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Nov 30, 2010

When employees abuse their legal rights

Should there be consequences for employees with frivolous claims?
    

By Jeffrey R. Smith (jeffrey.r.smith@thomsonreuters.com)

Employment standards legislation and common law precedents give employees a lot of protection. Many courts have made no bones about the fact they will lean towards the employee to offset the imbalance of power in the employee-employer relationship. As a result, employers may often be frustrated by what employees can get away with without being fired or what employees are entitled to if they are fired.

But courts and arbitrators have limits and if an employee’s claim seems beyond common sense, employers should take comfort that decision-makers will protect their interests as well if an employee goes too far in trying to take advantage of the pro-employee leanings of employment law.

Common law has established that when an employee says “I quit” under emotionally charged or other circumstances that might have affected the decision, the employer must take steps to ensure the employee meant it. This can involve a cooling off period or obtaining a written letter of resignation, but an employer can’t simply accept the resignation.

But last year, a British Columbia mine employee tried to take advantage of this legal protection by trying to retract his resignation after he caused an accident in the mine. He tried to claim he was under duress from a drug addiction and a manic episode, but the fact was he hadn’t had any drugs in a week and there was no medical opinion of a mental illness. The resignation itself wasn’t spur-of-the-moment either, as it happened a week after the accident and after he had discussed it with his union. The arbitrator determined the employee made a clear-headed decision to resign, but regretted it later and tried to come up with an excuse to retract it. Employment law may go far to protect employees, but not to the point where they can retract a clear resignation simply because they regret it.

I’ve also come across several cases where employees have tried to claim extra damages in wrongful dismissal suits because of undue stress caused by the employer in the course of dismissal or in constructive dismissal suits blaming excessive stress in the job caused by the employer. It’s become popular for employees to claim bad-faith damages, but courts will only go so far in considering them. Stress claims can be tricky, but courts recognize there are certain levels of stress inherent in the course of work and in termination of employment and they won’t award extra damages for stress caused by these circumstances.

Here’s a thought: If employees can claim bad-faith damages for an employer’s actions, should an employer be able to claim damages for bad faith on the part of the employee for a blatantly frivolous damage claim? The financial imbalance between employer and employee makes it unlikely the employer would get something, but perhaps there should be some sort of sanction against employees who go too far and try to take advantage of the protections afforded them under employment law.

Jeffrey R. Smith is the editor of Canadian Employment Law Today, a publication that looks at workplace law from a business perspective. For more information, visit www.employmentlawtoday.com.

    
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COMMENTS
Grasping at straws serves no one
Tuesday, November 30, 2010 6:26:00 PM by Todd Humber
Jeff,
Good column. It reminds me of comments that Justice Randall Echlin, of the Ontario Superior Court of Justice, made back in 2004 in his ruling in Yanez v. Canac Kitchens, 2004 CarswellOnt 5351 (Ont. S.C.J.).
At the time, claims for Wallace damages were creeping into almost every wrongful dismissal case, regardless of whether or not they were warranted.
Echlin said that such frivolous claims "seriously impede the potential consensual resolution of disputes which could otherwise be settled well short of trial. Additionally, the assertion and defence of specious Wallace claims can consume large amounts of valuable court time, can increase the costs to all concerned and can generally drive the parties apart.”
Echlin floated the notion of reducing damage awards due to frivolous Wallace claims — though refrained from doing so in that case.
Both parties in a court cases should come to the table with solid, irrefutable facts — and then let justice work its magic. Grasping at straws doesn't serve anyone well.