Manager let go because of failure of organization to become a team

Employer did not have the right to fire a manager who couldn’t get his employees to function as a team

Hennessy v. Excell Railing Systems Ltd., 2005 CarswellBC 1164, 2005 BCSC 734 (B.C. S.C.).

An employer did not have the right to fire a manager who couldn’t get his employees to function as a team, the British Columbia Supreme Court has ruled.

In July 2002 Edward Hennessy joined Excell Railing Systems Ltd., a manufacturing operation which employed about 25 people. In February 2003 he was concerned about his job security and sent an e-mail to the directors asking about his long-term future at the company. He did not receive a formal reply, but was appointed to the permanent position of general manager on May 1. In November he asked again and was told his job was secure.

On Jan. 11, 2004, the company terminated Hennessy’s employment. The company was not working as a cohesive unit and had become dysfunctional. It “was not due to anything specific you did wrong, but rather the failure of the organization to become a team,” he was told.

Excell did not allege Hennessy was terminated for cause until it filed its statement of defence to his claim for wrongful dismissal. The company said Hennessy:

•was unable to perform duties, including financial management, employee relations, sales management and quality control;

•had engaged in inappropriate and improper conduct; and

•had caused other employees to leave the company.

The British Columbia Supreme Court rejected the company’s argument. Hennessy was given no warning his job was in jeopardy or that he was failing to meet the level of performance required of him. Two months before he was dismissed he had been told his job was not at risk. The company knew about the alleged inappropriate conduct long before Hennessy’s dismissal – it can’t use condoned behaviour as grounds for wrongful dismissal, ruled the court.

The onus is on the employer to establish just cause for termination, and the standard of proof is more than a balance of probabilities. The court found the company had failed to do so. Hennessy’s performance was not grossly deficient, and if it was below the expected standard he was entitled to receive a warning and be given a reasonable opportunity to correct the deficiencies.

On the question of damages, Hennessy requested six to eight months’ salary in damages. Excell argued three to five months was justified. Hennessy was unemployed when he was hired, had worked for the company for only 18 months and he had failed to mitigate his damages, it argued.

The court agreed Hennessy had not done enough to mitigate his damages. He had made “limited efforts” to seek other employment. Although licenced to sell real estate he did not seek work in that field. In the month following termination he had responded to eight newspaper ads, but made no follow-up. His efforts “were far below what might be expected of a reasonable person in his position,” ruled the court.

It awarded Hennessy five months’ salary at $6,250 per month, less one month for the failure to mitigate. Hennessy had already received five weeks’ severance and was ultimately awarded another $17,790.

To read the full story, login below.

Not a subscriber?

Start your subscription today!