Raptor Society Receives Rapp on Knuckles Over Handling of Employee Termination
By Fasken
By Matthew Larsen and Kristen Woo, lawyers at Fasken
A flawed investigation and an ill-conceived termination result in an order that the employer pay a long service employee a large damage award.
A thorough workplace investigation is an essential step prior to disciplining an employee or terminating an employee for just cause. As illustrated by a recent decision of the B.C. Supreme Court: O.W.L. (Orphaned Wildlife) Rehabilitation Society v. Day, 2018 BCSC 1724, an employer’s failure to carry out a thorough investigation into suspected misconduct resulted in a negative result in court and an order to pay the terminated employee considerable damages.
Facts
In 1985, Beverly Day founded O.W.L., a charitable society dedicated to rescuing and caring for injured raptors, such as owls and eagles. Despite having no training or experience with operating a business, Ms. Day helped O.W.L. grow into an internationally renowned raptor rehabilitation and education facility. Ms. Day demonstrated a tremendous commitment to the success of O.W.L. and to bird care generally – she worked full-time hours and she was on call 24 hours a day, seven days a week. She also lived on site at O.W.L.’s premises in a small building that doubled as a home for injured raptors.
In October 2014, O.W.L.’s Board of Directors terminated Ms. Day’s employment for cause, alleging that Ms. Day had misappropriated O.W.L.’s funds to pay for her rent and for alleged mistreatment of two employees. Ms. Day was 63 years old at the time of her dismissal.
The Board assumed that Ms. Day was responsible for paying her own rent after learning from O.W.L.’s landlord that O.W.L.’s monthly rent payment was divided into two payments: one for Ms. Day’s residence and one for the remainder of the property. Despite finding Board minutes establishing that O.W.L. had agreed to pay for Ms. Day’s rent, the Board did not investigate the matter further. The Board also jumped to the conclusion that Ms. Day’s treatment of two employees was unfair, without conducting an investigation.
In January 2015, O.W.L. sued Ms. Day for her failing to ensure that O.W.L.’s bookkeeper deducted rental payments from her paycheques and for her failing to reimburse O.W.L. for the rent payments.
Ms. Day responded by bringing her own lawsuit against O.W.L. alleging that she had been wrongfully dismissed and seeking damages for wrongful dismissal. Ms. Day also sought aggravated and punitive damages for O.W.L.’s breach of its obligation to act fairly and in good faith, both in respect of her dismissal and the legal action taken by O.W.L. after her dismissal.
Of note, O.W.L.’s position changed several times leading up to the trial. O.W.L. first amended its claim to change the date when the unauthorized rent payments were alleged to have begun. Later, O.W.L. amended its claim to increase the amount of unauthorized payments they alleged Ms. Day had received. At the start of the trial, O.W.L. again changed the amount of the alleged unauthorized payments, this time reducing the amount of its claim.
he evidence during the trial revealed that Ms. Day did not misappropriate any unauthorized payments. Toward the end of the trial, O.W.L. abandoned its claim that Ms. Day had misappropriated funds.
Ms. Day’s termination and the lawsuit that followed came at an especially difficult time in Ms. Day’s life. Her daughter had passed away in June 2014 and she was struggling to come to terms with her husband’s recently diagnosed dementia. She was also suffering from back pain that forced her to use a walker.
Decision
The Court was highly critical of O.W.L.’s failure to conduct an adequate investigation. The Court found that O.W.L. did not have grounds to terminate Ms. Day’s employment for just cause. The evidence clearly proved that Ms. Day had not misappropriated funds. While the Court found that Ms. Day had made inappropriate comments to one employee, they found that she had no prior incidents of misconduct and had never received any warnings that her employment was in jeopardy as a result of her comments. Therefore, the Court found that the one isolated inappropriate comment did not amount to just cause for termination of employment.
The Court awarded Ms. Day 26 months of lost salary and employment benefits. The Court also awarded Ms. Day $30,000 in aggravated damages to compensate for O.W.L.’s reckless pursuit of a claim which the Court found had no merit, and which significantly aggravated and substantially worsened the emotional and physical distress that Ms. Day suffered as a result of her daughter’s death and continued to suffer as a result of her husband’s dementia.
Lesson for Employers
- A flawed investigation can prove very costly for an employer. Employers have an obligation to do a full and thorough investigation into alleged misconduct before dismissing an employee. Where an employer fails to properly investigate, it runs the risk of losing a lawsuit.
- Long service employees of advanced age with specialized skills are likely to be entitled to large damage awards. 26 months is a noteworthy damage award. As many readers might be aware, 24 months was long recognized as the maximum notice period available. In recent years there have been a handful of court decisions in which employees of advanced age, with long service, and a narrow field of expertise have been awarded more than 24 months of lost salary and employment benefits.
- Except in very exceptional circumstances, a single incident of misconduct will not justify termination for cause. Normally, the employee should be warned about the misconduct and told that further such conduct will give rise to further discipline up to and including termination. Warnings must be in writing and clear enough for the employee to understand that similar misconduct would place his or her continued employment in jeopardy.