Bad Faith Conduct in Wrongful Dismissal
Update by Erin Brandt, Cofounder
In Valle Torres v Vancouver Native Health Society, 2019 BCSC 523, the BC Supreme Court outlined how severance pay will be calculated for a wrongfully dismissed employee, and emphasized the need to treat an employee fairly in the manner of dismissal.
Background
Mr. Valle Torres, a 56 year old Project Manager of a facility in Vancouver’s downtown east side (DTES) was dismissed from his employment after almost 20 years of service. At the time of his dismissal, the employer provided him with 8 weeks’ compensation, the minimum amount required by the BC Employment Standards Act. As the employee did not have a written contract of employment with an enforceable provision limiting his entitlement to severance, he filed a legal claim for severance based on common law principles.
Decision
At the end of the trial, the judge found that the employer’s evidence was generally “disingenuous and filled with animosity toward” Mr. Valle Torres. For example, the trial judge found that the employer gave “many and varied” explanations for Mr. Val Torres’ dismissal, including restructuring, poor job performance, disloyalty, and ethnicity, and that these explanations often conflicted with prior evidence provided by the employer.
The judge awarded Mr. Valle Torres 24 months severance. She also awarded him an additional $30,000 in aggravated damages based on the following unfair / bad faith conduct of the employer:
Terminating Mr. Val Torres’ employment abruptly and without notice when there was no reason to do so;
Immediately escorting him from the office;
Sending out an email to the entire DTES social services community advising that Mr. Val Torres was no longer employed by or associated with the employer, leaving the impression that the employee had been engaged in some wrongdoing or impropriety;
Serving him with an intimidating lawyer’s letter demanding that he cease and desist communicating with any of the employer’s employees and threatening legal action instead of talking to him about their concerns;
Making baseless allegations about him to the Labour Relations Board; and
Deceiving him about the true reason for his dismissal.
Although the trial judge agreed that the employer’s bad faith conduct was malicious and outrageous and deserving of an additional award of punitive damages, she ultimately declined to make any further awards as the employer is a non-profit organization, and awarding further compensation to the employee would punish families in need more than it would punish the employer.
Costs Decision
In a follow up court appearance, Valle Torres v Vancouver Native Health Society, 2019 BCSC 893 the trial judge was asked to make a decision about the amount of “costs” Mr. Val Torres was entitled to. The BC Supreme Court Rules include a method of calculating how much money a successful litigant is entitled to as compensation for the legal costs they incur going to court. In some cases, the court may award a higher amount than the “standard” amount set out in the Rules if the losing party’s conduct warrants it. For example special costs will be warranted where there has been conduct by the unsuccessful party that is deserving of punishment or rebuke.
In this case, the judge awarded Mr. Val Torres special costs as a result of the employer pushing ahead “with defences that they should have known were without merit”, and calling witnesses “who were deliberately less than truthful”.
Key Take Away for Employers
This case is a good reminder for employers to review if their employees have signed an employment contract with an enforceable termination provision that sets out the employee’s entitlement to severance upon termination. If not, now is a good time to get things in order.
Further, bad faith conduct by an employer, either in the course of dismissal or in defending a legal claim, can attract significant financial penalties.
Key Takeaway for Employees
In the absence of an enforceable termination provision in a written contract, an employee can claim up to 24 months severance (depending of course on the particular facts of the case). And, in some cases (such as this one) the courts are willing to financially punish malicious employers.
