The Importance of Being Honest and Sensitive: The $50k+ Moral and Punitive Damage Award

Moral & Punitive Damage AwardEmployers may want to reassess how they terminate their employees and the timeframe and manner through which they provide their employees with their termination-related entitlements. Pohl v Hudson’s Bay Company, 2022 ONSC 5230, a recent Ontario decision, demonstrates, amongst other things, what a court may award an employee whose dismissal was conducted by an employer in an unfair manner.  

What Happened?

A 28-year full-time Hudson’s Bay Company Sales Manager in his 50s was terminated on a without-cause basis and immediately walked out the door. He earned an annual salary of $61,254 plus pension contributions and other benefits.

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Lessons in Managing an Aging Workforce: Terminations

age and gender discriminationIt has been only a few weeks since Lisa LaFlamme, CTV National News’ former chief anchor and senior editor,  shared on Twitter that Bell Media terminated her contract after over 30 years with the company. Her termination has since made international news due to allegations of age and gender discrimination. The company’s Vice President has announced a leave of absence and other employees have publicly raised concerns about a toxic work environment. 

Age discrimination is likely to become a more common allegation against employers given the general demographics of our workforce. The proportion of working-age people in Canada who are between the ages of 55 and 64 is at an all-time high of 21.8%.  

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Ontario Court of Appeal Upholds 26-Month Notice Period

In the world of workplace law we often say that, absent exceptional circumstances, the greatest notice period that any wrongfully dismissed employee could be awarded by an adjudicator is 24 months. But what are those exceptional circumstances? Years ago, we blogged about Dawe v. The Equitable Life Insurance Company of Canada, a case in which the Ontario Court of Appeal overturned the trial judge’s award of 30 months of reasonable notice for a terminated employee, reducing the final notice period to 24 months. Recently, the Ontario Court of Appeal released a decision, Currie v. Nylene Canada Inc. (“Currie”), affirming the trial judge’s assessment of damages in the amount of 26 months of reasonable notice for the wrongfully dismissed employee, Ms. Currie (“Ms. Currie”). Below we will look at the factors the Court considered in rendering this judgment.

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Firing Employees with 2 Weeks of Notice May be Insufficient

We’ve written about terminations in several of our blog posts throughout the years. Some of our employer readers (and clients) may recall scrambling to update their employment contracts following the 2020 release of Waksdale v. Swegon North America Inc. (2020 ONCA 391). Still, many employers who are seeking to terminate their indefinite-term employees on a without cause basis believe that as long as they provide their employees with 2 weeks of notice, or the period of notice set out in the Employment Standards Act, 2000, they are off the hook. More often than not, this notice period is legally insufficient. So, what is the applicable notice period? 

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Failure to Mitigate and Reduction of the Notice Period

Employees who have been wrongfully dismissed from their employment have a legal duty to mitigate. In other words, these employees must look for new employment if they wish to seek a termination payment from their former employers. Regardless of whether an employee successfully secures new employment prior to the end of their notice period, the court will still look to see that the employee took reasonable steps to find alternative comparable employment. If the court is not satisfied that the employee has made proper efforts to do so, it may reduce or deny the termination pay the former employer would otherwise be ordered to pay to the employee. A recent decision, Lake v. La Presse (2018) Inc., 2021 ONSC 3506, underlines the repercussions an employee could face if they fail to take such reasonable steps to mitigate their damages.

The Case of Lake v. La Presse (2018) Inc.

In this 2021 Ontario Superior Court case, the Court reduced a former employee’s common law/reasonable notice period from eight to six months due to the employee’s failure to mitigate their damages. 

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How Does Being Pregnant Impact an Employee’s Notice Period?

pregnant employee notice periodIn the case of Nahum v. Honeycomb Hospitality Inc., the employer, Honeycomb Hospitality, terminated their Director of People and Culture, Sarah Nahum when she was five months pregnant. 

Entitlement to Notice of Termination

The notice period is intended to bridge a terminated employee to their new position. Courts consider the employee’s age, length of service and the character of their employment when determining what notice period is appropriate. 

Ms. Nahum had been with Honeycomb for just four and a half months. She was 28 years old and made $80,000 per year. She was terminated without cause, did not have a valid contract governing her termination entitlements, and therefore was entitled to notice in accordance with the common law. 

Honeycomb argued that an appropriate notice period for Ms. Nahum was two months.  

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