Employee Awarded Statutory Severance on Top of 24 Months Notice!

Brien v. Niagara Motors Ltd. – Ontario Superior Court of Justice – August 20, 2008

An award of statutory severance under the Employment Standards Act, 2000 on top of 24 months  common law notice in a wrongful dismissal case has lead to an appeal.

The Ontario Superior Court of Justice’s August 20, 2008 decision of Brien v. Niagara Motors Ltd. [2008] O.J. No. 3246 (“Brien”) awarded the wrongfully dismissed employee 24 months notice, 2 months’ Wallace damages for the employer’s bad faith and 23 weeks severance. The awarding of both 24 months notice and 23 weeks severance in accordance with the Employment Standards Act, 2000, has lead to the employer filing an appeal, of the decision.

In Brien, the employee was 51 years old at the time of termination and had been working for the employer for 23 years with only two breaks from service to have her two children. The employee began her employment as a clerk and at the time of termination held the position of office manager. She had never been disciplined by the employer or provided with any warnings that her performance was unsatisfactory.

On September 19, 2003, the employer terminated the employee and provided her with a letter which included a Release for her to sign. The employee took the letter home and read it over. There was no indication in the letter of either gross misconduct, just cause or any other reason for termination.  After reading this letter and receiving a letter of reference which indicated that the employee had been terminated due to the elimination of her position, the employee commenced an action of wrongful dismissal.

In response, the employer claimed that the employee was dismissed for cause due to gross misconduct. To support this position, the employer claimed that the employee was consistently late in filing monthly reports, was rude to her co-workers, swore, and was unwilling to work overtime in order to meet deadlines when asked to do so. Additionally, the employee’s co-workers claimed that they had trouble dealing with the employee. However, the employer admitted that there were no procedures in place to deal with such poor employee performance or discipline.

At trial, the Court found that the employer did not have cause to terminate the employee.  Justice Lafreniere said, “[The employer’s] evidence was not credible and not believable. He is attempting to justify a decision to terminate the [employee] for just cause to avoid paying her a severance when the real motive was to reorganize the corporate structure and acquire a Secretary/treasurer with a different skill set then the [employee]…After 23 years of loyal service she was entitled to expect her employer to be honest, frank and forthright.” The Court further stated that, “the [employer] has played hardball and must accept the consequences of that course of action. The [employer] has engaged in bad faith conduct and as a result [found] that the [employee] is entitled to enhanced notice or –Wallace’ damages.” Accordingly, the Court decided that, “The [employee] is entitled to the maximum amount of notice that is 24 months…In addition to notice the [employee] is entitled to 23 weeks of severance. I award an additional two months of notice for the bad faith conduct of the [employer].”

This case is interesting because the Court decided to award the employee both common law notice and statutory severance. Typically an award of common law notice factors in an employee’s statutory entitlement and is not awarded on top of common law notice. Due to this double award and other areas of disagreement, the employer has decided to appeal the Court’s decision. We look forward to the Court of Appeal’s decision.

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