False allegations, investigation, firing 'a total mess of egregious behavior': lawyer
“An employer is entitled to terminate an employee without cause and without providing a reason, but you have to pay the proper severance and you can't fabricate allegations because you want to chase them out without paying them that severance – make sure you’re treating the employee with respect and dignity throughout that process.”
So says Glen Stratton, an employment lawyer at Ascent Employment Law in Vancouver, after a British Columbia court ordered an employer to pay a fired worker more than $200,000 for wrongful dismissal, including more than $100,000 in aggravated and punitive damages for the employer’s egregious bad-faith treatment of the worker leading up to, during, and after the dismissal.
In 2008, China Southern Airlines (CSA), an international airline controlled by the Chinese government, decided to establish regular flights between Vancouver and Guangzhou, the Chinese city in which it was headquartered. CSA approached the worker in 2009 and, after repeated efforts by the airline, the worker became CSA’s first Vancouver employee in January 201 . Her duties involved obtaining customers for CSA’s routes to China and recruiting and supervising staff at the Vancouver branch.
CSA made its first flight in June 2011 and shortly thereafter hired two other employees with expertise in the Vancouver-to-China travel market.
The worker’s responsibilities increased over the years until 2018 when CSA assigned a new general manager to the Vancouver branch. The new general manager reorganized the branch and reassigned the worker and her two colleagues. The worker lost the accounts she had developed and her supervisory responsibilities were taken away.
Salary, responsibilities decreased
The new general manager also hired new employees with little experience in the travel industry, paying them less than the worker and her two colleagues. The worker’s base salary was decreased, although her overall income increased with a new bonus structure related to obtaining new clients.
On Jan. 23, 2020, the worker was called into a meeting with CSA managers. They informed her she was being immediately placed on administrative leave and she was under investigation. CSA didn’t provide a reason for the investigation and ordered her to provide all documents, ID, passwords, keys, and any other CSA property she had. She had to pack up her belongings and leave the building immediately.
The worker felt humiliated and started suffering from panic and anxiety. She had trouble sleeping and eating, which became worse when CSA sent several emails demanding the return of documents and threatening to search her home.
On Jan. 28, the worker’s doctor provided a note saying that she shouldn’t work due to illness and prescribed antidepressant medication. CSA demanded that she come to a meeting to discuss the results of its investigation, but the worker provided the doctor’s note. CSA then contacted the doctor and told the worker that the note only said that she couldn’t work and if she didn’t come to the meeting she would be “giving up [her] job.”
The worker said she would be able to meet after seeing a psychiatrist, but on Jan. 31 CSA sent her a termination letter stating that she had copied and sent out confidential CSA documents to third parties.
Worker’s psychological health deteriorated
The next day, a psychiatrist diagnosed her with acute stress and post-traumatic stress disorder (PTSD) symptoms from “sudden termination of work.”
On Feb. 26, CSA sent the worker a letter demanding the return of confidential documents and threatening court action. The airline said that its investigation had uncovered financial irregularities involving her employment.
The worker tried to look for other work in the airline industry but she was unsuccessful, and CSA did not provide her with any letters of recommendation. She soon discovered that CSA had spread word throughout the Vancouver travel industry that she had been fired.
“Employee privacy is important, you can't go and talk to other employers or external parties about the terms of someone's employment - this is one that always gets courts in terms of awarding bad-faith damages,” says Stratton. “It's impacting the worker’s reputation in the industry and her ability to find comparable work.”
The worker’s mental health deteriorated and she decided that she would have to try to find employment in another industry. She retrained as a chef and found a pasty chef position in February 2022.
Claim for wrongful dismissal, aggravated, punitive damages
The worker filed an action against CSA for wrongful dismissal. CSA did not defend the claim and the worker obtained a default judgment against the airline. She then applied for general damages for reasonable notice, aggravated damages for CSA’s breach of duty of good faith and fair dealing in the manner of her dismissal, and punitive damages.
One of the worker’s colleagues also sued for wrongful dismissal and was awarded punitive and aggravated damages by the court.
The court noted that employees who hav advanced training and specialized skills, such as the worker’s experience and knowledge in the niche travel market of Vancouver-to-China flights, tend to be entitled to longer notice periods due to the difficulty in finding similar employment. The court also noted that CSA sought out the worker and induced her to leave her job with Air China specifically because of that expertise. In addition, the worker increased her expertise and level of responsibility over the course of her time with CSA, so the character of her employment pointed to the upper end of the notice period range, said the court.
The worker’s age and nine years with CSA, along with the limited availability of similar employment – as evidenced by her unsuccessful job search – were additional factors pushing towards a longer notice period, said the court in determining that 20 months was a appropriate period of reasonable notice.
The court also found that CSA breached its duty of good faith and fair dealing in the manner of the worker’s dismissal. The airline didn’t advise the worker of the reason for its investigation and placing her on administrative leave, it accused her of copying and retaining confidential documents with no evidence, it falsely accused her of financial irregularities, it failed to accept the doctor’s note, it threatened her with legal proceedings after her termination, and told others in the travel industry about her firing. None of CSA’s allegations had any merit, and the airline’s actions caused and aggravated the worker’s psychological injuries, the court said in finding that aggravated damages were appropriate.
“You already had a wrongful dismissal here and the worker wasn't paid any severance at all,” says Stratton. “But then when you have a breach of the implied term of good faith and fair dealing as well, then that's certainly going to bolster the wrongful dismissal claim.”
Employer’s egregious conduct needed deterrence
The court noted that CSA demonstrated “a pattern of firing senior employees without notice” and its actions against the worker constituted egregious conduct that required deterrence for CSA and other employers from similar misconduct, as well as “the community’s collective condemnation of what has happened.” As a result, the court determined that a significant award of punitive damages was necessary to reflect CSA’s “abusive, planned, and deliberate” conduct and the worker’s vulnerable position due to her age and niche expertise.
“The [aggravated and punitive damages] award was particularly high because the court found that there seemed to be a pattern of this employer bringing forward baseless and damaging allegations against senior employees,” says Stratton. “This pattern of trying to ice out senior-level employees as a way to avoid paying them their proper severance, the courts are certainly not going to look fondly upon that.”
Stratton notes that in order for there to be bad-faith damages in a wrongful dismissal action, there needs to be evidence of serious effects on the worker over and above the ordinary hurt feelings associated with a dismissal.
“Here, it's quite clear that that the worker suffered some really serious medical symptoms as a result of the way she was treated,” says Stratton. “The whole thing is a total mess of egregious behavior [by the employer].”
CSA was ordered to pay the worker more than $98,000 for 20 months’ salary, benefits, and bonus, plus $35,000 in aggravated damages and $75,000 in punitive damages.
