Fixed Term Employment Contract? Better Prove It!

When is a fixed term employment contract not enforceable?  A recent decision of the Ontario Superior Court in Tossonian v. Cynphany Diamonds Inc. addressed this issue.  The court held that the fixed term guarantee was not part of the original deal between the parties and threw out that part of the contract.  The plaintiff was still awarded wrongful dismissal damages but they were much lower than they would have been if the employment contract had been enforceable.

The plaintiff, Razmig Tossanian, moved from Vancouver, B.C. to accept a position at Cynphany Diamonds in Toronto.  According the trial decision, the plaintiff was looking for an opportunity to move his family to Toronto.  After lengthy negotiations, he accepted an email offer of employment that purported to be based on an oral agreement.  The email set out the various terms that had been agreed upon, but made no mention of a five year fixed term.  The plaintiff did not respond in writing, though he indicated that he had called the owner of Cynphany to confirm the five year guarantee.

The plaintiff moved from Vancouver to Toronto without anything further in writing.  He began working for the defendant in late August 2011.

Some weeks later, the parties signed an “Employment Contract.”  This document did not reference the five year term.  A further document, for mortgage purposes was prepared, and signed by the defendant.  The second document stated that the plaintiff had a “guaranteed five year position.”

There was yet another document that also referenced a five year period, which was also prepared for mortgage confirmation purposes.  When the bank called to confirm, the owner of the defendant confirmed the five year term.

Mr. Tossanian worked for a total of approximately 8 months for the defendant.  At some point, according to the evidence, the plaintiff began having discussions with another potential employer and he shared information with these discussions with at least one co-worker.  He apparently suggested to his co-worker that he had a guaranteed job if he was fired by Cynphany Diamonds.  The owner of the defendant found out about these discussions and became quite upset.  There was a factual dispute about whether or not the plaintiff resigned or was fired but the evidence seems to be fairly clear in this regard that he was fired.  He was not fired for just cause as it is not cause to fire an employee for looking for other work.  Just cause was not argued at trial.

After being dismissed, the plaintiff went to the potential employer but the job opportunity that he had been pursuing fizzled.  Ultimately, he wound up returning to Vancouver and going back to his old position after just more than 4 months.  This position was at a much lower rate of pay.

The plaintiff sued for wrongful dismissal.  He alleged that he had a five year fixed term employment agreement and that it had been breached.  Even though he found work after four months, he claimed that his losses over a period of five years would amount to approximately $175,000.

The court does not seem to have been impressed by the plaintiff or his evidence.  Despite the various written agreements, the court held that the initial email between the parties was the key document and it did not reference a five year term.  Although the employer made “inflated representations about the duration of Mr. Tossanian’s employment contract to help him get a mortgage” the five year term had not formed part of the initial employment contract.  The court held that there was no new consideration for the five year guarantee.  The decision notes that the presiding judge did not feel that a salesperson of fine jewellery would require a five year fixed term employment contract.

Even though the court refused to find that there had been a five year guarantee, it still found that the plaintiff had been wrongfully dismissed. The court then had to turn to the applicable notice period.  The judge was not particularly sympathetic to Mr. Tossonian.  He was awarded a total notice period of two months, amounting to just over $13,500.  This was awarded after a trial that spanned over seven days, not to mention all of the preliminary motions, examinations and other court appearances.  Ouch!

In some respects, the decision is puzzling.  The plaintiff had at least two documents, signed by the defendant, providing for a guaranteed five year period.  Although the owner of the defendant provided evidence that things were not really as they seemed, the court’s explanation of why the five year fixed term employment agreement should not be enforceable is not particularly convincing.  If the defendant signed a document guaranteeing a five year period, provided that document to third parties and answered oral inquiries in a manner consistent with that document, there seems to be ample reason to find that the document was binding.

