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Difference between revisions of "Employment Law Issues (9:V)"

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== C. Termination of Employment ==
== C. Termination of Employment ==


Employers can generally dismiss an employee at any time without cause and on provision of reasonable notice. In rare circumstances, employers  can dismiss an employee for just cause, if the employee is guilty of serious misconduct.   
At common law, employers can generally dismiss an employee at any time without cause and on provision of reasonable notice. In rare circumstances, employers  can dismiss an employee for just cause, if the employee is guilty of serious misconduct.   


Generally, dismissals are without cause. In without cause dismissal scenarios, employees are entitled to notice of dismissal, or pay in lieu of such notice, under both statute (''ESA'') and common law.   
Generally, dismissals are without cause. In without cause dismissal scenarios, employees are entitled to notice of dismissal, or pay in lieu of such notice, under both statute the ESA and common law.   


The ''ESA'' (or the ''Canada Labour Code'' for federally regulated employees) provides statutory minimums for notice, or pay in lieu, if an employee is dismissed from their employment. The maximum an employee would receive under the ''ESA'' is 8 weeks of notice or pay.
Non-unionized, federally regulated employees, as covered by the CLC, are subject to different laws concerning dismissal without cause.  See sections 240-246 of the CLC.  Also see ''Wilson v Atomic Energy of Canada'', 2016 SCC 29.
 
The ESA (or the CLC for federally regulated employees) provides statutory minimums for notice, or pay in lieu, if an employee is dismissed from their employment. The maximum an employee would receive under the ''ESA'' is 8 weeks of notice or pay.  


In addition, employees are entitled to a reasonable notice of dismissal at common law, or pay in lieu of such reasonable notice. The amount of reasonable notice, or pay in lieu, should be sufficient to allow the employee to find comparable employment, based on the employee’s age, length of service, and the nature of the employee’s position.     
In addition, employees are entitled to a reasonable notice of dismissal at common law, or pay in lieu of such reasonable notice. The amount of reasonable notice, or pay in lieu, should be sufficient to allow the employee to find comparable employment, based on the employee’s age, length of service, and the nature of the employee’s position.     
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Employment contracts may contain a termination provision that sets out how much notice the employee will receive if the employer terminates him without cause.  
Employment contracts may contain a termination provision that sets out how much notice the employee will receive if the employer terminates him without cause.  


If the employer fails to give the employee reasonable notice or pay in lieu, this would constitute a breach of the employment contract by the employer, and the employee could sue the employer in Small Claims Court or BC Supreme Court. This is commonly called a wrongful dismissal claim.  
If the employer fails to give the employee reasonable notice or pay in lieu, this would constitute a breach of the employment contract by the employer, and the employee could sue the employer in Small Claims Court, the Civil Resolution Tribunal, or BC Supreme Court. This is commonly called a wrongful dismissal claim.  


Generally, the notice periods recognized at common law tend to be larger awards than the statutory minimum.     
Generally, the notice periods recognized at common law tend to be larger awards than the statutory minimum.     
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☑ This section applies to both provincially and federally regulated non-unionized employees, dependent contractors, and independent contractors. It is necessary to determine which category the worker falls under. See [[Preliminary Matters for Employment Law (9:IV) | Section IV: Preliminary Matters]] to determine this.  
☑ This section applies to both provincially and federally regulated non-unionized employees, dependent contractors, and independent contractors. It is necessary to determine which category the worker falls under. See [[Preliminary Matters for Employment Law (9:IV) | Section IV: Preliminary Matters]] to determine this.  


☑ Determine whether the worker has an indefinite or fixed term contract of employment. See Section V.C.2(a): Successive or Expired Fixed term Contracts for details, as some contracts that appear to be for a fixed term may be deemed to be of indefinite duration by the courts, particularly when the fixed term contract is renewed year after year.  
☑ Determine whether the worker has an indefinite or fixed term contract of employment. See [[Section V.C.2(a): Successive or Expired Fixed Term Contracts (V.C)#2 | Section V.C.2(a) Successive or Expired Fixed Term Contracts]] for details, as some contracts that appear to be for a fixed term may be deemed to be of indefinite duration by the courts, particularly when the fixed term contract is renewed year after year.  
 
*If the contract is for an indefinite term, or if the worker was dismissed part way through a fixed-term contract, go to the next step of the checklist.  
*If the contract is for an indefinite term, or if the worker was dismissed part way through a fixed-term contract, go to the next step of the checklist.  
*If the worker was dismissed at the end of a fixed-term contract of employment, then their contract has simply been completed and there is generally no further entitlement to severance pay (unless their contract specifies otherwise).  
*If the worker was dismissed at the end of a fixed-term contract of employment, then their contract has simply been completed and there is generally no further entitlement to severance pay (unless their contract specifies otherwise).  


☑ Determine whether the worker was dismissed or if they resigned. Sometimes a worker may have been forced to resign or may have had their pay or working conditions changed significantly; see '''Section V.C. Termination of Employment''' to determine whether your situation would be considered a constructive dismissal or a resignation.  
☑ Determine whether the worker was dismissed or if they resigned. Sometimes a worker may have been forced to resign or may have had their pay or working conditions changed significantly; see [[Section V.C: Termination of Employment (V.C) | Section V.C: Termination of Employment]] to determine whether your situation would be considered a constructive dismissal or a resignation.  
 
*If the worker was dismissed, continue to the next step of the checklist.  
*If the worker was dismissed, continue to the next step of the checklist.  
*If the worker voluntarily resigned, they are generally not entitled to severance pay (unless their contract specifies otherwise).  
*If the worker voluntarily resigned, they are generally not entitled to severance pay (unless their contract specifies otherwise).  


☑ If it appears that the contract may have become impossible to perform, determine whether there has been “frustration” of the contract; see section [[{{PAGENAME}}#16. Frustration of Contract | Section V.C.16: Frustration of Contract]]. Note that this is rare, and layoffs usually do not fall into this category.  
☑ If it appears that the contract may have become impossible to perform, determine whether there has been “frustration” of the contract; see section [[{{PAGENAME}}#16. Frustration of Contract | Section V.C.16: Frustration of Contract]]. Note that this is rare, and layoffs usually do not fall into this category.  
*If the contract has been frustrated then generally there is no entitlement to severance pay. Otherwise, continue to the next step of the checklist.   
*If the contract has been frustrated then generally there is no entitlement to severance pay. Otherwise, continue to the next step of the checklist.   


☑ Determine whether the terms of the contract specify the amount or length of notice or severance pay the worker will receive if dismissed.  
☑ Determine whether the terms of the contract specify the amount or length of notice or severance pay the worker will receive if dismissed.  
*If this amount is specified, determine whether that provision of the contract is valid; see Section V.C(d) and (c): Invalid Contracts If it is valid, it will determine the amount of severance they are entitled to.  
*If this amount is specified, determine whether that provision of the contract is valid; see Section V.C(d) and (c): Invalid Contracts If it is valid, it will determine the amount of severance they are entitled to.  
*If this amount is not specified, or if the contract or that provision of the contract is invalid, then:  
*If this amount is not specified, or if the contract or that provision of the contract is invalid, then:  
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☑ If the worker was an employee, and was dismissed for a discriminatory reason, determine whether they have a claim with the Human Rights Tribunal (or the Canada Human Rights Tribunal for federally regulated employees); see [[Introduction to Human Rights (6:I) | Chapter 6: Human Rights]]. If they do have a potential claim, estimate how much the employee would be able to claim for (i) lost wages (minus any amount from the duty to mitigate), and (ii) injury to dignity, feelings, and self-respect. Compare this to the amount the employee  could claim for (i) reasonable notice (minus any amount from the duty to mitigate), and (ii) aggravated and punitive damages. If the employee is likely to obtain more money at the Human Rights Tribunal, and has been dismissed within the past 6 months, consider filing a human rights claim; see [[Introduction to Human Rights (6:I) | Chapter 6: Human Rights]]. Otherwise, continue to the next step of the checklist.  
☑ If the worker was an employee, and was dismissed for a discriminatory reason, determine whether they have a claim with the Human Rights Tribunal (or the Canada Human Rights Tribunal for federally regulated employees); see [[Introduction to Human Rights (6:I) | Chapter 6: Human Rights]]. If they do have a potential claim, estimate how much the employee would be able to claim for (i) lost wages (minus any amount from the duty to mitigate), and (ii) injury to dignity, feelings, and self-respect. Compare this to the amount the employee  could claim for (i) reasonable notice (minus any amount from the duty to mitigate), and (ii) aggravated and punitive damages. If the employee is likely to obtain more money at the Human Rights Tribunal, and has been dismissed within the past 6 months, consider filing a human rights claim; see [[Introduction to Human Rights (6:I) | Chapter 6: Human Rights]]. Otherwise, continue to the next step of the checklist.  


