In a ruling by the Quebec Court of Appeal in September 2013,1 one of the issues before the Court was whether an employee could be awarded non-monetary damages on account of alleged wrongful conduct by the employer when it did not renew her contract of employment. It was submitted that management had shown bad faith, among other things, by refusing to give the employee a letter of reference.
This case involved two teachers at a private high school in Montréal, Irène Arseneault (Arseneault) and Sylvia Mauri (Mauri). Both were hired on a yearly basis, under letter agreements in which the length of their contract and certain of their employment conditions were set out. A standard form contract, which included a description of their rights in relation to certain non-monetary aspects, was also provided to all faculty.
Arseneault had been a drama teacher for the high school almost without interruption since 1989. Although she did not have a teaching permit as required by the Department of Education, the Department had always granted her a “letter of tolerance” allowing her to teach. Thus the school had hired her, on a year-to-year basis, until 2008, the year that management decided that a teaching permit was now mandatory and therefore that Arseneault’s teaching contract could not be renewed. In the year after her contract was not renewed, Arseneault did not find another job and had to settle for part-time teaching duties from which she earned a modest income.
Mauri taught French and Italian. The record shows that her work was satisfactory and that over the years, her teaching contract had been renewed seven times. Owing to what it said was a curriculum change, the school having chosen in the future to offer Spanish instead of Italian, Mauri was told that her contract would not be renewed. When she requested a letter of reference, the principal of the school refused to give her one. In the year after her contract was not renewed, she nevertheless found a one-year replacement position teaching in another institution.
It is worth noting that in the months before Arseneault’s and Mauri’s employment ended, management of the school had tried to get the employees to waive the implementation of compensatory measures resulting from a pay equity process. Contrary to the conclusions reached by an anonymous ad hoc committee which had studied the matter, management claimed that the measures would yield only an insignificant benefit for the employees. Arseneault and Mauri were suspected of being behind the ad hoc committee, and indeed, alleged that this was the reason why they had been let go.
Although the trial judge came down very hard on the principal of the school, calling the reasons given by management to justify not renewing the contracts an excuse, she nevertheless found that the employer was entitled to terminate the contracts and dismissed the action.
The Court of Appeal decision
The Court of Appeal began by considering whether or not, in the circumstances, the contracts had in fact been renewed automatically. It noted that the standard contract contained a clause providing that a party could prevent automatic renewal from taking place as long as written notice was given prior to the last school day of the month of March of the current year. In this case, since such notice was not given within the allotted time, the Court was of the opinion that Arseneault’s and Mauri’s contracts had been renewed for an additional year.
Agreeing with the trial judge on the circumstances surrounding the termination of Arseneault’s and Mauri’s employment, the Court went on to find that management’s attitude had been wrongful and that the terminations had been carried out illegally, the reasons given for them having been mere excuses.
Consequently, the Court awarded damages for the wages lost by Arsenault. In Mauri’s case, the Court did not see fit to award her any damages for lost wages, since she had succeeded in finding full-time work during the year after her employment with the school ended. However, the Court awarded her $5,000 in damages on account of the school’s refusal to give her a letter of reference. While it declined to affirm that an employer had an obligation to provide a letter of reference, the Court stressed that such a refusal must not be contrary to good faith requirements, especially since a curriculum vitae is an integral component of a person’s reputation. Given the particular circumstances in which the employment ended, the unexplained gap, in the Court’s view, warranted an award for damages.
Characterizing management’s behaviour in this case as abuse of authority, the Court concluded that the employer had acted contrary to good faith requirements when it refused, for no apparent reason, to provide the letter requested.
In essence, the take-away from this decision is that an employer is not obliged to provide a letter of reference. However, it cannot refuse to give a letter of reference to a dismissed or resigning employee who requests one, without providing a reason or citing a reason that is not legitimate. It risks being ordered to compensate its ex-employee for damage to reputation if it does.