Dismissal With & Without Cause Flashcards
What area of law does dismissal deal with?
common law –> civil wrongs –> breach of contract
What is wrongful dismissal?
Dismissal without just cause and the employer breaches his common-law duty to provide reasonable notice of termination
What is reasonable notice?
Employment Standards Act sets minimum standard. In BC, after 3 months of probation employees are entitled to reasonable notice under ESA. (2 weeks to 8 weeks to a max of 8 years of service)
Do all contracts follow ESA standards?
Employement contracts must offer the minimum ESA approved minimum standard. Whichever offers more…contract or ESA….will be followed in the eyes of the law.
Duty to Mitigate in constructive dismissal
- under common law but not under ESA
- employee has duty to find alternative work to lessen damages owed by employer
CASE: Evans vs. Teamsters Local Union # 31
Read on Page 426 of Text
Facts:
- Evens employed for 23 years
- Terminated by union
- disagreement about reasonable notice
- union offered 24-month notice period, Evans refused
- Evans sued union for wrongful dismissal, awarded 22 months pay in lieu of notice
- union appealed and won with court saying Evans did not reasonably mitigate damages
What is constructive dismissal?
- Employer makes a fundamental change to employment contract without providing reasonable notice to employee
- Employee is entitled to resign in response and claim damages
What contract changes are unreasonable?
- changes to compensation package (Farber vs Royal Trust)
- a demotion, change in authority or responsibility
- geographical changes
- changes to hours or scheduling
- untenable work environment
CASE: Farber vs Royal Trust
Read on page 428 of text
(changes to compensation packages)
- Royal Trust was in financial difficulty and eliminated many managerial jobs
- Farber’s job eliminated, Royal Trust offered lower position with no chance to make same salary, Farber refused
- Farber sued for constructive dismissal
- Trial
- court and appeal court sided with RT and said offer was reasonable
- Supreme Court of Canada sided with Farber and gave him 12 months pay $100,000
- based on objective comparison between job duties of old job and new job
CASE: Shah vs Xerox Canada
untenable work environment
- Employers have an obligation to prevent workplace bullying which makes continued employment intolerable
(not in text, this is all the info from slides)
What is the dilemma facing a constructively dismissed employee?
- If they continue working, they may be viewed as condoning the change
- If they resign, a court may later find the change was not significantly fundamental
How can an employer avoid a constructive dismissal suit?
- Get employee’s consent and provide fresh consideration
- Give the employee reasonable advance notice of the change
- Include a term in the original employment contract specifying that parts of the agreement are subject to change
- Dismiss an employee with reasonable notice and then offer to rehire him under the new employment agreement
What are some wrongful dismissal damages?
Back in original position including: Salary Benefits Company vehicle Insurance Bonuses and stock options Pension entitlements
Classifications of damages?
- punitive (for outrageous and malicious employer behavior)
- compensatory damages (reasonable notice)
- Wallace damages (mental distress)
CASE: Honda vs Keyes
Page 437 of text, long case in text
- employee was disabled
- Honda wanted him to see a company approved doctor to prove the disability
- employee refused and was terminated
- Keyes sued, won and was given punitive and Wallace damages
- Honda appealed and damages were reduced
- Supreme court of Canada
- case is a bit confusing so PLEASE READ TEXT
How can an employer avoid wrongful dismissal claims?
- Hire intelligently
- Include and update a termination clause in employment contracts
- Make use of probationary periods
- Create a paper trail
- Provide reasonable notice of changes
- Determine whether a just cause claim is sustainable
- Provide outplacement counselling
- Get a signed release where possible
How long does an employer have in order to provide a ROE?
- 5 business days
In common law, what terms are implied in an employment contract?
- employees serve employer with honesty and loyalty
What are a few examples of information an employee is expected to keep private under the “duty not to disclose confidential information?”
- Trade secrets
- List of the employer’s customers
- Other confidential information (financial)
Does this duty encompass all employees equally?
- the higher up the employee with more access to confidential information, the stronger the duty
what is Fiduciary Duty?
- the duty for an employee to act in the best interests of their employer even at the expense of their own best interests
CASE: Aero Service ltd vs O’Malley
In Week 12 lecture slides, not in text
- 2 executives left their employer in order to compete as independent contractors
- stole client, found guilty of breach of fiduciary duty by courts
