SUPERIOR COURT OF JUSTICE – ONTARIO
CITATION: Armstong v. Lendon, 2015 ONSC 3004
COURT FILE NO.: 13-156-SR
DATE: 20150525
RE: TINA ELAINE ARMSTRONG – and – HAROLD AUSTIN LENDON
BEFORE: Sproat, J.
COUNSEL: M. Cummings, for the Plaintiff
N. Smitheman, for the Defendant
HEARD: April 24, 2015
E N D O R S E M E N T
[1] This case was heard as a summary trial. The parties filed affidavit evidence and the deponents also testified at trial. I have also considered supplementary written submissions.
[2] The plaintiff served as the defendant’s legal secretary for 26 years. On September 4, 2012 the defendant advised the plaintiff he was retiring on December 31, 2012. The defendant provided the plaintiff with a glowing letter of reference attesting to her “thorough competence,” her ability to deal with difficult clients, her determination to assist clients and her outgoing personality.
[3] The defendant testified he was not aware that the plaintiff had a common law right to reasonable notice of termination. His understanding was that he had more than complied with his legal obligation, as the approximately four months working notice he provided exceeded her eight week entitlement under the Employment Standards Act.
[4] When the plaintiff asserted her right to additional notice in June, 2013 the defendant, for the first time, asserted just cause for dismissal. The onus is on the defendant to establish just cause. In summary the defendant’s position is that:
a) Prior to 2008 the plaintiff was thoroughly competent, following which there was some deterioration in her performance.
b) The “crisis” occurred on July 11, 2012 when the plaintiff, in an emotional outburst of a type he had never witnessed from anyone, demanded a $5,000 bonus and an unspecified raise, threatening to quit on the spot. The outburst was so severe his first concern was for the plaintiff’s health.
c) He felt he had no choice and so agreed to pay the bonus and increase her hourly rate from $14 to $18 per hour.
d) In August the plaintiff called in sick on several occasions which put him under incredible stress. In particular, she was off when four deals were to close on August 23 and 24. He anguished over the unpleasant alternative of terminating the plaintiff but concluded that would be more stressful. On Labour Day weekend he decided the better alternative was to retire.
e) He provided the letter of reference because he believed that with proper psychological or other assistance the plaintiff could recover from her problems and perform at the level she had in the past.
[5] Dorothy Clayton, the defendant’s bookkeeper, also filed an affidavit and testified at trial. Her evidence was that after the defendant advised that he would be retiring by the end of 2012, the plaintiff was agitated and angry and “cursed” about the defendant in the reception area. Clients of a lawyer the defendant shared space with were present.
[6] The plaintiff’s evidence can be summarized as follows:
a) In 2008 she suffered from stress, provided a doctor’s note and was off work for approximately 2 months.
b) In 2012 she suffered from pneumonia and attended the emergency department three times. When she was absent it was because she was sick.
c) She felt she was underappreciated and overworked and did advise the defendant that if she did not get a raise she would leave on two weeks’ notice.
d) At the time she asked for the raise she did not in addition demand a $5,000 bonus. She did ask for a bonus the defendant had earlier mentioned. The amount had not been specified. Bonuses were routinely paid.
[7] Many of the facts are not in dispute. To the extent there are facts in dispute I prefer and accept the evidence of the plaintiff. She gave her evidence in a straight forward manner and was generally consistent. The defendant, however, admitted that he authored a seriously false and misleading reference letter. On his evidence he was prepared to seriously mislead members of the Owen Sound legal community who might want to hire the plaintiff. I also find it improbable, and do not accept his evidence, that he was unaware that the plaintiff, a 26 year employee had any rights beyond an eight week statutory entitlement. That long service employees have a significant entitlement would be known to any intelligent person who read or watched the news.
[8] McKinley v. BCTel, 2001 SCC 38, [2001] 2 S.C.R. 161, involved allegations of dishonesty. The allegations made by the defendant are a combination of insolence, incompetence, absenteeism and of conduct otherwise incompatible with continued employment. The lessons of McKinley are that:
a) A contextual approach must be taken to determine whether conduct constitutes just cause for dismissal.
b) The focus is on whether the conduct has given rise to a breakdown in the employment relationship.
c) Conduct which would constitute just cause for a short term junior employee will not for a long term employee in a more senior position.
d) There must be proportionality between the misconduct and the sanction imposed by the employer.
