Saturday, 10 January 2015

Judge Finds it Reasonable for Employee to Refuse to Return to "A Good Place to Work"

Under what set of circumstances will an Ontario Superior Court judge say that it is “reasonable” for an employee to refuse to return to work for the employer that dismissed her as a means of mitigating her damages?

The law concerning the duty to mitigate is rather clear; employees who are dismissed by their employers have a duty to mitigate their damages and may be required to return to work for the employer that dismissed them in order to do so. However, as the Supreme Court of Canada observed in the case of Evans v. Teamsters Local Union No. 31, [2008] 1 SCR 661, 2008 SCC 20:

[30] The critical element is that an employee “not [be] obliged to mitigate by working in an atmosphere of hostility, embarrassment or humiliation” and it is that factor which must be at the forefront of the inquiry into what is reasonable. Thus, although an objective standard must be used to evaluate whether a reasonable person in the employee’s position would have accepted the employer’s offer, it is extremely important that the non-tangible elements of the situation — including work atmosphere, stigma and loss of dignity, as well as nature and conditions of employment, the tangible elements — be included in the evaluation.

But what exactly is “an atmosphere of hostility, embarrassment or humiliation”? In the case of Turner v. Inndirect Enterprises Inc. (2009), 2009 CarswellOnt 9666, [2009] O.J. No. 6345, 87 C.C.E.L. (3d) 306 (ON SC) affd 2011 ONCA 97 the Honourable Justice David Salmers said that a culmination of seemingly common factors created such an atmosphere. It is an interesting read.

Facts

The case concerned an employee with 19 years of experience. According to Justice Salmers’ reasons for decision, which were delivered orally, the evidence established that the employer’s business was struggling and was under pressure from its bank to reduce expenses.

Curiously, Justice Salmers found that prior to her termination the plaintiff, Mrs. Linda Turner, had a very positive working relationship with her employer. There is nothing to indicate that the working environment was anything even close to “hostile or embarrassing” before the termination.

On September 13, 2007, the employer told Mrs. Turner that her employment of 19 years was ending. There was some ambiguity as to whether the employer told her that she was being let go or whether it told her it was a lay-off, but Mrs. Turner was sure that she was told she was being let go. On September 27, 2007, the employer clarified that it was lay-off and extended her last day of employment to October 15, 2007.

On Mrs. Turner's last day of work, management said nothing to her upon her departure.

On February 13, 2008, Mr. Turner’s lawyer sent the employer a letter advising it of her claim for damages for the manner in which she was dismissed. On February 25, 2008, the employer sent Mrs. Turner a letter recalling her to work as of February 26, 2008 at 9:00 a.m. Mrs. Turner did not return to work, but rather sued for severance pay in lieu of notice.

Decision

As framed by Justice Salmers, the first issue that the court had to resolve was “Whether Mrs. Turner should have returned to work on February 26, 2008 as part of her duty to mitigate damages.”

On that point Justice Salmers made the following observations:

[22] Inndirect Enterprises was a small business. It had only 13 employees, including management. On all of the evidence, Mrs. Turner did her job very well. Only she and Ms. Mayers were terminated. More junior employees kept their jobs. Any reasonable person who does their job well and is terminated nonetheless in similar circumstances, would reasonably be upset and possibly embarrassed and/or humiliated.

[23] Mrs. Turner was very upset by being terminated. She had worked for Inndirect for 19 years. By all accounts it was a good place to work. She had a close working relationship with Mr. Rademacher [the company president] that included personal interest in each other's families. Prior to the September 13, 2007 meeting there was no evidence that Mrs. Turner was or should have been aware of the company's financial difficulties. Any reasonable person in these circumstances would have been very upset to suddenly be told that his/her job was over because of their employer's financial difficulties.

[25] … When she left on October 15, 2007 nobody from management said anything to her. There was no obligation for management to say anything to Mrs. Turner, and management did nothing wrong in doing so. But, it is also not surprising that a long time employee like Mrs. Turner, who had a close working relationship with management, particularly with Mr. Rademacher, might feel unappreciated, uncared for, and upset by having her employment end in such a manner.

[36] More than once the company and Mr. Rademacher changed their position about the nature of the end of her employment, before finally suddenly recalling her to work on February 25, 2008, approximately five months after first telling her that she was being let go. Although no court action had yet been commenced, the February 25, 2008 letter advising of that recall to work was sent after Inndirect received a letter from counsel retained by Mrs. Turner to represent her with respect to her termination. The February 25, 2008 letter was Inndirect's first indication to Mrs. Turner that she was definitely being recalled to work. It was reasonable for her to believe that she was being recalled only because of the threat of litigation, not because she was really wanted or needed at Inndirect.

