What Is “Absolute Liability”? Absolute liability is the obligation of an insurer to indemnify an innocent third party who was injured by an insured, while the insured was in violation of the insurance policy. Under the absolute liability provision of the Insurance Act, RSNB 1973, c I-12, [the ‘Act’], the insurer may deny coverage to […]read more
First Wrongful Dismissal Decision from Newfoundland and Labrador in Over Four Years
The first wrongful dismissal claim to go to trial in Newfoundland and Labrador in more than four years was dismissed by the Newfoundland and Labrador Supreme Court (Trial Division). According to Justice Burrage, the Plaintiff a 29-year employee of Sameday Worldwide, was not only not wrongfully dismissed, but she was not actually dismissed since she continuously received disability and health benefits and also accumulated pensionable service from her employer.
In Roche v Sameday Worldwide, 2014 NLTD(G) 26, the Plaintiff was advised on 17 November 2008 that she was being removed from her current position due to her inability to meet performance targets over the previous number of years. The Plaintiff was offered one of two alternate positions with the employer, but at less pay. The possibility of a severance package was also raised during the meeting. Subsequent to this meeting the Plaintiff reported in sick and had been off work and in receipt of disability benefits ever since.
In August 2009, on the understanding that the Plaintiff had been cleared to return to work and that her long-term disability benefits would cease, the Defendant directed the Plaintiff to contact her supervisor by 2 October 2009 or she would be considered to be absent without authorized leave and her employment would be terminated. When the Plaintiff failed to do so, the Defendant sent her a letter on 23 October 2009, stating that her employment was terminated for cause, effective 2 October 2009. After the termination letter was sent, the Defendant became aware that the Plaintiff had in fact appealed the termination of her long-term disability with the benefits provider. Upon learning that the Plaintiff had not been cleared to return to work, the Defendant cancelled the termination of the Plaintiff’s employment before it could be given effect. At the Plaintiff’s request, her health benefits were reinstated, which were only available to employees of the Defendant. The Plaintiff continued to receive these benefits and to accumulate pensionable time as an employee of the Defendant.
The Plaintiff subsequently brought an action against the Defendant, claiming that she had been wrongfully dismissed on 2 October 2009. She did not claim constructive dismissal arising from the 17 November 2008 meeting. The Defendant responded that if the court accepted that the Plaintiff was not dismissed, the employment relationship had nevertheless, come to an end. The Defendant argued that by commencing the action, the Plaintiff had repudiated her employment contract and in addition, that the Plaintiff’s inability to report to work during the past five years, amounted to a frustration of her contract of employment.
Was the Plaintiff Wrongfully Dismissed?
Justice Burrage held that the Plaintiff had not been dismissed as she continued to be an employee of the Defendant; therefore the Plaintiff could not have been wrongfully dismissed. He held that the termination letter was sent to the Plaintiff on the mistaken belief that she had been cleared to return to work and that a final decision had been made to terminate her long-term benefits by the benefits provider. The termination was immediately revoked before it could have been given effect and the Plaintiff acknowledged such revocation by her subsequent conduct in requesting and receiving medical and dental coverage that was only available to employees. She had also continued to accumulate pensionable service since October 2009. The Defendant continued to make both the employer and employee contributions to the pension plan and the Plaintiff received a pension statement each year, reflecting these contributions.
Did the Plaintiff Repudiate her Employment Contract?
Justice Burrage also considered whether the Plaintiff repudiated her employment contract by commencing an action against her employer and held that the employment relationship was not repudiated by the issuance of the Statement of Claim. The Plaintiff continued to receive medical and dental benefits from the Defendant, uninterrupted by the commencement of this action; there was nothing to suggest that either party treated the employment relationship as repudiated.
Has the Employment Contract been Frustrated?
With respect to the Defendant’s claim for frustration, Justice Burrage held that such claim could only succeed as a defence in circumstances where there has been a termination of employment relationship, which did not occur on 2 October 2009.
Claim for Mental Distress
While not required to do so, Justice Burrage also addressed the issue of damages for mental distress, as claimed by the Plaintiff. He held, after a consideration of the leading Supreme Court of Canada decision of Keays v Honda Canada Inc. 2008 SCC 39, that had the Plaintiff been dismissed without cause, the Defendant’s conduct toward her in the manner of dismissal would not justify an award of aggravated, exemplary or punitive damages.
When an employee sues his or her employer, the general view of courts is that such conduct is incompatible with the continuance of an employment relationship; however, each case must be decided on its own facts. In this case, Justice Burrage concluded that there was no repudiation of the employment contract by the Plaintiff’s commencement of a lawsuit against the employer. He focused his analysis on the fact that the employer continuously contributed to the benefits provided to Plaintiff even after the Statement of Claim was filed and the fact that the Plaintiff remained a willing recipient of same.