Former business development manager, 71, ends up working as DoorDash driver
“The plaintiff was an exceptionally vulnerable employee... He was 68 years of age, with limited work opportunities. He accepted humiliating demotions, a substantial loss of pay, and endured multiple episodes of insulting and unfair discipline, in a desperate effort to retain [his] job… [He] was made to suffer pointlessly, since [the employer] wanted to terminate his employment all along.”
So said the Supreme Court of British Columbia recently, in a case that involved a marketing and business development manager who was demoted twice, and is now working as a 71-year-old DoorDash driver.
But his former employer — China Southern Airlines Company — is now facing a hefty penalty: $58,000 for wrongful dismissal, $50,000 for aggravated damages and $100,000 for punitive damages.
“I'm happy for my client,” says Jessica Lithwick, partner at Sugden, McFee & Roos in Vancouver. “The court said it much more fulsomely but he went through a lot. And I think he's got some vindication now and I'm happy for him.”
And there’s a lesson here for employers, she says.
“If you're making serious allegations of wrongdoing against an employee, without a good basis to do that, you might end up paying more than you would have otherwise.”
Job starts in 2008
Paul Chu began working for China Southern Airlines (CSA) on an informal basis in 2008 and gained full-time employment there in 2011. From then until 2018, he was, for the most part, a marketing and business development manager.
In early 2018, Chu’s general manager was replaced by a new one, Rui Zhang, who did not get along with the previous GM. Zhang was dismissive of Chu’s role and responsibilities, excluding him from management meetings and eliminating the department he headed.
She also criticized his work and issued reprimands accompanied by threats of dismissal.
In March 2018, Chu was demoted to a customer service position. His pay was also reduced by 25 per cent, and he was given new tasks despite limited training, making the job “practically impossible.”
In October 2018, he was demoted again, assigned to work as an airport services worker, with little understanding of the role or training, and in January, was told he was not performing up to standards and was on probation for three months.
In February 2019, CSA terminated the 68-year-old Chu for alleged cause, alleging incompetence, focusing on his work at the airport and alleged time theft.
Chu claimed damages for wrongful dismissal based on the airline’s failure to provide reasonable notice of termination. He also claimed aggravated damages based on CSA’s breach of duty of good faith and fair dealing in the manner of his dismissal, and punitive damages.
The airline’s Response to Civil Claim in November 2019 made further allegations, including that Chu never worked in a management position and was guilty of sexual harassment.
Chu alleged that CSA engaged in “broad and sustained pattern of bad faith abusive conduct, including unfair discipline, insincere warnings, manufactured cause, and public embarrassment.” He also alleged that the airline’s bad faith conduct continued throughout the course of the litigation — and the court agreed.
“Rather than simply dismissing the plaintiff, Ms. Zhang embarked upon a campaign designed to manufacture cause for dismissal or induce the plaintiff to resign,” said Justice Frits Verhoeven.
No cause for just cause
Mere dissatisfaction with an employee's performance is insufficient to ground just cause for dismissal, said Verhoeven in the decision.
“Likewise, failure to perform in isolated incidents to the satisfaction of the employer does not establish incompetence. Incompetence can only provide a basis for a finding of just cause if it is serious or gross incompetence.”
Any errors or failures on the part of Chu “were all minor, unintentional mistakes, and… none of them resulted in any serious consequences. The employer has failed to establish that any of these instances, alone or in combination with any other conduct it relies on, would be sufficient to constitute cause for dismissal.”
The employer failed to establish any default on the part of the plaintiff for unauthorized absences, let alone “time theft”, said Verhoeven, calling it “another meritless allegation manufactured by the employer in an effort to sustain its allegations of cause.”
The airline “singularly failed to establish just cause for dismissal without notice. All of its allegations are either entirely unsupported by evidence or lacking in any merit,” he said.
20 months’ notice
Accordingly, Chu was entitled to damages for wrongful dismissal, and the court took into account several factors: the nature of his employment, his level of responsibility, his years of work, his age, his experience “in a niche area” and limited work opportunities because of the pandemic.
This led to an award of 20 months’ notice adding up to $58,000.
The court said that Chu was “a highly vulnerable person because of the age and his unique professional background. He was going to have a hard time on the employment market,” says Lithwick.
Twenty months is on the higher end of the scale, considering that the court very rarely goes over 24 months for employees, she says.
