EMPLOYEES TREATED CALLOUSLY ENTITLED TO BAD FAITH/PUNITIVE DAMAGES
Paul worked as a bartender in Halifax for three years. Although he was an enthusiastic employee, he was sometimes late for work and had been disciplined a few times and even suspended for three days for his tardiness. That, however, is not why Paul was fired.
On the day after he had been late for a shift, an open water bottle was discovered under the bar he was tending. When his manager went to drink from it, he discovered what he thought was vodka in the bottle.
Paul, however, had not been the only one tending the bar that night and other employees had had access. When Paul was confronted, he denied any knowledge of the bottle or how it got there.
The next morning he was terminated, escorted from the premises in front of a number of other employees and told that he was barred from coming back to the pub for six months.
When Paul sued for wrongful dismissal the boss revealed that he had not kept the water bottle or had the contents analysed. He also admitted that he was planning to terminate Paul before his last shift because of his tardiness the day before. He only delayed the termination because he needed Paul to bartend that night.
It is clear that the trial judge believed the employer either fabricated the incident in relation to the the water bottle or seized upon it as an excuse to fire Paul without any real investigation of what occurred. This matter eventually ended up in front of the Nova Scotia Court of Appeal. It decided that Paul was not only entitled to three and a half months pay in lieu of notice for his termination, but that he was entitled to an additional three and a half months pay as a result of the bad faith treatment he suffered at the hands of his employer.
The law in Canada is that an employee who is terminated in a particularly callous manner is entitled to compensation for injuries such as humiliation, embarrassment and damage to one=s sense of self worth and self esteem. In wrongful dismissal cases, those damages are awarded by increasing the notice period which the employee might otherwise have received. In Paul=s case, that notice period was doubled.
Employers who believe an employee is guilty of an act of dishonesty or theft may make a valid business decision that the employee has to go, whether they can prove their allegation or not. Before taking the position that there is just cause, however, an employer should consider their situation carefully. If they do not have convincing proof of the act of dishonesty, the employer should simply terminate the employee without providing a reason and offer a reasonable severance package. Alleging dishonesty when you cannot prove it can double the cost of the dismissal.
In this case, if Paul=s employer had simply advised him that they were terminating him as a result of his ongoing tardiness and provided him an offer of two months pay in lieu of notice, he would very likely have taken it and the matter would have been over. Instead, they paid for a trial and an appeal, Paul=s legal costs and about three times the pay in lieu of notice they could have dished out if they had simply made a reasonable offer in the first place.
As published in the Hamilton Spectator, March 16, 2004