Generally speaking, an employer may terminate an employee as long as it provides the employee notice of termination. However, if an employer has ‘just cause’ for the termination, the employer does not need to provide notice of termination. However, if the employer does not have just cause, the employee will generally be entitled to damages for wrongful dismissal. Courts also have the authority to award aggravated or punitive damages in certain circumstances. A recent case from British Columbia provides a good example of when this type of compensation may be awarded by the courts.

Facts

In Lau v Royal Bank of Canada, RBC fired Mr. Lau, a five-year employee, for just cause after one of his clients filed a complaint about a transaction Mr. Lau had assisted her with. The client had agreed to modify the way her bank holdings would be invested, however, contrary to bank policy, Mr. Lau processed the transaction as new money instead of retained money.

RBC’s corporate investigation services team (“CIS”) was called in. Mr. Lau apologised and immediately acknowledged that he had tracked the sale improperly. However, he claimed that he had followed the instructions of a colleague, Anson Tse, who was also allegedly at the client meeting. During the investigation, it was discovered that several other employees had also been improperly tracking their sales data, and many claimed that Mr. Tse had told them to do so.

There was conflicting evidence regarding who was present at the client meeting. The client said she had met only with Mr. Lau, and Mr. Tse initially said he was at the meeting but later said he had not been there. There was also video surveillance footage that supposedly showed Mr. Tse had not been in Lau’s office.

On the basis of CIS’s investigation, the bank fired Mr. Lau for just cause and submitted a report to the BC Securities Commission which listed Mr. Lau’s “falsification of bank records and failing to tell the truth when questioned regarding… a session with a client” as the reasons for his termination. Mr. Lau experienced difficulty finding employment at a different bank.

At trial, the judge was very critical of the bank’s investigation, particularly the fact that the bank produced no copy of the recorded interview between CIS and Mr Lau, that Mr. Lau was never given an opportunity to view the video or respond to it, despite having asked to see it and that the client’s statement was not put to him.

In addition to awarding nine months’ worth of pay in lieu of notice, the court awarded $30,000 in aggravated damages for breaching their duty of good faith in the manner of dismissal.

Lessons to be Learned

1. An employer cannot simply claim it has just cause to terminate an employee. It is the employer that has the burden of proving just cause.

2. An employee has a right to be presented with, and respond to, the alleged misconduct.

3. An employer’s duty of good faith in the manner of dismissal may lead to an award for aggravated damages in addition to damages for wrongful dismissal.

If you have been recently terminated, with or without cause, you should speak to an employment lawyer.  If you would like to speak to a lawyer at MacLeod Law Firm, you can reach us at [email protected] or 647-204-8107.