Employer’s “Over-Reaction to a One-Off Event” Results in Six Months’ Severance to Short Term Employee

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Employer’s “Over-Reaction to a One-Off Event” Results in Six Months’ Severance to Short Term Employee

An employer’s “overblown reaction” to an employee’s “inappropriate” and “unfortunate” conduct did not permit it to dismiss the employee for just cause or rely on the “inaccurate and misleading” termination documents signed by the employee on the day of his termination.

In Saliken v. Alpine Aerotech Limited Partnership, 2016 BCSC 832, the plaintiff was a 54 year old helicopter mechanic who had been employed for about 15 months. During his employment, he took a three week training program in Texas and agreed to a “training bond” in which the employer paid $8,787.00 for his costs, on the condition that he would continue working for one year following the course and pay back the cost if he failed the course, resigned his employment or “became unsuitable for continued employment”.

The Plaintiff’s dismissal resulted from an incident involving a representative of the employer’s key customer. The representative attended the worksite to conduct an audit to ensure the employer had the necessary expertise and equipment. During the audit, the plaintiff tossed unlabeled bottles into the garbage when the representative told him they should be labeled. He then tossed his own tool into the garbage when the representative was unsatisfied with his explanation for its presence on his work bench.

The plaintiff’s manager believed the plaintiff was aggressive and rude to the representative, while the plaintiff believed the representative was abrupt and aggressive. The employer’s president was advised of the interaction and was worried that the employer would lose the much-needed client. Based on the reports of the incident from his managers, but without speaking to the plaintiff, the president decided to terminate his employment. He advised the head of human resources that he wanted the termination effective that day.

Termination documents were drafted which indicated that the plaintiff was terminated for cause but that the employer would not pursue re-payment of the training bond, provided he signed a release of liability in favour of the employer. The plaintiff signed the release during the termination meeting.

The court held that the employer did not have just cause to summarily terminate the employee. Although the judge determined that the representative was “thorough” and not aggressive towards the plaintiff, he found the plaintiff was “ill-equipped” to handle the representative’s questions because the employer had failed to prepare him in advance on how to respond. The plaintiff’s reaction to the representative was “not entirely his fault”.

In addition, the judge found that the president was told an “embellished version” of the interaction between the plaintiff and the representative and that the employer did not follow its own employee handbook on issuing discipline. The employer “failed, as it should have, to consider any disciplinary measures short of dismissal.”

The judge then considered whether the termination documents signed by the plaintiff were binding on him and prevented him from suing for damages. He found they were not because the agreement was “unconscionable”. In order to find a bargain unconscionable, there must be a weakness in bargaining position on one side and a taking of unfair advantage on the other.

The court held it was “substantially unfair” for the plaintiff to agree not to seek severance, given there was no just cause to terminate his employment. The documents were also “inaccurate and misleading” in that they wrongly suggested the employer had just cause to terminate his employment and that he was required to repay his training bond, which, in the circumstances, he was not.

In addition, the court found that the plaintiff, who had a grade 11 education, was “blindsided” and “confused” when he signed the documents and did not agree or understand the decision to terminate his employment. The managers conducting the termination meeting believed that the head of human resources wanted the termination documents signed by the plaintiff that day and that he should not receive his final pay cheque until he signed them.

After also determining that the plaintiff appropriately mitigated his losses by seeking alternate employment, the court awarded him six months’ damages, or $34,000, given his age and lack of available similar employment, even though he had been employed a relatively short period of time.

This case is a cautionary tale for all employers to ensure that the ‘whole story’ is heard before the decision to terminate an employee for just cause is made and to not rush either the termination process or the signing of any termination documents.