Employers who choose to raise unfounded allegations of just
cause for strategic reasons, to avoid severance costs or to use
such allegations as leverage to reduce their severance obligations,
ought to beware. The end result could be more costly. This clear
message was sent to an Ontario employer, Altus Group Limited
("Altus"), in a recent Ontario Superior Court
Alan Gordon sold the assets of his business to Altus in November
2008. Some of the sale proceeds were linked to the performance of
the business after closing, with the provision of an adjustment to
the purchase price by February 2010 based on the company's
performance. Mr. Gordon was hired to continue as an employee of
Altus post-sale under a written fixed term employment agreement.
The agreement included an express termination provision. Conflict
developed between Gordon and Altus as the parties approached the
purchase price adjustment date, and Mr. Gordon gave notice to
activate the arbitration clause in the purchase agreement to
resolve the dispute.
In March 2010, Altus terminated Mr. Gordon's employment for
cause. Amongst its allegations were that he had spoken to senior
management in a derogatory manner, swore often in the workplace,
and was generally unpleasant to work with. In addition, Altus
alleged and that Mr. Gordon had failed to disclose lending money to
a company with which Altus was doing business, placing him in a
conflict of interest. Altus also alleged that Mr. Gordon had hired
and continued to employ an individual who had been charged with
However, Justice Glass concluded there was little merit in the
employer's allegations, and that once Mr. Gordon gave notice to
arbitrate the purchase price adjustment, Altus wanted to end the
employment contract without paying him severance. "In other
words, they decided to be cheap and then conjured up a cause for
firing in order to save money."2 Justice Glass
concluded that Altus' actions were outrageous and warranted
punitive damages in the amount of $100,000. In arriving at the
quantum, the court stated, "that sum of money notes the harsh
treatment of Alan Gordon over an extended period of time as a means
of sanctioning Altus for its terrible
Employers should be careful to allege cause only where there is
a foundation for such allegations. Otherwise, courts may sanction
the employer's conduct. While exemplary damages in employment
cases used to be few and far between, the Altus decision
(among others) shows that courts will not shy away from awarding
them against an employer whose conduct is deserving of
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
A former teacher at Bodwell High School has learned a valuable lesson from the B.C. Human Rights Tribunal— it is not discriminatory for an employer to offer child-related benefits to only employees with children.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
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