Tag Archives: wrongful dismissal

Regular Employee Performance Appraisals a Must

by Michael V. Coyle, JD*

Sally’s job performance had been slipping. The boss grumbled but did nothing. Recently, she missed an important deadline that cost the company a contract. She used the ‘excuse’ that she was often distracted by her home situation because, as the employer knew, she had to look after her elderly mother with progressive dementia. The boss didn’t buy it and she was fired for poor performance.

Joan’s work was first rate. She was up to any challenge. The boss and the clients loved her and she was a real asset to the company with a bright future, which everybody just assumed she knew. Then she quit to work for a competitor and many of the clients followed her out the door.

In neither case did the company do regular employee performance appraisals. And in both cases it cost them.

Sally sued for wrongful dismissal and won. The company was unable to document her “increasingly poor performance” leading up to her dismissal and, even worse, was unable to show that there had been any warnings or counselling or any progressive discipline before she was fired for that “one incident”. She testified that her boss was irritable and unapproachable and made snide comments all the time. She also successfully brought a human rights complaint against the employer because the company had failed to accommodate her family situation and therefore had discriminated against on grounds of her family status. All told, with legal fees and damages, the cost to the employer was well in the six figure range.

If Sally had had regular performance appraisals not only would the employer have a record of her deteriorating performance and their efforts to help her improve it but they would likely have been made aware of her home situation. Human rights tribunals across the country are increasingly placing an onus on the employer, once they are aware of a potential human rights issue, to explore that with the employee and discuss accommodation. A routine performance review would have provided that opportunity.

The failure of Joan’s employer to have regular performance appraisals meant that it missed the opportunity to tell Joan how great she was doing, to thank her for her efforts and to discuss her future with the company. Instead, she felt taken for granted and that her accomplishments were unnoticed and unappreciated. She was particularly disappointed that the company never asked for her input on what they could do to be a better employer. When the competitor offered a more progressive employment package that included support for employee growth and development (based on regular reviews) she was off like a shot.

Performance reviews do not need to be a torment – for either the employee or the manager. Performance appraisal forms should avoid ‘check boxes’. They should permit both the manager and the employee to give a narrative answer, without the incessant ‘excellent, good, fair, poor’ categories or their numerical equivalents.

The purpose of these reviews is twofold. They provide an opportunity for the manager to give feedback – both positive and negative – so that the employee knows where they stand, good and bad. And they give both parties an opportunity to look towards the future in a constructive and mutually beneficial way.

It is legally very risky indeed for an employer not to have regular performance reviews with all of their employees. It is equally risky for employees to work for such an employer.

Regular performance reviews should, of course, be tied to a currently updated company employment policy. But that’s another topic.

*Michael Coyle is an experienced employment and human rights lawyer based in Kentville, Nova Scotia. Information and opinion expressed in this article is meant for general interest only and is not a substitute for legal advice about your own situation. Michael can be reached by email at [email protected]  For more information and tips, visit his website at www.michaelcoyle.ca

©Michael V. Coyle, 2012
















BC Jury Awards $809,000 in Wrongful Dismissal Case

by Michael V. Coyle, JD*

In an unusual case, a British Columbia jury recently awarded a fired employee total compensation of $809,000, approximately $573,000 of which was awarded as punitive damages against the employer after a three week trial.

Larry Higginson worked at a saw mill as an electrician for 34 years. In later years he was manager of the electrical department. The mill was “sold” to a related company. The “new” owner proposed an employment contract in which the employees would basically lose the severance rights they had earned. Mr. Higginson refused to go along. As a result, the employer started excluding him from meetings and started putting unfair pressure on him.

Then he was then fired without notice, allegedly “for cause”. He said that the employer concocted the grounds for dismissal so they wouldn’t have to pay him the severance he was legally entitled to as a long-term employee. He also said that the parent company was directing this particular strategy against long-service employees to lessen its financial exposure. The testimony at trial of other mill workers who had been fired and were now able to come forward confirmed the employer’s strategy of getting rid of long-service employees by firing them on trumped-up grounds. On that basis, Mr. Higginson sought damages in tort for the wrongful interference with contract against the parent company. That was in addition to the wrongful dismissal claim. That opened the door to a claim for punitive damages.

Essentially, Mr. Higginson argued that he was the victim of a nasty conspiracy. The jury obviously agreed. They handed him the largest punitive damage award in a wrongful dismissal case in Canadian history.

