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Huge wrongful dismissal damage award overruled by Ontario Court of Appeal on basis of misapplication of law of just cause dismissal

TerminationA 62 year old Mississauga teacher with 10 years of service experienced the joy of winning a huge damage award in the face of allegations of just cause at trial only to have the trial decision squarely overruled by a majority of the Ontario Court of Appeal with significant cost consequences to account for. While the Ontario Court of Appeal often gives Trial Judges significant deference in their decisions, the Court of Appeal found that the Trial Judge misapplied the facts to the proper law on just cause dismissal and overruled the entire decision and awarded the employer significant costs on both the trial and appeal.

In Fernandes v. Peel Educational & Tutorial Services Limited 2016 ONCA 468, the private school employer brought an appeal over the decision of a trial judge in a wrongful dismissal case. The school had fired the teacher who had 10 years of service on the basis of just cause. The Trial Judge had found that the teacher had committed acts of misconduct, including providing incorrect marks that were delivered late, allowing students to have overdue assignments, using a computer program that did not provide accurate marks despite the fact he was the computer teacher; lying to his employer about how the marks were calculated, lying to the courts about how the student presentations were marked and falsifying marks on student records. Despite these findings of fact, the Trial Judge held that the school had still released some of the marks and therefore the punishment of a just cause termination was disproportionate to the alleged offence.

The Trial judge awarded the teacher a common law notice period of 12 months in the amount of $57,000.00, a further $116,250 for loss of long term disability benefits and an illness that arose during his notice period and $130,000 in costs.

On appeal, the school board argued that that the trial judge had clearly misapplied the facts and the law on just cause dismissal and that based on the record there should have been a termination for cause.

The Court of Appeal began its analysis by reviewing the leading case on just cause, McKinley v B.C. Tel., 2001 SCC 38, where the Supreme Court of Canada held the test involves whether the employee’s misconduct gave rise to a breakdown in the employment relationship and balancing the misconduct versus appropriate proportionality from the employer. The Court of Appeal held that while the Trial Judge had found significant misconduct, he had failed to properly assess the seriousness of the misconduct and had also found that the teacher has no explanation for the misconduct and therefore there should have been a finding of just cause for dismissal:

[124]   For the reasons already given, a consideration of the full range of misconduct leads to the conclusion that it was very serious.  That misconduct – particularly, the intentional disregard for the fair and accurate grading of his students – was incompatible with Mr. Fernandes’ professional obligations as a teacher and with the essential conditions of his employment obligations.  No explanation was offered for the misconduct. None is evident on an examination of the record.

Further, the Court of Appeal noted that since the teacher had been dismissed with cause before the insurance issue arose, he was disentitled to insurance.

In the end result, the Court of Appeal reversed the entire Trial Judge decision on damages for wrongful dismissal and loss of insurance benefits. In place, it issued a cost award of $30,000 against the teacher for the appeal and $65,000 against the teacher for the trial.

This case highlights that litigation is expensive and even very experienced trial judges can misapply the facts and the law in a case. This result is no doubt devastating to the teacher who lost a massive damage award and must now find a way to pay a significant cost award against him.

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Simon Heath, BA, MIR, LLB, Heath Law

Employment Lawyer and principal at Heath Law, Employment Lawyers
Simon Heath, BA, MIR, LLB, is the Principal of Heath Law, Employment Lawyers in Mississauga, Ontario. Simon represents both public and private-sector employers and employees (unionized and non-unionized) at all stages of the employment relationship with a focus in the areas of employment law, labour law and human rights law; these representations are made at all levels of courts and all administrative tribunals. Read more
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