Short service employees achieving staggering results in court

Sunira Chaudhri

Sunira Chaudhri

Toronto Employment Lawyer

Most employers reading this column would likely agree two weeks is a reasonable payout to an extremely short service employee like Grimaldi. But what played out in court was a very different story.

When employees are terminated after a number of months, most think they aren’t entitled to much.

 

After all, how much should an employer have to pay an employee if they parted ways relatively early in the relationship?

 

Take for example the recent case of Joseph Grimaldi, a senior project manager that reported directly to the owner of CF + D Custom Fireplace Design Inc.

 

Grimaldi earned an annual salary of $90,000, health benefits, a $600 car allowance and an offer of ownership in the company that would vest after five years.

 

At the time he was hired, Grimaldi was employed at another company but resigned to join CF + D after various meetings and meals with owner Vince Volpe.

 

Grimaldi worked for CF + D for only four months and 23 days before he was terminated. He was 50 years old and received two weeks pay on termination.

 

Most employers reading this column would likely agree two weeks is a reasonable payout to an extremely short service employee like Grimaldi. But what played out in court was a very different story.

 

Grimaldi sued his employer in Hamilton court for, among other things, 12 months pay and an annual payment related to the shares offered to him.

 

The court awarded him five months-and-two-weeks of pay and 12.5% of pay in lieu of benefits.

 

Justice Bordin noted that Grimaldi applied for well over a 100 jobs and interviewed at five prospective employers. The court found his short service at CF + D would “require him to explain to prospective employers why he was terminated so soon after being hired.”

 

So, Grimaldi’s short service at CF + D seems here to have factored into a lengthier notice period, rather than a shorter one.

 

While it seems employers are receiving little reprieve in the court systems, there are undeniable factors that are leading to bigger wrongful dismissal damages in this country.

 

Waves of layoffs each quarter have created a frosty job market. Even though Canada has over 300,000 job vacancies, filling those jobs isn’t an easy task.

 

Terminated employees are entitled to hold out for comparable jobs at comparable pay. They aren’t required to take just any job that may be available. Of course, this makes eminent sense.

 

But, it begs the question, where are the comparable jobs?

 

Employees are seeing higher court awards on terminations because these jobs are being eliminated and not readily replaced. Highly skilled roles with higher pay have become and far between.

 

Perhaps our country needs to address what it will take for employers to invest their labour dollars here, rather than restructure their businesses away from Canada.

 

Every employer needs freedom to test out new employees without fear of serious financial consequences. A good employment agreement is a ready antidote.

 

But for those employers that prefer to negotiate outside the confines of a written contract, the courts can be unforgiving.

 

Have a workplace issue? Maybe I can help! Email me at sunira@worklylaw.com and your question may be featured in a future column.

 

The content of this article is general information only and is not legal advice.

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