Adding Insult To Injury Results In Punitive Damages For Wrongful Dismissal

Be careful what you say. Tell the truth. Perhaps your parents were on to something with those platitudes. A recent Ontario Small Claims Court decision illustrates the importance of accurately responding to a claim for wrongful dismissal rather than making accusations of serious wrongful conduct.

The dismissed employe was a 48 year old man who worked for the employer for just under six months. The termination meeting was amicable and the employee was told his performance was not good enough. He sued for wrongful dimissal, primarily on the grounds that he deserved the statutory notice. The employer defended... vigourously.

In response, the employer claimed that the probationary period was six months rather than the three month statutory probationary period. The employer also claimed that the employee had been terminated because of dishonesty, fraud, breach of trust and misrepresentation. According the the employer, the employee had misrepresented that he had an extensive network that would generate sales. The employee also allegedly "stole" from the company by inflating mileage receipts. Finally, the employer claimed that the employee had attempted to involve the company in a fraud by suggesting that certain expenses could be avoided under the Indian Act since he was a status Indian.

The court did not accept any of the employer's allegations. It dismissed the allegation of fraud on the basis that, although the employee had filled out the requisite paperwork to avoid the expenses, when the employer advised that they did not wish to proceed, the employee accepted the decision. The evidence demonstrated that, while the employer initially made mistakes with his mileage receipts by estimating mileage, when he was told readings had to be accurate, the employee complied. Finally, the court found that the representation of a extensive network had not played any significant role in the hiring decision.

Having found that the employee was dismissed without cause, the court then went on to determine whether punitive damages should awarded. It stated:

64. As stated earlier in these reasons, the law supports the awarding of punitive damages in the following scenarios, namely,

• the employer fabricates allegations of serious misconduct to support the dismissal and maintains these allegations either up to or during the trial;

• the employer terminates an employee for cause alleging serious misconduct (i.e. criminal or quasi-criminal conduct) without conducting a reasonably fair and unbiased investigation; and

65. This is exactly what has happened in this case. The defendant has persisted in advancing serious personal allegations of impropriety against the plaintiff without being able to maintain them and without having conducted a reasonably fair and unbiased investigation.

The court then went on to award punitive damages in the amount of $4,000.00 to the employee. While this may not seem like a significant award, it must be seen in the context of being more than one month's wage to an employee who worked less than six months for the company.

The Lesson for Employees: Courts seem to be taking an increasingly strong stand against employers who allege serious misconduct without basis or investigation. Should you find yourself facing such allegations, speak to a experienced employment attorney.

The Lessons to Employers: Think about what you say before alleging serious misconduct. If you are considering dismissal based on serious misconduct, conduct (and document) a thorough investigation into the misconduct. Where allegations go to reputation and future employability, it is prudent to ensure that you have a strong evidentiary basis for the dismissal and the allegation.

Budge v Dickie Moore Rental Inc., 2017 CanLII 468 (ON SCSM) https://www.canlii.org/en/on/onscsm/doc/2017/2017canlii468/2017canlii468.pdf

The content and the opinions expressed here is informational purposes only and does not constitute legal or professional advice. Nor does reading or commenting on it create a lawyer/client relationship with the author. I encourage you to contact me directly at adrianlawoffice@gmail.com if you have specific legal questions or concerns.

http://adrianlawoffice.wix.com/mysite

If you are an individual looking for assistance with a legal problem, contact Adrian

The author encourages you to share this article on social media.

Follow me on Twitter @gwendolynadrian