Fortunately for Mr. Higginson, he started to secretly record conversations at work when he feared that the employer might start to make things up about him. The tapes were used during litigation to substantiate his claims that the employer had done exactly that. Interestingly, the employer argued in court that his secret recordings were further evidence of his disloyalty and dishonesty and proved that the dismissal was justified. That unusual submission seems to have backfired on the employer.

Because this was a jury award we do not, of course, have the benefit of the judge’s reasons. Normally, we might expect that the employer would appeal from the jury award and that this would have resulted in a written decision from the appeal court no matter how the appellate court decided the appeal. However, it seems that the parties reached a confidential post-trial settlement to avoid an appeal. One can assume that involved an actual payment that was somewhat less than the $809,000 awarded by the jury, but not so much less that Mr. Higginson would have the incentive to defend the jury award in the court of appeal.

For its part, the employer likely decided to cut its losses in a case that should never have gone to court.

For confidential advice about your own situation, please contact me.

*Michael Coyle is an experienced labour and employment lawyer based in Kentville, Nova Scotia.  He is recognized by the Government of Canada as a neutral arbitrator, mediator and adjudicator. Information in this article is meant for general interest only and is not a substitute for legal advice about your own situation. Michael can be reached by email at [email protected]  For more information and FAQs on private dispute resolution please look under the Private Dispute Resolution tab on the left.

©Michael V. Coyle, 2012

Employment Basics – What Every Employer and Employee Should Know

by Michael V. Coyle, JD*

Every employee in Nova Scotia has a contract with their employer – whether they work full time, part time, seasonal or casual. The contract exists whether they have been working there 10 years or 10 minutes. In relatively rare cases the contract might be in writing, but in the vast majority of cases the contract of employment is unwritten. But it is still a contract in the eyes of the law.

The essence of the contract of employment is that the employee will faithfully carry out their assigned duties and the employer will pay the employee an agreed wage or salary and benefits. The contract continues until it is lawfully terminated by one party or the other.

In theory, an employer is free to terminate the contract at any time.

If the employee has breached the contract by failing to live up to his/her end of the bargain as a faithful employee that is called a “termination for just cause”. In plain language, the employee is “fired”. In that case, the employer owes the employee nothing except wages and benefits due to the date of firing.

But if the employer fires the employee without “just cause”, the employer must pay the employee an amount of money in lieu of the “reasonable notice” that they should have received from the employer. If the employer refuses to pay, the employee can sue the employer for wrongful dismissal. Generally, the employer’s financial position is not “just cause” for dismissal, nor is a decision by the employer to “restructure” or “down-size” their operation.

The determination of the amount that the employer must pay for wrongfully dismissing an employee is based on a variety of factors. These include the employee’s age, education, training and family circumstances, the time that it would likely take to find comparable employment in that business, trade or industry in that geographic area, the length of time the employee has worked for the employer and the kind of job or position they held with the employer. On the other hand, a unjustly dismissed employee has a legal obligation to look for work and take a comparable job if it is offered.

If the employer tries to avoid its obligations under the contract of employment by forcing the employee to quit, for example, by changing the employee’s fundamental terms of employment without their agreement, that might be a “constructive dismissal”. In that case, even though the employee quit, they can still sue the employer for wrongful dismissal.

Employers cannot discriminate against employees – before and after hiring – on  any of the grounds set out in the Human Rights Act. They have a legal duty to accommodate employees who are sick or who have disabilities. Employees are forbidden from harassing other employees on any of the prohibited grounds of discrimination under the Human Rights Act.

The Occupational Health and Safety Act prohibits “workplace violence”. That term now includes workplace harassment and is broader than the definition used under the Human Rights Act in that it can include meanness and nastiness from both supervisors and other employees.

Employers and employees must of course abide by the Labour Standards Code and, generally, employers have an obligation to continue additional benefits they have customarily provided to their employees beyond the Labour Standards Code. The Labour Standards Code provides that, once an employee has worked for an employer for 10 years, they can only be dismissed for “just cause”. A 10 year employee who has been fired without just cause can seek reinstatement to their former position, with back pay for lost wages, under the Labour Standards Code.

