What is the Tort of Harassment?

What is the Tort of Harassment?

I am often contacted by individuals who tell me that they have been subjected to harassment. In some cases, the individual did not really have much of a case because the conduct complained of was not severe or harsh enough to cause actual emotional distress. It may seem insensitive, but unfortunately, the law will not compensate an individual because he perceived someone being mean to him.

Until a few years ago, a claim for harassment had to be framed as a claim for infliction of mental distress in order to be successful. However, earlier this year, the decision of the Ontario Superior Court of Justice in Merrifield v. Canada (Attorney General) formally recognized the tort of harassment as a separate and distinct cause of action in Ontario.

Tracing the development of the case law since 2011, the court reiterated the following requirements for a claim of harassment at paragraph 719:

  1. Was the conduct of the defendant towards the plaintiff outrageous? In other words, the acts of harassment must be flagrant, wanton, extreme and insensitive.
  2. Did the defendant intend to cause emotional stress or did they have a reckless disregard for causing the plaintiff to suffer emotional harm? The impact of the conduct must be known by the plaintiff to be substantially certain to follow.
  3. Did the plaintiff suffer severe or extreme emotional distress? This does not require proof of a visible and provable illness, but rather emotional distress of such substantial quantity or enduring quality that no reasonable person in a civilized society should be expected to endure it.
  4. Was the outrageous conduct of the defendant the actual and proximate cause of the emotional distress?

Interestingly, at paragraph 697, the court stated that to prove severe emotional distress, the plaintiff is not required to provide medical evidence. Although a clinical report setting out a DSM-V diagnosis of a disorder can be persuasive and powerful, it is not necessarily required to prove a claim of harassment.

The damages that may be awarded for this kind of claim can be substantial.  In this case, the court awarded general damages for mental distress in the amount of $100,000.00 – despite the paucity of medical evidence.  This is consistent with the damages awarded in Boucher v. Wal-mart Canada Corp., a case that I wrote about here a few years ago.

As I mentioned above, the law will not compensate an individual because he perceived someone being mean to him. However, this case serves as a cautionary tale for those who feel that they can do or say whatever they want, without regard for those to whom direct such acts.

This article is intended only to provide general information and does not constitute legal advice. Should you require advice specific to your situation, please feel free to contact me to discuss the matter further

Written by Jeffrey Robles and originally published on the blog at http://jeffreyrobles.com. Jeffrey represents clients in the areas of employment law and personal injury in the Ontario Superior Court of Justice.  
Wrongfully Dismissed? Where Should You Sue Your Employer?

Wrongfully Dismissed? Where Should You Sue Your Employer?

It is not at all unusual for an employee to reside in one country, but work in another. In fact, it is not unusual for an employee to regularly work in more than one country. It is also common for the employer to maintain its head offices in a different country than the one where the employee resides.

Situations like these can give rise to conflict of laws questions such as:

“Which law should apply – the law of the country where the employee is situated, or the law of the country where the employer is located?”

“Should the court where the employer’s head offices are located have jurisdiction over the case, or the court where the employee resides?”

Generally speaking, these questions are often determined by the jurisdiction where the employment agreement was made or entered into. Sometimes, the employment contract itself specifies which country’s laws will govern. Other times, however, the answer is not always clear. A recent decision of the Divisional Court, found here, provides a good illustration of this.

In this case, the employee signed the employment contract in Ontario. However, the employee also worked in the state of New York. When the employee was dismissed for a cause, a wrongful dismissal action was started in Ontario.

In response, the employer brought a motion to stay the court proceedings on the basis that the court in New York was the proper forum for the proceedings since that was where the employee worked. The Master in Ontario hearing the motion had to determine whether the balance of convenience favoured conducting the litigation in Ontario or in New York.

The Divisional Court upheld the Master’s decision to dismiss the employer’s motion and  agreed with the Master’s analysis that there was an advantage that the courts in Ontario had over the courts in New York in properly determining the issues in this case. Specifically, since Ontario law applied to the employment relationship, it would be necessary to consider the principles of wrongful dismissal and the entitlement to reasonable notice. These are concepts that New York judges, who are more accustomed to “at will” dismissals, would not be as well acquainted with compared to Ontario judges.

The point to be taken away from this case is that these kinds of problems can be avoided with a carefully-worded employment agreement, underscoring the importance of obtaining legal advice before entering into an employment relationship. This type of risk management can save both employers and employees significant time and money down the road.

This article is intended only to provide general information and does not constitute legal advice. Should you require advice specific to your situation, please feel free to contact me to discuss the matter further.

Written by Jeffrey Robles and originally published on the blog at http://jeffreyrobles.com. Jeffrey represents clients in the areas of employment law and personal injury in the Ontario Superior Court of Justice.  
Video – What medical information can an employer request?

Video – What medical information can an employer request?


