Too many lawyers representing employees are commencing cases of little worth but asking for large amounts in punitive or aggravated damages. The courts are losing patience with such claims, and the lawyers’ credulous clients are being whacked with cost awards.
In Chin v. Beauty Express Canada Inc., the court awarded Chin seven and a half months’ severance, totalling $16,000. His lawyer claimed costs of $54,777, and most of the trial was spent dealing with Chin’s claim for bad faith damages, which the court dismissed.
In deciding to award no costs at all as the matter should have been brought in Small Claims Court, Justice Morgan pronounced:
“The trial can be objectively characterized as an unfortunate waste of the parties’ resources. The quantity of damages is far outweighed by the legal fees. And that is to say nothing of the court time consumed by what turned out to be a rather small claim.”
The same type of criticism has been meted out to employers who waste courts’ time, with similar cost consequences.
In Summers v. OZ Optics Limited, Justice Hackland determined that the employer failed to admit facts and law that it should have admitted, unduly lengthened the proceeding, and argued, without any basis — and, significantly, without assisting the fired employee find work — that the employee had not taken sufficient steps to mitigate his damages. As result, the court awarded the employee $25,000 in costs on a judgment of only $36,000.
Fixed term contracts are another hot topic in employment law.
In Bouchard v. Facility Condition Assessment Portfolio Experts Ontario Ltd., the employee agreed “to enter into an employment contract which shall be for no less than three years on terms agreeable to both the parties.” The court found that this created a three-year term and the early termination clause in the contract was found to be invalid. As result, Bouchard was held entitled to the balance of the remaining three years.
This is a cautionary tale for employers not to enter into fixed term contracts, particularly since courts are inclined to invalidate termination provisions because the employee is then presumptively entitled to pay until the end of the term, however long. It is far better for employers to not take the risk of such a payout.
Courts striking out termination provisions is the biggest employment law trend of the last two years — other than perhaps the workplace investigation industry being found to cost more than they add.
Employers are increasingly attempting to save their termination clauses by adding additional clauses, which specify that the employee will not receive less than the Employment Standards Act (ESA). These “saving provisions” are simply not working to “save” otherwise invalid termination provisions.