A “lay off” is a reduction in the workforce due to a shortage of work caused by the employer’s inability, in good faith, to secure orders or work or other circumstances (like fire, natural disaster, strikes or lockouts by suppliers or key customers, etc.) that are beyond the employer’s control. A “lay off” should not be confused with a “termination” or “dismissal”. Laid off employees are not “fired” and they have a contractual right to be recalled to work once the reason for the “lay off” has gone away. An employer who hires a new employee to replace one who has been “laid off” risks being sued for wrongful dismissal.

The law has changed in recent years concerning probationary employees. A judge of the Supreme Court of Nova Scotia recently summed it up this way: “The era when an employer could arbitrarily terminate a probationary employee without obligation or explanation is past.” In most cases, probationary employees can now only be dismissed for documented “just cause”, like regular employees.

In a unionized workplace, the employer and the Union bargain for terms of employment which are set out in the Collective Agreement. Generally speaking, a unionized employee cannot sue the employer for breach of the Collective Agreement, but instead must go through the Union by way of the grievance procedure in the Collective Agreement to seek justice. Unions, in turn, owe the employees they represent a “duty of fair representation” under the Trade Union Act.

If you are an employer or an employee and an employment law issue arises you should consult with a knowledgeable employment lawyer before taking any actions. Employment law is a specialized field. Most employment law cases can be resolved out of court with the help of experienced legal counsel.


*Michael Coyle is a Chartered Professional in Human Resources and a retired employment and labour lawyer based in Kentville, Nova Scotia. Information expressed in this article is meant for general interest only and is not a substitute for professional advice about your own situation. Michael can be reached by email at michael@michaelcoyle,ca  For more information and tips on employment and labour law issues, visit his website at www.michaelcoyle.ca


©Michael V. Coyle, 2012

Resignation or Termination: Fixed Term Employment Contract

by Michael V. Coyle, JD*
This question often arises in termination cases: Did the employee resign, or was she fired?

Leaving aside the ‘constructive dismissal’ cases where the employee says that he/she was pushed into a corner where he or she had no other reasonable alternative except to quit, it may surprise you how often employers will say “I didn’t fire her, she quit” in response to a wrongful dismissal claim.

A recent decision from the Supreme Court of Nova Scotia sheds some useful light on that subject. It also affirms the law about the damages an employer will have to pay if it breaches a fixed-term employment contract.

In that case, a teacher in a non-union setting was discussing her continued employment with her employer. There was a difference of opinion about her teaching methodology. The meetings went badly. A few days later, the employer “accepted” the teacher’s “resignation” in an email. The teacher said she did not quit, although she was certainly thinking about it, and she maintained that she was fired when the employer “accepted” her non-existent “resignation”. She commenced an action for wrongful dismissal. The Judge agreed that she did not quit and ordered the employer to pay her to the end of her contract as damages for wrongful dismissal.


This case reminds us that the test for whether or not the employee resigned is an objective one. That is, the question is not whether the employer subjectively believed in all honesty that the employee quit. The legal question is: “Would and objective, unbiased observer looking at all the circumstances think that the employee quit?”

Further, the law tells us that a resignation must be clear and unequivocal. It is not good enough for an employer to assume or believe that the employee resigned or for the alleged resignation to be read into the employee’s ambiguous words or conduct. It has to be clearly conveyed to the employer in unmistakable terms that the employee has quit his/her job.

The Court quoted this passage from the text “Employment Law in Canada”:


The test for determining whether an employee has resigned is an objective one. As Millward, J. stated: “Given all the surrounding circumstances, would a reasonable person have understood by the plaintiff’s statement that he had just resigned?”

 In order to tender an effective resignation, an employee must have the legal capacity to contract. An offer of resignation may be revoked before there is acceptance thereof. If a letter of resignation is not accepted as offered, it is not binding on the employee and does not terminate the employment relationship. An employee may resile from a resignation, provided the employer has not relied upon it to its detriment.

For an employer to successfully argue that an employee has resigned, the evidence must be clear and unequivocal that the employee has actually resigned. To be clear and unequivocal, the resignation must objectively reflect an intention to resign, or conduct evidencing such an intention.

It is easy to understand why an employer would be tempted to quickly “latch onto” a supposed resignation, as though it were “music to their ears”. It certainly makes the employer’s life easier if they can say, “I didn’t have to fire her, she quit.” It relieves the employer of both legal and moral responsibility to think that their “problem” has so conveniently solved itself. The difficulty arises when this belief turns into the employer’s mantra, and from that into their “position” in defence of a wrongful dismissal claim, without the benefit of objective analysis. I don’t know, of course, whether that is what happened in this particular case or not, but I’ve seen it happen in others.