For most employers, it is a common practice or policy to require medical documentation when an employee is off from work for an extended period of time due to illness or injury. There is, however, a delicate balance that an employer must strike between obtaining information needed to accommodate the employee’s disability and respecting the privacy of the employee’s health records. So the question is, “what medical information should an employer be allowed to obtain from an employee who is sick or injured?”

Recently, the Ontario Human Rights Commission released its policy position on the scope of medical documentation that an employer ought to be able to request from an employee when a disability-related accommodation is requested. A link to the policy position can be found here.

According to the Commission, too little information can prevent appropriate accommodations from being meaningfully implemented.  On the other hand, overly broad requests for medical information can undermine the dignity and privacy of people with disabilities.

In its policy position, the Commission provides guidance to employers and employees on the type and scope of medical information that can reasonably be sought to support an accommodation request.  The documentation should set out 5 things:

  1. That the employee has a disability;
  2. That there are certain limitations or needs related to the disability;
  3. Whether the employee can perform the essential duties or requirements of the job, with or without accommodation;
  4. The type of accommodation that may be needed to allow the employee to fulfill those essential duties or requirements of the job; and
  5. Regular updates about when the employee can be expected to come back to work if the employee is on sick leave.

As stated by the Commission, the key to this process is that the information requested must be the least intrusive to the employee’s privacy while still giving the employer enough information to make informed decisions about the accommodation sought.  To quote the Commission, “the focus should always be on the functional limitations associated with the disability, rather than a person’s diagnosis.”

An employer does not have a right to the employee’s confidential medical information.  This includes the cause of the disability, its symptoms or its treatment, unless the complexity of the the employee’s disability necessitates more information in order to develop and implement an accommodation.

This article is intended only to provide general information and does not constitute legal advice. Should you require advice specific to your situation, please feel free to contact me to discuss the matter further.

Written by Jeffrey Robles and originally published on the blog at http://jeffreyrobles.com. Jeffrey represents clients in the areas of employment law and personal injury in the Ontario Superior Court of Justice.  
How Long Can I Wait To Sue My Employer?

How Long Can I Wait To Sue My Employer?

This is a question that I am often asked by clients.

The Limitations Act, 2002, S.O. 2002, c. 24 provides that a person generally has 2 years from the day when that person knew or ought to have known that an injury, loss or damage had occurred. There are circumstances where the limitation period is extended beyond 2 years. There are other instances when the limitation period can be deferred. However, they usually do not apply to employment law cases.

In Bailey v. Milo-Food & Agricultural Infrastructure & Services Inc.the Ontario Superior Court of Justice dealt with a motion to dismiss a wrongful dismissal action on the basis that the 2 year limitation period had expired. The employer argued that the employee’s claim was statute-barred because the Statement of Claim was filed on December 21, 2015, more than 2 years after the notice of termination was given to the employee on March 18, 2013. On the other hand, the employee asserted that his claim was brought well within the 2 year limitation period because his employment did not actually end until March 22, 2015.

The motions judge reviewed the leading authorities on this issue, the principles from which can be summarized as follows:

  1. A limitation period commences when the cause of action arises. In a breach of contract, the cause of action arises when the contract was breached.  For the purposes of a wrongful dismissal action, the employment contract is breached when the employer dismisses the employee without reasonable notice.
  2. A cause of action accrues and a limitation period starts to run when all of the elements of a wrong exist. Once a plaintiff and a defendant have been identified and a breach of contract has occurred, time will start to run.

Applying these principles, the motions judge concluded that the employment contract in this case was breached when the employee received the notice of termination on March 18, 2013. It was at that point in time that the employee could have determined that the amount of notice was insufficient and could have sued for wrongful dismissal. Instead, the employee refrained from doing so and waited more than 2 years before starting his lawsuit. In other words, time had run out.  As a result, the employee’s claim was statute-barred and could not be allowed to continue.

In the end, the motions judge decided this issue in favour of the employer and dismissed the employee’s wrongful dismissal claim.

There are times when it makes sense to wait and hold off on starting a wrongful dismissal action. Perhaps there is an opportunity to negotiate a settlement and avoid the cost of litigation. Perhaps the employee has a good chance of finding a new job, which can guide the course of action to be taken. For employers and employees alike, obtaining legal advice from knowledgeable counsel can be a key component in developing the right strategy to deploy.

Written by Jeffrey Robles and originally published on the blog at http://jeffreyrobles.com. Jeffrey represents clients in the areas of employment law and personal injury in the Ontario Superior Court of Justice.  

This article is intended only to provide general information and does not constitute legal advice. Should you require advice specific to your situation, please feel free to contact me to discuss the matter further.

Weak Economy? You Could Be Entitled to More Pay in Lieu of Notice

Weak Economy? You Could Be Entitled to More Pay in Lieu of Notice

downturnIn a previous case comment, I wrote about how an employer’s declining financial health can reduce a court’s assessment of the reasonable notice period that an employee may be entitled to in a wrongful dismissal case.

