Earlier this year, the Ontario Superior Court of Justice rendered its decision in Teljeur v. Aurora Hotel Group. This case, which involved an otherwise fairly standard claim for wrongful dismissal, is notable in that the plaintiff had surreptitiously recorded his termination meeting and was able to rely on that recording as evidence in the course of the litigation, leading to a fairly significant award of moral damages stemming from his former employer’s conduct in the manner of his dismissal.
The plaintiff was employed as the General Manager of the Pinestone Resort & Conference Centre (“Pinestone”), a full service resort and golf course operated by the defendants. On December 6, 2021, he attended a meeting with Pinestone executives where he was advised that his employment was being terminated on a without cause basis. Sometime thereafter, he commenced an action against the defendants and brought a motion for summary judgment seeking:
- A declaration that the defendants are common employers and are therefore jointly responsible for any damages awarded in the action,
- Damages for wrongful dismissal based on a reasonable notice period of 10 months,
- Damages for loss of fringe benefits equivalent to 10% of any damages awarded for reasonable notice,
- Reimbursement of out-of-pocket expenses incurred on behalf of his former employer totalling over $16,000, and
- Moral damages for breach of the duty of good faith and fair dealing in the manner of his dismissal in the sum of $20,000.
The defendants conceded that they were jointly liable for any damages awarded to the plaintiff, and that the out-of-pocket expenses claimed were in fact owed to him. However, they asserted that any damages awarded on account of reasonable notice – which they assessed to be in the range of 3.5 to 5 months – should be reduced based on what they alleged was the plaintiff’s failure to properly mitigate his damages. They also denied that any damages should be awarded for loss of fringe benefits or for breach of the duty of good faith and fair dealing.
In his decision, Justice McKelvey began by determining what period of reasonable notice was owed to the plaintiff. In doing so, he considered the plaintiff’s age (56 years old), the length of his employment (just over 3 years), the character of his employment (senior management), and the challenging circumstances he had faced in finding new employment, which were speculated to be likely due, at least in part, to the COVID-19 pandemic. In the end, he assessed the reasonable notice period at 7 months. He also concluded that it was reasonable to make an additional damages award equivalent to 10% of the damages awarded for reasonable notice for the plaintiff’s loss of fringe benefits during the period of reasonable notice, in keeping with other similar Ontario decisions on the issue.
With respect to the plaintiff’s duty to mitigate his damages by seeking alternate employment, the defendants raised three issues. First, they alleged that the plaintiff had not made sufficient efforts to obtain alternate employment, as his efforts were primarily limited to updating his accounts with Indeed, Zip Recruiter and LinkedIn, as well as spending a few minutes per day reviewing job alerts and postings from these websites. Second, they alleged that the plaintiff’s job search was made more difficult as a result of his decision to make several social media posts complaining about Pinestone and his former employer. Finally, they alleged that the plaintiff – who also held a real estate license – had failed to follow up on an opportunity provided by the defendants during the termination meeting to assist them in locating properties for them to purchase. Despite the defendants’ arguments, however, Justice McKelvey held that there was no evidence that a better job search effort by the plaintiff could have resulted in him obtaining other similar employment, nor to support such an inference. Moreover, even assuming the plaintiff’s work as a real estate agent could have served as mitigation earnings, he held that there was no evidence with respect to how much could have been earned by the plaintiff on that account. Accordingly, he concluded that there was simply no basis on which to justify a reduction of the wrongful dismissal damages award for failure to mitigate.
Finally, Justice McKelvey determined that an additional award of damages for breach of the duty of good faith and fair dealing in the manner of dismissal was warranted in the circumstances. He reached that conclusion based on the contents of a recording that had been surreptitiously made by the plaintiff during his termination meeting. More specifically, the recording highlighted to the court that:
- During the termination meeting, the plaintiff had repeatedly asked the defendants’ representatives to provide him with written notice of his termination and, although they had agreed to do so and were in fact required to do so pursuant to the Employment Standards Act (“ESA”), they ultimately did not comply with his request,
- The defendants had failed to deliver to the plaintiff his statutory entitlements within 7 days of the end of his employment or the next pay day, in violation of the ESA,
- The defendants had altered a term or condition of the plaintiff’s employment during the statutory notice period by failing to reimburse his out-of-pocket expenses as promised during the termination meeting, also in violation of the ESA,
- During the termination meeting, the defendants had promised to provide the plaintiff with 8 weeks of severance pay, but then subsequently limited the amount paid to him to the statutory minimum, and
- During the termination meeting, the defendants had attempted to persuade the plaintiff to resign, alleging that he would be “better off” if he did so.
Justice McKelvey concluded that, collectively, these actions on the part of the defendants were untruthful, misleading or unduly insensitive, and constituted a breach of the duty of good faith and fair dealing in the manner of dismissal. He further concluded that it would have been within the reasonable contemplation of the defendants that their manner of dismissal would cause the plaintiff mental distress, and accepted the plaintiff’s evidence that it did. Although he did not award the full $20,000 claimed by the plaintiff, Justice McKelvey did award an additional $15,000 in moral damages stemming from the defendants’ conduct surrounding the plaintiff’s dismissal.
In Our View
Employers owe a duty of good faith and fair dealing to employees whose employment is being terminated. This case highlights the importance of upholding that duty and the costly consequences of failing to do so, particularly in jurisdictions like Ontario where a surreptitious recording could potentially be made and used as evidence against an employer in the event of litigation.