A culminating incident of misconduct is sometimes the “final straw” that ends the employment relationship. In Williamson v. Brandt Tractor Inc. [Williamson], a customer complained about an unprofessional interaction with a salesperson. In response, the employer dismissed the employee for cause because of a pattern of misconduct. The employee denied any wrongdoing and brought a wrongful dismissal claim.

The Ontario Court of Appeal (“ONCA”) upheld the Ontario Superior Court of Justice’s (“ONSC”) decision that the dismissal was without cause, as the employer did not have sufficient evidence to prove the misconduct occurred.

ONSC Decision

The ONSC found that the employer failed to establish just cause. While the employee and the customer discussed a potential sale, there was insufficient evidence to support the allegation that the employee acted inappropriately.

As the dismissal was without causeand there was no enforceable termination clause, the employee was entitled to reasonable notice at common law. Based on the Bardal factors (including that the employee was 56 years old, worked as a salesperson, and had 18 years of service), the ONSC awarded the employee 17 months’ notice.

The employer argued that the employee’s notice period should be reduced because of his duty to mitigate (i.e., make reasonable efforts to find comparable employment). While the employee secured a new non-sales position, the ONSC declined to reduce the notice period because he earned less money in the new role.

ONCA Decision

The employer appealed the ONSC’s decision and argued that the employee’s pattern of misconduct (as opposed to the culminating incident alone) was not appropriately considered. The ONCA rejected this argument, as the ONSC found no culminating incident of misconduct occurred at all. As the ONCA upheld that the dismissal was without cause, the employee was owed reasonable notice.

The ONCA stated that the employer had the burden to establish the employee failed his duty to mitigate by proving the following:

• the employee did not make reasonable efforts to obtain comparable employment;
• comparable employment opportunities were available; and
• the employee would have secured a comparable position if he made reasonable efforts.

As the employer did not provide evidence to support that comparable roles were available, the employee did not fail his duty to mitigate.

However, the ONCA disagreed with the ONSC’s decision to exempt the employee from offsetting his damages. The ONCA emphasized that the case law supported deducting $32,000 of employment income earned during the notice period, despite the employee accepting a lower-paying job.

Key Takeaways for Employers

Williamson clarified key principles related to wrongful dismissal, including best practices for record-keeping before and after dismissal.

• Keep mitigation records: When an employee asserts that they have been wrongfully dismissed, employers should document comparable job opportunities. This includes compensation, responsibilities, qualifications, and the date the job was posted. These records can support an argument that the employee failed to mitigate by not applying to available roles and significantly reduce their damages.
• Delayed mitigation matters: A former employee’s unreasonable delay in beginning their job search may support an argument that they failed to mitigate their damages. Employers should look for and preserve evidence of any such delay, as it can reduce damages they would otherwise owe.
• Consistently document misconduct: To rely on cumulative misconduct, employers must prove that each incident occurred. Employers should document coaching discussions, verbal and written warnings, and communications explaining the consequences of further misconduct.

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

This information is not intended as legal advice.