Usually when we talk about damages for wrongful dismissal, we look at the number of months, we try to calculate what a month is worth and we take into account salary, bonuses, commission, benefits, car allowance, pension, etc. And when we negotiate a settlement, we might throw in a token amount for the cost of finding new work, but that's usually an afterthought.
Employer ordered to pay aggravated damages for refusing to listen employee’s side of the story before firing him
Termination of employment is usually a very stressful and difficult time for an employee. This is especially true when the dismissal is for cause. The Alberta Court of Queen’s Bench decision in Lalonde v Sena Solid Waste Holdings Inc. should serve as a cautionary tale for employers; adding to the dismissed employee’s stress by acting in bad faith and refusing to give them a chance to provide their side of the story before dismissing them for cause will increase legal liability. In this case, the employee was awarded aggravated damages after the employer maintained an unsubstantiated allegation of misconduct for almost five years.
The Plaintiff, Kerry Lalonde (“Lalonde”), was employed by the Defendant, Sena Solid Waste Holdings Inc. (“Sena”), as a Journeyman Millwright. On June 13, 2012, Lalonde was called into a meeting with his manager. At the meeting, he was accused of a number of workplace infractions, including insubordination, putting a life in danger (because a contract worker was working that day without a permit) and lying. Lalonde was surprised by the allegations but when he tried to respond, he was given little, if any, opportunity to do so. Following the meeting, he was suspended and escorted off the premises by two employees in the presence of his co-workers.
During his suspension, Lalonde made several unsuccessful attempts to contact Sena to explain his side of the story and obtain further information regarding the allegations. Despite knowing that Lalonde was under stress as a result of the suspension, Sena never responded to any of his requests for further information. Instead, on July 24, 2012, Lalonde received a letter from Sena informing him that his employment was being terminated “with cause” due to his failure to follow safety procedures and his supervisor’s instructions.
On July 26, 2012, Lalonde sent a letter to Sena’s Divisional Manager providing detailed responses to all the allegations set out in the termination letter and asked a number of questions. In response, Sena sent an email to Lalonde with a list of Lalonde’s policy violations; this email was also copied to other senior employees.
Consequently, Lalonde brought a claim against Sena seeking compensation for wrongful dismissal and aggravated damages. Sena filed a lengthy defence detailing what it characterized as “serious safety violations and insubordination”, however, on the first day of the trial Sena abandoned its allegations of just cause.
The Judge held that Sena’s actions, which included maintaining wrongful allegations of cause for nearly five years, only to abandon them on the first day of trial, met the required threshold for aggravated damages. That is, Sena’s conduct was “intentional”, “unfair”, “breached the requirement of good faith”, and caused Lalonde mental distress by attacking his reputation. Sena tried to rely on the fact that it conducted an investigation to show that it acted appropriately but the Judge concluded that Lalonde’s side of the story was never seriously or properly considered by Sena. The Judge said that at best the investigation was “incompetent and unfair and at worst it was a sham.”
The Judge held that Sena did not have just cause to dismiss Lalonde, and he was awarded reasonable notice equivalent to six months’ salary, six months’ retention bonus and aggravated damages in the amount of $75,000.00.
This case reinforces the point that courts will penalize employers for their bad faith conduct in carrying out a termination, including maintaining unsubstantiated claims of misconduct, especially in circumstances where doing so causes humiliation and distress to the employee. The Court was very critical of Sena’s approach during the investigation and described it as “shoot first and ask questions later.”
It is also important to note that in this case, no expert medical evidence was provided by Lalonde to support his claim of mental distress flowing from the conduct of Sena.
Read Stuart Rudner’s review of this case on Canadian HR Reporter.