Focus On

WRONGFUL DISMISSAL - Reasonable notice period or wages in lieu - Employer's bad faith

Tuesday, March 24, 2020 @ 9:15 AM  

Lexis Advance® Quicklaw®
Appeal by Total Recovery Limited (TRL) from a wrongful dismissal award in favour of four employees, Marin, Allain, LeBlanc and Bourque. The respondents were dismissed in September 2015. Their service with TRL’s Atlantic division ranged from 4.5 to 22 years. Each respondent received a letter stating that the Moncton operations were closing. Allain and Bourque received four weeks’ severance pay. Martin and LeBlanc received two weeks’ severance pay. They each claimed reasonable notice damages, aggravated damages, or alternatively, an extended notice period based on a bad faith dismissal. A motion judge granted summary judgment, finding that the appellant was the respondents’ employer pursuant to the common employer doctrine. Although the notice periods were determined, a trial was required to quantify reasonable notice damages to reflect each respondent’s mitigation efforts. The judge further held that the respondents were entitled to an extension of their respective notice periods by four months to reflect punitive damages for a bad faith dismissal. TRL appealed.

HELD: Appeal allowed in part. The misconduct of the appellant was not so outrageous as to justify punitive damages as a rational requirement to act as deterrence. The fact that the dismissal was without cause and without sufficient notice was compensable in damages. No obligation arose to advise the respondents of the impending closure prior to clients. Given the common employer finding, no bad faith arose from the collapse of the Atlantic operation as an attempt to avoid reasonable notice damages. The award of punitive damages was thus reversed. The motion judge correctly applied the common employer doctrine to find that the appellant was the respondents’ employer. Although the doctrine was not specifically pleaded, the affidavits led to the undeniable conclusion that the appellant was sued as a co-employer. No prejudice resulted. The motion judge was correct in determining the notice periods while leaving the mitigation factor for future assessment.

Martin v. Total Credit Recovery Ltd., [2020] N.B.J. No. 32, New Brunswick Court of Appeal, K.A. Quigg, B.V. Green and C.A. LeBlond JJ.A., February 6, 2020. Digest No. TLD-March232020004