By contrast, in a recent case, Zoldowski v. Strongco Corporation, 2015 ONSC 5485, the Ontario Superior Court of Justice considered how an economic downturn can increase a court’s assessment of reasonable notice.

Facts of the Case

The plaintiff, Ms. Zoldowski, was 39 years old when she was let go from her job as a Parts Administrator after 22 years of employment.  The defendant employer, Strongco Corporation, did not assert cause for terminating Ms. Zoldowski’s employment, but paid her only the minimum statutory entitlements under the Employment Standards Act, 2000.  

Not surprisingly, Ms. Zoldowski was not satisfied with what she received and sued her employer.

Issue Before the Court

The main issue that the court had to determine was how much notice, or more specifically pay in lieu of notice, Ms. Zoldowski should have received.

Ms. Zoldowski’s lawyer argued that 15 months of pay in lieu of notice was appropriate based on the facts.  The employer’s counsel argued for 10 months only.  Interestingly, the case does not mention if the employer paid the difference between 10 months of pay in lieu of notice (that it ostensibly acknowledged owing) and the minimum statutory entitlements.

The court concluded that damages equivalent to 14 months of pay in lieu of notice were appropriate in light of the general economic downturn in the Greater Toronto Area and Southern Ontario for the first half of 2015.  In doing so, the court stated, “As part of this determination the court may consider the economic climate the employee is put into when terminated.  If there is an economic downturn, then that may make it more difficult to find a job and may justify a longer notice period…”

Practical Considerations

In my view, this case underscores the fact that the list of considerations that may go into an assessment of a reasonable notice period is not finite.  As the court stated, “This list is non-exhaustive, and each case will depend upon its own particular circumstances.”

In addition, employers would be well-advised to simply pay what they believe employees are entitled to upon termination and not just the minimum statutory entitlements.  Doing so can deter a wrongful dismissal action because it may no longer make sense for an employee to incur substantial legal fees when the best possible result is now a fraction of what it was when only the minimum statutory entitlement was paid.

This article is intended only to provide general information and does not constitute legal advice.  Should you require advice specific to your situation, please feel free to contact me to discuss the matter further.

Written by Jeffrey Robles and originally published on the blog at http://jeffreyrobles.com. Jeffrey represents clients in the areas of employment law and personal injury in the Ontario Superior Court of Justice.  
Fired or Laid Off? Know Your Rights

Fired or Laid Off? Know Your Rights

getting_firedIf you have been fired or laid off with no notice, or no pay, your employer may be breaking the law.

Find out about your rights under the Ontario Employment Standards Act (ESA).

Not all jobs are covered by the ESA, and in some cases only parts of the ESA apply.

Some employers claim that their workers are self-employed or independent contractors and the ESA does not apply to them. If this is your situation, it is a good idea to get legal advice. Even if you signed something that says you are an “independent contractor” or in business for yourself, the rights in the ESA might still apply to you.

Some industries are regulated by the federal government, including banks, airlines, trucking, and broadcasting. Workers in these industries are covered by the Canada Labour Code.

Your employer does not have to tell you why you are being fired or laid off.

In most cases, if you are fired or laid off for more than 13 weeks, your employer must give written notice.  If you are fired without proper notice, your employer must give you termination pay – your normal wages for the weeks you should have been given notice. The amount of notice or termination pay you get depends on how long you have worked for your employer.  The ESA sets out minimum notice periods ranging from 1 week for people who have worked at least 3 months, to 8 weeks for people who have worked for 8 years or more.  If an employer fires 50 or more workers within a 4-week period, the minimum notice periods might be different and you should seek legal advice.

A notice  ordered by the Court: A court can decide that more notice was required in a particular case because the court is not limited to the minimum notice periods in the ESA. The amount of notice a court will order depends on all the circumstances, such as the type of job, the availability of similar employment, and the age of the worker – not just length of employment. A court can also order an employer to pay you for damages such as  discrimination, harassment.

 

You can be laid off without notice if you are laid off temporarily. In most cases, the law says you are laid off temporarily if you are laid off for 13 weeks or less. The rules about temporary lay-off are complicated. If you are laid off, get legal advice about whether your lay-off is temporary or permanent.

In some cases, being forced out of a job is the same as being fired. For example, if you leave because your employer refuses to pay you, or because your employer is discriminating against you, you may have the same rights as if you were fired. You should get legal help right away.

In some situations you can be fired or laid off without notice; if you have not worked continuously for at least 3 months, or if you are fired because of your own misconduct However, what your employer says is misconduct might not be misconduct under the law so you should seek legal advice.

If you are protected by a union, check your collective agreement to find out about your rights at work, or talk to your shop steward. You will have to use the grievance procedure in the collective agreement to enforce your rights.