The court’s decision was likely coloured by the plaintiff and by the court’s assessment of the plaintiff as a witness.  The judge did not seem to like the plaintiff’s explanation as to why the five year fixed term was not included in the original email.  The court was less than impressed by the plaintiff’s efforts to find work for another employer, while still employed by the defendant.  In particular, the court found that the plaintiff had discussed that with at least one other employee and this caused the judge to empathize with the employer. As well, the court noted that the plaintiff returned to his old position reasonably quickly after being dismissed and may have had other opportunities as well.

The judge’s assessment of the plaintiff and that plaintiff’s character was quite damaging.  Not only did the court reject the five year term but it also awarded the plaintiff a very short notice period of only two months.  Courts have a great deal of latitude in selecting the appropriate notice period.  Although judges are supposed to consider the length of service, age, type of position and a variety of factors, decisions are inevitably coloured by the likeability of the plaintiff as a witness.

It may well be that this case is headed for an appeal to the Ontario Court of Appeal for a reassessment.  While the two month notice period is probably not likely to change if the Court of Appeal upholds the court’s findings, the real issue is whether or not the employer was bound by a five year employment contract.  This seems to be a question of law and one which the Court of Appeal may well consider carefully and could even reverse, depending on the particular Court of Appeal panel.

The decision is a reminder of some very key points that apply to many employment law situations:

1.  An enforceable contract must contain all of the terms and must be agreed upon by both sides, in advance, prior to the start date.  Oral representations, side agreements and “confirmation of employment letters” may not be binding if they conflict with the original contract;

2.  Where an employee finds work after being dismissed, courts will be reluctant to award large scale damages unless there is a very compelling reason to do so;

3.  Whether or not a witness makes a favourable impression on the court is crucial.  If a court has concerns about a witness’s honesty, character, motivation or if a court has other concerns, that may well have disastrous consequences for that side.

 

 

 

 

 

Key Employment Law Cases of 2014

Another year has passed and that means it is time to reflect back and consider some developments in employment law that we witnessed in 2014.  It was not an earth shattering year in the employment law field in Canada.  There were certainly many decisions reached across the country dealing with wrongful dismissal, breach of human rights, non-competition covenants and a range of other topics.  But the number of decisions that really changed the law was limited.  That being said, I have highlighted a few cases and other employment law developments that are worth summarizing.  I have provided the links to my original blog articles where they are cases that I wrote about.

1.  Ghomeshi and the CBC

This case is not completely over since there is a still a potential labour arbitration pending.  Moreover, the case was not adjudicated.  It was settled.  However, it created a great deal of discussion in the employment law world and for that reason it is worth including.  What are the key points to think about?

A.  Unionized employees will have an incredibly difficult time launching wrongful dismissal or other employment law related cases in the court system.  The proper venue for these cases is labour arbitration hearings.  For the most part, dismissed unionized employees must file a grievance.

B.  Egregious personal conduct, even off-hours conduct, can be cause for dismissal, particularly if at least some of it spills over into the workplace or into workplace related events.  Employers will need to pay careful attention to allegations of improper personal conduct and should address and deal with these matters before they become unmanageable.

C.  Taking an extremely aggressive approach to employment law litigation is simply not always the best strategy for plaintiffs.

There may still be more on this in 2015 as Canadians follow Ghomeshi’s criminal proceedings and his labour arbitration case.  The high profile nature of the dispute warrants its inclusion on a list of interesting developments.

2.  Boucher v. Wal-mart

The Ontario Court of Appeal awarded more than $400,000 to an employee who had been subjected to humiliating treatment in the workplace.  It is still rare in Canada to see these types of awards.  Although the amount of the trial judgment was reduced considerably, this case is still a significant weapon in the arsenal of decisions upon which abused employees and their counsel will rely.  It remains to be seen whether large scale punitive and aggravated damages become more commonplace in Canada.  Employees facing humiliating workplace conduct and bullying bosses have additional legal options to consider in light of this decision.