There was a second issue concerning the employer’s representation in its request that Mrs. Turner return to work that can really only be explained by reviewing Justice Salmers’ findings in full:

[31] There was no further contact between Mrs. Turner and Inndirect until after Mrs. Turner had retained counsel with respect to seeking compensation for her damages suffered as a result of her termination. On February 13, 2008 her lawyer sent a letter to Inndirect advising of Mrs. Turner's claim for damages and that to that date Mrs. Turner had received no word from Inndirect about her return to work. After reviewing the February 13, 2008 letter with counsel, Inndirect's lawyer replied by a letter dated February 25, 2008. The February 25, 2008 letter contained a statement that Inndirect had left a voicemail for Mrs. Turner on January 4, 2008, and that in the voicemail Inndirect had asked Mrs. Turner to call to discuss a return to work. The February 25, 2008 letter also advised Mrs. Turner to return to work on February 26, 2008.

[32] Mrs. Turner denied that any such voicemail had been received. It was not until the summer of 2009 that Mr. Rademacher acknowledged that no call had taken place on January 4, 2008. He did, however, maintain that in his December 27, 2007 voicemail (discussed earlier) he had asked Mrs. Turner to call him to discuss her return to work. For the reasons discussed earlier, I am not able to find that he left such a message during his December 27, 2007 voicemail to Mrs. Turner.

[33] Mrs. Turner was so incensed by the allegation with respect to a January 4, 2008 voicemail that on February 25, 2008 she withdrew her earlier advice to Inndirect that she was ready to return to work at any time. Mr. Rademacher was President of Inndirect, and on the evidence I find that he was the guiding mind involving and behind all of Inndirect's actions regarding Mrs. Turner's termination. Given this finding, and all of the other evidence, it is reasonable and I further find that Mrs. Turner believed from the February 25, 2008 letter that Mr. Rademacher was the person saying he had left a voicemail on January 4, 2008. It is reasonable that Mrs. Turner would be very hurt, probably humiliated, when Mr. Rademacher, a person with whom she had a close caring relationship, made allegations that were unfavourable to Mrs. Turner, and that also implied that Mrs. Turner was incorrectly stating important facts. Effectively, Inndirect's February 25, 2008 letter was saying that Mrs. Turner was misleading, dishonest, and possibly a liar. For that position to come from Mr. Rademacher must have been very hurtful, and it is reasonable and understandable that Mrs. Turner regarded it as the culminating incident that made it impossible for her to return to Inndirect.

After reviewing all of the evidence, Justice Salmers’ made the following decision:

[38] I have objectively considered all of these circumstances, the findings of fact, and all of the evidence. Having done so, I am satisfied that it was reasonable for Mrs. Turner to feel that if she returned to work after February 25, 2008 she would not be returning to a work situation and atmosphere similar to that described in paragraph 33 of Evans citing from Cox v. Robertson (1999), 69 B.C.L.R. (3d) 65 (B.C. C.A.) - that is, Mrs. Turner would not be returning to "a situation of mutual understanding and respect, and a situation where neither the employer nor the employee is likely to put the other's interests in jeopardy." It was reasonable for Mrs. Turner to think that returning to work would be embarrassing, humiliating, and hostile to her. Accordingly, I am satisfied that it would be reasonable for a reasonable person in Mrs. Turner's position to refuse the February 25, 2008 offer to return to work and, accordingly, that it was reasonable for Mrs. Turner to refuse the February 25, 2008 offer to return to work.

In the result, Justice Salmers awarded Mrs. Turner 18 months of pay in lieu of reasonable notice.

Commentary

It is difficult to not start this commentary by returning to Justice Salmers’ observation that “By all accounts it was a good place to work.” I have no doubt that given that finding the employer was somewhat shocked by the court’s finding that “It was reasonable for Mrs. Turner to think that returning to work would be embarrassing, humiliating, and hostile to her.” The two seem almost inherently inconsistent.

What is even more surprising is how routine Mrs. Turner’s termination was. The employer was in financial problems and was being pressured by its bank. Mrs. Turner was well paid and the employer ‘cut from the top.’ Although the employer had not told Mrs. Turner about these financial difficulties I am at a loss as to what duty it owed Mrs. Turner to do so.

I further have no doubt that her termination from employment came as a surprise to Mrs. Turner; most terminations do. But that fact alone should not, in my humble opinion, result in a finding that the employee would be reasonably embarrassed and/or humiliated. Upset? For sure, but humiliated? I don’t know. In making this comment I am reminded of what I said about the case of Brownson v. Honda of Canada Mfg., 2013 ONSC 896, summarized in the post Termination After Being Made the Subject of Workplace Investigation may Entitle Employee to Moral Damages :

What appears clear to me from Justice Eberhard’s decision is that she was prepared to accept that making someone the subject of suspicion before terminating his employment “without cause” could, potentially merit an award of moral damages. The impression left in the minds of the plaintiff’s coworkers was that he was fired for cause; the same of course being untrue. Honda’s actions were therefore clearly misleading.