“The overall consideration is always, at the time of termination: how long would you expect the person that was fired to find a new job?” she says. “The law varies on when age becomes a very significant factor, but by any measure, my client was older than that — being 68 years old when he was fired, he was beyond the average retirement age — and so that was a very important factor in this case, and so was the niche area of his work experience.”
The Ontario Superior Court of Justice recently awarded not just 24 months’ salary and benefits to a dismissed Air Canada worker, but also all the bonuses to which the worker would have been entitled under the airline’s annual incentive plan and profit-sharing plan during that two-year period.
Aggravated damages
The court also had “no difficulty” concluding that CSA breached its duty of good faith and fair dealing in the way it dismissed Chu.
Acting through Zhang, the employer “secretly wanted and intended to terminate the plaintiff’s employment,” said Verhoeven. “It sought to do so without giving reasonable notice or paying severance in lieu thereof. The employer could have simply informed the plaintiff that changes to its management structure meant that his position was redundant. It could have terminated the plaintiff’s employment at that time.
“Instead, the employer was duplicitous and unfair in its dealings with the plaintiff. It demoted the plaintiff to entry-level, front-line services positions, substantially reduced his pay, and began taking steps to manufacture cause for dismissal or to induce the plaintiff to resign.”
Chu was “shocked and humiliated” at the manner of his dismissal, said the court, and he felt “depressed, worthless, and betrayed.” The employee also saw his doctor in late March 2018 for treatment of nausea and sleeping problems, resulting from depression.
“I assess the plaintiff’s damages for mental distress suffered as a result of the defendant’s breach of duty of good faith and fair dealing in the manner of the dismissal at $50,000,” said Verhoeven.
Most people are negatively affected by their employment being ended, so it’s not like hurt feelings alone about being fired can lead to an award of damages, says Lithwick.
“On the flip side, you don't need forensic evidence, you don't need a psychiatrist report or anything like that, in the circumstances, to show that you did suffer mental distress. What you need is to show that you suffered a different kind of hurt than just a normal result of being fired. And that's what happened in this case — it wasn't mental distress damages for the fact that my client’s employment was ended, it's about how it was done.”
This is a number that the court came to by looking at other comparable cases, she says.
“This is not like a personal injury case where the there's a more mathematical approach... it's more art than science in the number.”
It’s a substantial amount for aggravated damages, says Lithwick, but even the judge commented that he was surprised her client felt better after just a year, “because of the very serious allegations that were still in the air.”
For these damages, you have to show that, but for that treatment, he wouldn't have suffered as much, says Barry Fisher of Barry Fisher Arbitration and Mediation in Toronto.
“You have to separate the suffering based on being dismissed, as opposed to the suffering based on these other things, which is, of course, impossible to do. There's no psychiatrist in the world who can differentiate. So the judges use that as an excuse to punish the employer.”
Last year, HBC was hit with moral and punitive damages after bad-faith treatment of employee.
Punitive damages
In assessing the punitive damages for $100,000, the court said it was looking at the “objectives of retribution, deterrence, and denunciation.”
CSA’s conduct was “highly blameworthy,” said the court, and the airline’s reprehensible conduct “extended from one year prior to termination to the present, a period of almost five years. Its abusive conduct was planned and deliberate throughout.”
The court cited a leading B.C. case, the 2013 Kelly v. Norsemont Mining Inc., which set out three kinds of employer conduct that can lead to punitive damages awards, says Lithwick.
“The first is knowingly making false allegations of serious misconduct or incompetence to support dismissals… Second, utilizing hardball tactics to intimidate an employee — so basically being aggressive to try to discourage someone from suing. And then third, dismissing in a way that's meant to make the employee look bad. And the court’s words are ‘to disparage the employee’s capabilities or honesty in the eyes of other employees or future employers.’”
Over the last couple of years, in assessing punitive damages, there’s been a trend for judges to also focus on the litigation conduct, says Fisher, though traditionally, it’s about looking at the treatment of the person before litigation.
“Inappropriate litigation conduct is usually remedy to cost awards,” he says. “To me, it's stretching punitive damages, but it seems to be a common method.”
These days, many courts seem to be combining or doubling up when it comes to aggravated and punitive damages, says Fisher.
“Aggravated damages are supposed to represent actual loss, whereas punitive damages are not compensatory, and they're just out to punish,” he says, citing factors in this case that may be covered by both, such as the employer’s false allegations.
“Aggravated is supposed to be different than punitive. And even in the judge's own reasons, he seems to repeat the same ones as a justification for both. Which I thought was odd… you don't issue punitive damages every time you find somebody's not telling the truth. That's what I found kind of surprising about it.”
