Ottawa Small Claims Court Awards $4,000 in Punitive Damages after Employer Falsely Alleges Just Cause

Truth or Consequences was an American television show originally hosted on NBC radio by Ralph Edwards (1940–1957) and later on television by Edwards (1950–1954), Jack Bailey (1954–1955), Bob Barker (1956–1975), Bob Hilton (1977–1978) and Larry Anderson (1987–1988). The television show ran on CBS, NBC and also in syndication. The premise of the show was to mix the original quiz element of game shows with wacky stunts.

The title “Truth or Consequences” serves as an appropriate introduction to the issue of what happens when an employer concocts reasons for termination after being served with an employee’s claim of wrongful dismissal.

The question answered by this post is: What is the penalty to an employer for concocting an allegation of theft in order to justify an allegation of just cause for termination? In a case from the Ottawa Small Claims Court, Budge v Dickie Moore Rental Inc, 2017 CanLII 468 (ON SCSM), the answer was $4,000 in punitive damages.

Employers Can Terminate Probationary Employees Without Cause

(c) istock/Jrcasas

Can an employer terminate the employment of an employee on probation without cause? That was the fundamental question that the Ontario Divisional Court had to answer in the case of Barton v. Bowerman, unreported, Divisional Court File No. 16-DC-2178 (Ottawa.)

In an earlier post, An employer can only dismiss a probationary employee for just cause” – Why that statement may have been correct, but it doesn’t mean what you think, I wrote about what it means to be on probation and the statement in the case of Mison v. Bank of Nova Scotia, 1994 CanLII 7383 (ON SC) that, “… an employer can only dismiss a probationary employee for just cause.”

In that earlier post, I wrote the following with respect to the termination of a probationary employee:

First, it is clear, settled law that a provincially regulated employer requires neither just cause nor even reason to terminate the employment of an employee who is not on probation. Meaning that those employees who either (a) are not placed on probation, see my next point below, or (b) ‘survive’ the probationary period, most certainly can be terminated without cause or reason.

Second, the placement of an employee on probation is wholly at the discretion of the employer; there is no automatic probationary period.

Third, the act of placing an employee “on probation” cannot possibly elevate the employee’s rights; that would be antithetical to the point.

So if all of those points are legally correct, and I would submit that they are, then why is an employer required to demonstrate just cause to terminate the employment of a probationary employee at all? Sure, it’s a modified test under Mison, but still, what is the legal basis for requiring an employer to show fairness to employee to whom it has arguably provided more notice of an intention to ‘fire at will’ than one to whom it has not? It simply makes no sense to me.

I then asked for comments on the issue of probation, and Professor David Doorey of Osgoode Hall Law School wrote the following:

I'd argue that a probationary clause does not oust the right of employer to terminate with notice, without alleging that termination is for cause. But once employer asserts termination is due to unfitness or failure to meet performance standards, a probationary clause allows court to assess the employer's decision on a low threshold standard of review (did employer fairly evaluate, give employee a reasonable chance, not act in bad faith, etc). The probationary clause introduces a lower standard of cause for employers who want to avoid notice and rely on summary dismissal. Having said that, if a probationary employee is terminated while a probationary clause is still in effect, a court may presume that the termination was due to performance or unfitness and consider the employer's decision in any event. Since notice period for a probationary employee would always be very short, at least if the contract requires only ESA minimum notice, I've never understand the value to an employer of including a probationary clause. If the probationary period is less than 3 months, no notice is required under ESA, if 3-12 months, it is one week's notice. Why not just give the notice and be done with it?

What Professor Doorey did not know at the time was that his position was exactly what I intended to argue before the Divisional Court and on November 30, 2016, I did make exactly that argument.

So are we right?

Ontario Small Claims Court Judge Awards $8,000 in Costs Against Unsuccessful Wrongful Dismissal Claimant

One of the most commonly held beliefs about the civil justice system is that the losing party has to pay the winning party’s legal fees. While that belief is not entirely correct, it is not entirely wrong either.

Civil courts in Ontario have the right to award “costs” following a “proceeding.” Without wading too far into the semantics, “costs” is not the same thing as the amount that one has paid his or her lawyer, and “a proceeding” may be a trial, but it may also be something else.

The issue of costs in the Ontario Small Claims Court is both more simple and more complex. What makes matters easier is that the law prescribes that the basic amount of costs to which a successful party will be entitled following a trial is 15% of the amount claimed, plus actual disbursements. With a jurisdictional limit of $25,000, that means that if one sues for $25,000, then costs may typically be in the range of $3,750, i.e. 15% of the amount claimed.

Where things get complicated is that the law also says that judges have discretion to award more or less money for costs. The law also allows the judge to award costs to the losing party.

Decisions on costs from the Ontario Small Claims Court are rare. Judges rarely issue written reasons for the costs award, and even when judges do write out their reasons they are infrequently reported.

In 2015, I was involved in a Small Claims matter where the plaintiff alleged that she was wrongfully dismissed. I acted for the defendants in that case. On January 1, 2016, the Honourable Deputy Judge Lyon Gilbert dismissed the plaintiff’s case for reasons reported as Barton v Bowerman, 2016 CanLII 30100 (ON SCSM). Following the trial the judge invited the parties to make submissions on the amount of costs that should be awarded.

Following the presentation of written submissions, Deputy Judge Gilbert awarded the defendants, for whom I acted, $8,000.00 in costs. The court’s reasons can be found by clicking the following link: Costs Decision in Barton v Bowerman. Ottawa Small Claims Court. Court File No. 14-SC-130470. January 18, 2016.