The recent case of Teljeur v. Aurora Hotel Group, 2023 ONSC 1324 (“Teljeur”) is an important one for employers and employees to take note of. It highlights a growing tendency by courts to award elongated notice periods to short-tenured employees, as well as significant moral damages for an employer’s bad faith conduct.
Facts
By way of background, Mr. Teljeur worked as the General Manager of the Pinestone Resort & Conference Centre (“Pinestone”) for a little over 3 years. At the time of termination, he was 56 years old and earned $72,500 in salary plus benefits.
On December 6, 2021, Pinestone advised Mr. Teljeur verbally that his employment was being terminated on a without cause basis and that they were going to provide him 8 weeks of severance. When Mr. Teljeur asked for something “in writing”, Pinestone agreed to provide it, but never did.
Despite having promised 8 weeks’ severance, Pinestone only paid Mr. Teljeur 3 weeks (his minimum entitlements under the Ontario Employment Standards Act (“ESA”)). Mr. Teljeur received this payment only 6 months after his termination.
Mr. Teljeur had also spent $16,680, out of pocket, to cover Pinestone’s business expenses. Pinestone acknowledged they needed to reimburse Mr. Teljeur this amount, but did not do so – even at the time of trial.
Mr. Teljeur sued for wrongful dismissal, reimbursement of his business expenses, as well as moral damages for the employer’s bad faith conduct.
Decision
The court awarded Mr. Teljeur 7 months’ pay in lieu of reasonable notice. His age and position were considered senior, and while his tenure “relatively short”, an elongated notice period was reasonable, in part, because Mr. Teljeur was dismissed during the COVID pandemic.
The court awarded Mr. Teljeur his salary and benefits over the 7 months’ notice period. Although no evidence was presented to the court regarding the details of the employee’s benefits package, or its costs, the court valuated pay in lieu of benefits as 10% of salary.
In terms of mitigation, Mr. Teljeur was found to have met his duty to mitigate his damages. The court held that, while the mitigation evidence was “skeletal” (Mr. Teljeur had only contacted three prospective employees over the course of 10 months), it could not be inferred that Mr. Teljeur would have found other work, had he applied for other positions.
The court also ordered reimbursement of business expenses and moral damages on account of:
- Pinestone’s failure to reimburse business expenses, which not only placed a significant financial burden on Mr. Teljeur, but also violated the ESA. (The ESA requires employers to not alter any term of employment during the statutory notice period);
- Pinestone’s failure to advise Mr. Teljeur of his termination in writing, contrary to the ESA;
- Pinestone’s payment of only Mr. Teljeur’s ESA minimum entitlements, despite having promised 8 weeks of severance at the time of termination; and
- Pinestone’s delay in issuing Mr. Teljeur his ESA payments. (The ESA requires payments to be issued no later than 7 days after termination, or the employee’s next pay day, whichever is later).
The court found that the foregoing conduct breached the employer’s duty to treat Mr. Teljeur in good faith, warranting $15,000 in moral damages.
Takeaways for Employers
Teljeur serves as a cautionary reminder for employers. Failure to comply with the ESA, withholding expense reimbursement, and an employer promising to pay more severance, without condition, but then leaving the employee with only ESA minimums, will all be regarded as bad faith conduct, carrying risk of a significant moral damage award.
In terms of mitigation, Teljeur demonstrates that mere demonstration that an employee’s mitigation efforts were lacking will not prove a failure to mitigate damages. Rather, the employer must produce evidence that the employee would have found other work, had they made better efforts.
Takeaways for Employees
For employees, Teljeur demonstrates that employees will be compensated with significant moral damage awards for an employer’s bad faith conduct.
It further highlights a trend[1] in the case law where courts are awarding elongated notice periods for short-tenured employees dismissed during the pandemic. Employees will be compensated for their damages over the notice period, and Teljeur shows us that this includes pay in lieu of benefits in the amount of 10% of salary, even where no evidence is produced about the details of those benefits or its costs.
Contact Us
If you’re an employer contemplating termination, or an employee who is facing termination, speak with an employment lawyer at Turnpenney Milne LLP to obtain employment law advice that is up-to-date with new cases and changing laws. Contact us today at 416-868-1457 or intake@tmllp.ca.
[1] See also Pavlov v. The New Zealand and Austrialian Land Company Limited, 2021 ONSC 7362.