February 4, 2023
Be careful not to terminate an employee by accident. The surest way to accidentally terminate an employee is to give them a notice of termination. This may sound obvious, yet the case ended up at the Ontario Court of Appeal.
Getting sound professional advice BEFORE terminating may prevent expensive accidents.
In Amerato v. TST-CF Solutions LP, following a merger and faced by the challenges of the pandemic, the company underwent significant changes. That included eliminating the plaintiff’s position. On January 2nd, 2021, the plaintiff, a Customer Service Supervisor was verbally informed that her employment was terminated and the same day she was sent a letter which unconditionally terminated her effective February 1st. At the same time, she was delivered a second letter in which she was offered a lesser position as a Customer Service Representative at lower pay. After some back and forth, she accepted that job and continued employment with the company. She then sued for wrongful dismissal.
Despite the fact that the employer had written to the plaintiff’s lawyer suggesting that she was required to mitigate (reduce her damages) by accepting the job offer and then sue for damages, the employer denied that she had been terminated. They took the position that she had been presented with two alternatives – termination or a new position. That simply did not match the facts. The wording of the termination letter was clear and the fact that she agreed to work in the new position to mitigate her damages did not change the fact that her employment had been terminated.
As an alternative, the trial judge said that if she had not been fully terminated on January 21st, she had been constructively dismissed by being offered a position at a lower salary and demotion from Supervisor to Representative.
The judge considered the usual factors of the character of the employment, the length of service, the age of the employee, and the availability of similar employment in setting a reasonable notice period. He also added consideration of the downturn in the economy and the fact that the employee was older and a long-term employee to justify a longer period of notice.
The judge also considered the fact that she had a disability, although she was continuing to work part time while receiving disability benefits. We have written before about the role of common sense in judges decisions and this is another example. It is simply common sense that somebody with a disability has a harder time obtaining employment.
The trial judge awarded a notice period of 18 months. He however did not award punitive damages for bad faith, or damages for mental distress, aggravated damages, or moral damages. There was no evidence of mental distress. The employer argued other factors but there was no evidence of bad faith including:
- All communications with the plaintiff were conducted in a professional manner;
- There is no evidence that the termination was due to her disability;
- It was not unreasonable to send an e-mail to her team advising she is leaving TST after receiving her lawyer’s letter stating that she was intending to pick up her personal belongings and return all company property;
- There was no obligation to offer a reference letter or outplacement services;
- The similar supervisory position was in Western Canada and was offered in May 2021 and was therefore not available to Ms. Amerato at the time of the termination of her employment; and
- The allegations of bullying were unfounded. TST denies that it sent the termination letter to Ms. Amerato to encourage her to accept the job change.
The judge did not analyze all of these, but by the terms of his decision it is apparent that these were persuasive. Depending upon the facts of your situation, this is a useful check list of some of the conduct that is appropriate or not.
More importantly, it is a reminder generally to play nice when terminating an employee without cause. It is never pleasant to have to terminate any employee, but one with a disability and long service should be treated with care and compassion.
The judge also did not award damages for discrimination as there was not enough evidence that the plaintiff’s disability played a role as opposed to the elimination of her job.
Her damages were reduced by the income that she earned during the notice period.
The judge however found that her disability benefits should not be deducted. He did point out that the plaintiff might have to account to her disability insurer for the recovery of that money. In our experience, that determination depends upon the insurance agreement and all of the facts which were not before the court in this case.
Surprisingly, the employer appealed this fairly obvious and not totally one-sided decision.
The Court of Appeal noted that the trial judge took into account the relevant correspondence and communications and did not misapprehend the evidence. The trial judge’s reasons demonstrated a firm grasp with the evidence and its relevance to the positions put forward by the parties. His findings of fact were reasonably supported by the evidence. The Court of Appeal did not overturn the judgment.
They also did not agree with the employer’s submission that the plaintiff should have been treated as if she had received the entire salary up to the date of the summary judgment motion; the actual amount paid by the employer to the plaintiff during the working notice was the relevant amount.
The judge’s treatment of deductions was appropriate. This may help clarify the murkiness of the many trial level decisions relating to deduction of collateral benefits such as disability payments since there are seldom Court of Appeal decisions on the subject. Time will tell whether trial judges continue to favour plaintiffs or find excuses to distinguish the Court of Appeal’s direction on this point.
- When dismissing an employee without cause, the employee should be treated with care and compassion.
- This is especially true for older long-term employees who may be entitled to enhanced notice.
- This is even more true for employees with a disability, not only because they can receive enhanced notice but because they may be entitled to other damages as well.
- Treating people who have been loyal to you well is just the right thing to do. It is not like a situation of dismissal for cause.
- Judges frown on employers who play hardball with employees who were dismissed without cause.
- Judges continue to generally favour employees by giving them the benefit of the doubt in dismissal situations.
- This is because the employment situation is not viewed the same as other contracts. Unlike most contracts, there is unequal bargaining power between employees and employers in most situations. In cases where there appears to be equal bargaining power, the favouring of employees is less.
- Benefits such as LTD to which employees have contributed will probably NOT be deducted from damages.
- Employees who find work, with the same employer or otherwise, to mitigate or reduce their damages, usually will be made whole. Deductions usually will not be permitted to reduce the employees overall earnings below what they would have made if they had remained on the job.
- The situation about mitigation may be different if the employee does not act reasonably, but the benefit of the doubt will be given to the employee.
- The Court of Appeal will not reverse the judgment when the judge’s findings are based upon the evidence, even if you think the judge is wrong, unless there is an error in law.
- Every case really is about its unique facts. As I like to say, cases are “90% facts, 10% law.”
WHAT WEILERS LLP CAN DO FOR YOU
Whether you are an employer or a dismissed employee, the growing complexity of the rules surrounding dismissal requires that you obtain timely advice.
At Weilers LLP, we have a track record of over 75 years in employment law in Thunder Bay and throughout Northwestern Ontario. Our progressive approach melds with this proud tradition to put our clients’ best interests first. This equips us to give you the sound advice you need.
For the timely advice you need, give us a call and find out if Weilers LLP are the right lawyers for you.