In a recent decision, the BC Court of Appeal upheld a trial decision which found that an employer did not have just cause to dismiss an employee who sexually harassed a subordinate employee in the workplace. At trial, the employee was successful in obtaining damages for wrongful dismissal, including a global amount of $25,000 for aggravated and punitive damages. The employer appealed but the decision concerning cause was upheld by the Court of Appeal and the amount of damages was upheld apart from a variance with respect to how damages were characterized.
Facts:
The plaintiff, the head baker at Café La Foret, and an assistant baker were working together when the employee touched the assistant baker twice without her consent. The assistant baker reported the events to the general manager.
The assistant baker told the general manager that she wanted an apology in writing from the head baker so she could report the incident to the police. The general manager contacted the corporate secretary for Café La Foret and asked him to prepare an apology letter to be signed by the employee. The corporate secretary prepared the apology letter in the form of an affidavit, which was sent to the employee for his signature. The general manager refused to provide the employee his record of employment and termination letter unless he signed the affidavit. The head baker refused to sign the affidavit and brought a wrongful dismissal action against the employer.
At trial, the employer argued that it had just cause for dismissal because the plaintiff engaged in serious misconduct by sexually harassing the assistant baker. While the trial judge found that the employee sexually harassed the assistant baker, the trial judge determined that the misconduct did not rise to the level of just cause because the employer terminated the employee because he refused to sign the affidavit, rather than because of the misconduct. The trial judge awarded damages for the failure to provide reasonable notice and a global award of $25,000 for aggravated and punitive damages.
Appellate Decision:
The employer appealed the decision. On the issue of just cause, the employer argued that the trial judge erred by (1) failing to find that the employee had been dishonest about the sexual harassment; (2) failing to consider all of the employee’s misconduct; and (3) considering irrelevant factors in assessing the nature and extent of the sexual harassment. The Court of Appeal, however, disagreed that there was an error to warrant overturning the trial decision.
With respect to the last argument, the trial judge characterized the employee’s misconduct as one of a gross error of judgment and not bad faith intentions. On appeal, the employer argued that the intentions of the perpetrator has no bearing on the severity of the harassment. The Court of Appeal agreed but explained that, in wrongful dismissal cases, the intentions of the perpetrator may be relevant in assessing whether the misconduct was so fundamentally inconsistent with the employee’s employment obligations as to give rise to a breakdown in the employment relationship.
On the issue of damages, the employer argued that the trial judge erred in making a global award for aggravated and punitive damages and so the $25,000 award should be set aside. The Court of Appeal agreed that aggravated and punitive damages must be assessed separately but determined that the evidence supported an award of $25,000 for aggravated damages alone. The damage award was varied accordingly, but the decision was otherwise upheld.
Takeaway:
This case highlights the difficulty in establishing just cause for dismissal. Even where there is serious misconduct, the court will engage in a contextual assessment of the misconduct in the context of the employment relationship at issue. Despite serious misconduct, a court may conclude that the employee’s conduct does not rise to the level of just cause for dismissal.
If you have any questions about this article, please contact your Harris lawyer.