In a decision released earlier this month, the B.C. Supreme Court awarded a former loan manager at a Vancouver credit union $220,000 in wrongful dismissal damages. The manager, Mr. Szczypiorkowski, was terminated for cause and without notice or pay in lieu of notice, after he sent an email to co-workers containing sexual jokes.
In Szczypiorkowski v. Coast Capital Savings Credit Union, 2011 BCSC 1376, the plaintiff manager had 19 years of service, was earning an annual income of $100,000 to $150,000 per year, and was 62 years old at the time his employment was terminated. All of these factors normally point to a lengthy notice period in Canadian employment law. However, if the employer was justified in terminating the manager for cause or misconduct, then he would be owed no notice at all.
After initially alleging dismissal for cause, the employer abandoned its allegation of cause prior to trial, and conceded that the only issue before the Court was how many months of pay in lieu of notice the manager should receive.
After abandoning the allegation of cause, the employer paid Mr. Szczypiorkowski his statutory minimum 8 weeks of notice, and offered a further 6 months for his common law notice entitlement. Mr. Szczypiorkowski rejected that offer, claiming notice in the range of 18 months to 24 months.
In Justice MacKenzie’s reasons, he noted that the Plaintiff “did acknowledge that he ‘probably’ should not have sent the email. He said he had no intention to offend anyone, but simply to ‘lighten their day’.”
This is a case where it would appear that the employer realized prior to trial that it had a low chance of success in proving its allegation of just cause, based only on a single incident of sending an inappropriate email. While there are some acts of misconduct that are sufficiently egregious to justify dismissal for cause based on a single incident, the employer apparently concluded that the email sent in this case would not reach that high threshold.
Justice MacKenzie further noted that an offer of only 6 months of notice to a 19-year employee is a significant deviation from notice period awards in similar cases. One of the case-specific factors that this judge looked at in arriving at an 18-month notice period was that the Defendant employer acknowledged that if asked for a reference for the Plaintiff, it would tell prospective employers that it would not re-hire Mr. Szczypiorkowski.
The Defendant employer also refused to provide a reference letter for the Plaintiff. These factors were seen to limit the Plaintiff’s prospects for securing replacement employment, and contributed to the lengthy notice period awarded.
There are a couple of messages for employers in this case. One being that a single incident of misconduct will rarely amount to just cause at law. Another being that if you undermine a dismissed employee’s search for replacement employment by refusing to provide a reference or obstructing that person’s job search, you can expect to pay more in dismissal damages when the matter goes to trial.
A message for employees is that a weak allegation of cause that is abandoned before trial will not automatically result in punitive damages. The Plaintiff in this case argued that he should receive punitive damages because the allegation of cause was abandoned. However, the Court ruled that as long as there was a reasonable basis on which the employer concluded that misconduct had occurred, an employer can allege cause and then change its position at a later time without incurring liability for punitive damages.