☑ If the potential award for (i) reasonable notice and (ii) aggravated and punitive damages is under $25,000, consider filing a claim in  Small Claims Court; see [[Introduction to Small Claims (20:I) | Chapter 20: Small Claims]]. If the worker has a strong case for an award significantly greater than $25,000, the worker should strongly consider contacting an employment lawyer to discuss proceeding with a claim in BC Supreme Court. If the potential award is only slightly over $25,000, the employee may wish to file in Small Claims Court, and waive their entitlement to any amount over $25,000, as proceeding in Small Claims Court can be less costly than proceeding in BC Supreme Court.
☑ If the potential award for (i) reasonable notice and (ii) aggravated and punitive damages is under $35,000, as of June 1, 2017, consider filing a claim in  Small Claims Court; see [[Introduction to Small Claims (20:I) | Chapter 20: Small Claims]]. If the worker has a strong case for an award significantly greater than $35,000, the worker should strongly consider contacting an employment lawyer to discuss proceeding with a claim in BC Supreme Court. If the potential award is only slightly over $35,000, the employee may wish to file in Small Claims Court, and waive their entitlement to any amount over $35,000, as proceeding in Small Claims Court can be less costly than proceeding in BC Supreme Court.


=== 2. Employment Contract Considerations ===
=== 2. Employment Contract Considerations ===
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==== b) Consideration ====
==== b) Consideration ====


Once a job offer is made and accepted, a contract is in place (though as discussed above, it may be unwritten).  In order to change the terms of the contract after it is in place, there must be fresh consideration flowing from each party to the other.  Consideration in contract law is the benefit one party receives from another as a result of entering into a contract with another party.  This means that to change an existing contract, the new contract must contain a new benefit for both the employer and the employee. Because of this, an entire written contract might be invalid if the contract was imposed on the employee after they had already accepted the job offer: the employee would already have a contract, and the written contract would need to have some new benefit, or “fresh consideration”, for the employee.  Students should compare the signature dates on the written contract to the actual start dates.
Once a job offer is made and accepted, a contract is in place (though as discussed above, it may be unwritten).  In order to change the terms of the contract after it is in place, there must be fresh consideration flowing from each party to the other.  Consideration in contract law is the benefit one party receives from another as a result of entering into a contract with another party.  This means that to change an existing contract, the new contract must contain a new benefit for both the employer and the employee. Because of this, an entire written contract might be invalid if the contract was imposed on the employee after they had already accepted the job offer: the employee would already have a contract, and the written contract would need to have some new benefit, or “fresh consideration”, for the employee.  Compare the signature dates on the written contract to the actual start dates.


==== c) Invalid Contracts – Vagueness or Ambiguity ====
==== c) Invalid Contracts – Vagueness or Ambiguity ====


Vague or ambiguous contract terms may be unenforceable. Courts will examine the wording of the contract terms to determine whether a clause is  enforceable for vagueness or ambiguity. If a clause is not enforceable, courts may rule on the term of agreement based on the conduct of the employer and employee and pre-contractual communication between the parties.  
Vague or ambiguous contract terms may be unenforceable. Courts will examine the wording of the contract terms to determine whether a clause is  enforceable for vagueness or ambiguity. If a clause is not enforceable, courts may rule on the term of agreement based on the conduct of the employer and employee and pre-contractual communication between the parties. See ''Alsip v Top Rollshutters Inc. dba Talius'', 2016 BCCA 252. 


==== d) Invalid Contracts – Contrary to ESA ====
==== d) Invalid Contracts – Contrary to ESA ====
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Under certain circumstances, employers and employees cannot use the above rules to invalidate a contract for their own benefit.  If a new contract is imposed in which all the benefit is to the employee, the employee cannot have the contract invalidated for lack of fresh consideration to the employer in order to avoid a severance provision or other provision of the contract.  Additionally, the employer cannot back out of a contract that only gave benefits to the employee, due to lack of fresh consideration to the employer.  
Under certain circumstances, employers and employees cannot use the above rules to invalidate a contract for their own benefit.  If a new contract is imposed in which all the benefit is to the employee, the employee cannot have the contract invalidated for lack of fresh consideration to the employer in order to avoid a severance provision or other provision of the contract.  Additionally, the employer cannot back out of a contract that only gave benefits to the employee, due to lack of fresh consideration to the employer.  


=== 3. Without Cause v. Just Cause Dismissal ===
=== 3. Without Cause vs. Just Cause Dismissal ===


Employers can dismiss an employee in one of two ways:  
Employers can dismiss an employee in one of two ways:  
*A. Without cause, and on provision of reasonable notice; or   
 
*A. Without cause, and on provision of reasonable notice or pay in lieu of notice; or   
*B. For Just Cause.   
*B. For Just Cause.   


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=== 4. Without Cause Dismissal and Reasonable Notice ===
=== 4. Without Cause Dismissal and Reasonable Notice ===


If an employee is dismissed without cause, he is entitled to a reasonable notice of dismissal, or pay in lieu, under both statute law and common law.   
If an employee is dismissed without cause, he is entitled to a reasonable notice of dismissal, or pay in lieu, under both statute law and common law.
 
If a non-unionized, federally regulated employee has been dismissed without cause, refer to sections 240-246 of the CLC; see ''Wilson v Atomic Energy of Canada'', 2016 SCC 29.   


==== a) Notice under the ESA ====
==== a) Notice under the ESA ====


Employees are entitled to notice, or pay in lieu, under the ''ESA''. These are the minimum statutory requirements for compensation for individual terminations. For periods of employment greater than three months, the employer must pay severance to the employee, or satisfy that obligation by giving a written notice of termination.  
Employees are entitled to notice, or pay in lieu, under the ESA. These are the minimum statutory requirements for compensation for individual terminations. For periods of employment greater than three months, the employer must pay severance to the employee, or satisfy that obligation by giving a written notice of termination.  