Severance pay is another payment that some people get when they lose their jobs under specific circumstances. To qualify you must have worked at least 5 years for your employer and your employer pays out wages of at least $2.5 million a year in Ontario, or at least 50 people will be losing their jobs within a 6-month period because the business is being cut back. Under ESA severance pay equals one week’s pay for each year of employment, up to a maximum of 26 weeks.one week’s pay for each year of employment, up to a maximum of 26 weeks.

Your employer must pay your wages and vacation pay and any money owing to you as a result of your termination no later than 7 days after your employment ends, or your next regular pay day if it comes more than 7 days after your employment ends. Severance pay can be paid in instalments up to 3 years if you agree in writing or if the Director of Employment Standards approves. In this case if your employer misses a scheduled payment, the balance of the severance pay becomes due immediately.

Your employer must prepare a Record of Employment (ROE) and give it to you within 6 days after your last day of work. Or your employer can send it to the government electronically within 16 days after your last day of work.

f you are unemployed and looking for work, you may be able to get Employment Insurance(EI) benefits. If you do not qualify for EI or you are waiting for EI, you might be able to get social assistance benefits from Ontario Works (OW). If you quit or got fired, you might still qualify for benefits depending on the circumstances.

In most cases, you cannot get your job back if you are fired. But, if you think you were fired because you tried to exercise your legal rights under the ESA, you should get legal help. The Ministry of Labour can order your employer to compensate you and give you back your job. Examples of exercising your legal rights under the ESA are:

  • taking the pregnancy or parental leave you are entitled to, and returning to your job at the end of your leave,
  • asking about your rights or asking your employer to obey the law,
  • refusing to sign an agreement affecting your rights (for example, an agreement about how you will be compensated for overtime),
  • making a claim against your employer, or
  • giving information to an Employment Standards Officer who is investigating your employer.

You should also get legal help if you think you were fired:

  • because of your race, sex, age, disability, or other reasons that violate your human rights,
  • because you raised a health or safety issue in the workplace, or
  • because you raised a concern about your employer not obeying environmental protection laws.

You may be able to enforce your rights as a worker by making a claim against your employer. The Ministry of Labour can order your employer to pay you money that you are owed.

In some cases, you may be able to bring a court action against your employer. If you do, you cannot file a claim for the same violation of your rights with the Ministry of Labour.

In general, a claim for unpaid wages must be filed with the Ministry of Labour within 6 months of the date the wages were owing. The claim can include unpaid wages for the last 12 months, as long as it is filed within 6 months of one of the dates when unpaid wages were due. A claim for vacation pay can be filed up to 12 months after it became due.

In certain cases, you have up to 2 years to file if your claim does not involve any unpaid wages. For example, you have up to 2 years to file a claim against your employer for penalizing you, or threatening to penalize you, because you exercised your legal rights.

If your employer has gone bankrupt, you may be able to get wages, vacation pay, severance pay, and termination pay owing to you by applying to the federal Wage Earner Protection Program (WEPP).

Bhasin V. Hrynew: Good Faith In Contractual Performance

Bhasin V. Hrynew: Good Faith In Contractual Performance

Employment LawUntil last month, there was no one conclusive decision in Canadian case law as to whether or not there was a common law duty of good faith in the performance of contractual obligations.  The Supreme Court of Canada’s decision in Bhasin v. Hrynew, 2014 SCC 71 last month changed that.  This case stands for the proposition that the common law does indeed impose a duty on parties to perform contractual obligations honestly based on a general organizing principle of good faith contractual performance.

The following is a summary of some of the highlights from this decision:

  1. At paragraph 33 of the decision, the Supreme Court of Canada concluded that it was time to take two incremental steps in order to make the common law less unsettled and piecemeal, more coherent and more just:
    • The first step is to acknowledge that good faith contractual performance is a general organizing principle of the common law of contract which underpins and informs the various rules in which the common law, in various situations and types of relationships, recognizes obligations of good faith contractual performance.
    • The second step is to recognize, as a further manifestation of this organizing principle of good faith, that there is a common law duty of honesty which applies to all contracts to act honestly in the performance of contractual obligations.
  2. According to Mr. Justice Cromwell, writing for the majority, these two steps “will put in place a duty that is just, that accords with the reasonable expectations of commercial parties and that is sufficiently precise that it will enhance rather than detract from commercial certainty.”
  3. The organizing principle of good faith exemplifies the notion that, in carrying out his or her own performance of the contract, a contracting party should have appropriate regard to the legitimate contractual interests of the contracting partner.
  4. At paragraph 60, Mr. Justice Cromwell states, “Commercial parties reasonably expect a basic level of honesty and good faith in contractual dealings.  While they remain at arm’s length and are not subject to the duties of a fiduciary, a basic level of honest conduct is necessary to the proper functioning of commerce.  The growth of longer term, relational contracts that depend on an element of trust and cooperation clearly call for a basic element of honesty in performance, but even in transactional exchanges, misleading or deceitful conduct will fly in the face of the expectations of the parties.”
  5. Since the duty of honesty in contractual performance is a general doctrine of contract law that applies to all contracts, parties are not free to exclude it.

