Management Behaving Very Badly

Two recent court decisions from Ontario and British Columbia show the potential costs for employers who don't address exceptionally bad behaviour by managers and supervisors.

In Osmani v. Universal Structural Restorations Ltd. , the plaintiff claimed not only that he had been constructively dismissed, but that his supervisor had engaged in a number of other tortious behaviours, including assault. After a trial, a judge of the Ontario Superior Court of Justice made the following findings:

• That the plaintiff's supervisor (who was named as a defendant in the claim) had engaged in verbally abusive behaviour, including making rude sexual remarks about the plaintiff's wife and daughter, and had made remarks threatening to have the plaintiff (who was on a work permit) removed from Canada;
• That the supervisor had degraded and insulted the plaintiff in the presence of co-workers, calling him a "stupid/f***ing Albanian" or "stupid/f***ing Italian, throwing a Tim Horton's coffee card at his face and making other demeaning comments and gestures aimed at humiliating the plaintiff;
• That the supervisor had punched the plaintiff in the groin, ultimately leading to the plaintiff having one testicle removed (which, in turn, led to sexual dysfunction);
• That the company was aware of the supervisor's actions, including the fact that he had punched the plaintiff in the groin, causing the plaintiff's injury, but took no action to address the behaviour; and
• That, after the plaintiff suffered a fall from a ladder at work, he was allowed to lay on the ground for hours, that staff failed to call an ambulance (and later claimed this was the plaintiff's decision), and that the employer made a concerted effort to discourage or interfere with the plaintiff's WSIB claim.

Based on these findings, the judge found that the plaintiff had made out the torts of assault (threat of physical harm) and battery (non-consensual physical contact, whether it results in injury or not), violation of the Human Rights Code, and that the plaintiff had been constructively dismissed due to the toxic workplace that had been created by the supervisor's actions and the employers' inaction. In the result, the plaintiff was awarded the following:

• $100,000 for battery, plus $25,000 in punitive damages against the supervisor;
• $10,000 for the tort of assault;
• Payment in lieu of four (4) months' reasonable notice of termination, in the amount of $26,286.30 less mitigation income, in relation to the constructive (wrongful) dismissal (the plaintiff was 47 years old, a skilled labourer, with 14 months' service, making $37/hour at the time of termination);
• $75,000 in aggravated or moral damages with respect to bad faith in the manner of termination;
• $25,000 in punitive damages to denounce the employer's conduct;
• $50,000 in damages for violation of the plaintiff's rights under the Human Rights Code; and
• $5,794 in unpaid wages, due to the employer's requirement that the plaintiff pay a portion of the work permit application and had "skimmed"

Without any disrespect to Mr. Osmani, he was employed as a labourer for 14 months. In normal circumstances, one would never imagine damages in excess of a quarter of a million dollars for a similarly situated employee.

In Chu v. China Southern Airlines Company , the B.C. Superior Court was dealing with a wrongful dismissal claim from an individual who had worked for the airline for almost 11 years when his employment was terminated. For seven years, he had been the company's Marketing and Business Development Manager, before his employment took a precipitous downward trajectory. After the company's GM was replaced, he was demoted to a customer service position, in March 2018 and saw his salary reduced by 25%, before a second demotion (to an airport services worker at Vancouver International Airport in October of that year. Ultimately, the employer terminated the plaintiff in February 2019, purportedly for cause, alleging "time theft". The plaintiff claimed that he had been wrongfully dismissed, but also claimed punitive damages for the manner in which the employer had treated him prior to and at the time of termination.

The Court found that the employer had engaged in the following conduct:

• Upon being appointed, the new GM "embarked upon a campaign designed to manufacture cause for dismissal or induce the plaintiff to resign". Though there were no complaints about his performance or conduct prior to January 2018, she almost immediately began criticizing his work, issuing reprimands and building a paper trail of "self-serving records";
• He was disciplined for attending industry events, allegedly without authorization, and for other alleged failures;
• He was demoted to a sales position, reporting to someone who had previously been his colleague, and his monthly salary was reduced from $3,890 to $2,940. He was forced to work at the reception desk, dealing with customers in person and by phone;
• The new customer service role, the plaintiff was required to learn and apply a complex ticketing system, with limited training and little time to learn a thick codebook, setting him up for failure;
• Further formal discipline was issued to the plaintiff before he was again demoted to an airport operations worker, a front-line customer service role, at Vancouver International Airport. In his new role, he was under constant time pressure and was subject to frequent criticism from his new supervisor. After a couple of months, he was told that he was not meeting expectations and was placed on three months' probation. The employer asserted that the plaintiff agreed to resign if his performance did not meet expectations in a month. He was not given promised training, and was terminated before the month was up;
• After terminating the plaintiff, the company refused to provide him with a Record of Employment, delaying his application for Employment Insurance for 2 1/2 months;
• After the plaintiff commenced litigation for wrongful dismissal, the employer advanced a number of fabricated or embellished reasons for his dismissal, including that it was only after the change of GM that it was discovered that he had no real management responsibilities, that he was not qualified to act as Business Development Manager (a "sham role created by the former GM), that he was incompetent to perform even the roles he was demoted to, that he was guilty of sexual harassment of a female supervisor, he engaged in theft of several model airplanes, that he engaged in activities that were not authorized by the company or which he knew were contrary to policy, and that he failed to fulfil regulatory requirements. None of the allegations were well-founded, other than his ability to perform the duties of airport services worker, which the employer knew was the case when it assigned him to the job;
• Shortly before the summary hearing, the employer abandoned most of its baseless allegations in support of dismissal, but persisted in alleging fraud, deceit, theft and sexual harassment. At the hearing, the company did not put forward evidence from any of the witnesses who could have supported its allegations, leading to the "irresistible" inference that the evidence of those witnesses would not have supported the employer's case.

After concluding that the allegations of just cause for dismissal were without any foundation, or had actually been 'manufactured' in hopes of supporting the alleged cause, the Court made the following findings with respect to damages:

• Damages for failure to give reasonable notice of 20 months, less mitigation earnings ($58,053);
• $50,000 in damages for mental distress suffered as a result of the employer's bad faith and dishonesty in the manner of dismissal;
• $100,000 in punitive damages for the "“harsh, vindictive, reprehensible and malicious" conduct of the employer, including the employer's "hardball tactics" in the course of litigation which were clearly designed to "stall and frustrate the prosecution by the plaintiff of his claims in this litigation"; and
• The plaintiff's costs (including costs related to a prior unnecessary delay of the trial by the defendant, which the defendant had not paid as of the time of the hearing).

For employers who become aware of abusive behaviour by supervisors or managers, the message is clear that they must take prompt and meaningful action to bring it to an end. Failure to do so can result in not just reasonable notice damages, but significantly greater liability in the form of moral, aggravated or punitive damages, or even for separate torts.

Need help with a challenging termination or looking for an investigator to root out workplace harassment? Contact [email protected] for expert advice and guidance.

Operating as Ceaser Work Counsel since early 2014, Lance Ceaser is a 19+ year management-side labour and employment lawyer operating from London, Ontario, where he resides with his lovely spouse, a dog and 2 cats. Lance has provided timely, cost-effective advice to organizations of all sizes in virtually every sector of industry and the public sector throughout his career.