3.  AG Canada v. Johnstone

In this key case, the Federal Court of Appeal looked at the issue of “family status” under human rights legislation and concluded that family status includes childcare responsibilities and similar family care obligations.  This means that an employee with childcare responsibilities may, in certain circumstances, be entitled to protection and accommodation under applicable human rights legislation.  The Court set out a number of criteria that must be met and tried to make it clear that not every employee with some child care responsibilities will be able to request accommodation.  However, many employers are trying to deal with the issues pro-actively and are finding ways to accommodate the needs of employees with child care and elderly care responsibilities.

4.  Jan Wong and the Globe and Mail

Although I originally discussed this in 2013, the adjudicator’s decision was upheld in 2014 and Jan Wong was left facing a significant award as well as an award of legal costs.  The case illustrates a few points:

A.  The difficulty of proceeding in any kind of dispute in a unionized workplace without the backing and support of the union;

B.  The seriousness of confidentiality provisions in a settlement.  Employees who sign confidentiality provisions in settlements with their former employers can expect to face repercussions if they breach these provisions.  In some cases, a breach can mean a requirement to pay back to the employer the full amount of the original settlement.

5.  Fulawka v. Bank of Nova Scotia (Originally 2012 Ontario CA)

The Bank of Nova Scotia reached a settlement of a class action lawsuit with a group of bank employees claiming entitlement to overtime pay.  This settlement means that as many as 16,000 employees of the Bank of Nova Scotia could be entitled to overtime pay for overtime hours worked during the time period 2000 to 2013.  The affected employees were required to submit their claims by October 2014.  The case is a significant illustration of the availability of class actions to deal with widespread policies of large employers that may affect many different employees.  It is also which has caused employers and employees to examine their overtime hours and overtime policies.  Just because an employee is paid a salary does not mean that the employee can be required to work uncompensated overtime hours.

 

2014 Blog Posts – Selected Highlights

As well as they the key cases and issues set out above, I have highlighted a few of my blog posts from the past year.  In case you missed any of these, you might find them interesting:

1.  Hollander v. Tiger Courier Inc. (Sask C.A.)

It was not considered wrongful dismissal where a package of marijuana was delivered to an employee at his workplace.    The employee claimed that he knew nothing about the pot and that it wasn’t his…Fascinating reading.

2.  Rhebergen v. Creston Veterinary Clinic (B.C.C.A.)

The B.C. Court of Appeal upheld a very onerous non-compete provision for a veterinarian.  The clause prohibited a vet from setting up a practice within 25 miles of her employer’s clinic, for a period of 3 years.  It included huge financial penalties that would become payable in the event of a breach.  Surprisingly, the B.C. Court of Appeal upheld this clause.

3.  Steps to Take When You Are Fired

In this blog post, I have set out some things to consider when facing a dismissal situation.

4.  Are Employment Contracts Negotiable?

This post deals with aspects of employment contracts that can and should be negotiated.

5.  Poisoned Work Environment?  Not in this Restaurant.

Discussion of a recent Ontario Human Rights Tribunal decision addressing allegations of a poisoned work environment.

 

For 2015, I will aim to put up one or two new posts a month and I hope to send out an email update quarterly, or so.

 

Wishing everyone a Happy New Year.

Dismissal of Ghomeshi: Some Employment Law Points

The dismissal of Jian Ghomeshi from the CBC continues to dominate headlines. At this point, however, it has really become much more of a case about sexual assault and the criminal proceedings that Ghomeshi faces rather than about the employment law aspects of the case. I am not going to delve into the criminal law aspects of this matter or get into a discussion about sexual assault laws in Canada. Instead, I wanted to highlight some of the employment law points that emerged from the case.

A CBC spokesperson announced earlier this week that Ghomeshi had dropped his $55M lawsuit against the CBC. According to the CBC, Ghomeshi agreed to a dismissal of the case and to pay $18,000 towards the CBC’s legal costs. Wow, what an embarrassing result; a total victory for the CBC.  In hockey terms, that is the equivalent of an 8-0 loss, something that Toronto Maple Leaf fans have been known to experience (even if the CBC will have fewer future occasions to broadcast these matches). Ghomeshi can still pursue a grievance arbitration, if his union decides to take the case to a hearing. But the only courtroom he is likely to encounter now will be a criminal court, if his case winds up going to trial.

