From time to time, it’s good for employers to be reminded of what can happen should a termination not be handled properly. The recent BC Supreme Court decision in Vernon v. British Columbia (Ministry of Housing and Social Development – Liquor Distribution Branch) provides a good example of the care that must be taken with investigations and that if not handled properly, punitive and aggravated damages may still be awarded to dismissed employees.
In this case, the Plaintiff began her career with the employer at an entry level position. Over the course of the next 30 years, she was promoted all the way to senior store manager. Her management style was described as “non-nonsense”. She not popular with some of her subordinates, but she was, however, continually promoted through the ranks and praised for her work.
There were allegations that the Plaintiff engaged in workplace misconduct including bullying. It was specifically alleged that the Plaintiff used profane language and lacked sensitivity towards her subordinate employees who had physical difficulties. The allegations in the case are colourful to say the least. The Plaintiff was accused of telling an employee who was on light duties with a back problem that “if you can f*** your husband, you can do a liquor load.” The Plaintiff denied many of the allegations.
The employer investigated, but the Court found that the investigation was flawed from the outset. Justice Goepel called the interviews “interrogations that were not carried out in an impartial manner”. The Court found that witnesses who spoke out in favour of the Plaintiff were accused of lying.
Justice Goepel concluded that the investigation was flawed in that it was neither objective nor fair and the report which was relied on in the termination was factually inaccurate.
After the decision to dismiss her was made and the Plaintiff was advised that she’d be fired, she was offered the opportunity to resign with a reference letter.
The Court concluded that the employer did not have sufficient cause for dismissal and awarded damages of 18 months’ notice. The Court further awarded aggravated damages, concluding that the investigation was in violation of the company’s duty to act in good faith. The Court found that the dismissal caused the Plaintiff to suffer mental distress and awarded $35,000 of damages, “formerly known as Wallace”.
The Plaintiff also was awarded punitive damages based on the finding that the company offered the Plaintiff a letter of reference in exchange for her resignation. Justice Goepel found that this was deserving of punishment and awarded the Plaintiff an additional $50,000 in punitive damages.
Since the Supreme Court of Canada Decision in Honda v. Keays in 2008, awards of punitive damages are rare, but employers need to keep in mind that these types of damage awards are still possible, and can be awarded where a court deems it necessary to punish the employer for its conduct. When dealing with allegations of employee misconduct in particular, employers need to ensure that their investigations are balanced, impartial and conducted fairly.