timely fashion, not just at the trial .
6) I admit this somewhat controversial, but consider paying out what you think is reasonable notice without a release, or better still keep the employee on salary continuance for what you think is reasonable notice.
7) Waive or at least limit any non compete or non solicit agreements.
8) Handle the termination itself in a way that shows respect and an understanding about how devastated the employee feels. Do you really have to take his cell phone that day ?
If you would like a copy of this case, email me at barry@barryfisher.ca
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Municipal Supervisor Using City Washing Facilities to Wash His Own Truck Not Just Cause :
BC Court of Appeal Rules That CERB is NOT Deductible from Wrongful Dismissal Damages :
In Yates v Langley Motor Sport Centre Ltd ( 2022 BCCA 398) Justice Bauman finally definitively answered the issue of whether or not CERB payments received by a terminated employee are deductible from wrongful dismissal damages that cover the same time period .
The answer was NO, they are not deductible and thus the windfall goes to the benefit of the employee, not the employer.
The analysis was largely based on social policy. The concluding words say it all:
“Whether the payments are in the end to be repayable by the plaintiff is of no concern to the defendant employer. It is a matter between the plaintiff and the authorities administering the plan .”
This is the first appellate decision on this issue, and as this is a federal law, it is my understanding that all lower courts in Canada are obligated to follow it.
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Employer Loses on Just Cause and Pays $50,000 in Bad Faith Damages in Part Because of Improper Investigation:
In Rutledge v Markhaven ( 2022 ONSC 3183) Justice Dow awarded 22 months notice to a 43 year old Executive Director of a long term care home with just under 21 year service .
The Defendant alleged just cause because they claimed that she had breached her fiduciary duty by agreeing with a service provider of the Defendant to promote one of their employees who worked in the defendant’s premises with whom she was having a romantic relationship. However it was determined by the Court that :
- No such relationship existed at the time of the promotion
- The Plaintiff disclosed the relationship at the time to the HR department and that the Board of Directors knew about the relationship a short time later.
- The Board took no action regarding this matter until months later and only when an employee complained.
The Judge therefore found that the Board of Directors condoned the Plaintiff’s actions. When asked in the investigation whether she had been romantically involved, the Plaintiff admitted it .
The interesting part of the case is the Judge also awarded $50,000 for bad faith damages . This seems to be largely based on the manner in which the Defendant conducted their investigation. The Judge noted the following concerns:
- Although the Plaintiff was told that the investigation would be conducted by an independent third party, it was in fact conducted by a “investigation business associated with defence counsel”
- The defendant secured information from the Plaintiff without her prior knowledge.
- It conducted parts of the investigation at a local Tim Hortons where many of the Defendants went for coffee, thereby failing to conduct the investigation in a confidential manner.
- ” Portions of the investigation file were not produced under the guise of solicitor – client privilege.”
- The scope of the investigation was expanded.
The Plaintiff went on disability leave prior to her dismissal and led evidence that her psychological condition was caused by the investigation.
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Court Awards Costs of $429,654 Against Employer Who Lost Motion for an Interlocutory Injunction:
In Aware Ads Inc. v. Walker 2022 ONSC 6121 , Justice Centa assessed costs in an action where the Plaintiff former employer was suing the Defendants ex employee and the new employer seeking to prevent Walker from joining the Plaintiff’s competitor.
Costs were awarded on an elevated scale for the following reasons:
1.No basis or reasonable grounds to bring the motion ;
2.It failed to demonstrate a strong prima facie case to support its serious allegations;
3.The Plaintiff initially sought extraordinarily broad relief, such as a Mareva and Mills order, a CPL, and discovery aid of injunction and inspection order. It withdrew these reliefs only after delivering its factum. It then revised the relief sought several times thereafter.
4.The relief sought was viewed as an effort to “punish” the Defendant instead of protecting legitimate business interest.
5.For one of the Defendants, it completely abandoned all relief sought after putting him through significant expense and time.
It is important to note that the Plaintiff had previously sought an interim injunction along the same lines , which was also dismissed. They then tried to get a second kick of the can by way of this interlocutory injunction and failed miserably.
Quere: Will they still proceed to trial to seek a permanent injunction after having to pay almost half a million dollars in costs ?
If you would like a copy of this case, email me at barry@barryfisher.ca
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Prior Service to Bankrupt Employer Considered in Notice Period:
In Chin v Beauty Express Canada Inc., 2022 ONSC 6178 Justice Morgan had a situation where the Plaintiff, a 69 year old aesthetician , worked first for 14 years for Company A , which then went bankrupt, and then 6 years for the Defendant. She worked inside a Bay store so after the change in employer her bosses and her work location stayed the same.
When deciding the length of service upon which to assess notice the two choices proposed by the parties was 20 years or 6 years. The Judge rejected both of those choices and instead examined what advantage the Defendant had when it hired the Plaintiff who already had 14 years experience on the job. The judge concluded that given the limited skill set involved in the job, she should only get one half of the notice that she would have got if she had been a 20 year employee. He thus awarded the Plaintiff 10 months notice.