For service between three months and one year, one week of wages (or notice) is required. For one to three years, two weeks’ wages or notice are required. For three years, three weeks’ wages or notice are required. After three consecutive years of employment, one additional week of wages or notice is required for each additional year of employment, to a maximum of eight weeks (s 63(3)(iii)). Additional compensation is required for group terminations (see below).   
For service between three months and one year, one week of wages (or notice) is required. For one to three years, two weeks’ wages or notice are required. For three years, three weeks’ wages or notice are required. After three consecutive years of employment, one additional week of wages or notice is required for each additional year of employment, to a maximum of eight weeks (s 63(3)(iii)). Additional compensation is required for group terminations (see below).   
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Group terminations (those of 50 or more at a single location) have additional requirements under the ESA. First, the employer must give written notice to the Minister, to each employee being terminated, and to the union. This notice must specify the number of employees being terminated,  the date(s) of termination, and the reason for termination. According to s 64, the number of weeks notice for group terminations varies with the number of employees being terminated:
Group terminations (those of 50 or more at a single location) have additional requirements under the ESA. First, the employer must give written notice to the Minister, to each employee being terminated, and to the union. This notice must specify the number of employees being terminated,  the date(s) of termination, and the reason for termination. According to s 64, the number of weeks notice for group terminations varies with the number of employees being terminated:
*At least eight weeks if between 50 and 100 employees;  
*At least eight weeks if between 50 and 100 employees;  
*12 weeks if between 101 and 300; and  
*12 weeks if between 101 and 300; and  
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Exceptions to these guidelines (ss 63 and 64), to which minimum notice requirements do not apply, are laid out in section 65 of the Act. No minimum notice or compensation is required of the employer by the ''ESA'' when the employee:  
Exceptions to these guidelines (ss 63 and 64), to which minimum notice requirements do not apply, are laid out in section 65 of the Act. No minimum notice or compensation is required of the employer by the ''ESA'' when the employee:  
*has not worked for a consecutive period of three months;  
*has not worked for a consecutive period of three months;  
*quits or retires;  
*quits or retires;  
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The case of ''Bardal v Globe and Mail Ltd'' (1960), 24 DLR (2d) 140 (Ont HCJ) includes a list of the four primary factors to be considered in  determining the appropriate length of a notice period:  
The case of ''Bardal v Globe and Mail Ltd'' (1960), 24 DLR (2d) 140 (Ont HCJ) includes a list of the four primary factors to be considered in  determining the appropriate length of a notice period:  
i) character of the employment;  
i) character of the employment;  
ii) the length of service;  
ii) the length of service;  
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However, these factors are not exhaustive, and additional factors may be considered on a case-by-case basis.   
However, these factors are not exhaustive, and additional factors may be considered on a case-by-case basis.   


Reasonable notice is an entitlement to assist the employee.  In Michela v. St. Thomas of Villanova Catholic School 2015 ONCA 801, the Ontario Court of Appeal held that the financial health of a company does not reduced its notice obligations to employees.   
Reasonable notice is an entitlement to assist the employee.  In ''Michela v. St. Thomas of Villanova Catholic School'', 2015 ONCA 801, the Ontario Court of Appeal held that the financial health of a company does not reduce its notice obligations to employees.   
 
Termination clauses in contracts are not always valid and enforceable.
 
In addition, be aware that employers may try to rely on termination provisions in an employee handbook or other such workplace policy documents.  For example, in ''Cheong v Grand Pacific Travel & Trade (Canada) Corp.'', 2016 BCSC 1321, the court found that an employee handbook termination clause did not act to limit the employee’s reasonable common law severance.  It is important to review and question all documentation relied on to limit an employee’s severance.


==== d) Calculating Reasonable Notice ====
==== d) Calculating Reasonable Notice ====


To determine how much notice an employee might get, compare their case to previously decided cases. Law students can use Quicklaw’s Wrongful Dismissal Notice Search to search for cases where the employees had a similar range of age, length of service, and job type as compared to the employee in question.   
To determine how much notice an employee might get, compare their case to previously decided cases. Carswell hosts an online Wrongful Dismissal Database.  The database calculates average notice period awards from precedential cases.  Reports can be purchased individually or by subscription. This is a helpful tool for searching for cases where an employee had a similar range of age, length of service, and job type as compared to the employee in question. The database is accessible online at: http://www.wrongfuldismissaldatabase.com  


Additionally, the UBC Law Library and many other law libraries hold publications with tables of cases sorted by job type, such as the Wrongful Dismissal Practice Manual by Ellen E. Mole (which is also found on Quicklaw). Comparing the Bardal factors of the employee in question with those of previous cases using either of these methods can assist in finding an appropriate range for the reasonable notice period. As a starting point, you can ask the particular employee how much time it would take or has taken to find similar work for similar pay.  
Additionally, the UBC Law Library and many other law libraries hold publications with tables of cases sorted by job type, such as the Wrongful Dismissal Practice Manual by Ellen E. Mole (which is also found on Quicklaw). WestlawNext Canada also offers Quantum Services Database for wrongful dismissal.  Comparing the Bardal factors of the employee in question with those of previous cases using either of these methods can assist in finding an appropriate range for the reasonable notice period. As a starting point, you can ask the particular employee how much time it would take or has taken to find similar work for similar pay.


==== e) Extensions to Notice Period ====
==== e) Extensions to Notice Period ====


There is case law that supports the principle that more vulnerable employees, for example due to injury or illness, are entitled to more notice.  
There is case law that supports the principle that more vulnerable employees, for example due to injury or illness, are entitled to more notice.  
 
For example, the employee’s notice period was increased from 5 to 8 months in ''Pakozdi v. B & B Heavy Civil Construction Ltd.'', 2016 BCSC 992 (this case is currently being appealed), as a result of the “vulnerability” of an employee at the time of dismissal due to a medical condition.. 


For example, the employee’s notice period was increased from 5 to 8 months in Pakozdi v. B & B Heavy Civil Construction Ltd., 2016 BCSC 992 as a result of the “vulnerability” of an employee at the time of dismissal due to a medical condition.   
There is also case law to support the principle that an employee’s unique background and the nature of their responsibilities can outweigh an employee’s short length of employment in assessing a reasonable notice period upon termination.  For example, the employee’s notice period was increase from 5 to 10 months in ''Waterman v Mining Association of British Columbia'', 2016 BCSC 921, based on the employee’s position in the company, her unique background and the nature of her responsibilities.  Also see ''Munoz v Sierra Systems Group Inc.'', 2016 BCCA 140.


Generally, the maximum reasonable notice period is 24 months.  In exceptional circumstances, such as very long services cases, courts can award notice periods beyond 24 months.  Markoulakis v Snc-lavalin Inc., 2015 ONSC 1081 http://www.canlii.org/en/on/onsc/doc/2015/2015onsc1081/2015onsc1081.html
Generally, the maximum reasonable notice period is 24 months.  In exceptional circumstances, such as very long services cases, courts can award notice periods beyond 24 months; see ''Markoulakis v Snc-lavalin Inc.'', 2015 ONSC 1081.


==== f) Damages at Common Law- Fixed Term Contracts ====
==== f) Damages at Common Law- Fixed Term Contracts ====
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Other lost benefits, such as extended health and dental coverage are also recoverable during the notice period. Usually a judge will calculate this loss by adding up all of the medical expenses incurred by the dismissed employee during the notice period that would have been recoverable under the employer’s benefits plan had the employee been working.  
Other lost benefits, such as extended health and dental coverage are also recoverable during the notice period. Usually a judge will calculate this loss by adding up all of the medical expenses incurred by the dismissed employee during the notice period that would have been recoverable under the employer’s benefits plan had the employee been working.  


If the employee had a pension plan, the loss is generally calculated as: [the projected commuted value that the pension would have had if the  employee remained employed during the notice period] minus [the commuted value the pension actually had at the time the employee was dismissed]. The commuted value is the net present value of the invested money, and its calculation is complicated; the pension plan administrator can provide the employee with the current and projected commuted values.   
If the employee had a pension plan, the loss is generally calculated as:  
 
[the projected commuted value that the pension would have had if the  employee remained employed during the notice period] minus [the commuted value the pension actually had at the time the employee was dismissed].  
 
