In the case of Huber v. Way, 2014 ONSC 4426 (CanLII), the Plaintiff was awarded $134,994.40 in damages and $150,000.00 in costs due in part to the Defendant’s conduct prior to the commencement of and during the litigation. This case is important as it highlights what not to do if you are an employer being sued by a former employee.
The claims against Way, in this case, were for wrongful dismissal damages for breach of an employment contract by failing to provide reasonable notice of termination, commissions owed, as well as punitive, aggravated and exemplary damages.
The manner in which Way handled these allegations should be a lesson to all employers on how not to act when you are being sued by a former employee.
The Case
The Plaintiff entered into an oral agreement with the Defendant, the employer, wherein the Plaintiff would sell condominium units for $65,000.00 per year in salary and would receive an additional 1% commission of their total sales. The commission was to be paid at the completion of construction.
In the beginning phase of the condominium development,the Defendant met with the Plaintiff and informed him that the Defendant would be transitioning to licensed real estate agents for the rest of the units they had to sell, but that there would be transitional work in the interim. At this point, the Plaintiff had already sold 36 out of 70 available units.
The next meeting with the Defendant,the Plaintiff was informed that his services were no longer needed. The Defendant did not terminate the Plaintiff for cause, but also failed to provide any notice of the termination, or payment in lieu of notice. Furthermore, the Plaintiff had not been paid any commission for the sales of the condominium’s he had sold, which totaled nearly $100,000.00.
Following his termination, the Plaintiff contacted the Defendant, informed him that construction was underway and reminded the Defendant of the owed commissions. However the Defendant informed the Plaintiff that he had rendered the final invoice and final release and he owed nothing further. At trial, the Defendant was unable to provide any evidence supporting this Defence.
The Defendant went so far as to counter sue the Plaintiff and engage in inappropriate threatening behaviour such as showing up at the Plaintiff’s home unannounced and late at night, and calling the police requesting that they arrest the Plaintiff on false allegations that he stole documents from him. The Defendant even threatened to take the Plaintiff’s home and car and later during the litigation to have his lawyer disbarred.
The Employer’s Errors
After the Plaintiff commenced a wrongful termination action against the Defendant, the Defendant counterclaimed, however it was dismissed when the Defendant failed to produce any evidence supporting the counterclaim.
At trial the Defendant’s evidence was found to be contradictory, unreliable and not credible. Both prior to and during the ligation the Defendant tried to lie to avoid his obligations to the Plaintiff as an employer. Justice Flynn held that this dishonesty, in conjunction with the aforementioned issues, warranted aggravated and exemplary damages of $25,000.00.
Conclusion
Justice Flynn found that the Defendant’s actions deserved censure and specifically referred to the Defendant’s counterclaim for $400,000.00 as a tactic to intimidate the Plaintiff from seeking recourse for his wrongful termination. Furthermore, the Defendant’s lack of credibility or reliability jeopardized his case.
It is important to ensure that when you are faced with a wrongful termination law suit that you act in a civil and appropriate manner and hire an expereinced employment lawyer to assist you throughout the process. You should also take as many steps as possible prior to the commencement of the employment relationship to safeguard your business by creating lawful and enforceable employment contracts.
The Dos and Dont’s of Employment Litigation
In not for cause terminations, there are some basic do’s and don’t’s that all employers should consider.
Do – pay out any wages or commissions owing at the time of termination to employees and file an ROE;
Don’t – withhold wages or statutory notice as a bargaining chip;
Do – pay out statutory minimum notice required by the ESA;
Don’t – be dishonest in your dealings with the employee or their counsel;
Do – provide a letter confirming employment and assist the employee with mitigation;
Don’t – bring frivolous, baseless counterclaims or motions in an attempt to intimidate the Plaintiff; and most importantly:
Do – retain experienced employment law counsel early to reduce litigation risk.
Failing to adhere to the above do’s and don’t’s of employment termination and litigation, may expose the employer to greater liability and high exemplary damages or costs awards.
As an employer, it is essential that you become knowledgeable about your obligations to terminated employees in order to reduce litigation risk. That is why Monkhouse Law offers flat fee termination packages to assist you throughout the process. Contact us for today.
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