[9] Even if I accepted the defendant’s version of events, which I do not, it would fall far short of just cause. An emotional demand for a raise and a threat to quit do not amount to just cause after 26 years of service. An angry outburst on learning that you are being terminated on less than four months’ notice after 26 years of service, considered with the totality of the evidence, does not amount to just cause.
[10] I also note that the defendant’s evidence was that:
a) on July 11, 2012 the plaintiff’s outburst was such that he was concerned for her health as it was completely out of character;
b) He believed that the plaintiff could once again be a good employee if she received psychological or other assistance.
[11] The defendant himself viewed the plaintiff as having a psychological problem. Improper conduct which is not deliberate, but is a manifestation of a psychological problem, is unlikely to constitute just cause on the Mckinley analysis.
[12] Further, the plaintiff’s evidence, which I accept, was that any absences in 2012 were the result of pneumonia or other illness.
[13] In Nossal v. Better Business Bureau of Metropolitan Toronto Inc., (1985) 1985 CanLII 1980 (ON CA), 51 O.R. (2d) 279 (C.A.) the Court stated:
Almost 100 years ago, this Court dealt with the issue of the use of accumulated past conduct by employees. In McIntyre v. Hockin (1889), 16 O.A.R. 498, Maclennan J.A., speaking for the Court, said at pp. 501-2:
It may be proper, however, to add a few words on the subject of condonation. When an employer becomes aware of misconduct on the part of his servant, sufficient to justify dismissal, he may adopt either of two courses. He may dismiss, or he may overlook the fault. But he cannot retain the servant in his employment, and afterwards at any distance of time turn him away. It would be most unjust if he could do that, for one of the consequences of dismissal for good cause is, that the servant can recover nothing for his services beyond the last pay day, whether his engagement be by the year or otherwise: Smith's Law of Master and Servant, 4th ed., p. 220; Boston Deep Sea Fishing Co. v. Ansell, 39 Ch. D. 339. If he retains the servant in his employment for any considerable time after discovering his fault, that is condonation, and he cannot afterwards dismiss for that fault without anything new. No doubt the employer ought to have a reasonable time to determine what to do, to consider whether he will dismiss or not, or to look for another servant. So, also, he must have full knowledge of the nature and extent of the fault, for he cannot forgive or condone matters of which he is not fully informed. Further, condonation is subject to an implied condition of future good conduct, and whenever any new misconduct occurs, the old offences may be invoked and may be put in the scale against the offender as cause for dismissal.
[14] In our case the defendant clearly condoned any misconduct. Being fully aware of the alleged misconduct, and to avoid what he concluded would be the greater stress of terminating the plaintiff for just cause, he made the decision that he would not terminate the plaintiff for just cause.
[15] I, therefore find that the plaintiff was wrongfully dismissed.
[16] The onus is on the defendant to prove a failure to take reasonable steps to mitigate damages. The plaintiff’s affidavit demonstrates her efforts to find employment which met with limited success. The only cross-examination related to whether she limited her job search because any earnings would reduce her Canada Pension Plan (“CPP”) entitlement. I accept the plaintiff’s evidence that while she initially understood that earnings did reduce CPP she telephoned the Canada Revenue Agency and confirmed this was not the case. In any event I accept her evidence that she never limited her job search for this reason.
[17] In my opinion cases such as DiTomaso v. Crown Metal Packaging Canada LP, 2011 ONCA 469 and Hussain v. Suzuki Canada Ltd. [2011] O.J. No. 6355 (Ont. S.C.J.), cited by the plaintiff support a notice period for the plaintiff in the range of 18 to 21 months.
[18] The defendant submitted that the notice period should be reduced on account of the fact that he had modest earnings over the years he employed the plaintiff. I do not agree. As a matter of law ability to pay is generally not a factor to be considered in assessing damages for breach of contract. (see Lim v. Delrina (Canada) Corp., [1995] O.J. No. 71 (Ont. Gen. Div.)).