Fixed Term Employment Contracts

This case, also reminds us that the calculation of damages for breach of fixed-term employment contracts is significantly different from the calculation used in the more usual open-ended employment contracts, which are generally unwritten.

The Judge in this case quoted the law as stated by other Nova Scotia judges in earlier cases:

The damages arising from termination of a fixed term contract was explained by Cacchione, J. [citation omitted] as follows:

 60. The measure of damages for breach of a fixed term contract is the recovery of wages the plaintiff would have received had the defendant performed the contract in the manner least disadvantageous to itself. In Employment Law in Canada (3rd) ed. (Butterworths Canada, 1998), the authors discuss damages under a fixed term contract by stating at 14.3:

Where an employee has been hired for a definite term, in the absence of just cause for summary dismissal he or she can be terminated only by full payment of the contract amount of wages.

61. In [citation omitted] Hall, J. was dealing with an action for wrongful dismissal under a fixed term contract. In addressing the issue of damages he states as follows at page 337:

This is not the ordinary case of wrongful dismissal where the court is obliged to fix the appropriate period of notice. The term of employment was fixed by the contract between the parties. The defendant breached that contract by dismissing the plaintiff without just cause. Subject to any reduction for failure to mitigate, the plaintiff would be entitled to recover for the unexpired term of the contract or $46,000 as claimed by her counsel.

Accordingly, the Judge in this case ordered the employer to pay the employee the balance owing under the contract to its end. This was probably significantly more than an employee with this teacher’s length of service would have otherwise received had there not been a fix-term contract. As well, the Judge rejected the employer’s argument that she had failed to mitigate her losses by not looking for a job in another field even at minimum wage.

And finally, the Judge brushed aside the employer’s suggestion that the teacher was merely a “probationary employee” with this comment:

The Court does not accept that [the plaintiff] was a “probationary” employee as that term is typically understood. As [her supervisor]confirmed in his evidence, that term was utilized in the Memorandum of Agreement as reflecting that the School was not obligated, after the term of the contract, to re-hire [the plaintiff] in subsequent years. Even if she was “probationary” in the usual sense, the fact that this dispute involves a fixed term contract, would not impact on the calculation of damages.

While the dollar amount of the damages awarded was fairly small (because the employee’s salary was just $28,000 per year) the cost of proceeding to trial, plus costs and interest could have easily exceeded the damages as awarded by a wide margin.

Obviously, with the benefit of hindsight, the employer would have been much better off had it known that the teacher’s “resignation” was just wishful thinking on its part.

For more information on how this case might apply in your situation, please contact me.

*Michael Coyle is an experienced employment-labour relations lawyer and a neutral mediator and arbitrator based in Kentville, Nova Scotia. Information provided in this article is meant for general interest only and is not a substitute for legal advice about your own situation. Michael can be reached by email at [email protected]  For more information and tips on employment and labour law issues, visit his website at www.michaelcoyle.ca

©Michael V. Coyle, 2012






Defamation Of Employee Costs Employer $60,000

Defamation and Wrongful Dismissal 

by Michael V. Coyle, JD*

A  Nova Scotia employer was recently ordered to pay a wrongfully dismissed employee over $60,000 in damages, costs and interest for defamatory statements the employer made – including a statement made to EI about why they dismissed the employee. This comes on top of the employee’s reinstatement ordered by the Labour Standards Tribunal, with 18 months back pay.

The plaintiff was the Chief Bar Steward with a branch of the Royal Canadian Legion with over 11 years service. The employer believed that he had been selling draft beer at “Happy Hour prices” outside of Happy Hour, causing the employer to suffer a loss of profits on its bar sales. In the Legion’s view, that loss of revenue was tantamount to theft, so they fired him.

The employee first went to the Labour Standards Tribunal and won reinstatement, with 18 months lost wages, when the employer was unable to prove just cause for his dismissal. There was never any suggestion that the employee had personally gained in any way from his alleged misconduct. The employee then sued the employer for defamation in the Supreme Court.