One of the questions raised by this decision is, “How does this affect employment law?”  The simple answer is that it does not.  As noted by Mr. Justice Cromwell at paragraph 54, the above-noted principles are entirely consistent with the Supreme Court of Canada’s earlier decisions in Honda Canada Inc. v. Keays, 2008 SCC 39 and Wallace v. United Grain Growers, 1997 CanLII 332 that all employment contracts have an implied term of good faith in the manner of dismissal.  This decision merely serves to reinforce what we already knew about the employer’s duty of good faith and fair dealing – which is one of the things that the Supreme Court of Canada was looking to achieve with this decision.

This article is intended only to provide general information and does not constitute legal advice. Should you require advice specific to your situation, please feel free to contact me to discuss the matter further.

Written by Jeffrey Robles and originally published on the blog at http://jeffreyrobles.com. Jeffrey represents clients in the areas of employment law and personal injury in the Ontario Superior Court of Justice.  
“WHAT ABOUT MY PENSION?!” – TERMINATION WHEN RETIREMENT IS IN SIGHT

“WHAT ABOUT MY PENSION?!” – TERMINATION WHEN RETIREMENT IS IN SIGHT

pension“I can’t wait for the day when I reach the Magic Number!” This thought often runs through the minds of employees with 20 or more years of service, and fortunate enough to be vested in a pension. With each passing year, these employees give more and more thought to the sum of their age plus years of service – that Magic Number which many pension plans require for participating employees to retire and begin receiving benefits.

For example, the terms of a pension plan may require a Magic Number of 90 in order to retire with an unreduced pension. A 63 year old employee with 27 years of service meets that requirement. However, a 62 year old employee with the same years of service does not. While the former employee can look forward to retirement, the latter employee may be in a precarious position until his next birthday or his next completed year of  service. Until that point in time, the latter employee has to worry about the possibility of termination and the potential loss of that unreduced pension.

The recent decision of the Ontario Superior Court of Justice in Arnone v. Best Theratronics Limited, 2014 ONSC 4216 highlights this concern.

Facts of the Case

The plaintiff, Mr. Arnone, was a 53 year old sales and customer support manager with 31 years of service. At the date of his dismissal, he was 16.8 months away from being able to retire with an unreduced pension.

In his Claim, Mr. Arnone sought damages based on a notice period of 24 months. He also sought damages of $65,000 which represented the actuarial calculation of the amount needed to compensate for the loss of the unreduced pension.

Although Justice James disagreed that Mr. Arnone was entitled to a notice period of 24 months, the judge noted that “the fact that the plaintiff was less than two years away from being entitled to an unreduced pension should not be ignored in the factual matrix surrounding his termination. Objectively assessed, it seems to me that the most reasonable view of the situation prevailing at the time of termination would be to recognize the reality of the approaching entitlement to an unreduced pension and to factor this into a termination arrangement that included the other benefits available to the plaintiff upon retirement.” In other words, Mr. Arnone’s impending retirement was a factor to consider in assessing the appropriate notice period.

Justice James concluded that, absent the fact that Mr. Arnone’s retirement was on the horizon, the appropriate notice period was 22 months. Nevertheless, the judge limited damages for pay in lieu of notice to the equivalent of the 16.8 months Mr. Arnone would have needed to retire with an unreduced pension. To account for the fact that Mr. Arnone would no longer receive pension benefits, Justice James also awarded damages of $65,000 to compensate for that loss.

Interestingly, Justice James did not deduct the income earned by Mr. Arnone after dismissal. In support of this, the judge held, “An arrangement to bridge an employee to the point he or she would receive an unreduced pension in circumstances where this period of time is less than the appropriate common law notice period would reasonably include a concession on the part of the employer not to require mitigation efforts.”

Practical Considerations

The take-aways from this case include the following:

  1. A pension is often an employee’s most significant asset.  In cases where the termination of employment is without cause and  retirement with an unreduced pension is on the horizon, it is important for the employer to consider the interplay between the range of reasonable notice the employee’s Magic Number.
  2. This decision underscores that fact that there is no complete set of factors that go into an assessment of reasonable notice.  An impending retirement may be just as important as the employee’s age, duration of service or position.
  3. Where the loss of pension benefits is claimed, an actuarial calculation based on correct assumptions is essential.

This article is intended only to provide general information and does not constitute legal advice. Should you require advice specific to your situation, please feel free to contact me to discuss the matter further.