Perhaps what the employer ‘did wrong’ in the Turner case was not say anything prior to Mrs. Turner’s termination about the company’s financial state. Perhaps the employer did owe Mrs. Turner a duty to tell its employees that it was under pressure from the bank to cut costs and that, as a result, good people would have to be let go. While there is undeniably and understandably upset at being let go because one’s employer cannot manage the company’s finances, being let go for such a reasonable should not result in any embarrassment; it was not the employee’s fault that she was let go – she had done nothing wrong.

Similarly, I am troubled by the incident concerning management’s failure to say anything to Mrs. Turner on her last day of work. As Justice Salmers observed, “There was no obligation for management to say anything to Mrs. Turner, and management did nothing wrong in doing so.” However, the same obviously factored into Justice Salmers’ finding that returning to Inndirect would have exposed Mrs. Turner to “an atmosphere of hostility, embarrassment or humiliation.” Why did not management say anything? While we do not know, the spectrum of possibilities runs from indifference to spite to, I suspect, embarrassment on the part of management. Management and Mrs. Turner knew each other, were involved in each other’s personal lives and were likely friends. It may have been very difficult for management to face Mrs. Turner on her last day of work. That is not to say that it was the correct decision to say nothing to her, but one can see how it could have happened. If anyone was to have been “embarrassed” on that date, surely it was the party who had failed to maintain the conditions necessary to keep a friend employed.

Turner is an excellent decision for employees. The Court of Appeal’s short endorsement of the decision, “The trial judge applied the proper test as set out in Evans v. Teamsters Union, 2008 SCC 20 (CanLII), 2008, SCC 20. And based on his findings of fact, which are supported by the evidence, the conclusion that the respondent did not have to return to work was correct.” only serves to bolster the credibility of the decision. That the trial decision is not presently on CanLII is both a little surprising and disappointing.

I will rely on Turner when acting for employees. While any one finding may not be enough, the combination of all the factors, taken together, do make a compelling point.

When acting for employers, however, the points in Turner must be read with caution. As I say above, I am not sure that any one point is sufficient. To put it another way, it was not one straw that broke the camel’s back; it was one straw too many.

Takeaways for Employees with Labour Pains

If you are a worker in Ontario and you have been let go from your job making sense of the duty to mitigate can be challenging. Employees who get it wrong can and have been awarded nothing. Therefore, before doing anything you should speak with an experienced employment lawyer.

The professional, experienced and cost-effective employment lawyers for employees at Ottawa's Kelly Santini LLP would be happy to be of service to you.

Takeaways for Employers with Labour Pains

There are several takeaways for employers from this case, not the least of which is that the management of the termination of an employee’s employment can be crucial. For nearly twenty years this employer had ‘got it right.’ “By all accounts it was a good place to work.” How then, in only five months, could the employer have thrown away all that goodwill?

Terminations are neither easy nor fun. Courts will demonstrably be sympathetic to employees in such cases and, as the Turner case demonstrates, ‘getting it right,’ can be harder than it looks. Say one wrong thing, get a date wrong in a letter, whatever, and it is all over.

The ability to have an employee work out his or her notice period is a powerful tool for employers; it allows employers to reap some benefit from their employees during the reasonable notice period. Had Inndirect simply advised Mrs. Turner of the company’s financial problems and provided her with 18 months of working notice, this whole case likely could have been avoided.

If you are an employer in Ontario and are considering, or are being asked, to let some of your employees go, it is likely worth the initial investment to speak with a lawyer before doing so. The professional, experienced and cost-effective employment lawyers for employers at Ottawa's Kelly Santini LLP would be happy to be of service to your business or organization.

Contact Me

To reach the author of this blog, Sean Bawden, email sbawden@kellysantini.com or call 613.238.6321 x260. You may also use the contact box at the top of this page.

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As always, everyone’s situation is different. The above is not intended to be legal advice for any particular situation. It is always prudent to seek professional legal advice before making any decisions with respect to your own case.

Sean Bawden, publisher of Labour Pains, can be reached by email at sbawden@kellysantini.com or by phone at 613.238.6321.

Sean P. Bawden is an Ottawa, Ontario employment lawyer and wrongful dismissal lawyer practicing with Kelly Santini LLP. He is also a part-time professor at Algonquin College teaching Trial Advocacy for Paralegals and Small Claims Court Practice.



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