The line between respectful and bad-faith dismissal
Question: If a dismissed employee is escorted off the premises without being allowed to return to her workstation to collect any personal belongings — which would be sent later — is the employer at risk of added damages in the manner of dismissal?
Answer: If at the time of dismissal the dismissed employee is treated respectfully and with as much privacy as reasonably possible, it is unlikely that the employer would be at risk for additional damages for not allowing the employee to collect her own personal belongings before leaving the workplace.
The law regarding damages for the manner of dismissal has been subject to significant changes in the past 20 years, and because of such changes, some of the jurisprudence respecting such damages is no longer valid.
The seminal Supreme Court of Canada decision that allowed employees to recover damages based on the manner in which they were dismissed is Wallace v. United Grain Growers Ltd. In Wallace, the Supreme Court allowed for an extension of the reasonable notice period based on the manner of dismissal and for the mental distress caused by the dismissal on the basis of the employer’s good faith and fair dealing obligation. The court reasoned that, at minimum, an employer must be “candid, reasonable, honest and forthright with their employees and should refrain from engaging in conduct that is unfair or is in bad faith by being, for example, untruthful, misleading or unduly insensitive.”
Following Wallace, certain high-handed or unfair conduct by the employer could result in an increased notice period award. However, the normal hurt feelings that can accompany the end of an employment relationship were not, and still are not, compensable.
In 2008, The Supreme Court modified the ruling from its Wallace decision in Honda Canada Inc. v Keays. The primary modification is that the damages awarded for bad faith conduct upon dismissal is no longer realized in an arbitrary extension of the reasonable notice period. Instead, such an “increase” in a damages award must be rooted in actual foreseeable and suffered damages. While the court reaffirmed the criteria set in Wallace, the main impact of this decision was to award damages based on “actual damages” and eliminate the possibility of damages being awarded through an arbitrary extension of the notice period. This brings the treatment of such damages in line with “all other cases dealing with moral damages.”
Most importantly, the court provided examples of what conduct at dismissal could result in compensable damages. These are: attacking the employee’s reputation by declarations made at the time of dismissal; misrepresentation regarding the reason for the decision to dismiss; or dismissing an employee in order to deprive her of a pension benefit or other right.
As demonstrated above, in order for added damages to be awarded, there must be some sort of bad faith conduct on the part of the employer. As such, it is unlikely that escorting a dismissed employee from the workplace in a respectful manner that does not draw attention, and providing her personal belongings to her after the dismissal, would be conduct that would attract damages. One idea is to respectfully and discretely escort an employee from the premises upon termination, but allow the employee to return to the workplace to pack up her personal belongings after hours (with supervision). However, if that is not possible, it is acceptable to discretely pack up an individual’s personal belongings and send them to the employee after her dismissal. If the employee is not permitted to pack her belongings, it is a good idea to keep a careful inventory of what is packed and to ensure that all belongings are carefully stored so that they are not damaged.
For more information see:
• Wallace v. United Grain Growers Ltd., 1997 CarswellMan 455 (S.C.C.).
• Keays v. Honda Canada Inc., 2008 CarswellOnt 3743 (S.C.C.).