Time To Take Workplace Harassment and Abuse Seriously

Time To Take Workplace Harassment and Abuse Seriously

The Ontario Court of Appeal’s decision inBoucher v. Wal-Mart Canada Corp., 2014 ONCA 419, is an excellent example of the consequences that can follow from failing to handle claims of workplace harassment and abuse carefully.

Facts of the Case

Meredith Boucher started working for Wal-Mart in 1999.  After 9 years, she rose to the position of Assistant Manager at a store location in Windsor.  In May 2009, her working relationship with her supervisor and Store Manager, Jason Pinnock, deteriorated after she refused to falsify a temperature log.  According to the decision, thereafter Mr. Pinnock continuously humiliated and demeaned Ms. Boucher, often in front of other employees and using profane language.

Ms. Boucher eventually filed a complaint about Mr. Pinnock’s conduct under Wal-Mart’s Prevention of Violence in the Workplace Policy.  However, in November 2009, senior management concluded that Ms. Boucher’s complaints were unsubstantiated and informed her that she would held accountable for making the allegations.

As stated in the decision, shortly thereafter, Mr. Pinnock once again humiliated Ms. Boucher in front of other employees.  This time, he grabbed Ms. Boucher by the elbow and told her to prove to him that she could count to ten by counting out loud ten pallets of products that had yet to be unloaded.  This caused Ms. Boucher to resign and a constructive dismissal action followed two weeks later.

Trial Decision

At trial, the jury concluded that Ms. Boucher was constructively dismissed and awarded her damages for pay in lieu of notice equivalent to 20 weeks of salary, aggravated damages of $200,000.00 and punitive damages of $1,000,000.00 against Wal-Mart.  The jury also awarded her damages for mental distress of $100,000.00 and punitive damages of $150,000.00 against Mr. Pinnock.

Both Wal-Mart and Mr. Pinnock appealed on the basis of liability and the quantum of damages for mental distress, aggravated damages and punitive damages.  Ms. Boucher cross-appealed the dismissal of her claim for future loss of income.

Appeal Decision

Mental Distress

In order to succeed on a claim for intentional infliction of mental distress, the employee must show:

  1. the defendant’s conduct was flagrant and outrageous;
  2. the defendant’s conduct was calculated to produce harm to the employee; and
  3. the defendant’s conduct caused the employee to suffer a visible and provable illness.

Although the Court of Appeal found the award of $100,000.00 very high, it was not so plainly unreasonable that it should be set aside.  The award reflected the fact that the jury, representing the collective conscience of the community, was deeply offended by Mr. Pinnock’s misconduct.

Aggravated Damages

Aggravated damages compensate an employee for additional harm suffered as a result of the bad faith or unfair way in which the employment agreement was terminated.  Wal-Mart argued that an award of aggravated damages in addition to damages for mental distress amounted to double recovery for the same wrong.  The Court of Appeal rejected this argument on the basis that the unfair way Wal-Mart handled Mr. Pinnock’s misconduct and Ms. Boucher’s complaint constituted a separate wrong from the actions of Mr. Pinnock.

Wal-Mart also argued that the award of $200,000.00 was excessive.  Nevertheless, while the quantum of the award was unprecedented in Canadian employment law, the Court of Appeal concluded that it was not so inordinately high that it was plainly unreasonable and upheld the jury’s award.

Punitive Damages

Unlike damages for mental distress and aggravated damages, punitive damages are not compensatory.  They are intended to act as the court’s denunciation where a defendant’s conduct has been malicious, oppressive and high-handed.  The employee must also show that the award is rationally required to meet the objectives of retribution, deterrence and denunciation.

The Court of Appeal, at paragraph 61, had no difficulty in concluding that Mr. Pinnock’s conduct amounted to “a marked departure from the ordinary standards of decent human behavior.”  Yet, having regard to the fact that the damages for mental distress already carried a strong punitive component, the Court of Appeal concluded that an additional award of $150,000.00 was not rationally required to achieve the purpose of punitive damages.  The amount, as awarded against Mr. Pinnock, was reduced to $10,000.00.

In cases of breach of contract, such as an employment agreement, an award of punitive damages also requires an actionable wrong independent of the underlying breach of contract claim.  Vicarious liability for the actions of another employee is not enough.  The actionable wrong must be committed by the employer and requires more than just negligent conduct.  In this case, the Court of Appeal concluded that Wal-Mart breached its duty of good faith and fair dealing towards Ms. Boucher, a separate actionable wrong that justified an award of punitive damages against Wal-Mart.

However, the Court of Appeal also noted that Wal-Mart was liable for $200,000.00 in aggravated damages, damages for constructive dismissal, $140,000.00 in trial costs, as well as $100,000.00 in mental distress damages against Mr. Pinnock for which Wal-Mart was vicariously liable.  As such, a further award of $1,000,000.00 in punitive damages was not rationally required.  The Court of Appeal reduced this head of damages to $100,000.00.

