Termination of employment can cause an employee a great deal of
hardship. This is especially true when allegations of misconduct
and insubordination are at play. The case of Lalonde v. Sena
Solid Waste Holdings Inc, 2017 ABQB 374 cautions employers to exercise
good faith when dismissing an employee.
At the time of his termination, Mr. Lalonde (the
"Plaintiff") was a 56-year-old millwright who had worked
at the Swan Hills Waste Treatment Plant (the "Facility")
from April 15, 2008 until his dismissal on July 24, 2012. Prior to
his dismissal, he had not received any verbal or written warnings
from his employer, nor had he been subject to any
suspensions.
On June 13, 2012, the Plaintiff was called to the office of his
manager and was accused of a number of workplace infractions,
including putting a life in danger, lying to his supervisor-, and
insubordination. The Plaintiff was surprised by the allegations,
but was not given an opportunity to respond. He was told he was
suspended, and was escorted off the Facility by two other
employees.
Subsequently, the Plaintiff made efforts to communicate his side
of the story. For several weeks he did not hear anything from his
employer, and became so upset while waiting for a response that he
went on stress leave. Then, on July 24, 2012, the Plaintiff
received a letter advising him that his employment had been
terminated for just cause "due to [his] failure to follow
safety procedures and [his] failure to follow [his]
supervisor's instructions."
As a last resort, the Plaintiff wrote a letter to a Division
Manager providing a detailed response to the allegations and asked
a number of questions. The employer responded with a list of safety
infractions it investigated in the course of making its decision to
terminate him. The Plaintiff subsequently filed a claim against the
employer seeking compensation for wrongful dismissal.
The Notice Period and Letters of Employment
The Court found that the Plaintiff had been wrongfully dismissed
without just cause. As a result, the Court turned its mind to the
question of an appropriate notice period. The Plaintiff had signed
two employment letters in 2008 (the "April 2008 employment
letter") and again in 2011 (the "February 2011 employment
letter") when ownership of the Facility changed. The employer
argued the April 2008 employment letter applied, as this limited
reasonable notice to the amounts prescribed by provincial
legislation. For his part, the Plaintiff argued the February
2011 employment letter should apply since it did not restrict the
notice period to amounts set out in ss. 56 and 57 of the
Employment Standards Code.
The Court found that the April 2008 letter applied, because the
Plaintiff had been employed since April 20, 2008 and the February
2011 employment letter did not effectively restart his employment.
The Court then assessed the limiting clause in in the April 2008
employment letter, which provided
The Court found that termination for any reason "other than willful or professional misconduct, conflict of interest, disobedience or willful neglect of duty that has not been condoned by [the employer]" would have limited the Plaintiff's entitlement to the amounts prescribed by provincial legislation. However, the Court went on to find that if the reason for termination is "willful or professional misconduct, conflict of interest, disobedience or willful neglect of duty that has not been condoned by [the employer]" then by implication the employee's entitlement is not limited to the amounts prescribed by provincial legislation. Since the Plaintiff was terminated for alleged disobedience and professional misconduct, the April 2008 employment letter did not have the effect of limiting the amount of notice he was entitled to be paid. The Court ultimately decided upon a notice period of six months.
Aggravated Damages
The next issue concerned whether the Plaintiff was entitled to
aggravated damages for how he was treated by his employer before
and after the termination: he was accused of theft,
humiliated, and escorted off company property in full view of his
co-workers. It was also significant that throughout the entire
litigation, the employer maintained its grounds for just cause,
until the first day of trial in May 2017 when it withdrew its
allegations. The Plaintiff argued his reputation in the small town
he resided in was harmed by the employer's bad faith
conduct.
The Court characterized what had happened as a case where the
employer decided to "shoot first and ask questions
later." Mr. Justice Gill held the actions of the employer
amounted to a breach of the obligation of good faith and fair
dealing as considered by the court in Wallace v. United Grain
Growers Ltd, [1997] 3 SCR 701. The
employer maintained the wrongful allegations as "serious
safety violations and insubordination" from the date of the
Plaintiff's suspension for a period of nearly five years, up
until shortly before trial. It also terminated his employment
without regard for his explanation and without giving him a full
opportunity to explain the alleged misconduct. This conduct
breached the requirement of good faith and the expectation of both
parties to the contract that the employer would act in good faith
in the manner of dismissal. An award of $75,000 was granted to
compensate the Plaintiff for the employer's conduct.
Takeaway
Employers are urged to review termination clauses in letters and
contracts of employment to ensure they clearly limit notice amounts
if – and in the manner – intended to do so. In this
case, the Court found the reasons for dismissal relied upon by the
employer did not limit the Plaintiff's entitlement to the
amounts prescribed by provincial legislation, based on the wording
of the clause and what it implied. The Court's finding
underscores once again the crucial importance of clarity and
precision in drafting termination clauses.
In addition, the Lalonde decision suggests that, in cases
of wrongful dismissal, the Court will consider the employer's
conduct in carrying out the termination. If there is any indication
the employer has acted in bad faith, in particular by humiliating
the employee in some fashion, or denying an opportunity to make
full answer to allegations of wrongdoing, the Court may award
aggravated damages.
The lawyers in the Field Law Labour and Employment Group can assist you and your organization in reviewing termination clauses in letters and contracts of employment in order to safeguard your interests.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.