Dismissal Without Cause: When Shifting Explanations Weaken the Employer’s Position

In the case of David Strauss v. Calko (Canada) Inc., the Superior Court ruled on an application for damages for wrongful dismissal brought by a chief operating officer. The issue before the Court was whether, in light of the facts, the employee’s dismissal had been made for serious reasons or, alternatively, whether the employer had offered sufficient compensation in lieu of notice.

The employee began working for the company in the spring of 2009. In August of the following year, he was dismissed after being told that the company was taking a “different direction.” A month later, the record of employment filed by the employer identified “restructuring” as the reason for the dismissal. However, no prior notice had been given, and there had been no indication that the employee’s performance was an issue. The employer offered four weeks of severance, but only on the condition that the employee sign a final release.

In response to the employee’s claim for damages for wrongful dismissal, the employer took the position that the termination was justified by the employee’s alleged incompetence and inability to properly carry out his responsibilities.

The Court further considered the testimony of the witnesses, including that of the former president of the company, who was found to be credible and who spoke positively about the employee’s work. It also considered the employee’s expertise in the textile industry, his credentials as a graduate of the Fashion Institute of Technology in New York, his age, and the senior nature of his role. As Chief Operating Officer, he supervised between 80 and 120 employees.

Likewise, the Court considered the factors that undermined the employer’s position. The employer’s lack of transparency and consistency, notably the shifting reasons given for the dismissal, was not ignored. This, combined with the absence of any evidence of fault, negligence, or misconduct on the employee’s part, led the Court to find that the employer’s severance offer was not reasonable.

Ultimately, the Court concluded that the employee had been dismissed without cause and that the notice offered by the employer was insufficient. The employer was ordered to pay an indemnity equivalent to five months of salary, with legal interest and the additional indemnity under article 1619 of the Civil Code of Québec.

The following excerpts from the “considerings” part of the conclusion of the decision are particularly relevant:

“CONSIDERING that Plaintiff’s testimony is credible and it is clear to the Court that Defendant tried to diminish Plaintiff’s contribution to Calko in order to terminate his employment, almost showing bad faith in doing so;

[…]

CONSIDERING the evidence shows that the Plaintiff occupied a position at the level of a senior officer during his employment;

[…]

CONSIDERING the Plaintiff supervised between 80 to 120 employees when he was Chief Operating Officer;

[…]

CONSIDERING the Defendant’s lack of transparency and fairness regarding the reasons given to Plaintiff for his dismissal;

[…]

CONSIDERING the Defendant’s lack of truthfulness in the reasons given or not given to the Plaintiff for his dismissal;”