The commuted value is the net present value of the invested money, and its calculation is complicated; the pension plan administrator can provide the employee with the current and projected commuted values.   


An employee may be entitled to compensation for loss of bonus during the notice period. This assessment will require a consideration of  whether the bonus was discretionary or based on quantifiable metrics, and whether the employee would have likely received a bonus had he  worked during the notice period. Students  should research this topic to determine potential entitlement.   
An employee may be entitled to compensation for loss of bonus during the notice period. This assessment will require a consideration of  whether the bonus was discretionary or based on quantifiable metrics, and whether the employee would have likely received a bonus had he  worked during the notice period. Research should be done on this topic to determine potential entitlement.   


At common law, the employee is only entitled to be compensated for wages and benefits to which he or she would have been contractually entitled during the notice period, and not for any ex gratia expectancies (see ''Swann v MacDonald Dettwiler and Associates Ltd'', [1995] BCJ No 1596 (QL) (SC)).  
At common law, the employee is only entitled to be compensated for wages and benefits to which he or she would have been contractually entitled during the notice period, and not for any ex gratia expectancies (see ''Swann v MacDonald Dettwiler and Associates Ltd'', [1995] BCJ No 1596 (QL) (SC)).  


Courts have a wide discretion to determine the appropriate damages based on the evidence of the plaintiff’s pre-dismissal earnings (''Davidson v Tahtsa Timber Ltd'', 2010 BCCA  528). If an employee’s earnings have varied in the years prior to dismissal, some courts in BC have calculated damages by averaging the employee’s annual wages (see ''Krewenchuk v Lewis Construction Ltd'', [1985] BCJ No 1553 (SC). Where remuneration is based on an annual salary and not an hourly rate, a court may still assess damages on the basis of the average salary paid in the years prior to dismissal (see ''Goodkey v Dynamic Concrete Pumping Inc'', 2004 BCSC 894)  
Courts have a wide discretion to determine the appropriate damages based on the evidence of the plaintiff’s pre-dismissal earnings (''Davidson v Tahtsa Timber Ltd'', 2010 BCCA  528). If an employee’s earnings have varied in the years prior to dismissal, some courts in BC have calculated damages by averaging the employee’s annual wages (see ''Krewenchuk v Lewis Construction Ltd'', [1985] BCJ No 1553 (SC). Where remuneration is based on an annual salary and not an hourly rate, a court may still assess damages on the basis of the average salary paid in the years prior to dismissal (see ''Goodkey v Dynamic Concrete Pumping Inc'', 2004 BCSC 894)  
Where an employee earns a variable income, courts may average the rate of pay within the relevant notice period for calculating damages; see ''O’Dea v Ricoh Canada Inc.'', 2016 BCSC 235.)


=== 5. Just Cause Dismissal- General ===
=== 5. Just Cause Dismissal- General ===
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Just cause it is a question of fact, and must be determined by a judge on a case by case basis.     
Just cause it is a question of fact, and must be determined by a judge on a case by case basis.     


Note that in the case of independent contractors, courts may instead consider whether there was a fundamental breach of the contract, or one  that goes to the root of the contract, depriving one party of the whole or substantially the whole benefit of the contract (see ''Hunter Engineering Co v Syncrude Canada Ltd'',[1989] 1 SCR 426; ''1193430 Ontario Inc v Boa-Franc Inc'', 78 OR (3d) 81); however, the law on this topic can be complex and may require additional research.  
Note that in the case of independent contractors, courts may instead consider whether there was a fundamental breach of the contract, or one  that goes to the root of the contract, depriving one party of the whole or substantially the whole benefit of the contract (see ''Hunter Engineering Co v Syncrude Canada Ltd'',[1989] 1 SCR 426; ''1193430 Ontario Inc v Boa-Franc Inc'', 78 OR (3d) 81); ''Fernandes v Peel Educational & Tutorial Services Limited (Mississauga Private School)'', 2016 ONCA 468.  The law on this topic can be complex and may require additional research.  


Common law has defined just cause as conduct that is inconsistent with the fulfilment of the express or implied condition of service (''Denham v Patrick'' (1910), 20 OLR 347 (Div Ct)). It is conduct inconsistent with the continuation of the employment relationship, which constitutes a  fundamental breach going to the root of the contract (''Stein v BC  Housing Management Commission'' (1989), 65 BCLR (2d) 168 (SC), (1992), 65  BCLR (2d) 181 (CA)). This includes serious misconduct, habitual neglect of duty, incompetence, conduct incompatible with the employee’s duties  or prejudicial to the employer’s business, or wilful disobedience to the employer’s orders in a matter of substance (''Port Arthur Shipbuilding CovArthurs et al'', [l969] SCR 85).
Common law has defined just cause as conduct that is inconsistent with the fulfilment of the express or implied condition of service (''Denham v Patrick'' (1910), 20 OLR 347 (Div Ct)). It is conduct inconsistent with the continuation of the employment relationship, which constitutes a  fundamental breach going to the root of the contract (''Stein v BC  Housing Management Commission'' (1989), 65 BCLR (2d) 168 (SC), (1992), 65  BCLR (2d) 181 (CA)). This includes serious misconduct, habitual neglect of duty, incompetence, conduct incompatible with the employee’s duties  or prejudicial to the employer’s business, or wilful disobedience to the employer’s orders in a matter of substance; see ''Port Arthur Shipbuilding Co v Arthurs et al'', [1968] S.C.J. No. 82, [1969] S.C.R. 85.


An objective test is used to determine whether there has been a serious misconduct or a fundamental breach. For a long term or senior employee, the employer may need more than mere misconduct (''Mallais v Lounsbury Co'' (l984) 58 NBR (2d) 345 (QB)).  
An objective test is used to determine whether there has been a serious misconduct or a fundamental breach. For a long term or senior employee, the employer may need more than mere misconduct; see ''Mallais v Lounsbury Co'' (l984) 58 NBR (2d) 345 (QB).  


What constitutes just cause will vary from case to case and must be something that a reasonable person would be unable to overlook (''McIntyre v Hockin'', [1889] OJ No 36, l6 OAR 498 (Ont CA)).   
What constitutes just cause will vary from case to case and must be something that a reasonable person would be unable to overlook (''McIntyre v Hockin'', [1889] OJ No 36, l6 OAR 498 (Ont CA)).   
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Where an employer accepts a certain standard of performance over a period of time, the employer cannot without warning treat such conduct as  cause for dismissal (''Dewitt v A&B Sound Ltd'' (1978), 85 DLR (3d) 604 (BCSC)).  
Where an employer accepts a certain standard of performance over a period of time, the employer cannot without warning treat such conduct as  cause for dismissal (''Dewitt v A&B Sound Ltd'' (1978), 85 DLR (3d) 604 (BCSC)).  


Courts are required to take a contextual approach to determining whether just cause for dismissal existed, taking into account numerous factors. See the Supreme Court of Canada case of ''McKinley v BC Tel'', [2001] 2 SCR 161.  
Courts are required to take a contextual approach to determining whether just cause for dismissal existed, taking into account numerous factors. See ''McKinley v BC Tel'', [2001] 2 SCR 161.  


