In wrongful dismissal cases, an employee’s entitlement to reasonable notice of termination is typically determined on an individual basis. As a result, the termination packages offered to other employees are usually not relevant. These packages are often considered as “without prejudice” communications protected by settlement privilege, preserving the confidentiality of information exchanged for the purpose of settling a dispute. However,in Saarinen v Rogers Communications Ltd. [Saarinen], the Ontario Superior Court of Justice (the “Court” or “ONSC”) granted an employee’s motion to compel the employer to disclose the termination packages provided to similarly situated employees, as well as the employer’s practice in determining those packages.
Background
The plaintiff, a former employee of the defendant company, was dismissed for cause and subsequently brought a wrongful dismissal action against the employer. Early into the litigation process, the parties attended examinations for discovery, asking each other questions about matters related to the claim. During this process, the employee asked the employer to produce the termination packages of all employees who had more than 25 years of service and were terminated without cause by the employer during the period of January, 2017 to December, 2019.
The employer refused to comply with this request, stating that the termination packages were subject to confidentiality provisions.
The employee then asked the employer to advise of its Human Resources department’s practice in determining the termination packages offered to employees who did not have a written employment and were dismissed without cause in January 2019, as well as who made said determination, and whether there were any general guidelines regarding the length of notice, incentive compensation, benefits and related items. The employer refused to answer this question, stating that HR’s practice with respect to employees dismissed without cause is irrelevant, as the plaintiff employee was dismissed for cause.
The employee proceeded to file a motion with the Court for an order compelling the employer to answer the questions refused. After the employee brought the motion, although the employer did not take this position at the outset, the employer asserted that, in addition to being irrelevant, the requested information and documents are without prejudice communications, which are protected by settlement privilege.
ONSC Decision
The ONSC granted the employee’s motion and awarded costs to the employee on a partial indemnity basis, in the amount of $6,540.67.
The Court considered the relevance of the requested documents and information, noting that the termination packages offered to other employees are typically irrelevant to an individual’s common law entitlements since these are determined on a case-by-case basis. However, the Court found that the requested information and documents were relevant in this case because the employee had claimed that there was no just cause for her dismissal. Therefore, the ONSC reasoned that if there was no just cause for dismissal, the termination packages provided to similarly situated employees who were dismissed without cause and the employer’s practice with respect to those packages would be relevant in determining the employee’s damages.
The ONSC also considered whether the documents and information that the employee requested were privileged, and the Court accepted that in certain circumstances, communications between an employer and employee are covered by settlement privilege. However, the Court found that in this case, the employer initially refused to answer the employee’s questions at discoveries on the basis of relevance, and did not raise an objection based on privilege until later in the litigation process. The Court also noted that the employer failed to submit any evidence to in support of its belated assertion that the documents and information are privileged.
Takeaways for Employers
The ONSC’s decision in Sarinaan sheds light on the circumstances under which courts may require employers to disclose termination-related documents and information in wrongful dismissal actions. While the decision is fact-specific and its broader application remains uncertain, it offers valuable insights for employers dealing with sensitive information and documents related to dismissals and settlement discussions:
- Confidentiality of Termination-Related Documents and Information: Employers should assess whether communications with employees, especially those related to dismissals and termination packages, qualify as confidential. In such cases, it may be advisable to mark the documents as “privileged”, “confidential” and/or “without prejudice” to signify the employer’s intention to preserve their confidentiality.
- Timely Assertion of Settlement Privilege: Employers should promptly assert settlement privilege with respect to documents and information they wish to keep confidential. However, it is important to note that there are exceptions to settlement privilege, which means that a court may still compel the production of certain documents if they are relevant to the issues in the claim.
This blog is provided as an information service and summary of workplace legal issues.
This information is not intended as legal advice.