Employers have a duty to pay adequate severance and treat employees fairly at all times leading up to termination. If the employer fails to do this then they are liable for increased damages in addition to severance pay. Employment relationships are not a one way street, poor conduct is poor conduct, regardless of whether it is the conduct of the employee or employer.

This was recently confirmed by an Ontario Court in the decision of Gordon v. Altus Group Limited where the employee was awarded $100,000.00 in addition to severance pay as a result of the employer’s “terrible” conduct at the time of termination.

Specifically, the Court found that the employer only alleged cause so that they could save money by dismissing the employee without paying severance. The employer argued that they terminated the employee due to poor workplace behavior, being involved in a conflict of interest, and hiring an individual who had been criminally charged. The Court found there was “no basis” for the employer’s allegations and that the employer “got mean and cheap” in trying to dismiss the employee. As a result of the employer’s “outrageous” conduct the employee was awarded $100,000.00 in punitive damages.

This is a landmark decision for all workers in Ontario as it confirms that an employer must treat all individuals fairly when they decide to terminate their employment. The following includes situations where a Court will penalize an employer and award additional damages when an employee is terminated:

POST TERMINATION CONDUCT

Employers cannot raise new allegations against an employee after they were terminated. For example, if an employer initially tells an individual they were terminated for business reasons, they are not able to then state that the employee was terminated for performance issues in order to save money. If they do this, the employee is entitled to increased damages.

FALSE ALLEGATIONS OF POOR CONDUCT

Employers cannot rely on false or unfounded allegations of misconduct as a way to avoid paying severance. If an employee has been terminated for serious misconduct (theft, dishonesty, etc.), and the employer does not complete a full and fair investigation, they are entitled to increased compensation in addition to severance pay. An employer cannot fabricate or fail to fully investigate a situation where serious misconduct is alleged – if they do, that employee is entitled to more.

Employers cannot conjure up a cause for firing an employee in order to save money. For example, an employer who purposely provides an employee with poor performance reviews as a way to terminate them for cause is liable for damages over and above the severance they already owe.

An employer must have a solid foundation upon which to terminate an employee without severance. This is extremely difficult for an employer to do. If you are terminated with little or no severance and not provided a satisfactory reason why, then you are eligible for additional damages.

WITHHOLDING MONEY

Employers cannot withhold money that is owed in order to pressure an employee to accept a poor severance package. If an employer withholds vacation pay, overtime pay, a record of employment, bonuses earned, or any other amounts owing as a way to force an individual to accept settlement, they are liable for increased damages. It is always illegal for an employer to use their unequal bargaining position in the employment relationship to force an employee to accept little or no severance.

If the severance provided is inadequate or an employee feels that have been treated unfairly, I strongly encourage them to call me right away and have the situation surrounding their termination fully reviewed.