Although there is no comprehensive list of what constitutes just cause, the list below discusses some of the more common grounds for a dismissal.
Although there is no comprehensive list of what constitutes just cause, the list below discusses some of the more common grounds for a dismissal.
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==== a) Insubordination/Disobedience ====
==== a) Insubordination/Disobedience ====


Insubordination or insolence that is incompatible with the continuation of the employment relationship is just cause for dismissal (''Latta v Acme Cheese Co'' (1923), 25 OWN l95 (Ont SCAD)). A single incident that is very severe and interferes with and prejudices the safe and proper conduct of the business will be just cause for dismissal (''Stilwell v Audio Pictures Ltd'', [1955] OWN 793(CA)). Poor judgment, insensitivity, or resentment, is generally not sufficient (''Leblanc v United Maritime Fisherman Co-op'' (1984), 60 NBR (2d) 341 (QB)).   
Insubordination or insolence that is incompatible with the continuation of the employment relationship is just cause for dismissal (''Latta v Acme Cheese Co'' (1923), 25 OWN l95 (Ont Div CT)). A single incident that is very severe and interferes with and prejudices the safe and proper conduct of the business will be just cause for dismissal (''Stilwell v Audio Pictures Ltd'', [1955] OWN 793(CA)). Poor judgment, insensitivity, or resentment, is generally not sufficient (''Leblanc v United Maritime Fisherman Co-op'' (1984), 60 NBR (2d) 341 (QB)).   


An intentional and deliberate refusal of an employee to carry out lawful and reasonable orders will generally suffice as cause for dismissal. However, should an order be outside the employee’s job description, then such an order will not be considered “lawful and reasonable”. Frequent less serious instances of disobedience can justify dismissal where they are combined with other misconduct (''Markey v Port Weller Dry Docks Ltd'' (1974), 4 OR (2d) 12 (Co Ct); ''Stein v BC Housing'' (1989), 65 BCLR (2d) 168 (SC), (1992), 65 BCLR (2d) 181 (CA)). Generally, one  isolated act of disobedience will not, in itself, be cause for dismissal.  
An intentional and deliberate refusal of an employee to carry out lawful and reasonable orders will generally suffice as cause for dismissal. However, should an order be outside the employee’s job description, then such an order will not be considered “lawful and reasonable”. Frequent less serious instances of disobedience can justify dismissal where they are combined with other misconduct (''Markey v Port Weller Dry Docks Ltd'' (1974), 4 OR (2d) 12 (Co Ct); ''Stein v BC Housing'' (1989), 65 BCLR (2d) 168 (SC), (1992), 65 BCLR (2d) 181 (CA); ''Cotter v Point Grey Golf and Country Club'', 2016 BCSC 10). Generally, one  isolated act of disobedience will not, in itself, be cause for dismissal.  


For a breach of company policy or company rules to constitute just cause for dismissal, the rule or policy must have been made clear to the employees and must have been regularly enforced by the employer.  
For a breach of company policy or company rules to constitute just cause for dismissal, the rule or policy must have been made clear to the employees and must have been regularly enforced by the employer.  
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Where there is actual incompetence, not just dissatisfaction with an employee’s work, the employee may be dismissed with cause if such incompetence is the fault of the employee (''Waite v La Ronge Childcare Co-operative'' (l985), 40 Sask R 260 (QB)). If an employee presents an exaggerated assessment of his or her own skills, a company is justified in dismissing that employee after finding out his or her true abilities (''Manners v Fraser Surrey Docks Ltd'' (1981), 9 ACWS (2d) 155). Incompetence is assessed using an objective standard of performance, and it  is for the employer to prove that the employee fell below the standard. Usually, one isolated example of failure to meet such a test does not  warrant discharge (Clark v Capp (1905), 9 OLR 192). The employer must prove that:
Where there is actual incompetence, not just dissatisfaction with an employee’s work, the employee may be dismissed with cause if such incompetence is the fault of the employee (''Waite v La Ronge Childcare Co-operative'' (l985), 40 Sask R 260 (QB)). If an employee presents an exaggerated assessment of his or her own skills, a company is justified in dismissing that employee after finding out his or her true abilities (''Manners v Fraser Surrey Docks Ltd'' (1981), 9 ACWS (2d) 155). Incompetence is assessed using an objective standard of performance, and it  is for the employer to prove that the employee fell below the standard. Usually, one isolated example of failure to meet such a test does not  warrant discharge (Clark v Capp (1905), 9 OLR 192). The employer must prove that:
*a) reasonable standards of behaviour and performance were set and clearly communicated to the employee;  
*a) reasonable standards of behaviour and performance were set and clearly communicated to the employee;  
*b) the employee was notified when he or she did not meet those standards;  
*b) the employee was notified when he or she did not meet those standards;  
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See ''Hennessy v Excell Railing Systems Ltd.'' (2005 BCSC 734), for a comprehensive list of what an employer must show to establish poor performance.
See ''Hennessy v Excell Railing Systems Ltd.'' (2005 BCSC 734), for a comprehensive list of what an employer must show to establish poor performance.


Incompetence as grounds for dismissal needs to be considered in light of the ''Human Rights Code'' and the ''bona fide'' occupational requirement (“BFOR”) test (see ''British Columbia (Public Service Employee Relations Commission) v British Columbia Government and Service Employees’ Union'' (BCGSEU), [1999] 3 SCR 3). In a case of poor employee performance, the Employment Standards Branch will not find just cause for dismissal unless the employer can demonstrate a “neglect of duties”.  
Incompetence as grounds for dismissal needs to be considered in light of the ''Human Rights Code'' and the ''bona fide'' occupational requirement (“BFOR”) test (see ''British Columbia (Public Service Employee Relations Commission) v British Columbia Government and Service Employees’ Union'' (BCGSEU), [1999] 3 SCR 3). In a case of poor employee performance, the ESB will not find just cause for dismissal unless the employer can demonstrate a “neglect of duties”.  


==== c) Dishonesty ====
==== c) Dishonesty ====


Dishonesty must be proven on a balance of probabilities and the burden rests with the employer (''Hanes v Wawanesa Insurance Company'', [1963]  SCR 154). The employer must show that the employee intentionally and deceitfully engaged in the misconduct. Failure by the employer to prove  dishonesty may lead to punitive damages. Dishonesty may be a cause for dismissal, especially if it indicates an untrustworthy character or is  seriously prejudicial to the employer’s interests or reputation (''Jewitt v Prism Resources'' (1981), 127 DLR (3d) 190 (BCCA)). In ''McKinley v BC Tel'', [2001] 2 SCR 161, the Supreme Court used a contextual approach. The test is whether the dishonesty violates an essential condition of the employment contract, breaches the faith inherent to the work relationship or is fundamentally or directly inconsistent with the employee’s  obligations to his or her employer. An effective balance must be struck between the severity of the misconduct and the sanction imposed.  
Dishonesty must be proven on a balance of probabilities and the burden rests with the employer (''Hanes v Wawanesa Insurance Company'', [1963]  SCR 154). The employer must show that the employee intentionally and deceitfully engaged in the misconduct. Failure by the employer to prove  dishonesty may lead to punitive damages. Dishonesty may be a cause for dismissal, especially if it indicates an untrustworthy character or is  seriously prejudicial to the employer’s interests or reputation (''Jewitt v Prism Resources'' (1981), 127 DLR (3d) 190 (BCCA)). In ''McKinley v BC Tel'', [2001] 2 SCR 161, the Supreme Court of Canada used a contextual approach to make this assessment. The test is whether the dishonesty violates an essential condition of the employment contract, breaches the faith inherent to the work relationship or is fundamentally or directly inconsistent with the employee’s  obligations to his or her employer. An effective balance must be struck between the severity of the misconduct and the sanction imposed.  


