The Curious Case of Damages without Liability

I will start this post by saying that the content of this post will be different from what I usually write. Typically, my posts start with a question, which is then answered by the content. However, this time it is content that leaves me with a question.

On February 5, 2016, the Honourable Justice Timothy D. Ray released his reasons for decision in the case of Muntean v Enablence Canada Inc., 2016 ONSC 923 (CanLII). The “catchwords” for the decision are “lay-off notice — constructive dismissal — treat the lay-off — temporary lay-off — voicemail”. “Cool,” I thought, “a recent, local decision in my practice area. I’ll read this.” So I did.

With much respect to Justice Ray, after reading the decision and discussing it with others I simply cannot make sense of it. I like to fancy myself someone who knows a thing or two about Ontario employment law, but in this case I am simply at a loss.

If someone can explain to me why damages were awarded in this case and for what, I would be most appreciative.

Facts

The decision is short. According to it, the case proceeded as a summary judgment motion for constructive dismissal.

As set out in Justice Ray’s reasons for decision, the court was asked to answer six questions, Justice Ray’s answers to which were as follows:

1. Is there a genuine issue requiring a trial? Answer: No.
2. Did the purported lay-off notice by the defendant on November 25, 2014 amount to constructive dismissal of the plaintiff at the time? Answer: No.
3. If not, did the plaintiff acquiesce with the lay-off so as treat the lay-off as subsisting, and therefore maintaining the employment relationship? Answer: Yes.
4. Did the defendant’s call to the plaintiff on the morning of December 16, 2014 amount to a call to return to work and therefore a resumption of work? Answer: Yes.
5. Did the plaintiff’s lawyer’s letter received by the defendant the afternoon of December 16, 2014 have the effect of turning the lay-off into constructive dismissal entitling the plaintiff to damages? Answer: No.
6. Are the damages for wrongful dismissal to be assessed with reference to the notice period of 6 months by the defendant stipulated in the employment contract? Answer: No.

The actual ‘what happened’ facts are not really as important as the above. Note that based on the above Justice Ray found no wrong-doing by the employer. The purported lay-off notice by the defendant on November 25, 2014 did not amount to constructive dismissal and in any event, Justice Ray found that the plaintiff acquiesced to the lay-off so as treat the lay-off as subsisting, and therefore maintaining the employment relationship.

Decision

The most confusing aspects of the decision are paragraphs 14 and 15 of the decision, in which Justice Ray wrote the following:

[14] It is clear on the evidence that the plaintiff did not decide what he wanted to do until after he was aware the defendant wanted him to return to work. By that time, it was too late for him to declare that he had been constructively dismissed. In addition, his continued application for a receipt of benefits from the defendant’s employment is troubling and is inconsistent with his declaration of constructive dismissal.

[15] I find that at the time the defendant offered to bring the plaintiff back to work, the plaintiff had acquiesced with the lay-off notice, and the defendant had, by virtue of the lay-off notice, abandoned its right to require 3 months’ notice from the plaintiff. In the unique circumstances of this case, I find that both parties had implicitly or explicitly accepted terms other than those contained in the written employment agreement, and the plaintiff is entitled to damages for wrongful dismissal on a common law basis.

Commentary

I have read this decision several times. I simply cannot figure out why damages were awarded. When was the employee "dismissed", let alone "wrongfully"?

In order for a plaintiff in a civil lawsuit to be awarded damages the court must first find that the defendant did something legally wrong. For example, there must be a breach of contract or a civil wrong, a “tort”, committed. As far as I can see, the only wrong alleged in this case was constructive dismissal and Justice Ray very clearly found that such a thing did not occur.

So if the defendant employer committed no wrong, why was the plaintiff is “entitled to damages for wrongful dismissal on a common law basis”?

Had the plaintiff lost I would better understand the decision. Justice Ray could have decided that no constructive dismissal had occurred and therefore dismissed the case, in which event this post would be much different and I would be reviewing the decision in that context. But he didn’t. He said no constructive dismissal had occurred, but awarded damages anyway.

I challenge others to review the decision and see if they can make sense of the decision better than I can. Comments welcomed below.

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As always, everyone’s situation is different. The above is not intended to be legal advice for any particular situation. It is always prudent to seek professional legal advice before making any decisions with respect to your own case.