ESA rights cannot be used as bargaining chips

A recent Ontario Superior Court of Justice decision reminds employers that they cannot mess around with minimum statutory rights when terminating someone’s position.

In Teljeur v. Aurora Hotel Group, 56-year-old John Teljeur was dismissed without cause after more than three years in a senior management role. Unknown to his employer, he surreptitiously recorded the discussion when he was being dismissed. That recording showed the company’s casual and callous approach to his basic rights as an employee, resulting in the firm paying him $15,000 in moral damages.

After a summary judgment motion hearing, the court held that the employer acted in an “untruthful, misleading or unduly insensitive manner,” and it listed “disturbing aspects” of the plaintiff’s termination.

These included:

• Teljeur was not given written notice of termination after he specifically asked for “something in writing” on at least three occasions. The judgment noted “there is no evidence” the company provided this letter, contrary to section 54 of the Employment Standards Act, 2000 (ESA) which requires employers to provide dismissed employees written notice of termination.
• Teljeur did not receive his ESA entitlements within seven days of the day employment ended or his regular payday, contrary to section 11(5) of the ESA. The court noted “that meant had to go through the holiday season without the benefit of any financial support from his employer.”
• Failing to reimburse Teljeur $16,680 for his incurred business expenses, as well as any interest on that money. The court ruled that “The principle amount in this case represents approximately 23 per cent of the plaintiff’s annual income and is a very significant financial burden for him to carry since the date of his termination, especially given that he has not been successful in obtaining alternate employment.”
• Assuring Teljeur that he would receive eight weeks of severance or additional pay, but instead limiting the amount paid to his ESA entitlement.
• Encouraging him to resign from his employment, saying “it is better off for you to do it.” As the court held, “It is not clear from the meeting whether the encouragement to resign was designed to limit the employer’s exposure in a wrongful dismissal claim. However, that possibility cannot be ruled out.”

Employee typically needed to prove ‘bad faith conduct’

Following the seminal Honda Canada Inc. v. Keays decision, to receive moral damages, an employee typically needed to prove employer “bad faith conduct” and something else, usually reputational harm or mental health harm, the latter backed up by medical evidence.

In Teljeur, the court ruled that the employers’ action were “untruthful, misleading or unduly insensitive. They constitute a breach by the employer of their duty of good faith and fair dealing in the manner in which the employee was dismissed.”

While the decision goes on to find a degree of mental distress, the reasoning suggests that the bad faith conduct alone, along with Teljeur’s simple description of the impact on him, was sufficient proof to warrant damages: “it would be within the reasonable contemplation of the employer that its manner of the dismissal would cause the employee mental distress … I am prepared to accept the plaintiff’s evidence that all of the factors enumerated above added significant stress to his life on top of the stress he was experiencing as a result of being terminated.”

While the judgment might suggest an almost automatic right to general damages and while some might criticize it for that, it should not require much more than the Plaintiff’s description of the impact of an employer’s actions to secure such damages.

Justification for the line of reasoning

There is justification for that line of reasoning, including:

• Statutory minimums are matters of public order, put in place because of the assumed hardship of not complying with such minima.
• At termination, ESA minimums provide immediate relief from potential poverty and the loss of health/medical coverage. Having immediate continued income and coverage and having it without question so employees can recover and look for work is essential to their well-being and should not require proof.
• ESA minimums are an absolute right. If an employer withholds them, they are essentially turning them into a bargaining chip, which is not fair. In prior decisions, courts have criticized employers who “offer” ESA minimums or offer to settle disputes when they should realize they are not theirs to “offer” but to give unconditionally.

This decision is another example of how damages can remedy “bad faith” when there is a casual or callous approach by the employer at termination with respect to an employee’s basic statutory rights.