I discussed some of the employment law aspects of his case here when some of initial details began emerging. Now that the case is effectively over, it is worth highlighting a few additional points:

  1. The best defence is not always an outrageous offence:

Although there are some very aggressive employment lawyers in Toronto, a pre-emptive strategy is simply not always the best course of action. Some Canadians might be tempted to think that a strategy that worked in the past for former Prime Minister Mulroney must be a sensible one. But each case has its own facts. Sometimes employees facing a dismissal with cause are able to negotiate a quiet resolution of their situation that involves minimal publicity and perhaps even a mutually agreeable statement about the person’s departure. It is far from clear that Mr. Ghomeshi would have been able to arrange that type of deal with the CBC. But a strategy of posting a lengthy message on Facebook, launching an outrageous, ill-conceived claim and remaining defiant is extremely risky at the best of times. It does not seem to have served Mr. Ghomeshi very well in this case.

  1. Appropriate legal representation

Unionized employees face a tremendous uphill battle in trying to sue their former employers. Generally, they are prohibited from bringing such cases. If they wish to proceed, they must show that the lawsuit raises issues that our outside of the scope of the employment relationship and can stand on their own as independent torts or causes of action. In Mr. Ghomeshi’s case, he claimed, among other things, that he was dismissed because the CBC made a moral judgment about his lifestyle choice. That type of pleading almost certainly doomed this lawsuit from the start.

Employment lawyers are left scratching their heads. We must prepare a pleading that stands a decent chance of surviving the requirements that have been set out by the Supreme Court of Canada. If this cannot be done, clients will usually be advised that the claim has no chance of success. Mr. Ghomeshi may well have been provided with that advice. However, Mr. Ghomeshi’s decision to proceed with such an ill-fated claim, even after having been provided with the assessment that success was virtually impossible seems highly questionable, at best, on the part of Mr. Ghomeshi and his legal team.

  1. Resolving an unwinnable case

The CBC did not even bother putting in a Statement of Defence in response to Mr. Ghomeshi’s claim. There was no need to do so. Instead, it simply brought a preliminary motion to strike out the claim as one that disclosed no real cause of action. Normally, that is a difficult standard to meet. Moreover, if a plaintiff becomes concerned that the case is unwinnable or that there are reasons to drop it (like the prospect of criminal charges), this can often be done on terms that are close to neutral for the plaintiff. Many defendants will agree to a consent dismissal of a lawsuit without the payment of any legal costs. If legal costs are to be paid, most defendants will agree to some type of confidentiality provision. In this case, Mr. Ghomeshi appears to have surrendered completely. His case was dismissed with costs. It was announced publicly. And it was also announced that he was forced to pay the CBC’s legal fees of $18,000. While there are certainly cases in which a plaintiff is ordered to pay the defendant’s costs after losing an actual trial, it is quite rare for a plaintiff to pay legal costs just for the privilege of dropping a lawsuit. Obviously, there are many facts that the public has not been told and it became quite clear to Ghomeshi and his lawyers that he was likely to wind up paying a much higher amount in legal fees if the case was dismissed by court after hearing the motion.

Overall, the case has been a reminder that lawyers cannot work miracles. Sometimes the best strategy for dismissed employees facing strong just cause cases is to negotiate the best possible, confidential, walk-away resolution. If that cannot be done, steps should still be taken to minimize the potential damage rather than exacerbate it.

Just Cause for Dismissal? Hard to Prove.

What kind of conduct is just cause for the dismissal of a teacher?  If the teacher has been a long serving employee, the threshold will be quite high, according to a recent Ontario Superior Court decision.

In the case of Fernandes v. Peel Educational & Tutorial Services Limted, the plaintiff was awarded one year’s salary.  Perhaps more significantly, he was awarded the value of disability benefits that he would have been eligible to receive because he became disabled within a short time period after being dismissed.

