Some employers never learn

Treating employees fairly during termination is a basic concept, courts won’t hesitate to punish rogue employers

Play nicely. Treat people fair. And keep the sand in the sandbox. That’s the message Robert Fulghum delivered in his book All I Ever Really Needed to Know I Learned in Kindergarten.

In 1997 the Supreme Court of Canada solidified these elementary principles in law when it handed down its decision in Wallace v. United Grain Growers. It said employers have a duty to act in good faith and be fair when terminating an employee. Notwithstanding the lessons in kindergarten, this seminal case and the numerous decisions which have re-enforced it, some employers have failed to grasp this simple concept.

The recent case of Zadorozniak v. Community Futures Development Corp. of Nicola Valley provides an almost unbelievable example of this. In Zadorozniak the British Columbia Supreme Court held the manner in which the employer terminated this employee was so outrageous it awarded six additional months’ notice.

On Nov. 6, 2000, Joseph Zadorozniak began working for Community Futures Development Corporation in Merritt, B.C., about 270 km northeast of Vancouver. He had an annual salary of $57,000. Although a six month probationary period was referred to in his offer of employment, no formal evaluation or conclusion to this probationary period ever took place. The only informal feedback Zadorozniak received was that he was “doing a good job.”

On Dec. 10, 2001, Zadorozniak’s annual appraisal advised he had the potential to be an excellent manager, but he required improvement in several areas. He was directed to:

•win back the trust and confidence of staff;

•improve the relationship with the corporation’s funders;

•ensure the board is informed of any financial matters that have ongoing costs that exceed budget; and

•ensure line changes on budgets were approved by the finance committee.

In all other areas he met or exceeded requirements.

But on Jan. 31, 2002, the board of directors met with Zadorozniak and gave him a termination letter in which his employment was terminated for cause. The letter stated the board had on “numerous occasions” requested him to improve relations with his staff, the board and Human Resources Development Canada. It also spoke of the board’s concern he had not completed tasks and made decisions without board approval or consultation.

Finally, the letter stated: “Your actions and omissions have resulted in potential liability concerns for CFDC. Valid warnings by the executive committee have been followed by written evaluation and a review with yourself, yet the problems that have been identified in all areas continue to worsen and your behaviour towards members of the board has become so deteriorated that it constitutes insubordination. We have lost confidence in your ability to carry out your duties as general manager for CFDC. Therefore, we are dismissing you from employment for just cause.”

Zadorozniak was shocked by this letter, especially in light of the fact his last performance review had been mostly positive. After reading it, he left the boardroom to find his staff to ask whether they thought he did not get along with them.

He then went to his office while the board members remained in the boardroom. The board members soon became concerned he might be deleting files, so four of them entered his office and attempted to unplug his computer.

A scuffle ensued and Zadorozniak was pinned against the wall and held there until police arrived. The police escorted him from the building, located in the middle of town, and forced him into a squad car on the main street. He was taken to a cell, fingerprinted, photographed and held for the day. He was released pursuant to a restraining order not to contact the board members or the staff.

Having reviewed the evidence, the judge found there was no gross misconduct on the part of Zadorozniak. The judge also found there was no evidence the employer had entered into a full and frank discussion with Zadorozniak or that he had been given a clear warning about his performance. Nor was he given time within which to improve. Although Zadorozniak was only employed for 14 months with Community Futures, the court held he was entitled to a notice period of 12 months.

It is the breakdown of the 12 months which is of particular interest. Had the termination of his employment been ordinary and routine, the court found six months might be a reasonable period of notice. But, given the manner in which Zadorozniak’s employment was terminated, six additional months were added for the manner in which the employer acted.

The court said Zadorozniak had been publicly humiliated before the board, the staff and the town. Terminating his employment in the office, at the beginning of a workday before the full board, ensured the staff would undoubtedly be alerted to what was going, something the court found troubling.

But the court was even more concerned Zadorozniak was embarrassed in front of the staff given that he was told, initially, he was being terminated for his failure to get along with them. Then he was taken to a police car on the main street of his small town, “thus ensuring speculation of the reason for his termination would be damaging and difficult to counteract.”

Finally the court noted the board’s unsuccessful appeal of Zadorozniak’s application for Employment Insurance benefits and attempts to allege he falsified expense claims on the first day of trial also formed part of the bad-faith conduct on the part of the employer. Consequently, the court found the employer’s behaviour caused Zadorozniak mental distress and could reasonably be foreseen to have had an effect on his self-esteem.

In the court’s eyes, all of the events which had transpired caused Zadorozniak embarrassment and humiliation and required redress in the form of six extra months of damages, not an insignificant amount for this particular employer.

This decision underscores what the case law requires when terminating an employee for performance reasons, and highlights the length a court will go to when it finds the employee has been dismissed in bad faith.

Natalie MacDonald is an associate with Grosman, Grosman & Gale, a Toronto-based law firm specializing in employment law. She can be reached at (416) 364-9599 or [email protected].

To read the full story, login below.

Not a subscriber?

Start your subscription today!