My Comments:
The important thing to realize about this case is that the break in service was due to a bankruptcy and not a sale of either shares or assets . Therefore the law is clear that the bankruptcy ended her employment with Company A and that the Defendant was not a successor employer, either under the common law or the ESA.
However, in this situation the Judge was still prepared to give consideration to the fact that the Defendant in effect inherited an experienced employee and thus saved the time and expense of training a new employee.
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CLC Adjudicator Has No Authority to Reinstate to a Different Position :
In Miawpukek First Nation v. Howse, 2022 FC 1501 (CanLII) Justice Furlanetto reviewed the decision of an adjudicator under the Unjust Dismissal section of the Canada Labour Code who, having found that the complainant had been unjustly dismissed from her position of Director of Training & Development, ordered her reinstated but to any position other than her former position. The Adjudicator also imposed a set of conditions on her reinstatement , including a one year probationary period, that she not supervise anyone and that she take training.
The Federal Court determined that the Adjudicator had exceeded their jurisdiction and that the power to reinstate was limited to the same position that the complainant held at the time of termination.
My Comment :
It seems that if the adjudicator finds that reinstatement is not appropriate, then the only remedy would be a payment in lieu of reinstatement as it is not within the power of the adjudicator to require the employer to either create a position or displace an innocent employee from their position so that the complainant can be reemployed.
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Ontario Court of Appeal Reverses Finding That Plaintiff Failed to Mitigate :
In Lake v. La Presse, 2022 ONCA 742, the trial judge had assessed an 8 month notice period for a 52 year old General Manager with 5.5 years service making $185,000. However the trial judge reduced the notice period by 2 months on the grounds of poor mitigation.
The Court of Appeal reversed the reduction and said the trial judge erred for the following reasons:
1. The Judge said that as time went on the Plaintiff should have looked for lesser positions such a salesperson. The Court held that this was an error and that the Plaintiff is always entitled to look for comparable employment and that she need not lower her sights as time went on.
2. The trial judge said that she was aiming too high in applying for VP jobs. The Court found that the trial judge focused too much on the titles of the positions the Plaintiff was applying for and ignored the Plaintiff’s evidence that the jobs she was applying for were of the same nature as hers, despite their loftier titles.
3. The trial judge admitted that she had no evidence before her on this issue , but went on to infer that if there were VP jobs available there must have also been more junior jobs available and that if the Plaintiff had applied for such junior jobs, she likely would have got one. The Court stated that the employer has to show not only that such jobs actually exist ( on which point no evidence was led) but that if she had applied she would have obtained that job.
My Comments:
The law seems to be that the employer must not only show that the Plaintiff failed to pursue comparable employment but that if the Plaintiff had done so that they would have had a job before the end of the notice period.
The first part of the test is not hard to prove but the second part is almost impossible. Many job applicants meet the qualifications of a job ad but do not get the job. There may be many qualified candidates but only one position. The job may go to the most qualified applicant or to the GM’s lazy nephew.
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an amount equal to 12 months salary in the event of termination by UHN without just cause.
The Plaintiff was terminated without just cause but the trial judge held that this did not include the bonus, even though historically the Plaintiff had received a bonus.
The Court of Appeal had this to say :
[4] However, we are satisfied that the motion judge erred in denying the appellant the performance-based bonus payable under the Employment Agreement. The Employment Agreement clearly provided for a discretionary annual performance-based bonus of up to 25% of the appellant’s annual base salary. The motion judge found that there was a dearth of evidence concerning the bonus – no evidence as to the appellant’s performance and whether he would have been eligible for 25% or some lesser amount. This finding overlooks evidence in the record establishing that the appellant was paid bonuses of approximately 25% for 2018 and 2019, and slightly less on a pro-rated basis for 2020, up to the termination of his employment. The Employment Agreement provided for payment “of an amount equal to 12 months salary” in the event of termination by UHN without just cause. “Salary” was undefined. The appellant’s uncontroverted evidence was that the bonus was a substantial and integral part of his overall compensation. The motion judge found that the appellant’s health care spending account, an amount required to be under the Employment Agreement in addition to “base salary”, was owing as part of the appellant’s compensation on termination. That finding was not appealed.
[5] Like the health care spending account, the bonus is properly
considered part of the compensation owed on termination. Termination deprived the appellant of the opportunity to earn the bonus for the year ahead and in our view it is reasonable to infer that he would have earned it. The respondent offered no basis for finding otherwise.
My Comments :
The term used in the agreement was ” salary”. If the agreement had said ” base salary only” the outcome may have been different. However one must be careful when using that language because under the ESA both termination and severance pay are based on regular wages which can include bonus payments. Therefore if you had a clause which provided the correct number of weeks pay to be in compliance with the ESA but limited it to base pay only then you could be in violation of the ESA as it did not include the bonus amount in the calculation.
Nobody said that employment law was easy.
If you like a copy of this case, email me at barry@barryfisher.ca
To book a mediation date go to www.barryfisher.ca