Mr. Fernandes had been a teacher with Peel Educational Tutorial Services for more than 10 years.  In 2009, the school alleged that Mr. Fernandes had falsified students’ marks and committed “academic fraud” by doing so.  Mr. Fernandes conceded that some of his calculations were incorrect and that there were some issues with his submitted marks.  But he denied his conduct was “fraudulent.”

This case involved a 10 day trial, which featured the evidence of numerous witnesses.  One of the witnesses called by the school was  a “Mr. Zero,” who certainly has an interesting name for a witness in which one of the allegations is that certain students should have been given a mark of “0” for failing to hand in assignments.

In any event, after all of this extensive evidence, Justice Lemon concluded that Mr. Fernandes had been wrongfully dismissed.

The court made some interesting findings including:

  • Mr. Fernandes gave incorrect marks;
  • The marks he gave were late;
  • He allowed students to have overdue assignments;
  • Even though he was a computer teacher, his own computer program did not provide accurate marks;
  • He lied to his employers about how the marks were calculated;
  • He lied to the court about the student presentations were marked;
  • He admitted to falsifying some marks on students’ records.

These are all findings made by the court and appear in the decision.

However, the court also noted that Mr. Fernandes had been employed for more than 10 years and up to these incidents, was considered a “well-regarded teacher.”

Taking into account all of the circumstances and relying heavily on a charitable reading of McKinley v. B.C. Tel (2001) S.C.C. 38, [2001] 2 S.C.R. 161, the court concluded that “immediate termination was not the appropriate sanction for this misconduct.”  The court noted that “the defendants could have fashioned a reprimand and a warning that such conduct, if repeated, would lead to summary dismissal.”   The court awarded Mr. Fernandes one year’s compensation amounting to just over $50,000.

Mr. Fernandes had also sued for $300,000 in “intentional infliction of mental distress.”  This claim was rejected.

However, in addition, he had brought a claim for “long-term disability benefits” for $226,000.  At trial, he demonstrated that he was suffering from severe depression and other related symptoms.  The court held that he became disabled after being dismissed and during the applicable notice period.  The employer was therefore responsible for the full value of the disability benefits.  Given that Mr. Fernandes was 52 at the time of dismissal, this could mean approximately 13 years of LTD benefits, for which the defendant school would be responsible.

It remains to be seen what the Ontario Court of Appeal will do with this case.  Given the findings of the judge, there seems to be significant findings of improper conduct that may well warrant a just cause dismissal.  Although the judge was in the best position to make these findings of fact, the Court of Appeal may well review the court’s conclusion that just cause dismissal was not warranted in the circumstances.  It should provide for some interesting reading if the case is actually appealed and argued.

Irrespective of what ultimately happens with this case on appeal, if it gets there, here are some key points to consider:

1.  Establishing just cause for long service employees is extremely difficult and costly.  Many judges are willing to give plaintiffs the benefit of the doubt, even where serious misconduct is alleged.  Even were there is evidence of some misconduct, courts will consider the whole employment history of a dismissed plaintiff;

2.  Dismissed employees can and should fight employer determinations of “just cause” if there is any reasonable prospect of success and sometimes, these cases can sometimes even be won where the prospects look grim;

3.  Dismissed employees are entitled to insurance benefits during any applicable notice period.  If they are cut off from these benefits by their employer and then later found to have been wrongfully dismissed, employers will be responsible for the full value of the benefits.  This means that if an employee dies during a notice period, the employer will be responsible for the full value of the life insurance policy that had been in effect.  If the employee becomes disabled, the employer will be responsible for the full value of the disability benefits.  Employers need to consider liability very carefully before cutting of an employee from all benefits when making a termination decision.

 

 

 

CBC Decision to fire Jian Ghomeshi: More Details to Come?

Everyone is talking about the CBC decision to fire Jian Ghomeshi. Certainly, Canadians love a good sex scandal story as do readers across the world. In fact, I have already been contacted by several people in the U.S. and asked about the Canadian legal perspective in this type of case.  This story has legs.

