An escalator can never break: it can only become stairs. You should never see an Escalator Temporarily Out Of Order sign, just “Escalator Temporarily Stairs. Sorry for the convenience.”
Mitch Hedberg
There are a substantial number of types of misconduct that a Court may award damages to address. An employer may be required to pay punitive damages to demonstrate the Court’s condemnation of their actions or aggravated damages to address the negative impact of their actions on their employee. Beyond these, an employer may be ordered to pay damages for breaching an employee’s rights under a statute such as the Occupational Health and Safety Act or the Human Rights Code.
However, this does not mean that the concept of damages is closed to innovation or expansion. Periodically, a Court will award damages for a novel reason. For example, damages for the employer’s breach of the duty of good faith only became a concept in the past few decades. A further expansion recently happened in Khanom v. Idealogic PDS Inc., where Justice Parghi awarded the employee damages for “inconvenience” resulting from the employer’s conduct.
Khanom v. Idelogic PDS Inc.
The Facts
The employee had worked for their employer for approximately thirteen and a half years. In response to the government’s stay at home order during the pandemic, the employee asked to be permitted to work remotely, citing concerns about their spouse’s health. The employer initially refused the request, advising the employee that their employment would be terminated if they did not attend work the following day. The employer then terminated the employee’s employment.
The employer did not pay the employee’s entitlements under the Employment Standards Act, 2000 (the “ESA”) or at common law on dismissal. The employer also issued a Record of Employment (“ROE”) which indicated that the employee had resigned. This led to a ten-month period where the employee could not obtain Employment Insurance, which the Court noted caused the employee “inconvenience and stress”.
The employee sued, seeking damages for:
- wrongful dismissal,
- breach of their rights under the Human Rights Code,
- aggravated damages, and
- damages for the improperly categorized ROE.
The Judgment
The employer did not defend the claim, and the matter proceeded via default judgment.
The Court found that:
- the employee’s conduct had not met the standard for wilful misconduct under the ESA, meaning that the employer had to pay their statutory entitlements under the ESA;
- the employer did not have cause to dismiss the employee, meaning that the employee was entitled to reasonable notice at common law, with a notice period of fourteen months; and
- the employer’s conduct breached the employee’s Code rights due to her relationship with a disabled individual (her husband).
The Court also awarded the employee:
- aggravated damages for the employer’s high-handed conduct in the dismissal process; and
- $1,000.00 for the “inconvenience” they suffered as a result of the improper ROE.
The Court cited a 2017 judgment of the Small Claims Court as a basis for an award of damages for inconvenience.
Conclusion
An employer has an obligation to issue an accurate ROE within five days of the termination of an employee’s earnings, as outlined in the Employment Insurance Regulations under the Employment Insurance Act. This ensures that an employee can apply for Employment Insurance shortly after their income ends. Where an employer fails to observe this requirement, it can impact the employee’s ability to obtain Employment Insurance benefits. This can be especially problematic for an employee who has been dismissed and provided less than their common law entitlements.
In this case, the impact on the employee was apparent. The employee was earning approximately $31,000.00 a year, was paid nothing on dismissal, and could not locate another job. Employment Insurance would have been the only income available to them. The impact of the employer’s misconduct likely rose well above simple ‘inconvenience’ for the employee.
Whether this decision will set a trend for damage awards in the future remains to be seen. However, it stands as a good reminder of why it is always in an employer’s best interest to comply with their statutory obligations on dismissal, including promptly issuing a correct ROE.
We assist both employers and employees in all aspects of the employment relationship, and would be happy to assist you whether you are an employee whose employment has been terminated, or an employer contemplating dismissing an employee. Feel free to check out our FAQs and contact us for advice tailored to your situation.