Saskatchewan, Canada: Court Of Appeal Affirms Moral Damages Award Due To Untruthful Employee Termination

• Published date: 02 October 2020
• Subject Matter: Employment and HR, Litigation, Mediation & Arbitration, Unfair/ Wrongful Dismissal, Trials & Appeals & Compensation
• Law Firm: Littler - Canada
• Author: Ms Rhonda B. Levy, Barry Kuretzky and George Vassos

In Porcupine Opportunities Program Inc. v Cooper, 2020 SKCA 33 (Porcupine), the Saskatchewan Court of Appeal affirmed, among other things, that a trial court appropriately decided to award $20,000 in moral damages to an employee upon finding that the employer had breached its duty of good faith and fair dealing when it was untruthful and misleading during the termination process.

Background

The employer is a community-based and community-governed organization dedicated to enhancing the quality of life of persons experiencing disability. A 53-year-old employee of 33.5 years came under the supervision of a newly hired general manager. At an in camera meeting of the board of directors, the general manager alleged that the employee had been stealing product, and recommended a new approach that involved eliminating the employee's position. At that meeting, the board resolved to terminate the employee. The next day, the employee met with the general manager and three board members who informed him that he was being laid off and that his position was being eliminated. The employee was asked to return all corporate property and leave the premises, and he was given eight weeks' pay in lieu of notice.

Two months later, the employee received a letter from the general manager alleging that the employee had been attempting to communicate in an inappropriate and threatening manner with program participants, and the employer's board and management. The general manager indicated that this letter constituted notice pursuant to The Trespass to Property Act, and that the employee would not be permitted to enter any property owned by the employer. The general manager also asked that further communication be directed to legal counsel.

The employee made a claim for wrongful dismissal and moral damages.

Trial Decision

At trial, it was decided that the employee's appropriate notice period was 18 months. Furthermore, the trial judge found that the general manager fabricated the theft allegations to justify the termination and that the "inappropriate and threatening" conduct never occurred. The trial judge determined that the general manager lied about the position being eliminated as the employee's former assistant was later hired to replace him, and drew negative inferences against the employer as it did not provide evidence to back up its allegations against the employee.

Moral damages award

The trial judge decided that the employer breached its duty of good faith and fair dealing in the course of dismissal and awarded $20,000 in moral damages, based on the cumulative consequences of (1) the false allegations of theft; (2) the false explanation that the employee's position would be eliminated; and (3) the false allegations of threatening and inappropriate communications.

Decision of the Court of Appeal

The employer appealed, arguing that the trial judge erred by awarding moral damages or, if awardable, by fixing them at $20,000.

Moral damages award

The employer argued that the $20,000 moral damages award was inconsistent with the decision of the Saskatchewan Court of Appeal in Capital Pontiac Buick Cadillac GMC Ltd. v Coppola, 2013 SKCA 80 (Coppola) as: (a) there was an...