But it is far too early to draw any definitive conclusions. I am not involved in this case in any way and have no first hand knowledge.  I am certainly in no position to assess whether or not Ghomeshi’s conduct was such that it actually substantiated the termination of his employment. But a few observations can be made to this point in time.

For one thing, unionized employees generally face quite an uphill battle in launching lawsuits. The Supreme Court of Canada has ruled, on a number of occasions, that unionized employees who are fired must use their grievance arbitration process. As a unionized employee, this means that Ghomeshi must proceed with a grievance arbitration with respect to the main  issue in his dispute – whether the CBC had just cause for terminating his employment.

Ghomeshi’s lawyers are obviously aware of this law. As a result, they have not sued for “wrongful dismissal.” Instead, they have framed the claim as one of “breach of confidence” and “defamation.” This is essentially a back-door effort to circumvent the existing case law and try to show that the essence of Ghomeshi’s case is not really wrongful dismissal.

Hard to imagine that much of the case will proceed successfully. In all likelihood, there will be a preliminary motion in which the CBC will seek to have most, if not all of the case thrown out. The basis for the motion will be the argument that this is really a lawsuit over the CBC decision to terminate Ghomeshi’s employment. The Statement of Claim itself alleges that the CBC fired Ghomeshi because it made a moral judgment about the appropriateness of Ghomeshi’s sexual conduct. For the most part, this type of allegation and dispute would be the type of issue that an arbitrator has the exclusive legal jurisdiction to adjudicate in a unionized context.

What about allegations of “breach of confidence?” In certain circumstances, dismissed employees can succeed with tort claims that are beyond the scope of the normal dismissal claim. But, for the most part, the court must find that the conduct is outside of the scope of the employment relationship.

Here the Statement of Claim alleges that Ghomeshi shared various details about his sexual practices, which it is alleged included consensual BDSM. The claim alleges that Ghomeshi shared this information with the CBC “voluntarily and in good faith” in the interest of working with the CBC to refute “false allegations.”

Does this duty of confidence normally exist? It might in certain limited circumstances. For the most part, when employees tell their employers about conduct in which they are involved, they are not normally immunizing themselves from their employer’s future assessment of the propriety of their conduct. To date, Canadian law has not normally recognized a principal of prophylactic, premature explanation as a means of inoculating oneself from future disciplinary action.

If the facts demonstrate that CBC either explicitly, or even implicitly, undertook to ensure confidentiality and agreed that it would not use Ghomeshi’s information for any other purpose, perhaps there might be an argument. But that does not even appear to be the allegation that is being made in the claim.

Overall, there may well be something to the suggestion that has been made by some commentators that the Statement of Claim is largely strategic, a further protective move aimed at discouraging any would-be complainants from coming forward under the threat of facing expensive litigation. But I did not read the Statement of Claim as one that was filled with defamatory statements made about other individuals. Nevertheless, given that the CBC is not likely to back away from the litigation any time soon, one can’t help but wonder about the real intended recipients of the claim and the real goals of the lawsuit.

As I mentioned, I am in no position to predict the final results or assess the various claims. But if at least part of the claim remains public (union arbitration hearings are not), salacious news stories will create lots of buzz. Canadians are bound to find the details of Ghomeshi’s alleged BDSM lifestyle titillating, particularly in the wake of the world wide success of 50 Shades of Grey.

The employment law question, assuming that Ghomeshi’s alleged conduct was in fact consensual, will be whether an employer can fire a high profile employee for legal personal behaviour to which it objects because of its concerns about its own profile and image. If the case is ever actually decided (rather than settled like most Canadian cases), the decision is likely to make for some fascinating and very entertaining reading.

Theft and Just Cause: Better Prove It!

Is theft just cause for termination of employment in Canada?  It might be.  But employers looking to support a just cause case with allegations of theft must be able to prove that they have built a very solid, airtight case.  Otherwise, the dismissed employee may well succeed with a wrongful dismissal claim and win substantial damages.