==== d) Intoxication ====
==== d) Intoxication ====


Depending on the extent of intoxication and degree of prejudice to the employer, intoxication may be a cause for dismissal (''Armstrong v Tyndall Quarry Co'' (1910), l6 WLR 111 (Man KB)). But, intoxication in itself is not grounds for dismissal. The courts look at all relevant factors, particularly work record  through previous years and whether the position is safety sensitive. Courts may be sympathetic to alcohol abusers especially if they are long-term employees (''Robinson v Canadian Acceptance Corp Ltd'' (l974), 47 DLR (3d) 417 (NSCA)).
Depending on the extent of intoxication and degree of prejudice to the employer, intoxication may be a cause for dismissal; see ''Armstrong v Tyndall Quarry Co'' (1910), 16 WLR 111 (Man KB). But, intoxication in itself is not grounds for dismissal. The courts should undertake a contextual approach, per McKinley, look at all relevant factors (i.e., work history, discipline history, and whether the position is safety sensitive. Courts may be sympathetic to alcohol abusers especially if they are long-term employees; see ''Robinson v Canadian Acceptance Corp Ltd'' (l974), 47 DLR (3d) 417 (NSCA).


Consider whether the intoxication is part of a larger substance abuse issue. If so, the employee may have a Human Rights claim (see [[Introduction to Human Rights (6:I) | Chapter 6: Human Rights]] and the duty to accommodate).
Consider whether the intoxication is part of a larger substance abuse issue. If so, the employee may have a Human Rights claim (see [[Introduction to Human Rights (6:I) | Chapter 6: Human Rights]] and the duty to accommodate).
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==== b) Condonation ====
==== b) Condonation ====


If an employer’s behaviour indicates that they are overlooking conduct which gives cause, that employer cannot later dismiss the employee without new cause  arising (''McIntyre v Hockin'' (1889), l6 OAR 498 (CA)). This applies only where the employer knows of the conduct. The employer is entitled to reasonable time to decide whether to take action, and this reasonable time period commences at the time that the employer learns of the employee’s conduct.  
If an employer’s behaviour indicates that they are overlooking conduct which gives cause, that employer cannot later dismiss the employee without new cause arising; see (McIntyre v Hockin (1889), 1l6 OAR 498 (CA)). This applies only where the employer knows of the conduct. The employer is entitled to reasonable time to decide whether to take action, and this reasonable time period commences at the time that the employer learns of the employee’s conduct.


Behaviour by the employer constituting condonation may include actions or omissions such as failing to dismiss the employee within a reasonable time (''Benson v. Lynes United Services Ltd'', [1979] AJ No 724), tolerating an employee’s behaviour without reprimand (''Johnston v General Tire Canada Ltd'', [1985] OJ No 98), giving the employee a raise (''SS v. Port Alberni Friendship Center'', [2000] BCJ No 608), or giving the employee a promotion (''Miller v Wackenhut of Canada Ltd'', [1989] OJ No 1993).  
Behaviour by the employer constituting condonation may include actions or omissions such as failing to dismiss the employee within a reasonable time (Benson v. Lynes United Services Ltd, [1979] 18 A.R. 328), tolerating an employee’s behaviour without reprimand (Johnston v General Tire Canada Ltd, [1985] OJ No 98), giving the employee a raise (SjervenS v. Port Alberni Friendship Center, [2000] BCJ No 608), or giving the employee a promotion (Miller v Wackenhut of Canada Ltd, [1989] OJ No 1993).


If an employer learns of an employee’s misconduct after dismissing the employee, the employer may use that misconduct to justify the dismissal for cause. However, if the employer already knew of the employee’s misconduct, but terminated the employee without alleging cause or gave the employee a letter of reference, in some cases the employer has been held to be estopped from alleging cause or has been taken to have condoned the employee’s misconduct. However, there is conflicting case law on this subject and many cases have held that the employer may still allege cause.
If an employer learns of an employee’s misconduct after dismissing the employee, the employer may use that misconduct to justify the dismissal for cause.  This can be referred to as after-acquired cause.   


According to some case law, past misconduct that has been condoned may be revived by new instances of misconduct, and the employer may then use the cumulative effect of the past and the new misconduct to justify dismissal. However, this is an area with conflicting case law. If the employer has warned the employee about the past misconduct, there would not be an issue regarding the revival of the past misconduct, as it would not have been condoned in the first place;  the cumulative effect of the misconduct could then be used to justify dismissal.  
However, if the employer already knew of the employee’s misconduct, but terminated the employee without alleging cause or gave the employee a letter of reference, in some cases the employer has been held to be estopped from alleging cause or has been taken to have condoned the employee’s misconduct. However, there is conflicting case law on this subject and many cases have held that the employer may still allege cause. See Smith v Pacific Coast Terminals, 2016 BCSC 1876; Technicon Industries Ltd v Woon, 2016 BCSC 1543.


The employee carries the burden of proving the condonation (''Perry v Papillon Restaurant'' (1981), 8 ACWS (2d) 216).


=== 7. Redundancy and Layoff ===
=== 7. Redundancy and Layoff ===
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=== 8. Probationary Employees ===
=== 8. Probationary Employees ===


The ''Employment Standards Act'' does not require any payment for length of service during the first three months of employment.  
The Employment Standards Act does not require any payment for length of service during the first three months of employment (s 63). 
 
However, if no probationary period is expressly specified in the employment contract, then the employee may still be entitled to reasonable notice at common law.  The dismissed probationary employee could file a claim in Small Claims Court for wrongful dismissal.
 
In British Columbia, there is a developing judicial trend towards extending the right to be treated fairly to probationary employees.  The test in British Columbia for terminating probationary employees is that of suitability, not just cause, as set forth in ''Jadot v Concert Industries'', [1997] BCJ No 2403 (BCCA).  In determining suitability, the case of ''Geller v Sable Resources Ltd'', 2012 BCSC 1861, explained that the probationary employee must be given a chance to meet the standards that the employer set out when the employee was hired; the employer cannot begin imposing new standards afterwards.


However, if no probationary period is expressly specified in the employment contract, then the employee may still be entitled to reasonable notice at common law. The dismissed probationary employee could file a claim in Small Claims Court for wrongful dismissal.  
In ''Ly v. British Columbia (Interior Health Authority)'', 2017 BCSC 42, the Court held that if a company wants to fire an employee on probation, it should give the employee a fair chance to prove he or she can do the job. Otherwise, it may owe severance.


In British Columbia, there is a developing judicial trend towards extending the right to be treated fairly to probationary employees. The test in British  Columbia for terminating probationary employees is that of suitability, not just cause, as set forth in ''Jadot v Concert Industries'', [1997] BCJ No 2403, (BCCA). In determining suitability, the case of ''Geller v Sable Resources Ltd'', 2012 BCSC 1861 explained that the probationary employee must be given a chance to meet the standards that the employer set out when the employee was hired; the employer cannot begin imposing new standards afterwards.  
In order to give an employee a fair chance to prove he or she can do the job, companies should do the four following things.  
 
*1. Make the employee aware of how he or she will be assessed during the probation period.
*2. Give the employee a reasonable chance to demonstrate his suitability. 
*3. Think about the employees suitability based not only on work performance but also on personal characteristics such as compatibility and reliability. 
*4. Act fairly and with reasonable diligence in assessing suitability.


=== 9. Near Cause ===
=== 9. Near Cause ===
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In some circumstances, an employer can make fundamental changes to the terms of an employee’s employment in such a way that the employee may be forced to leave their job.  This is called “constructive dismissal”, and an employee who is constructively dismissed is entitled to the same benefits as if he were fired without cause.
In some circumstances, an employer can make fundamental changes to the terms of an employee’s employment in such a way that the employee may be forced to leave their job.  This is called “constructive dismissal”, and an employee who is constructively dismissed is entitled to the same benefits as if he were fired without cause.


