McDonald’s lawsuit a wake-up call for employers

McDonald’s lawsuit a wake-up call for employers

McDonald’s lawsuit a wake-up call for employers A former McDonald’s employee’s massive award after quitting her job over a demotion should be a wake-up call to other employers.

The restaurant manager, who had worked for the fast-food chain for more than 20 years, was given two options by her employer after alleged performance issues: accept a demotion or be fired.

The worker refused to be demoted and sued for constructive dismissal.

She struggled to find a comparable managerial position elsewhere, and instead took low-level positions at Tim Horton’s and Home Depot.

A judge later ruled in the worker’s favour, awarding her 20 months’ pay in lieu of notice with no deductions, even though she had been working over the intervening period.

Cox & Palmer lawyer Jessica Bungay describes it as a “unique case” with lessons for other employers.

A major issue in the former worker’s award was figuring out when, after leaving her job, she earned her other income.

“It was clear that this employee earned other income after she was terminated, and they could identify it via the years, probably using T4s, but she was terminated at the end of 2012, had a little bit of income there; at the beginning of 2013, they knew she worked for two months at Tim Hortons but they didn’t know which two months of the year it was.

“That became an evidentiary problem because they couldn’t prove whether it was in the statutory notice period or whether it was in the common law period. If they’d been able to prove it – if they’d examined her and asked her questions about that, then they would have potentially been able to use some of that as mitigation income - maybe.”

Bungay says employers have “really got to nail down” when any mitigation income or income earned after termination was earned – which gets harder the longer you wait.

“We collect and rely on T4s, because that’s the information that’s considered an accurate recording of income, but again, it only records income for the year, and you need to get more particular. So requesting, say, pay statements that can identify the period of time in which that pay is earned may be a way to remedy that issue.”

Bungay adds that the case shows why it’s important for employers to pick their battles: in the McDonald’s case, the employer claimed the worker had quit and tried to her statutory entitlements.

“Withholding that got them down a road and a path that they probably didn’t want to go down. Making that assessment of when to withhold statutory entitlements very carefully. If you are disputing constructive dismissal, then it may be necessary for your case, but if it’s in a situation when it’s a termination, those should be paid out unconditionally.”

Related stories:
When can HR ask for a second medical opinion?
What happens when your employment agreements are deemed unenforceable?