The recent case of Dennis v. Ontario Lottery and Gaming Corporation (2014) ONSC 3882 demonstrates just how high the bar may be for Ontario employers.

The plaintiff, Brenda Dennis, was a security manager for the defendant, the OLG.  She had worked for the OLG for more than 13 years in a senior position, supervising some 55 employees.

Ms Dennis was dismissed on what was, initially, a without cause basis.  She was offered a severance package of just under one year’s pay.  She signed off on the package and waited for her settlement funds.

However, it came to light that Ms Dennis had been in charge of arranging Wonderland tickets for OLG employees, for the social committee.  This was not an official part of her job duties.  However, in performing this role, Ms Dennis apparently “borrowed” more than $1,000 from the social committee’s Wonderland ticket proceeds.  She needed the money to pay debt she had incurred after becoming the victim of a Nigerian scam.  She gave evidence that she had always intended to repay the money.

Before paying out Ms Dennis’ severance, OLG discovered that there was a shortfall of more than $1,000 from this Wonderland ticket arrangement.  It questioned Ms Dennis and decided to withhold the agreed upon severance pending a further investigation.

Ms Dennis was charged criminally with theft but the charges were ultimately dropped.  However, OLG continued to maintain that Ms Dennis had stolen the money and that this would constitute just cause.  It refused to pay out the agreed upon settlement.  Ms Dennis sued and argued that there was no evidence of theft as she had always intended to repay the money.  She sued for an order that OLG should be required to honour the settlement arrangements.

OLG took the position that this was “after acquired cause” and that it should not have to pay out the funds since it had discovered the “theft.”

After reviewing various just cause decisions, the court came to the conclusion that termination with “just cause” would be “totally disproportionate.”

Justice O’Marra relied on a number of points:

1.  Running the social committee’s Wonderland ticket program was something that was “voluntarily assumed” by the plaintiff was not “an essential condition of her employment contract with the OLG;”

2.  Ms Dennis might not have believed or understood that “borrowing” the money would be criminal;

3.  The victim was Canada’s Wonderland rather than Ms Dennis’ employer;

4.  The employer concluded that Ms Dennis had admitted to theft but she had only admitted to borrowing the money;

5.  The internal investigation was “inadequate and inaccurate;” and

6.  The employer had agree to pay the settlement funds and Ms Dennis had signed a release that OLG had prepared.

The court therefore concluded that OLG could not maintain just cause and that it was required to pay out the agreed upon severance amounts plus legal fees.

The end result is one that seems very charitable for Ms Dennis, the dismissed employee, using the analysis the court proposed.  Obviously, this was a compassionate judge who considered the human elements of the case, the impact on Ms Dennis of being denied severance after 13 years and the circumstances in which Ms Dennis had been the victim of a Nigerian scam.  There is certainly case law support for taking into account these types of considerations.

However, stepping back for a moment, the facts seem to show that Ms Dennis’ actions were quite serious.  She removed and used more than $1,000 from a social committee fund that did not belong to her and only repaid the money after being caught.  For many judges, this may well have met or exceeded the high standard required for an employer to prove just cause, particularly for an employee in a position of trust in a high level security role.

It remains to be seen whether this decision will be appealed and how the Ontario Court of Appeal would approach the case.

The court may well have come to the same result by focusing on the deal that the employee had reached with the employer.  Since Ms Dennis had already signed off on a signed release that the employer had prepared and had already agreed to a deal, it would probably have been fair for the court to say that it was too late for the employer to start making allegations of just cause after the deal was concluded.  Instead, the court delved into issues of just cause and theft.

If the decision is upheld, particularly the court’s analysis of the theft allegations, it will demonstrate quite clearly that wrongful dismissal law in Canada is heavily skewed in favour of employees.  While more often than not that is a good thing, this type of decision will leave some employers wondering whether the just cause bar can ever be reached.

Perhaps the real message that should have been taken from this case is that neither side can reopen a severance deal once the deal has been negotiated and the release has been signed unless there is clear evidence of misrepresentation by one side or the other, which was clearly not an issue in this case.

 

 

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