COURT FILE AND PARTIES
COURT FILE NO.: SR9647/08
DATE: 2013/12/05
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Richard Ludchen
Plaintiff
– and –
Stelcrete Industries Ltd. o/a Salit Steel a Division of Myer Salit Ltd.
Defendant
Margaret Hoy, for the Plaintiff
Daniel Fogel and Laila Karimi Hendry, for the Defendant
HEARD at Welland, Ontario:
October 7, 8, 9, 10, 11, 18 and 21, 2013
THE HONOURABLE JUSTICE J. R. HENDERSON
rEASONS FOR JUDGMENT
Introduction
[1] The plaintiff Richard Ludchen (“Ludchen”) was a plant superintendent who worked for the defendant Stelcrete Industries Ltd. (“Stelcrete”) at Stelcrete’s Welland plant. On February 4, 2008, Stelcrete terminated Ludchen’s employment without notice. Ludchen now brings this action for damages for wrongful dismissal, aggravated damages, and punitive damages.
[2] Stelcrete submits that it had just cause for Ludchen’s termination without notice because on January 17, 2008, Ludchen made anti-Semitic remarks about the owners of Stelcrete, Larry Cohen and Steve Cohen, in response to Stelcrete’s decision to not provide the employees with a paid holiday on Family Day.
[3] Ludchen denies that he made any anti-Semitic remarks about the owners of Stelcrete on that day, or on any day. In the alternative, counsel for Ludchen submits that any such remarks do not provide just cause for Ludchen’s termination without notice.
THE BACKGROUND FACTS
[4] Stelcrete is in the business of making and assembling rebar for sale to the precast concrete industry. Stelcrete is a wholly owned subsidiary of Myer Salit Ltd., operating under the name Salit Steel. The major shareholders of Myer Salit Ltd., and the acknowledged “owners” of Stelcrete, are Larry Cohen and his son, Steve Cohen.
[5] Ludchen started working for Stelcrete in January 1997 as a production welder. He was promoted to a welding supervisor at the Niagara Falls plant in 1999. His title changed to plant superintendent in 2006, and he moved to the Welland plant in the same capacity when it opened in 2007. At the time of termination Ludchen was in charge of the rebar assembly division of the Welland plant, but not in charge of the entire Welland operation which consisted of three separate divisions.
[6] Ludchen’s duties included supervising and directing the production welders; purchasing the steel and consumables required for the rebar assemblies; hiring, firing, and disciplining employees; and ensuring that production occurred in a cost effective and safe manner. At the time of his termination he supervised approximately 16 or 17 fulltime employees in the assembly division.
[7] Ludchen had no history of discipline problems. By all accounts he was a respected employee, and he was regarded as a good boss by his subordinates.
[8] At the time of termination Ludchen’s base salary was $61,000 per year. He had received a bonus every January in the range of $2,000 to $5,000 per year from 2003 to 2008. Ludchen had health benefit insurance coverage provided for him by Stelcrete, and counsel agree that the cost to Stelcrete of that coverage was $542 per month.
THE LAW
[9] The onus is on the employer to prove on a balance of probabilities that there was just cause for the employee’s termination without notice. The task of proving just cause is often broken down into two steps. The employer must prove first that there has been misconduct on the part of the employee, and second that the misconduct justifies termination of the employment relationship. In that respect see the cases of McKinley v. BC Tel, 2001 SCC 38, [2001] S.C.J. No. 40, at para. 29, and Geluch v. Rosedale Golf Association, Limited, 2004 14566 (ONSC), at para. 85.
[10] Further, whether the employee’s misconduct justifies termination of the employment relationship requires a contextual analysis. I accept that insubordination by an employee, as is alleged in this case, is akin to dishonesty, and therefore the passage set out below from para. 48 of the McKinley case applies:
In light of the foregoing analysis, I am of the view that whether an employer is justified in dismissing an employee on the grounds of dishonesty is a question that requires an assessment of the context of the alleged misconduct. More specifically, the test is whether the employee’s dishonesty gave rise to a breakdown in the employment relationship. This test can be expressed in different ways. One could say, for example, that just cause for dismissal exists where the dishonesty violates an essential condition of the employment contract, breaches the faith inherent to the work relationship, or is fundamentally or directly inconsistent with the employee’s obligations to his or her employer.
