If an employee is terminated with cause they are not entitled to notice or payment in lieu of. However, if they are terminated without cause, the opposite is true. But what happens when an employer alleges an employee to have committed an offense, but it turns out no wrongdoing occurred? As seen in a recent decision from the Ontario Superior Court of Justice, such an occurrence can lead to substantial damages for the employee.

The termination

The employee began working for the employer on March 6, 2006. He had been working there for 12 years and was serving as Office Manager by the Spring of 2018. In May of that year he was terminated. The employer informed him he was being terminated for cause after alleging him of wrongdoing on his part. The Record of Employment included a comment stating, He was terminated with cause and there is currently an on going (sic) court case.” However, the employee denied the alleged wrongdoing and argued his termination of employment was without cause.

The employer fails to respond

The employee brought an action against the employer on July 10, 2018. The employer failed to return a statement of defence. By the fall of 2018 a motion for default judgment was scheduled for January 2019. By the time of the trial, the employer had been noted in default. The motion judge stated there were three issues to be determined:

1. Was (the employee) wrongfully dismissed from his employment with the (employer)?
2. If so, to what damages is (the employee) entitled (a) as compensation in lieu of notice, (b) for vacation pay, and (c) for employee benefits?
3. If so, is (the employee) entitled to declaratory relief with respect to the wording of the Record of Employment issued by the (employer)?

The court’s analysis

The employee denied any wrongdoing and argued he was never provided with any of the details concerning his alleged offenses. Having been noted in default, the employer was deemed to have admitted the facts as presented by the employee. As a result the court accepted that the employee did not commit the wrongdoing alleged by the defendant and was terminated without cause.

In determining how much compensation the employee should receive, the court analyzed a number of factors, including:

(The employee) had worked for the (employer) for slightly more than 12 continuous years;

•      At the date of termination of his employment, (the employee) was 60 years old;
•      The position held by (the employee) as of 2018 was one of considerable responsibility;
•      (the employee) fulfilled his role as the Office Manager in a manner that met or exceeded the defendant’s expectations;
•      (the employee) was paid a salary and received benefits that he will be unable to replace; and
•      It will be difficult for (the employee) to find alternate employment because of his age and the manner in which his employment was terminated.

The court accepted the employee’s evidence that he would have a difficult time finding a new job and awarded him 24 months of salary. The court also found him to be entitled to vacation pay and a portion of the value of his employee benefits. The employer was also ordered to provide an updated record of employment without the comment relating to his termination being for cause.

The experienced employment team at HMC Lawyers provides advice about all employment law matters, including those related to wrongful or constructive dismissal. We provide our clients with exceptional service at reasonable rates as we guide them through the resolution of their issue. We can be reached online or by phone at 1-800-480-3534