In many instances employers will litigate against the assumption
of a power imbalance, an employee viewed as the party in need of
protection. This is seen in the way employment contracts are
interpreted in wrongful dismissal claims, and how actions and
decisions of employers are scrutinized. One certainty for employers
is when found to do nothing wrong, when your case has been proven,
you are not liable for damages. Recently an Ontario Superior Court
decision found otherwise.
In a case that left both parties scratching their heads, Justice
Ray ordered common law damages against Enablence Canada Inc.
despite no finding of liability.
The case, Muntean v Enablence Canada Inc., was
a claim for wrongful dismissal damages by Mr. Muntean, an engineer
laid-off after 6.5 years of employment. The employment relationship
was based on a 3-year written contract that provided for 6-months
of notice if terminated by the employer, required 3 months'
notice if ended by resignation, and did not contemplate
In November of 2014 the employer instituted a lay-off affecting
Mr. Muntean due to financial difficulties. The lay-off notice
indicated that his employment benefits would continue and the hope
for recall within 35 weeks. In less than 4 weeks the employer
requested that Mr. Muntean return to work, but the employee claimed
the layoff amounted to a constructive dismissal. If the lay-off
amounted to a constructive dismissal then the employee would be
entitled to damages, either through the termination provisions of
the contract or at common law.
Despite Ontario case law that temporary lay-offs are not an
automatic right of employers, a lay-off may be appropriate with
evidence of past practice, contemplation within an employment
contract, or if the employee acquiesces to the lay-off. In this
case the layoff notice clearly contemplated recall and allowed for
continuing benefits. Mr. Muntean also acquiesced to the layoff by
not immediately treating the layoff as a constructive dismissal
and, more importantly, his use of the continued employment
benefits. In fact, Mr. Muntean continued to claim benefits until
May 2015 despite commencing work with a new employer in February of
the same year.
Justice Ray concluded that Mr. Muntean acquiesced to the layoff
and "at no time did the lay-off become a constructive
dismissal." It was found that neither party could rely on the
contract for damages related to the required notice provisions.
Despite this finding, Justice Ray determined "the plaintiff is
entitled to damages for wrongful dismissal on a common law
basis" and ordered damages from the date of the notice of
layoff until Mr. Muntean commenced his new employment.
The ordering of damages for wrongful dismissal without finding
anything "wrongful" about the dismissal is bizarre and
confusing. On a positive note, this case is unlikely to stand on
appeal. This case doesn't provide any lessons for employers but
does highlight the inherent riskiness of litigation.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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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.
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.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
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