Fabricating just cause has cost one organization dearly after a judge deemed the actions “outrageous.”
Dismissing without cause can be a costly operation and temptation to invent reason may arise – however, anyone unscrupulous enough to try may want to heed a recent Ontario case that ended in a six-figure punishment for one dishonest employer.
The case
In a sale that was valued at several million dollars, Atlus Group Ltd. purchased Alan Gordon’s business assets in November 2008 – however, the final sale price was linked to the performance of the business after closing and a clause was included that allowed for a price adjustment by February 2010, depending on the company's performance.
Gordon was hired to continue as an employee of Altus but as the purchase price adjustment date approached, conflict arose between Gordon and Altus – the former eventually gave notice to activate the arbitration clause in the purchase agreement to resolve the dispute.
However, in March 2010, Altus dismissed Gordon for cause, citing his “derogatory” behaviour towards senior management, his frequent profanity, and “generally unpleasant” nature.
Altus also alleged Gordon was involved in a conflict of interest and had continued to employ someone who had been previously charged with fraud.
The outcome
The judge saw straight through the organization’s ill-disguised attempts to prove just dismissal and said Altus had simply wanted to end the employment contract without paying him severance.
“In other words, they decided to be cheap and then conjured up a cause for firing in order to save money,” said Justice Bruce Glass.
Justice Glass slammed the company’s actions as “outrageous” and warranted punitive damages to the amount of $100,000.
“That sum of money notes the harsh treatment of Alan Gordon over an extended period of time as a means of sanctioning Altus for its terrible conduct,” he explained in court documents.
“Employers should be careful to allege cause only where there is a foundation for such allegations,” warned leading employment lawyer Jennifer Fantini. “Otherwise, courts may sanction the employer's conduct.”
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The case
In a sale that was valued at several million dollars, Atlus Group Ltd. purchased Alan Gordon’s business assets in November 2008 – however, the final sale price was linked to the performance of the business after closing and a clause was included that allowed for a price adjustment by February 2010, depending on the company's performance.
Gordon was hired to continue as an employee of Altus but as the purchase price adjustment date approached, conflict arose between Gordon and Altus – the former eventually gave notice to activate the arbitration clause in the purchase agreement to resolve the dispute.
However, in March 2010, Altus dismissed Gordon for cause, citing his “derogatory” behaviour towards senior management, his frequent profanity, and “generally unpleasant” nature.
Altus also alleged Gordon was involved in a conflict of interest and had continued to employ someone who had been previously charged with fraud.
The outcome
The judge saw straight through the organization’s ill-disguised attempts to prove just dismissal and said Altus had simply wanted to end the employment contract without paying him severance.
“In other words, they decided to be cheap and then conjured up a cause for firing in order to save money,” said Justice Bruce Glass.
Justice Glass slammed the company’s actions as “outrageous” and warranted punitive damages to the amount of $100,000.
“That sum of money notes the harsh treatment of Alan Gordon over an extended period of time as a means of sanctioning Altus for its terrible conduct,” he explained in court documents.
“Employers should be careful to allege cause only where there is a foundation for such allegations,” warned leading employment lawyer Jennifer Fantini. “Otherwise, courts may sanction the employer's conduct.”
More like this:
China confirms world’s largest layoffs
Shocking criminal charges won’t always warrant dismissal
Oil price slump sees jobs cut in Canada
