Employer's Wrongful Dismissal Conduct Leads to Moral Damages

In a previous Ontario employment law blog, the courts have generally sided on an employer’s side to conclude that surreptitiously recording a work-place meeting could be grounds to terminate an employee for just cause, resulting in an employee not receiving any wrongful dismissal damages. However, in a recent case called Teljeur v. Aurora Hotel Group, 2023 ONSC 1324, an Ontario court cited an employer’s unfair behaviour during an employment termination meeting surreptitiously recorded by the employee. As a result, it awarded the employee with significant amount of moral damages for bad faith in the manner of dismissal (in addition to his financial severance package).

Facts of the Case

In this case, the employee was employed as the general manager of a full service resort and golf course operated by two related companies. During a meeting, he was informed by the company’s executives that his employment was being terminated on a without cause basis. Following his employment termination, the employee commenced an action for wrongful dismissal damages seeking summary judgment for:

1. A declaration that the defendants are common employers and are therefore responsible for any damages for the relief claimed in this action

2. Damages for wrongful dismissal based on a reasonable notice of 10 months

3. Damages for loss of fringe benefits equivalent to 10% of the damages for reasonable notice

4. Expense reimbursement of $16,680.03

5. Moral damages for the breach of the duty of good faith in the sum of $20,000

During trial, the corporate defendants conceded that they were jointly liable for any damages awarded to the wrongfully dismissed employee as his common employer, and also admitted to owing him out-of-pocket expenses claimed. However, they claimed that any damages awarded on account of reasonable notice of termination (which they argued was in the range of 3.5 to 5 months) should be reduced based on what they claimed was the employee’s failure to properly mitigate his damages; the employee should not be awarded any damages for loss of health benefits; and no damages were owing for breach of the duty of good faith and fair dealing.

The Court Decision

In its decision, the court awarded the employee a severance package of 7 months of reasonable notice of termination based on his age (56 years old), as well as the facts that he was working for the employer for 3 years in a senior management role, and the challenging economic circumstances making it more difficult for him to find new employment “likely due in part, to the COVID pandemic and possibly due to his age.”

With respect to loss of his health benefits coverage as a result of his termination of employment, the court awarded him 10% of the damages awarded for reasonable notice for the plaintiff’s loss of fringe benefits during the period of reasonable notice, following similar Ontario decision.

In an attempt to reduce the employee’s severance package, the employer argued the employee failed to mitigate, the employer argued:

the employee did not make sufficient efforts to obtain alternate employment, because his efforts were primarily limited to updating his accounts with Indeed, Zip Recruiter and LinkedIn, as well as “a couple of minutes in the morning” and “five to ten minutes” searching for a job through Indeed unless he received an alert
the employee did not properly keep track of his job search in his job search with more details than simply stating that he updated his resume and looked for jobs on websites.
the employee’s job search was made more difficult due to the fact that he made a number of social posts by complaining about the employer on Facebook

the employee failed to follow up had failed to follow up on an opportunity sent to him by the employer during the termination meeting to assist them in locating properties for them to purchase

In rejecting the employer’s argument, the could held that the employer did not provide any evidence that the wrongfully dismissed employee could have obtained other similar employment if he conduced a better job search effort, nor was it appropriate for the court to make an inference that, if she had applied for other positions, he would have found comparable employment. Therefore, the court concluded that there was simply no basis on which to justify a reduction of the employee’s wrongful dismissal damages award for failure to mitigate.

Lastly, the court determined that the employee was entitled to additional award of damages for breach of the duty of good faith and fair dealing in the manner of dismissal. In reaching this conclusion, the court relied on a secret recording made by the employee during his termination meeting, which showed that:

he had repeatedly asked the employer’ to provide him with written notice of his termination and, although they had agreed to do so and were in fact required to do so pursuant to the Ontario Employment Standards Act, 2000, they ultimately failed to do so
the employer had failed to deliver to the wrongfully dismissed employee with his statutory entitlements within 7 days of the end of his employment or the next pay day, in violation of the Employment Standards Act, 2000
the employer had altered a term or condition of the employee’s employment during the statutory notice period by failing to reimburse his out-of-pocket expenses as promised during the termination meeting, also in violation of the Employment Standards Act, 2000
the employer had promised to provide the employee with 8 weeks of severance pay, but then subsequently limited the amount paid to him to the statutory minimum
the employer had attempted to persuade the employee to resign, alleging that he would be “better off” if he did so.

Citing the above examples, the court concluded that the employer’s actions “were untruthful, misleading or unduly insensitive. They constitute a breach by the employer of their duty of good faith and fair dealing in the manner in which the employee was dismissed.” As a result, the court concluded that it would be within the reasonable contemplation of the employer that its manner of the dismissal would cause the employee mental distress, and awarded the employee an additional $15,000 in moral damages stemming from the employer’s’ conduct surrounding the wrongful dismissal.

Call a Toronto Employment Lawyer

In Ontario employment law, it is always prudent for employers (and employees) to speak with an experienced employment lawyer when they would like to know what legal rights you have as an employer or employee in Ontario. If you are an employee who believes you were wrongfully dismissed or want to negotiate your severance package, please speak with our experienced wrongful dismissal lawyer in Toronto regarding your legal rights and options as an employee, including negotiating your severance package to obtain the severance compensation you deserve, as well as wrongful dismissal claim.

Contact a Toronto human rights lawyer by phone 647-822-5492 or fill out the contact form to the side. Our employment lawyer in Toronto would be happy to assist in your employment law matter as quickly as possible.

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