A recent Alberta Court of Queen's Bench case sends a strong
caution to employers: act in good faith in performing the
employment contract or be prepared to pay. In
Karmel v Calgary Jewish Academy, the judge awarded a staggering
$200,000.00 in aggravated damages to the employee for the harm he
suffered from the employer's bad-faith handling of his
termination. This award was in addition to the $606,027.97 awarded
to the employee for the outstanding balance owed to him under the
The plaintiff was a school principal at the Calgary Jewish
Academy. A minor conflict between the principal and the President
and Chair of the Board led to the eventual breakdown of the
employment relationship. This Board member had a significant role
in pushing for, and eventually succeeding in, the employee's
termination before the expiry of its fixed term. The Court found on
the evidence that the employee was wrongfully dismissed, despite
his numerous, good-faith attempts to reconcile with the Board
member. Not only did the employer not have grounds to terminate the
employee with cause, the court concluded that it pursued a
dishonest strategy of papering a path to the employee's
termination so as to avoid paying out the remainder of his five
year contract. The court noted, with reference to recent Supreme
Court of Canada authority, that the law requires employers to be
candid, reasonable, honest and forthright with their employees. The
trial judge concluded that the employer failed in its duty to act
honestly in the performance of its contractual obligations for a
period of about 18 months through its attempts to orchestrate the
unjustified termination for alleged just cause. Aggravated damages
of $200,000 were awarded to the employee for the additional harm he
suffered due to the manner in which the employment contract was
This case continues a trend in other provinces with similarly
massive awards. In the recent Ontario Superior Court of Justice
Gordon v. Altus Group, the Court found that the employer did
not have cause to justify the employee's termination. The
employer was found to have 'puffed up complaints' to
justify the termination and punitive damages of $100,000.00 were
awarded. The Court based this significant damage award on the
employer's 'outrageous behaviour,' 'terrible
conduct', and failure to honestly perform the employment
contract by honouring a contractual arbitration clause. The
$100,000.00 punitive damage award was in addition to the
$168,845.00 awarded to the employee for the payout of his ten-month
If an employer is considering justifying a termination for
cause, they would do well to ensure that the employee's alleged
misconduct is serious, and not exaggerated, otherwise the employer
risks a significant damages sanction from the Court. Do not
orchestrate a weak 'just cause' case or prevail in alleging
'just cause' for termination unless there is a strong
foundation for doing so.
Alberta Court of Appeal has said that you will be protected
from damages based on improperly alleging cause when you have an
"honest belief, especially with arguable grounds," but
how confident can you be that the judge will believe you?
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The arbitrator's decision covered a number of issues including whether the termination was appropriate and whether the City had breached the grievor's human rights. The following, however, will focus on the privacy issue raised.
In my December 15, 2016 article, Federal Government's Cannabis Report: What does it mean for employers?, I noted the Report's1 suggestion that there was a lack of research to reliably determine when individuals are impaired by cannabis.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).