[19] As a matter of fact the defendant did not produce tax returns and other documents to establish his earnings and assets. In my view this would be essential because it is extremely common to find self-employed persons “cry poor” and report low line 150 income only to find on closer examination of documentation that they have substantial earnings and assets.
[20] In weighing the Bardal factors, particularly given the age and length of service of the plaintiff, I find that a 21 month notice period is appropriate. In reaching the conclusion that the notice should be at the upper end of the range, I take into account that:
a) The plaintiff had a highly responsible position as evidenced by the fact that the defendant entrusted her with his password so she herself could effect all entries on Teranet.
b) The plaintiff had suffered stress and other health problems which would tend to make it more difficult to obtain new employment.
c) The plaintiff had no ability to provide a favourable reference to a prospective employer given the serious allegations against her which, as a matter of common sense, would almost certainly preclude her from obtaining new employment as a legal secretary.
[21] In his affidavit the defendant stated he told the plaintiff on September 4, 2012 that he was retiring by the end of the year. In her affidavit the plaintiff did not take issue with the date of the conversation. As such I find that the plaintiff received notice of termination on September 4, 2012. Written notice was not given until October 19, 2012, effective December 21, 2012. It remains that as of September 4, 2012 the plaintiff had clear notice her employment was ending. As such the working notice is September 4 to December 21, 2012, which amounts to 15.6 weeks or approximately 3.5 months.
[22] I value the plaintiff’s annual compensation at $40,100. This is based on $18 per hour, 32.5 hours per week plus a $5,000 bonus. There was a history of paying bonuses regularly and $5,000 was the most recent bonus. In the absence of any evidence that a different level of bonus would have been paid over the notice period I utilize $5,000 in my calculation of damages:
Damages for 21 months $70,175
Deduct:
(a) 3.5 months working notice $11,695
(b) Earnings in mitigation $12,073
Subtotal $23,768
TOTAL $46,407
[23] The plaintiff claims aggravated damages. Her evidence in this regard includes that:
a) She felt as if she was kicked in the stomach after reading the startling and false allegations of just cause;
b) The allegations have caused her stress for which she has sought medical attention;
c) She continues to suffer self-doubt and humiliation.
[24] The plaintiff was certainly treated unfairly. The allegations of just cause were baseless and hurtful. The plaintiff has put forward evidence, which I accept, of mental distress related to the manner of dismissal. I take into account that the plaintiff has not provided medical evidence and that considerable stress was no doubt caused by the mere fact of the termination of employment which is not compensable. I award the plaintiff $7500 in aggravated damages for the humiliation, embarrassment, loss of self-esteem she has suffered and the damage to her dignity and reputation.
[25] In my opinion the conduct of the defendant was not, however, sufficiently egregious to justify an award of punitive damages having regard to the criteria in Whiten v. Pilot Insurance Co., 2002 SCC 18, [2002] 1 S.C.R. 595. The award of aggravated damages reflects that the defendant treated the plaintiff unfairly. I do not, however, believe that the defendant’s conduct was harsh, vindictive, reprehensible or malicious so as to justify an additional award of punitive damages.
[26] I, therefore, award the plaintiff damages as follows:
a) wrongful dismissal $46,407
b) aggravated damages $7,500
TOTAL $53,907
[27] The plaintiff shall file written cost submissions within ten days and the defendant shall respond within a further ten days. These submissions may be delivered or sent by email to my attention in Brampton.
Sproat, J
DATE: May 25, 2015
CITATION: Armstrong v. Lendon, 2015 ONSC 3004
COURT FILE NO.: 12-156 SR
DATE: 20150525
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: TINA ELAINE ARMSTRONG – and – HAROLD AUSTIN LENDON
BEFORE: Sproat, J.
COUNSEL: M. Cummings, for the Plaintiff
N. Smitheman, for the Defendant
ENDORSEMENT
Sproat, J.
DATE: May 25, 2015