Future Loss of Income

Ms. Boucher argued that the trial judge erred in failing to award her damages for future loss of income in the amount of $726,601.00.  The Court of Appeal upheld the trial judge’s decision.

According to paragraph 103 of the reasons for the decision, “A claim for future loss of income can arise in an employment context where a plaintiff has not recovered from the effects of the wrongdoer’s action and the plaintiff has thus suffered a loss of any earning capacity because of the wrongdoer’s tortious conduct.”  In this case, Ms. Boucher recovered from her mental distress within two months of her resignation.  Thus, she was capable of earning an income, but simply could not secure comparable employment.

In essence, Ms. Boucher did not suffer a future loss of income, but a past loss of income.  The concept of reasonable notice is intended to assist the employee in securing comparable employment.  It is the writer’s opinion that if the employee is incapable of searching for new employment, due to the employer’s tortious conduct, the notice period should not start.  Until the employee has recovered from the employer’s wrong and the notice period can begin, the employee has a claim for the loss of income that would have been earned but for the termination of employment.

Practical Considerations

Some of the points to take away from this case are as follows:

  1.  This case reiterates that damages for mental distress are indeed a separate head of damages from aggravated damages which, in turn, are another separate head of damages from punitive damages.  Although the distinction may be seen as subtle, they are in fact discrete.
  2. Consequently, employers need to take claims of harassment and abuse in the workplace seriously and handle the investigation of such claims carefully.  Investigations should be handled by someone with the requisite training and skill set.  It is not enough to simply direct the matter to the HR manager or in-house counsel if he or she does not have any background in investigations.
  3. Since the Supreme Court of Canada’s decision in Keays v. Honda Canada Inc., personal injury litigation and employment litigation have become inextricably linked.  It is important to have employment counsel with knowledge and experience in both areas.  Medico-legal reports and subrogated OHIP claims are matters that employment lawyers have not always had to deal with.

This article is intended only to provide general information and does not constitute legal advice.  Should you require advice specific to your situation, please feel free to contact me to discuss the matter further.

Written by Jeffrey Robles and originally published on the blog at http://jeffreyrobles.com. Jeffrey represents clients in the areas of employment law and personal injury in the Ontario Superior Court of Justice.  

Gristey V. Emke Schaab Climatecare Inc.: The Effect Of Economic Factors On The Notice Period

Gristey V. Emke Schaab Climatecare Inc.: The Effect Of Economic Factors On The Notice Period

Wrongful Dismissal and Employer Notice

Justice Conlan’s decision in Gristey v. Emke Schaab Climatecare Inc. 2014 ONSC 1798 (Ont. S.C.J.) underscores the fact there is no complete catalogue of factors that go into determining the amount of notice that would be reasonable for an employee to receive.

By way of background, if an employee is let go without cause for dismissal, the employee is generally entitled to reasonable notice – either working notice or pay in lieu of notice.  There are, however, exceptions.  For instance, the employer and the employee can sign an employment agreement that limits the notice period to what the Employment Standards Act, 2000 provides.

The seminal decision in Bardal v. Globe and Mail tells us that there is no formula to determine how much notice of dismissal would be reasonable in any given case.  While the main considerations are the employee’s age, years of service, position and job market for comparable positions, the list of possible considerations is not fixed.

Facts of the Case – Wrongful Dismissal 

In this decision, the employer dismissed Mr. Gristey, a 54 year old gas technician with some supervisory responsibilities, after 12 years of service on a without cause basis.  The employer asserted that the basis for ending Mr. Gristey’s employment was a shortage of work.  Yet, the employer opted not to use a temporary layoff as provided for under theEmployment Standards Act, 2000.

Instead, the employer paid Mr. Gristey 8 weeks of termination pay and offered an additional 8 weeks as a gratuitous payment in exchange for a signed Full and Final Release.  Not surprisingly, Mr. Gristey refused the employer’s offer and sued for wrongful dismissal.

Issue Before the Court – Damages in Lieu of Notice

At trial, the main issue for Justice Conlan to consider was the appropriate amount of damages for pay in lieu of notice having regard to the fact that the employer no longer had enough work to keep Mr. Gristey busy.

Taking into account the Court of Appeal’s decision in Bohemier v. Storwal International Inc., Justice Conlan accepted the employer’s submission that its declining financial health should be a relevant consideration and discounted the initial assessment of a 12 month notice period by one-third to 8 months.  At paragraph 59 of the decision, Justice Conlan states:

Essentially, this is a recognition (as I have said above), had Mr. Gristey’s employment not been terminated, he would have likely worked less hours during the notice period.  Thus, it would not be fair to the Defendant to apply the full twelve-month notice period.

 Practical Considerations

There are a couple of take-aways from this decision.

