BAD FAITH BY EMPLOYERS WHEN TERMINATING AN EMPLOYEE – TYPES OF MISBEHAVIOUR BY EMPLOYERS CAUSING HIGHER (PUNITIVE) DAMAGES FOR WRONGFUL TERMINATION – KNOW YOUR RIGHTS

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BAD FAITH BY EMPLOYERS WHEN TERMINATING AN EMPLOYEE – TYPES OF MISBEHAVIOUR BY EMPLOYERS CAUSING HIGHER (PUNITIVE) DAMAGES FOR WRONGFUL TERMINATION – KNOW YOUR RIGHTS  

Employers in Ontario have a well-established duty at law to, among other things: (a) perform their employment contracts with their employees fairly and honestly; and (b) act in a reasonable and fair manner when terminating an employee, not in bad faith.

If an employer breaches either duty when terminating an employee, not only is it exposed to damages for pay in lieu of notice, depending on the case, but also special damages, known as punitive or aggravated damages.

In a fairly recent case, Justice Bruce Glass ordered an employer to pay an additional $100,000 in punitive damages due to the employer’s bad faith and “terrible” misconduct when it terminated an employee. The employer had, among other things: only alleged cause to try to gain a tactical advantage over the employee to secure a favourable, early settlement, without paying its legal obligations; effectively fabricated, after termination, more, unsubstantiated allegations of cause, which it maintained until the trial in the case at the very end; and treated the employee in a very demeaning and insensitive manner through the termination process and afterwards. 

Justice Glass used words like: “mean and cheap” and “outrageous” when describing the employer and its conduct at the trial.

There is no limit on what type of misconduct or misguided maneuvering by an employer may raise the ire of the Court, but a few common examples, based on the cases in Ontario, are:

POST-TERMINATION CHANGE OF POSITION:

Employers are not permitted to allege new allegations against an employee after they were terminated, such as terminating for “restructuring reasons”, but subsequently alleging performance reasons to try to justify cause for the initial termination.

FALSE ALLEGATIONS OF POOR CONDUCT:

Advancing false, unsubstantiated or unfounded allegations of misconduct or poor performance to try to justify cause, or save money on a termination, is improper. If cause for termination is asserted, employers must complete a fair and reasonable investigation before the termination and should provide specific reasons for the termination at the time, particularly if serious allegations of misconduct are made against the employee, such as theft, fraud or dishonesty. Fabricating a basis for cause and then failing to prove it will be very costly for every employer.  Employers should not terminate for cause without having a solid, substantial and well-founded basis for doing so, which should be documented and communicated to the employee. 

WITHHOLDING MONEY:

Withholding money from an employee (business expense reimbursements, vacation pay, overtime pay, bonuses, etc.), refusing to provide a letter of reference (or letter of employment, at least) or failing to provide a Record of Employment, for example, may also trigger these special damages. These tactics cannot be utilized to coerce an employee, particularly if he is or she may be facing financial hardship due to being fired, to accept less than the employee is entitled to at law. Negotiation between employers and employees is effectively presumed not to be a level-playing field. Employers are assumed to have a better bargaining position and, if they misuse it, is likely to raise the spectre of punitive or aggravated damages.

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Thank you for reading this - Jason Ward of WARDS PC LAWYERS.

If you would like to read more, please go to wardlegal.ca/blogs.  

This WARDSPC blog is for general information only. It is not legal advice, or intended to be. Specific or more information may be necessary before advice could be provided for your circumstances.

More information? We're here to help - jason@wardlegal.ca  www.wardlegal.ca

 

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Thank you for reading this - Jason Ward of WARDS LAWYERS PC.

If you would like to read more, please go to wardlegal.ca/posts.

This WARDS LAWYERS PC blog is for general information only. It is not legal advice, or intended to be. Specific or more information may be necessary before advice could be provided for your circumstances.

More information? We're here to help - jason@wardlegal.ca | www.wardlegal.ca