Williams HR Law LLP

SUPREME COURT RULING SETS THE STAGE FOR FASTER WRONGFUL DISMISSAL ACTIONS BY EMPLOYEES

April 15, 2016

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The past year has seen a significant rise in the number of wrongful dismissal actions that have been resolved following a motion for summary judgment, rather than a trial.

This trend stems from the recent Supreme Court of Canada case, Hryniak v Mauldin, which held that “summary judgment rules must be interpreted broadly, favouring proportionality and fair access to affordable, timely and just adjudication of claims.” (Hryniak v Mauldin, 2014 SCC 7 at para. 5) The Hyrniak case has had a substantial effect on the manner in which civil claims proceed and are adjudicated, and has perhaps had the most substantial effect on wrongful dismissal actions.

Historically, civil lawsuits have been initiated with the filing of a statement of claim and resolved following a trial. The purpose of a trial is two-fold: for the judge to make findings of fact regarding the case, and for the judge to make findings of law. In order to make findings of fact, the trial procedure involves hearing live testimony from witnesses. Based on that testimony, the judge makes factual findings. After making findings of facts, the judge applies the facts to the law to determine whether the claims in the lawsuit are established.

The trial process has become increasingly long and expensive, which can make it effectively inaccessible to individual litigants of modest means. This has particularly been the case for employees who seek to bring wrongful dismissal claims, due to the time and resources that a plaintiff would need to invest in a trial.

The implication of the Hryniak decision will be significant for employers. It will allow a wrongful dismissal claim to be adjudicated much more quickly. It will be far more difficult for an employer to engage in the typical tactical delay strategies, which are common through the documentary and oral discovery processes that must be completed before a matter can be set down for trial. A quicker process will also make it more likely for an employee to hold out for a decision from a judge, rather than accept an offer to settle that he or she perceives to be inadequate.

The fact that it will be faster and cheaper for an employee to bring a claim to a judge means that it is also more likely that there will be more publicly accessible decisions. A negative decision could be embarrassing for the employer, set a precedent that may embolden other employees and could include information that the employer would rather not have in the public forum. A negative decision could also attract unwanted media attention, which could sully the name of a corporate brand.

The upshot is that there are more reasons than ever for an employer to seek to avoid wrongful dismissal litigation. The best way to do so is to include termination clauses in employment agreements. By agreeing to an employee’s entitlements in the event of termination without cause at the beginning of the employment relationship, there will be little to fight about in the event that the relationship does end in a termination without cause.

A proactive approach to employment agreement design, in other words, can help mitigate much of the risk associated with the trend toward motions for summary judgment in wrongful dismissal actions. 

 

This blog is provided as information and a summary of workplace legal issues.

This information is not intended as legal advice.

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