The employer stated on the ROE that he was dismissed for “willful misconduct or criminal conduct”. When the employees appealed the denial of his EI benefits, the Legion wrote to EI that his conduct “may be considered fraudulent”. Further, at a branch general meeting, the Audit Committee chair reported that the fired employee had been involved in what they considered to be the “misappropriation of funds”. The word in the community was, as one witness put it, that the fired employee had been caught with his “hand in the cookie jar”.

The Court rejected the employer’s claim it had “qualified privilege’ in its statements to EI, saying that while the first statement on the ROE (“wilful or criminal misconduct”) may have been ambiguous (because it was a check-box on the ROE), there was nothing ambiguous about the second statement to EI that the employee’s actions “may be considered fraudulent”. The Court was not at all impressed with the weasel words “may be considered”.  As the judge bluntly put it: “This is a serious allegation, and the use of the word “may” does not, in my view, mitigate from the imputation of criminal conduct. The statement is defamatory.”

So too was the report on the matter given by the Audit Committee chair at the general meeting. In both cases the employer was either deliberately attacking the employee’s reputation for honesty and integrity by imputing criminal conduct, or it was being reckless about how such statements would be understood in the community. In either event, the statements were held to be defamatory.

The Court also pointedly rejected any suggestion that because the Legion is a non-profit body, it should receive special treatment in the Court. The Judge quoted authority that, “A non-profit or benevolent corporation is liable for its torts, including libel and slander, the same as any other corporation.” The same law applies, of course, to small businesses.


This case reminds us that defamatory statements are judged, not merely by the words used, but also by what they imply about the person who is defamed. The law books are full of cases where people thought that by using clever wording they could avoid a defamation suit. The question is not merely “What words were used?”, rather the Court will also ask itself, “What would a reasonable person in the community think that those words really meant?”

This case also reminds us that employers should be very careful what they say about their reasons for termination. Some employers believe that taking an aggressive posture with EI is a good strategy. The theory is (and I’ve heard this many times, sometimes attributed to lawyers) that if they can prevent the fired employee from getting EI that will improve the employer’s position in a wrongful dismissal suit.

Some  employers believe, or are advised,  that clever wording like “may be considered” will shield them from the legal consequences of their statements.

On the other hand, the theory goes, if the employer takes a more objective stance with EI, that will simply encourage the employee to file a wrongful dismissal claim. That theory is misguided and this case shows that it can be very dangerous. I always remind employers that whether a former employee gets EI is a matter between that employee and the Government. The employer does not have to take a position on that matter and it is often very unwise, as this case shows us, for the employer to do so.

The truth is that statements of this nature made by employers are often simply emotional responses to the hurt feelings surrounding the dismissal. Some employers will even try to justify their aggressive statements to EI by saying that they have a “moral duty” to see that the fired employee is deprived of EI benefits.

Small business and community organizations are particularly prone to this thinking because of the highly personal nature of their employment relationships and the level of hurt feelings that naturally arise when things go wrong. Unfortunately, many employers do not get objective legal advice on terminations because they see no need to talk to a lawyer about somthing that seems so obvious to them. That can be a costly mistake.

This case demonstrates the importance of obtaining specialized legal advice, preferably before the termination. Legal advice should not be reserved for “doubtful” termination cases but, as this case shows, objective legal advice is just as important where the employer firmly believes that dismissal is justified.

Obviously, with the benefit of hindsight, the Legion branch should have known that it did not have legal grounds to dismiss the plaintiff in this case.  That would have avoided the whole long and expensive mess. It certainly should have been more cautious in its statements to EI and should never have made the statements it did attacking the employee’s honesty and integrity, even at a closed general meeting. They should have sought and heeded legal advice, even if it was not what they wanted to hear at that particular time.

The result of the case is that the fired employee is still working at the Legion, with 18 months back pay in his pocket, plus $60,000 in damages, interest and costs for defamation. The Legion, of course, had to bear its own legal costs throughout, both before the Labour Standards Tribunal and in the Supreme Court. My guess would be that, altogether, it probably cost the Legion something in the neighborhood of $100,000 or more.

For more information about this case and how it might apply in your personal situation, please contact me for advice.

*Michael Coyle is an experienced employment-labour relations lawyer and a neutral mediator and arbitrator based in Kentville, Nova Scotia. Information provided in this article is meant for general interest only and is not a substitute for legal advice about your own situation. Michael can be reached by email at [email protected]  For more information and tips on employment and labour law issues, visit his website at www.michaelcoyle.ca

©Michael V. Coyle, 2012