In the case of Armstrong v Lendon, the Ontario Superior Court of Justice concluded that the employer had to pay 21 months of reasonable notice plus aggravated damages for the manner of termination which caused humiliation, embarrassment and the loss of self-esteem. The court did not buy the employer’s argument that there was just cause for the termination, especially since the allegations for cause were made after the fact.
Facts of the case
Tina Elaine Armstrong served as Harold Austin Lendon’s legal secretary for 26 years.
On September 4, 2012, Lendon advised Armstrong that he was retiring on December 31, 2012 and that her job would no longer be available. He provided her with a glowing reference letter and thought that by notifying her in this manner, he was giving working notice as required by law.
However, Armstrong believed she was owed much more notice given her length of service and filed a wrongful dismissal suit.
Upon hearing of Armstrong’s claim, Lendon alleged cause for dismissal. According to Lendon, Armstrong was competent prior to 2008, but then there was some deterioration in her performance. He claimed on July 11, 2012, that Armstrong made an emotional outburst and 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 her health. He complied and gave her the bonus and a raise.
Then, in August 2012, Armstrong called in sick on several occasions which put Lendon under incredible stress. She was off when four deals were to close on August 23 and 24. He anguished over the unpleasant alternative of terminating her, but concluded that would be more stressful. To that end, on Labour Day weekend, he decided the better alternative was to retire. He provided the letter of reference because he believed that with proper psychological or other assistance she could recover from her problems and perform at the level she had in the past.
According to Lendon, he was not aware that Armstrong was entitled to common law reasonable notice of termination. In his opinion, the four months’ working notice that he provided Armstrong exceeded her eight week entitlement under the Employment Standards Act.
According to Armstrong, in 2008 she suffered from stress, provided a doctor’s note and was off work for approximately two months. In 2012, she suffered from pneumonia and ended up in emergency three times. When she was absent it was because she was sick. She felt she was under-appreciated and overworked and admitted that she told Lendon that if she did not get a raise she would leave on two weeks’ notice.
The onus is on Lendon to establish just cause based on Armstrong’s conduct. Was the alleged conduct enough to permanently damage the employer-employee relationship?
After hearing the evidence, the court found Armstrong appeared to be the more credible witness. It did not make sense that Lendon, a lawyer, did not know that a long-term employee could be entitled to common law notice of termination based on her length of service with the employer. Also, by providing a glowing reference he supplied a letter that was dishonest and contradictory to his case. The court did not accept his version of events.
The court found there was no cause for the termination. Just because there was an emotional demand for a raise, this did not constitute just cause after 26 years of service. Lendon himself admitted that there was a psychological issue, so an outburst because of psychological distress could not be considered a basis for termination.
As a result, in the court’s view, Armstrong was wrongfully dismissed and there was no failure to mitigate damages. The notice should not be reduced because Lendon made only modest earnings after her termination.
When considering the Bardal factors, particularly given the age and length of service of the plaintiff, a 21-month notice period was appropriate. It was important to note that Armstrong had a highly responsible position, she suffered stress and other health problems which would tend to make it more difficult to obtain new employment. In addition, she was unable to provide a favorable reference after the termination given the serious allegations against her.
Given that Armstrong received three and one half months of working notice, and there was a history of paying bonuses, and she did have some earnings in mitigation, she was entitled to receive $46,407. Armstrong was entitled to $7,500 in aggravated damages for the humiliation, embarrassment, loss of self-esteem she has suffered and the damage to her dignity and reputation, for a total of $53,907 in damages.
However, the conduct of the employer was not so egregious enough that punitive damages should be awarded. The award of aggravated damages reflects that the defendant treated the plaintiff unfairly. The court stated: “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.”
What can employers take from this case?
As can be seen from this case, ignorance of the law is not a good defence, especially if the employer is a lawyer. Employers who claim that they do not know that terminated employees may be entitled to common law notice will not be successful in court.
Also, claiming after the fact that there was just cause after a without cause termination has already occurred is a dangerous move; employees suffer greatly when they are accused of things at the end of the employment relationship, as it can prevent them from finding new employment. It causes a loss of self-esteem and humiliation that may impede their duty to mitigate their damages. Employers are strongly recommended to be careful of making hasty accusations after the fact, as it might come back to haunt them later.