Museum worker wins 19 months’ notice

Court tacks on Wallace damages for the way the Royal Ontario Museum handled termination

An Ontario court has awarded 16 months’ pay in lieu of notice plus Wallace damages to an ex-director of the Royal Ontario Museum (ROM).

David Rinaldo joined the ROM after graduating from university in 1985 and was steadily promoted. In October 2000 he was appointed director of public programs. Prior to that he had been the subject of four grievances filed by a union, alleging a poisoned work environment had been created. Other complaints were made to human resources about the harsh management techniques of Rinaldo and a colleague. All four managers who reported to Rinaldo were dismissed or resigned.

On Oct. 23, 2001, Rinaldo was called into a meeting. He was told he had performed well for 14 years but that his performance in the previous six months was completely unacceptable. He was accused of being a bad manager and of insubordination. He was told his responsibilities would change, he would be reporting to a different person and the days he worked would need to be changed. He was told he was being placed on six months’ probation and if his work performance didn’t dramatically improve he would be fired and given a six-month severance package.

Rinaldo said he felt overwhelmed by the allegations and that three top managers were confronting him. A week later Rinaldo met with his psychiatrist, who he had been seeing since 1998. He was diagnosed as suffering from severe stress. The doctor wrote a note on his behalf saying he required sick leave and would be reassessed in two to three weeks. The note did not identify the doctor as a psychiatrist. Rinaldo delivered the letter to human resources himself and said he would take sick leave starting that day, although he didn’t start it for another two days.

The ROM initially challenged Rinaldo’s sick leave. It sent him a letter requesting more evidence of his medical condition and telling him without such documentation the leave would be without pay. That letter was sent to the wrong address.

In early December Rinaldo’s psychiatrist wrote another letter stating he had developed a major depressive disorder with high levels of anxiety. She recommended he take a medical leave. Along with that letter Rinaldo’s lawyer wrote to the ROM requesting his salary be reinstated.

On Dec. 21, 2001, the ROM informed Rinaldo that on the basis of his recent conduct he was deemed to have resigned as of Oct. 31. In April 2002, after litigation proceedings were started, the museum conceded Rinaldo’s right to short-term disability leave and that he had been employed until Jan. 31, 2002. In late June the ROM paid him $14,500 for three months of short-term disability payments and $29,500 for six months’ salary less deductions.

Rinaldo filed an action seeking 15 to 20 months’ notice and aggravated Wallace and punitive damages. The ROM argued Rinaldo refused to accept his probation, that this refusal amounted to him resigning and he was thus not entitled to damages for wrongful dismissal.

An interesting element of the case was Rinaldo’s insistent claim that the ROM had created a hostile working environment because of his sexual orientation. The court dismissed this aspect of his claim, noting Rinaldo had steadily been promoted to positions of greater responsibility and that the ROM had supported a number of gay and lesbian events he had initiated.

“There was a tendency on his part to attribute ulterior motives to the actions of others”, said the court: “The criticisms that came his way… had nothing to do with (his) sexual orientation.”

The court also ruled there was just cause to place Rinaldo on probation. There were serious deficiencies in his management style and job performance in the months leading up to Oct. 31, 2001. Placing him on probation was a legitimate response and could not be deemed constructive dismissal.

What the ROM did afterwards was constructive dismissal. It refused him sick leave, even though he had provided medical documentation to a known condition. It had cut off his e-mail access, preventing him from communicating with staff and colleagues from home. It had stopped paying him. The ROM created “an environment that was not conducive to his returning. In the circumstances, (Rinaldo) reasonably believed he was being dismissed,” said the court.

Rinaldo had spent his entire 15-year working life at the ROM. He was 39 and was in middle management, earning $85,000 a year at the time of his dismissal. The court awarded him 16 months’ notice. It tacked on three months’ salary for Wallace damages, for the ROM’s insensitivity in not accepting his sick leave and in the manner in which he was dismissed. The court did not award additional aggravated or punitive damages, but did award an extra $2,530 for prescription drugs used during the notice period, for damages to personal property and for personal items not returned to Rinaldo.

For more information see:

Rinaldo v. Royal Ontario Museum, 2004 CarswellOnt 5209, 37 C.C.E.L. (3d) 1 (Ont. S.C.J.).

What are Wallace damages?

Wallace v. United Grain Growers, a landmark decision by the Supreme Court of Canada in 1997, altered the wrongful dismissal landscape.

The decision allows employees to receive additional notice if the employer acts in a callous manner during termination.

But there are some misconceptions about what Wallace damages really are. Wallace damages are not damages for mental distress. Being fired on its own will cause some mental distress in almost everyone.

Nor are Wallace damages designed to punish employers for bad-faith discharge. Requiring employers to have good-faith reasons for dismissal would deprive employers the ability to determine the composition of their workforce.

So what, then, was the intention of Wallace? It was, quite simply, to give judges the ability to extend the reasonable notice period to compensate employees if the employer acted in a callous manner in the way it handled the termination itself. It holds employers to an obligation of “good faith and fair dealing” in the manner of dismissal.

In the Rinaldo case, the court said the museum worker was entitled to Wallace damages because “the manner of dismissal was particularly insensitive to (Rinaldo’s) medical condition.”

While he was on sick leave, the ROM rushed to judgment and cut off his salary and other benefits. At one point, before he had officially resigned, Rinaldo discovered that the museum had posted an opening for his job.

The ROM’s actions exacerbated his health problems and had a serious effect on Rinaldo, the court said.

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