In Armstong v. Lendon 2015 ONSC 3004, the employee, a legal secretary for 26 years, was provided with a “glowing letter of reference” attesting to her “thorough competence”, her ability to deal with difficult clients, her determination to assist clients and her outgoing personality. This letter was given to her after the employer advised her in early September 2012 that he was retiring at the end of December 2012 and her services would no longer be necessary.
The employer thought that he had complied with his legal obligation to the employee as he had given her approximately four months’ working notice that exceeded minimum notice under the Ontario Employment Standards Act. However, the employee claimed common law notice in June 2013 and the employer, in its defence, alleged just cause. After the employee filed her claim, the employer wrote a “seriously false” and misleading reference letter and said, in his evidence at the hearing, that he was “prepared to seriously mislead members of the Owen Sound legal community who might want to hire the employee”.
What happened in the courtroom?
The following is what the employer’s position was at the hearing.
- Before 2008, the employee was thoroughly competent. Then there was deterioration in her performance.
- A “crisis” occurred on July 11, 2012 when the employee, in an emotional outburst of a type the employer had never witnessed from anyone, demanded a $5,000 bonus and an unspecified raise, threatening to quit on the spot. The outburst was so severe the employer’s first concern was for the employee’s health.
- The employer felt he had no choice and agreed to pay the bonus and increase the employee’s hourly rate from $14 to $18 per hour.
- In August, the employee called in sick on several occasions which put the employer under incredible stress. In particular, the employee was off when four deals were to close on August 23 and 24.
- The employer provided the letter of reference because he believed that with proper psychological or other assistance, the employee could recover from her problems and perform at the level she had in the past.
The employer alleged a combination of insolence, incompetence, absenteeism and of conduct otherwise incompatible with continued employment. The court reviewed the McKinley v. BCTel,  2 S.C.R. 161 test for establishing just cause based on dishonesty:
- A contextual approach must be taken to determine whether conduct constitutes just cause for dismissal.
- The focus is on whether the conduct has given rise to a breakdown in the employment relationship.
- Conduct which would constitute just cause for a short term junior employee will not for a long term employee in a more senior position.
- There must be proportionality between the misconduct and the sanction imposed by the employer.
The court said:
Even if I accepted the defendant’s version of events, which I do not, it would fall far short of just cause. An emotional demand for a raise and a threat to quit do not amount to just cause after 26 years of service. An angry outburst on learning that you are being terminated on less than four months’ notice after 26 years of service, considered with the totality of the evidence, does not amount to just cause.
Ultimately, the court concluded that the employer clearly condoned the misconduct he alleged saying that he was fully aware of the behaviour, but had not terminated the employee for just cause then or otherwise addressed the issue; only raising it as cause for dismissal when the secretary made her common law claim.
The court found that the secretary had been wrongfully dismissed and awarded her 21 months’ notice, less the amount of working notice she received and her mitigation earnings, taking into account the following:
- The employee had a high level position as evidenced by the fact that the employer entrusted her with his password so she herself could effect all entries on Teranet.
- The employee had suffered stress and other health problems which would tend to make it more difficult to obtain new employment.
- The employee had no ability to provide a favourable reference to a prospective employer given the serious allegations against her which, as a matter of common sense, would almost certainly preclude her from obtaining new employment as a legal secretary.
What does this mean for employers?
- Unless there is something in the contract of employment between the parties limiting notice, the door to common law notice may be open to employees who believe they are entitled to more notice than the employer offers or gives to them.
- Think carefully before you write a reference letter for an employee you are terminating and, if you’ve written a glowing reference letter, think even more carefully before you subsequently turn around and write a “false and misleading” reference letter and seriously consider your motivations for that “false and misleading” reference letter.
- If an employee acts out of character or behaves inappropriately in the workplace, make sure you go on the record at that time. If you don’t and you attempt to rely on that behaviour later to substantiate just cause, good luck because it’s probably not going to work.