If the employer makes a fundamental, unilateral change in the employment contract, it may amount to constructive dismissal. Changes to a “fundamental term of  the contract” includes changes such as: significant reduction in salary, a significant change in benefits, a significant change in job content or status, or a job transfer to a different geographic location if such a transfer is not a normal occurrence or contemplated in the employment contract. Generally, a  reduction in pay of more than 10% may result in a constructive dismissal.   
If the employer makes a fundamental, unilateral change in the employment contract, it may amount to constructive dismissal. Changes to a “fundamental term of  the contract” includes changes such as: significant reduction in salary, a significant change in benefits, a significant change in job content or status, or a job transfer to a different geographic location if such a transfer is not a normal occurrence or contemplated in the employment contract. Generally, a  reduction in pay of more than 10% may result in a constructive dismissal.  See ''Price v 481530 BC Ltd et al'', 2016 BCSC 1940.


The imposition of a temporary layoff, where not provided for in the contract, has also been deemed to constitute constructive dismissal (see [[{{PAGENAME}}#7. Redundancy and Layoff | Section V.C.7: Redundancy and Layoff]] for details).  
The imposition of a temporary layoff, where not provided for in the contract, has also been deemed to constitute constructive dismissal (see [[{{PAGENAME}}#7. Redundancy and Layoff | Section V.C.7: Redundancy and Layoff]] for details).  
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The basis for these additional damages is a breach of the implied term of an employment contract that employers will act in good faith in the manner of dismissal. In ''Honda Canada Inc v Keays'', 2008 SCC 39, the Supreme Court of Canada held that any such additional award must be compensatory and must be  based on the actual loss or damage suffered by the employee, which can include mental distress stemming from the manner of dismissal. However, normal distress and hurt feelings arising from the dismissal itself are not grounds for additional damages.
The basis for these additional damages is a breach of the implied term of an employment contract that employers will act in good faith in the manner of dismissal. In ''Honda Canada Inc v Keays'', 2008 SCC 39, the Supreme Court of Canada held that any such additional award must be compensatory and must be  based on the actual loss or damage suffered by the employee, which can include mental distress stemming from the manner of dismissal. However, normal distress and hurt feelings arising from the dismissal itself are not grounds for additional damages.


Prior to the ''Honda v Keays'' decision, damages awarded where the employer had acted in bad faith were assessed by simply extending the notice period to  which the employee would otherwise be entitled. This practice was based on the Supreme Court of Canada’s decision in ''Wallace v United Grain Growers Ltd'', [1997] 3 SCR 701, and the awards were informally known as “Wallace Damages”. Following the ''Honda v Keays'' decision, the practice of assessing damages by extending the notice period is no longer to be used. Now, one must prove what actual losses or mental harm the employee incurred, and the employee is then compensated for those actual losses or mental distress.
Prior to the ''Honda v Keays'' decision, damages awarded where the employer had acted in bad faith were assessed by simply extending the notice period to  which the employee would otherwise be entitled. This practice was based on the Supreme Court of Canada’s decision in ''Wallace v United Grain Growers Ltd'', [1997] 3 SCR 701, and the awards were informally known as “Wallace Damages”. Following the ''Honda v Keays'' decision, the practice of assessing damages by extending the notice period is no longer to be used. Now, one must prove what actual losses or mental harm the employee incurred, and the employee is then compensated for those actual losses or mental distress. See ''Strudwick v Applied Consumer & Clinical Evaluations Inc.'', 2016 ONCA 520.
 
'''(1) Bad Faith Performance of Contracts'''


What constitutes “bad faith” is for the courts to decide, and has in the past centred on deception and dishonesty. Mere “peremptory” treatment is not sufficient: see, for example, ''Bureau v KPMG Quality Registrar Inc'', [1999] NSJ No. 261 (NSCA). Sexual harassment has been held not to give rise to additional damages (''Chiang v Kejo Holdings Ltd'', 2005 BCSC 414). See, however, ''Sulz v Minister of Public Safety and Solicitor General'', 2006 BCCA 582 where punitive damages were awarded for sexually harassing conduct in the employment context. “Bad faith” has been found in cases the  following cases:
What constitutes “bad faith” is for the courts to decide, and has in the past centred on deception and dishonesty. Mere “peremptory” treatment is not sufficient: see, for example, ''Bureau v KPMG Quality Registrar Inc'', [1999] NSJ No. 261 (NSCA). Sexual harassment has been held not to give rise to additional damages (''Chiang v Kejo Holdings Ltd'', 2005 BCSC 414). See, however, ''Sulz v Minister of Public Safety and Solicitor General'', 2006 BCCA 582 where punitive damages were awarded for sexually harassing conduct in the employment context. “Bad faith” has been found in cases the  following cases:
i) where the employer lied to the employee about the reason for dismissal (see ''Duprey v Seanix Technology (Canada) Inc'', 2002 BCSC 1335, where an employer told a commissioned employee he was being released due to financial hardship,  when it was found he was being released so the employer would not have to pay owed commission);
ii) where an employer has deceived the employee  about representations of job security (''Gillies v Goldman Sachs Canada'', 2001 BCCA 683);
iii) where a senior employee was induced to leave  his position under the promise of job leading to retirement; and
iv) where an employer promised an employee he would keep his job after a  merger, although he knew differently (''Bryde v Liberty Mutual'', 2002 BCSC 606). In one case, a response by employer’s counsel to an  employee’s counsel containing an allegation of just cause where none existed was held not to constitute bad faith (''Nahnychuk v Elite Retail Solutions Inc'', 2004 BCSC 746). However, in another province, a letter threatening to allege just cause where none existed, for the purpose of  forcing a settlement, even though just cause was not plead in court, was held to give rise to additional damages (''Squires v Corner Brook Pulp and Paper Ltd'', [1999] NJ No 146 (Nfld CA)).


(1) Good faith performance of Contracts
*i) where the employer lied to the employee about the reason for dismissal (see ''Duprey v Seanix Technology (Canada) Inc'', 2002 BCSC 1335, where an employer told a commissioned employee he was being released due to financial hardship,  when it was found he was being released so the employer would not have to pay owed commission);
*ii) where an employer has deceived the employee  about representations of job security (''Gillies v Goldman Sachs Canada'', 2001 BCCA 683);
*iii) where a senior employee was induced to leave  his position under the promise of job leading to retirement; and
*iv) where an employer promised an employee he would keep his job after a  merger, although he knew differently (''Bryde v Liberty Mutual'', 2002 BCSC 606). In one case, a response by employer’s counsel to an  employee’s counsel containing an allegation of just cause where none existed was held not to constitute bad faith (''Nahnychuk v Elite Retail Solutions Inc'', 2004 BCSC 746). However, in another province, a letter threatening to allege just cause where none existed, for the purpose of  forcing a settlement, even though just cause was not plead in court, was held to give rise to additional damages (''Squires v Corner Brook Pulp and Paper Ltd'', [1999] NJ No 146 (Nfld CA)); and,
*v) where an employer has made false accusations about the employee at the time of dismissal.  See Price v 481530 BC Ltd et al, 2016 BCSC 1940, where an employer dismissed an employee on the basis of false allegations of dishonesty contributing to the creation of a hostile work environment and ultimately his constructive dismissal.
 
