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As a Québec employer recently learned, an alleged breach in the relationship of trust between employer and employee must be supported by objective evidence and facts if it is to form cause for termination of employment. In Senécal vs. CEGEP du Vieux Montréal, 2012 QCCS 1995 (PDF - available only in French), in the absence of this evidence, the employer was ordered to pay significant damages to Francine Senécal ("Senécal") following her termination on this ground.
The Facts
Very succinctly, the facts are as follows:
In 2001, Senécal left her career in post secondary education to enter into municipal politics. She was elected as a counselor for the City of Montréal and became Vice-President of the City's Executive Committee. Throughout her term in office, Senécal's spouse worked in a senior management position for the City's housing and development corporation (called in French, the "Société d'habitation et de développement de Montréal" or "SHDM"). After 7 years in public life, Senécal decided she wanted to resume her career and applied for the position of director general of the CEGEP du Vieux Montréal1 (the "CEGEP"). Senécal was the successful candidate. She received confirmation in October 2008 of her appointment for a 5 year term, to begin in January 2009. Senécal therefore resigned from public office.
In the days immediately following her resignation, an article was published in a Montréal newspaper that raised serious doubts about the integrity and management of her spouse at the SHDM. It alluded to possible links with certain notorious individuals. The article further referenced the "sudden" resignation of Senécal from her position as Vice-President of the City's Executive Committee as if the two matters were related.
As a result of the article, the CEGEP became worried about its own reputation. Its officials met with Senécal and asked her to confirm that she was never in conflict of interest while in municipal office. Senécal reassured them in several ways. including legal opinions and a signed affidavit. Notwithstanding, the CEGEP withdrew her appointment before employment even commenced. It alleged that the relationship of trust no longer existed. The CEGEP publicly announced its decision.
Senécal sued the CEGEP. She claimed $720,000 in damages for the loss of the 5 year contract, plus $250,000 for loss of reputation and $150,000 in other damages.
The Decision
In alleging breach of the relationship of trust, the CEGEP argued that it had serious reasons to withdraw from its contract with Senécal and that consequently, it owed no damages to her. The CEGEP alleged that Senécal had not reassured it and the general population of her own integrity.
The Superior Court disagreed.
As the Court reminded us, a serious reason for termination of employment exists when the employee does not fulfill or improperly fulfills his or her obligations. The burden of showing cause lies with the employer. It is often a heavy onus, especially where the reasons relied upon are subjective.
The Court further explained that an allegation of breach of trust must be examined objectively, taking into account the entire circumstances. As the Court stated: "If it were left to an employer to simply state that he has lost confidence in his employee to justify the unilateral termination of the employment relationship, the recourse of employees to contest the validity of their dismissal would become assuredly very random" (our translation).
Ultimately, the Court considered that the CEGEP had failed to show cause for termination through objective facts. Considering the entire context, the Court noted that Senécal had complied with the CEGEP's various requests to dispel any potential issues of conflict of interest while she was in municipal office. The CEGEP'S allegations were not only ill-founded but abusive.
The CEGEP was consequently ordered to pay damages representing lost earnings over the 5 year contract, including lost pension benefits and social benefits, less mitigation (Senécal had been successful in finding alternate employment although at a lesser yearly salary). No damages for loss of reputation were awarded. In all, the CEGEP was ordered to pay over $429,000 to Senécal, plus interest and court costs.
Lessons to be learned
Although this case is very fact specific, it serves to remind all employers across Canada that it is not sufficient to allege breach of trust in order to justify the dismissal of an employee. An employer must have relevant evidence of actions or omissions of the employee. These must be sufficient to reasonably result in a loss of confidence such that the employment relationship has in fact been irrevocably tarnished. If you fail to do so, you may be exposing yourself to a similar result as the one summarized in this article.
Footnotes
1. A CEGEP in Québec is a post secondary college.
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.
