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WRONGFUL DISMISSAL - Dismissal without cause

Tuesday, October 06, 2020 @ 6:15 AM  


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Appeal by the plaintiff from summary judgment dismissing his action for wrongful dismissal and his summary judgment motion. The respondent was in the business of leasing furniture, appliances, home electronics and computers. At the time of his dismissal in 2017, the appellant, 55, was the respondent’s Regional Manager for New Brunswick. He held a high school diploma and was in the respondent’s sole employ for nearly three decades. His annual work-related compensation package was worth more than $150,000. In 2017, a store manager informed the respondent she was involved in a romantic/sexual affair with the appellant, her immediate hierarchical superior. The appellant admitted to the affair. He was terminated but was told that the termination of his employment was without cause. The last Contract of Employment between the parties featured a very restrictive Non-Competition Clause and included a Termination of Employment Clause that limited the appellant’s notice entitlement for a termination effected without cause to four weeks, the minimum prescribed under the Employment Standards Act. Following termination, the appellant was given four weeks wages in lieu of notice. The respondent issued a Record of Employment that confirmed the termination was made on a without cause basis and the Termination Letter effectuated a dismissal without cause. The respondent subsequently alleged the termination was for cause. The judge dismissed the action on the ground there was cause for termination but did not find explicitly that the termination was made on a with cause basis.

HELD: Appeal allowed. The appellant’s motion for summary judgment was allowed. He was awarded damages totalling $315,200. He was dismissed on a without cause basis, and the respondent breached the employment contract by failing to provide reasonable notice of termination. The judge committed a palpable and overriding error in finding that the dismissal was on a with cause basis. If the dismissal was made on a with cause basis, it was not effected in writing and was therefore legally invalid. The Termination of Employment Clause was void because it purported to deny benefits guaranteed under the Act, specifically accrued wages and vacation pay and freed the respondent from making any further payments to the appellant once it provided written notice or pay in lieu of notice equivalent to his entitlement under the Act. The appellant was entitled to reasonable notice, the length of which was not dictated by the Termination Clause. The appellant was in the deemed or actual employ of the respondent for 29 and one-half years. The respondent did not substantiate its allegation that the appellant failed to mitigate his losses. The court accepted the appellant’s uncontradicted evidence that the pool of comparable jobs with a comparable salary was extremely shallow in New Brunswick and that, despite best efforts, he was unable to secure such a job. He lost salary and other financial benefits during the 24 months following termination.

Abrams v. RTO Asset Management, [2020] N.B.J. No. 200, New Brunswick Court of Appeal, J.E. Drapeau, K.A. Quigg and B.V. Green JJ.A., September 3, 2020. Digest No. TLD-October52020003