'''(2) Good Faith Performance of Contracts'''


The Supreme Court of Canada affirmed the principle of good faith performance of contracts and its creation of the new common law duty of honesty in contractual performance in ''Bhasin v Hrynew'', 2014 SCC 71.   
The Supreme Court of Canada affirmed the principle of good faith performance of contracts and its creation of the new common law duty of honesty in contractual performance in ''Bhasin v Hrynew'', 2014 SCC 71.   
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If the employee has suffered any of the following situations through the employer’s conduct, consider claiming for punitive damages:
If the employee has suffered any of the following situations through the employer’s conduct, consider claiming for punitive damages:
*Defamation  
 
*Malicious prosecution, if the employer maliciously instigates criminal proceedings against an employee (''Teskey v Toronto Transit Commision'', 2003 OJ No 4547)  
*Defamation
*Duress
*Malicious prosecution, if the employer maliciously instigates criminal proceedings against an employee (Teskey v Toronto Transit Commision, 2003 OJ No 4547)
*Interference with the employee’s compensation  
*Duress  
*Flawed investigation of alleged employee misconduct  
*Interference with the employee’s compensation
*Unproven alleged cause  
*Flawed investigation of alleged employee misconduct
*Constructive dismissal  
*Unproven alleged cause
*Demotion  
*Constructive dismissal
*Sexual harassment  
*Demotion
*Unsafe or unhealthy work environment  
*Sexual harassment
*Oppression (if the employee is also a shareholder of the corporation)  
*Unsafe or unhealthy work environment
*Inducement to resign, for example by offering a letter of reference only if the employee resigns (''Vernon v British Columbia (Liquor Distribution Branch)'', 2012 BCSC 133).
*Oppression (if the employee is also a shareholder of the corporation)
*Misrepresentations by the employer  
*Inducement to resign, for example by offering a letter of reference only if the employee resigns (Vernon v British Columbia (Liquor Distribution Branch), 2012 BCSC 133)
*Employer’s behaviour before, during, or after the dismissal  
*Misrepresentations by the employer
*Breach of the employee’s privacy  
*Employer’s behaviour before, during, or after the dismissal
*Insensitivity to an employee’s pregnancy  
*Breach of the employee’s privacy
*Physical or verbal assault or abuse  
*Insensitivity to an employee’s pregnancy
*Interference with trade unions  
*Physical or verbal assault or abuse
*Any independent causes of action  
*Interference with trade unions
*Being “mean and cheap in trying to get rid of an employee” as ''Gordon v. Altus'', 2015 ONSC 5663
*Any independent causes of action
*Unduly insensitive treatment during attempts to exercise rights to contract renegotiation” ''Pepin v. Telecommunications Workers Union'', 2016 BCSC 790.  
*Being “mean and cheap in trying to get rid of an employee” (''Gordon v. Altus'', 2015 ONSC 5663)
*Unduly insensitive treatment during attempts to exercise rights to contract renegotiation (''Pepin v. Telecommunications Workers Union'', 2016 BCSC 790; overturned on appeal, 2017 BCCA 194, and remitted back to the BCSC for a new trial)
*The tort of intentional infliction of mental distress (''Strudwick v Applied Consumer & Clinical Evaluations Inc.'', 2016 ONCA 520).


==== c) Workplace Investigations ====
==== c) Workplace Investigations ====


Workplace investigations into misconduct must be carried out in a good faith manner without bias. Unfair process may entitle an employee to aggravated or punitive damages.  
Workplace investigations into misconduct must be carried out in a good faith manner without bias. Unfair process may entitle an employee to aggravated or punitive damages.


A flawed workplace investigation followed by a dismissal can attract aggravated damages.  ''Lau v. Royal Bank of Canada'', 2015 BCSC 1639, aggravated damages of $30,000. ''Kong v. Vancouver Chinese Baptist Church'', 2015 BCSC 1328, aggravated damages of $30,000.  ''George v. Cowichan Tribes'', 2015 BCSC 513 aggravated damages of $35,000.
A flawed workplace investigation followed by a dismissal can attract aggravated damages; see ''Lau v. Royal Bank of Canada'', 2015 BCSC 1639; ''Kong v. Vancouver Chinese Baptist Church'', 2015 BCSC 1328; and ''George v. Cowichan Tribes'', 2015 BCSC 513.


=== 14. Duty to Mitigate ===
=== 14. Duty to Mitigate ===
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==== a) Common Law ====
==== a) Common Law ====


Claimants in civil court should be aware that an employee has a common law duty to mitigate his or her losses. The employee need only take reasonable steps to do so; searching for similar work is sufficient.  
Claimants in civil court should be aware that an employee has a common law duty to mitigate his or her losses. An employee does not have to take every action possible to mitigate; instead, reasonable effort is required; see ''Gust v Right-of-Way Operations Group Inc.'', 2016 BCSC 1527.  Searching for similar work is sufficient.  For a discussion of the relevant legal test for mitigation, see ''James v The Hollypark Organization Inc.'', 2016 BCSC 495.


Because of the requirement to mitigate, the employee may have to take another job the employer offers, as long as the new job is not at a lower level than the previous one, and the change does not amount to constructive dismissal. Similarly, a dismissed employee may have to accept an employer’s offer to work through the notice period (''Evans v Teamsters Local Union'', 2008 SCC 20). Retraining may be considered part of mitigation if it is to enter a job field with better prospects. This applies where an employee tries and fails to obtain alternate suitable employment (''Cimpan v Kolumbia Inn Daycare Society'', [2006] BCJ No 3191).
Because of the requirement to mitigate, the employee may have to take another job the employer offers, as long as the new job is not at a lower level than the previous one, and the change does not amount to constructive dismissal. Similarly, a dismissed employee may have to accept an employer’s offer to work through the notice period (''Evans v Teamsters Local Union No 31'', 2008 SCC 20). Retraining may be considered part of mitigation if it is to enter a job field with better prospects. This applies where an employee tries and fails to obtain alternate suitable employment (''Cimpan v Kolumbia Inn Daycare Society'', [2006] BCJ No 3191).


In many cases, the duty to mitigate may require a constructively dismissed employee to stay on the job while seeking other employment (''Cayen v Woodwards Stores Ltd'' (1993), 75 BCLR (2d) 110 (CA)).  
In many cases, the duty to mitigate may require a constructively dismissed employee to stay on the job while seeking other employment (''Cayen v Woodwards Stores Ltd'' (1993), 75 BCLR (2d) 110 (CA)).  


An employee does not have to take every action possible to mitigate. Employees are not required to return to a position where the fundamental terms of their job have changed or where they have been maligned such that the relationship cannot be restored. Accusations of dishonesty in negotiations or radically limited and uncertain terms in offers may result in reemployment being found to be unreasonable. The employee is not expected to act in the employer’s best interest to the detriment of their own interests. For example, if an employee was ill at the time of dismissal they are not required to make strenuous efforts to find new employment. Similarly, an employee in the late stages of pregnancy may  not be required to seek new employment until several months after the birth of their child. The employee’s perception of what is reasonable is  usually given more weight than that of the employer.   
Employees are not required to return to a position where the fundamental terms of their job have changed or where they have been maligned such that the relationship cannot be restored. Accusations of dishonesty in negotiations or radically limited and uncertain terms in offers may result in reemployment being found to be unreasonable. The employee is not expected to act in the employer’s best interest to the detriment of their own interests. For example, if an employee was ill at the time of dismissal they are not required to make strenuous efforts to find new employment. Similarly, an employee in the late stages of pregnancy may  not be required to seek new employment until several months after the birth of their child. The employee’s perception of what is reasonable is  usually given more weight than that of the employer.   
 
An employee’s failure to take accept a job in the course of looking for employment may not mean they failed meet the requirements of mitigation if they were overqualified for the job; see ''Luchuk v Starbucks Coffee Canada Inc.'', 2016 BCSC 830.


In a legal dispute, the onus of proof as to whether the claimant former employee has properly taken efforts to mitigate their damages generally falls on the defendant former employer.
In a legal dispute, the onus of proof as to whether the claimant former employee has properly taken efforts to mitigate their damages generally falls on the defendant former employer.
LSLAP
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