First, paying an employee the bare minimum required by the Employment Standards Act, 2000 is not necessarily going to be enough of a deterrent to prevent the employee from starting a wrongful dismissal action.  There are other factors that must be considered.  Competent employment counsel can help you make this determination.

Second, judges deciding a case are ultimately concerned with arriving at a fair result.  This case is a good example of the analysis that a judge goes through in balancing fairness.  Employers and employees alike should keep in mind that the employer’s financial health is a factor that can tip a judge’s scales in assessing the reasonable notice period.

This article is intended only to provide general information and does not constitute legal advice.  Should you require advice specific to your situation, please feel free to contact me to discuss the matter further.

Employment Law and Liability for Constructive Employee Dismissal

Employment Law and Liability for Constructive Employee Dismissal

One of the realities of running a business is that sometimes an employee’s role has to change in order to ensure the efficient operation and, in some cases, the survival of that business. Unfortunately, despite an employer’s well-meaning intentions, this kind of business decision can result in liability for constructive dismissal.

This was the situation before the Ontario Court of Appeal in Farwell v. Citair, Inc. (General Coach Canada), 2014 ONCA 177 where a 58 year old VP of Operations with 38 years of service was returned back to his former position as a Purchasing Manager by the employer.

Employment Law: Constructive Dismissal

Unlike a wrongful dismissal, a constructively dismissed employee has not actually been dismissed.  Instead, the employer has made fundamental changes to the employee’s job without the employee’s input or agreement.  In effect, the changes made by the employer are so drastic that the job the employee accepted at the start of the employment relationship no longer exists.  Hence, the term “constructive dismissal”, a dismissal implied by operation of law.

At trial, the court held that Mr. Farwell was constructively dismissed and awarded him damages equal to 24 months of pay in lieu of notice.  The employer appealed on three grounds:

  1. The trial judge misapplied the principles of the law of constructive dismissal;
  2. The trial judge erred in her assessment of damages; and
  3. The trial judge erred in failing to find that Mr. Farwell did not mitigate his damages by working for the employer as a Purchasing Manager during the notice period.

Employment Law: Ontario Court of Appeal

On the first ground of appeal, the Ontario Court of Appeal accepted the trial judge’s conclusion that the demotion back to Purchasing Manager from VP of Operations was a significant loss of status and prestige that constituted a fundamental change to the employment agreement and a constructive dismissal.  With regard to the second ground of appeal, the court deferred to the trial judge’s assessment of damages and concluded that 24 months of pay in lieu of notice was reasonable for a 58 year old high-level manager who spent two-thirds of his life with the employer.

As for the third ground of appeal, the court acknowledged that the trial judge may have incorrectly taken a subjective approach in assessing that the stigma and loss of dignity was too great to mitigate by returning to work for the employer.  In other words, rather than objectively considering if a reasonable person would return to work under the same circumstances, the trial judge may have focussed her assessment on what Mr. Farwell thought about returning to work for the employer.  The court also acknowledged that, in light of the absence of any animosity between the parties, Mr. Farwell may well have been obligated to mitigate by working for the employer as a Purchasing Manager.

However, Mr. Justice Lauwers, writing for the court, pointed out, “To trigger this form of mitigation duty, the appellant was therefore obliged to offer Mr. Farwell the clear opportunity to work out the notice period after he refused to accept the position of Purchasing Manager and told the Appellant that he was treating the reorganization as constructive and wrongful dismissal.”  Herein was the fatal flaw in the employer’s case.  In order to successfully argue that Mr. Farwell failed to mitigate his damages by working as a Purchasing Manager during the reasonable notice period, the employer first had to offer the position after Mr. Farwell refused to accept the imposed changes.

Employment Law: Constructive Dismissal – Practical Considerations

The take-away for employers in this case is that it is not safe to assume that the employee is always free to accept the position unilaterally imposed on him in order to mitigate his damages.  Once the employee has rejected the change, the employment agreement is at an end. In order to bolster the mitigation argument, the employer must then make it clear to the employee that the very same position that led the employee to assert constructive dismissal is still available to mitigate damages.

For the employee, the take-away is that it is important to assess the workplace atmosphere before claiming constructive dismissal.  Depending on the circumstances, the employee may be obligated to return to work for the employer in order mitigate his damages, despite whatever hard feelings he may bear towards the employer.

As I stated in a previous blog post, employment law, and constructive dismissal in particular, can be a lot like a chess match.  It is often beneficial to have competent employment counsel advising you on how to best respond to the moves that the other side makes.

This article is intended only to provide general information and does not constitute legal advice.  Should you require advice specific to your situation, please feel free to contact me to discuss the matter further.

Written by Jeffrey Robles and originally published on the blog at http://jeffreyrobles.com. Jeffrey represents clients in the areas of employment law and personal injury in the Ontario Superior Court of Justice.