The largest wrongful dismissal award in Canadian history was recently awarded by a jury in Prince George, British Columbia in the case of Higginson v. Babine Forest Products Ltd. The case was reported by the Prince George Citizen newspaper on July 27, 2012. The Plaintiff, Larry Higginson, had been employed by Babine Forest Products for 34 years and at the time of his dismissal worked as a manager in the electrical department of Babine's sawmill. At trial the jury awarded $809,000.00, the majority of this award was in punitive damages.
Punitive damages are not typically awarded in wrongful dismissal cases but in Higginson's case he alleged that the company management had deliberately attempted to create an unpleasant work environment at the sawmill in the hope that he would decide to leave on his own. When he didn't quit the company created false grounds to dismiss him for cause in order to avoid paying severance. In its decision the jury appeared to accept most, if not all, of Higginson's arguments in awarding approximately $236,000 in wrongful dismissal damages and $573,000 in punitive damages.
Following the trial, the company appealed the jury's decision but the parties settled the matter before the case reached the B.C. Court of Appeal. The company's appeal would likely have focused on the substantial punitive damages award. The Supreme Court of Canada has said that punitive damages should only be awarded when normal compensatory damages do not achieve the purposes of punishment, deterrence, and denunciation required by the circumstances of the case.
The case of Honda v. Keays decided by the Supreme Court in 2008 has been interpreted as restricting the availability of punitive damages in employment law cases.
In follow up interviews regarding the case the Lawyers for Higginson noted that prior to his dismissal the company asked Higginson to sign a document relinquishing his rights to severance and excluded him from meetings that he was normally required to attend as part of his duties. Because Higginson asked for a trial with a jury, there is no detailed decision from the trial judge explaining the precise reasons for the substantial judgement. However, the size of the total award should provide caution to any employer trying to use pressure tactics to get an employee to quit in order to avoid their severance obligations.
Frequently Asked Questions
I recently changed roles at work. My new title is “Accounts Manager” and I am responsible for all the company’s accounts payable and receivable. I also help other staff price our products and develop new accounts. I am very happy about my new role but my job used to be “9 to 5” and now I have to work late and on weekends. I asked my boss about overtime but was informed that managers and supervisors do not receive overtime pay. Is this true?
For most employees in Ontario overtime hours start after 44 hours of work in a week. For every hour worked in excess of 44 hours an employee is supposed to receive time and a half.
Under the Employment Standards Act there are exceptions to the general rule including that managers and supervisors do not receive any overtime compensation. For this “manager exception” to apply, an employee generally needs to be performing work that involves the supervision of other employees in a leadership role as opposed working in general administrative duties. Also, the exempt employee must be working in the manager role the majority of the time while at work - not just every now and then. The fact that someone’s job title includes the word “manager” or “supervisor” does not determine their entitlement to overtime pay. Rather, it depends on what the actual duties of the employee are.
Although many job titles, such Accounts Manager, include the word “manager” this does not necessarily mean you don’t get overtime pay. If your job does not involve supervising other employees this is a good indication that you may be entitled to overtime compensation. For more information you can seek legal counsel or examine the Ministry of Labour’s website at http://www.labour.gov.on.ca/.
My employer has again asked that I work in a foreign country. I am concerned that this posting is unsafe. Last time I worked abroad multiple bombings took place and several governments closed their embassies. I also had my personal belongings stolen while I was in what was supposed to be a secure area. Do I have to go work in this country? If I do is my employer required to provide travel insurance in case something goes wrong?
The first thing to look at is your employment contract. Most employment contracts contain both written terms, and unwritten terms that are implied into the contract by law. The written portion of an employment contract usually mentions the benefits and insurance coverage that an employer is required to provide and it may also mention work locations and travel.
Unless travel insurance is covered in the original contract, or has since been agreed to by the employer, an employer generally cannot be forced to provide travel insurance. Also, most travel insurance policies will not cover all of the risks you’ve outlined. However, the failure to mention travel or relocation in a contract may prevent an employer from requiring that an employee work in a foreign country. Whether an employer can make such a request, without it being specifically mentioned in the contract, depends primarily on the nature of the work and if foreign travel to that country was expected or foreseeable when the employee was hired or promoted into their current position.
If an employee has a legitimate fear for their safety they may be able to argue that a travel request from their employer is not consistent with their contract. The context of the employment and the country involved are important considerations. For example it could be implied into many contracts that travel to the United States is acceptable, whereas travel to parts of Afghanistan is not. It is always best to review your contract, check your facts, and consult with a Lawyer before making any demands of your employer.
Last month local newspapers reported the case of a McDonald’s employee in Kanata who was dismissed after receiving poor performance reviews. The employee received more than $100,000.00 in court. Why?
The short answer is that the judge in this case found that although the employee’s performance was not perfect the employer did not have “just cause” to terminate her employment contract. If a business chooses to dismiss an employee the employer has to first decide if they have just cause to end the contract or not. Just cause exists when an employee has committed a serious breach of contract such as theft or continually missing work without reason. If the employer does not have just cause then in most cases they have to provide compensation which can equal up to a month of salary for every year of the employee’s service.
Many employers have staff who they believe are poor performers. Performance reviews are often done to encourage better performance but may also be an attempt to build a case for a just cause dismissal. After several poor performance reviews an employer may choose to dismiss an employee for just cause. However, a decision to terminate an employee for just cause can be challenged in court where employers often find it difficult to prove that the alleged breach of contract was serious enough to warrant a just cause dismissal. Poor performance reviews may show that an employee was less than perfect but this alone is usually not enough to disentitle them to some compensation when they are dismissed. Because compensation is typically based on the number of years the employee has worked, the amount owing to dismissed employee can be significant which is what occurred in the case of the former McDonald’s employee.