[11] I also accept that a single incident of misconduct or insubordination may constitute just cause for termination. See for example the case of Wise v. Broadway Properties Ltd., 2005 BCCA 546, a case in which a caretaker was dismissed for just cause because of a letter that he wrote in which he compared his Jewish employer to German corporations that utilized Jewish slave labour in World War II. Also see for example the case of Bennett v. Cunningham, 2012 ONCA 540, a case in which a lawyer was dismissed for just cause because she wrote a letter in which she accused her employer of being dishonest and negligent.
THE ALLEGED MISCONDUCT
- OVERVIEW
[12] The incident that gave rise to Ludchen’s termination revolves around the Ontario government’s decision to create a new public holiday, Family Day, in February of each year. The first Family Day was scheduled to occur on February 18, 2008. In that year Stelcrete had an option to not provide a paid holiday on Family Day if Stelcrete provided at least the minimum number of paid holidays required by the legislation. Stelcrete exercised that option.
[13] On January 17, 2008, the Manager of Human Resources, Robin Dietsch (“Dietsch”) sent an email to Ludchen, with an Announcement attached to the email, and requested that Ludchen post the Announcement at the Welland Stelcrete plant. The Announcement informed the employees that Stelcrete would not be recognizing Family Day on February 18, 2008, but would be providing an additional paid holiday during the Christmas season.
[14] Ludchen was in his production office at the Welland plant when he received the Announcement from Dietsch. Then, it is alleged by Stelcrete that Ludchen had an angry outburst in front of his subordinates during which he called the owners “cheap fucking Jews”, or made a similar anti-Semitic remark, because the owners were not honouring Family Day.
[15] The decision to terminate Ludchen’s employment was made by Dietsch and Robert Nichols (“Nichols”) the General Manager of Stelcrete, but neither had any firsthand knowledge of the alleged incident. Rather, they relied on information that was provided to them by a private investigator, Stacey Avlonitis (“Stacey”).
[16] Stacey had been hired by Dietsch and Nichols to work undercover at the Welland plant to investigate drug use on the job by employees, and had been introduced to the employees as an ergonomics expert. At some point after the alleged incident had occurred Stacey sought out Dietsch and Nichols and informed them about Ludchen’s remarks.
[17] Dietsch and Nichols did not conduct any independent investigation into these allegations. On February 4, 2008, Dietsch and Nichols informed Ludchen that his employment was terminated for cause without notice. At the time of termination, Stelcrete relied solely on the January 17, 2008, incident as just cause for Ludchen’s dismissal.
[18] Stacey left her undercover job at Stelcrete in March 2008. At some point after she left, Stacey provided Stelcrete with a written report. Later, she sent an email dated September 2, 2008, to Dietsch in which she provided more information about Ludchen.
[19] Subsequently, in April 2013, during her examination under oath as a witness in this action, Stacey disclosed to the lawyers for both the plaintiff and the defendant that she had heard Ludchen make anti-Semitic remarks on several other occasions during her undercover job at Stelcrete. As a result, Stelcrete amended its Statement of Defence, and now relies upon this after-acquired evidence in support of its position that there was just case for Ludchen’s termination.
(Full text continues exactly as in the original judgment through paragraph [98], maintaining all wording and paragraph numbering.)
Henderson J.
Released: December 5, 2013
COURT FILE NO.: SR9647/08
DATE: 2013/12/05
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Richard Ludchen
Applicant
– and –
Stelcrete Industries o/a Salit Steel a Division of Myer Salit Ltd.
Respondent
REASONS FOR JUDGMENT
Henderson J.
Released: December 5, 2013