Improper Cause Allegations

One of the more interesting challenges for the employment lawyer is to find ways given the facts of the case, to argue for additional damages. There are many ways to increase damages for individuals who were fired with or without just cause. This article will canvass a few ways to do that.

I start with the concept of "improper cause allegations". This is a head of damage that arises when a company fires an individual without notice or pay in lieu claiming just cause, where none actually exists. The theory behind awarding additional damages in this instance is enunciated in Clark v. Horizon Holidays Ltd. a 1993 Ontario case:

"Employers know or ought to know that such allegations of misconduct, when reported to prospective employers, make the finding of subsequent employment exceedingly difficult. In my view, such loss may be reasonably foreseeable at the time of the formation of the contract."

In the Clark case, the court found that additional damages for improper cause allegations could only be awarded if the loss was foreseeable at the commencement of the employment. The Newfoundland Court of Appeal (Trask v. Terra Nova Motors Ltd., (1991) however, found that it was improper to go through the fiction of what may have been considered at the outset of employment before awarding such damages. In that case, the employee was accused of theft during his employment. In a different case from Ontario, the court increased the notice period by 50% under this head of damage because it the improper allegations of cause were found to be likely to bear upon the employee's chances of finding another job.

Another way that an employee can argue for additional damages, is when the employer fails to provide a reference letter or provides a 'perfunctory' reference letter. In a 1992 Alberta case, Gillman v. Saan Stores Ltd., the court increased the notice period by 50% where the employer failed to provide adequate references.

A further reason for additional damages is known as "diminution of future prospects of employment". This occurs when an employer fails to provide the training it promised due to the employer firing the employee before the training commenced. A case to refer to in this area is Dunk v. Geroge Waller & Son Ltd. [1970] 2 Q.B. 163 (C.A.).

Finally, a fairly common situation arises when an employee who is fired is not in the best of health. The employee may not have been on a disability leave when fired, but for whatever reason is unable to make an all-out job search or is not able to be fully employed due to poor health. Cases go both ways in this area. For instance, if an employee's health become poor after being fired and the employer did not know of the condition at the time of the dismissal, that employee may not be awarded additional damages.

If you have been fired and are wondering whether there is any justification for an increased period of notice or pay in lieu of notice, please call me to discuss your case.