Secret recording highlights poor handling of termination

In a recent Ontario Superior Court of Justice action, Teljeur v. Aurora Hotel Group, an employer found themselves in hot water based on remarks made during what they thought was a private termination meeting. Turns out the employee was secretly recording the meeting and was able to rely upon it to prove the employer did not treat him fairly at the time of termination.

Facts:

The employee, Mr. Teljeur, worked for the employer, Pinestone Resort ("Pinestone"), from May 2015 to September 2016. He was subsequently rehired on October 1, 2018 and worked there until his termination without cause on December 10, 2021.

Mr. Teljeur was advised of his termination during a meeting with two senior executives, which he surreptitiously recorded. During this meeting he was promised he would receive notice of his termination in writing, that he would receive 8 weeks of severance, and encouraged to in fact resign from his employment.

Mr. Teljeur did not agree to resign. Following which, Pinestone failed to provide him with notice of his termination in writing or the promised 8 weeks of severance, instead only providing Mr. Teljeur with his minimum statutory termination pay after a significant delay.

Mr. Teljeur commenced an action for wrongful dismissal, seeking pay in lieu of 10 months reasonable notice, as well as damages for the manner in which he was terminated.

Pinestone denied Mr. Teljeur was entitled to 10 months of reasonable notice, and further argued any entitlement should be reduced on account of his failure to mitigate. Pinestone also strictly denied he was entitled to any bad faith damages.

Outcome:

The judge sided with Mr. Teljeur, awarding him 7 months of reasonable notice, based on his full compensation package, and did not find a failure to mitigate. Further, he was awarded $15,000 in moral damages.

Analysis:

Reasonable Notice:

On the topic of reasonable notice, the judge found that Mr. Teljeur's previous stint of service with the employer in 2015-2016 should not be included for the purpose of calculating his reasonable notice entitlement. Nonetheless, the judge found that despite Mr. Teljeur's relatively short tenure of just over three years, his senior role, coupled with his more senior age (56) and the fact his termination occurred during the COVID-19 pandemic, warranted a notice period of 7 months. Mr. Teljeur was entitled to receive damages in lieu of his full compensation package, including fringe benefits, during the reasonable notice period.

Further, the judge declined to find Mr. Teljeur had failed to mitigate. The judge confirmed that in order to succeed on a failure to mitigate argument, the employer must prove (a) the employee did not make reasonable efforts to mitigate, and (b) if they had, it could have resulted in the employee obtaining other similar employment. While Pinestone argued Mr. Teljeur had failed to take reasonable steps to mitigate, the judge found there was no evidence before him that would support that Mr. Teljeur would have secured alternative employment had he taken better steps to mitigate. As a result, Pinestone had not discharged the burden of proving Mr. Teljeur failed to mitigate.

Bad Faith Damages:

The judge awarded Mr. Teljeur additional damages for Pinestone's poor handling of the termination. In reaching this conclusion, the judge relied upon the following:

1. Pinestone failed to provide written notice of termination – This was not only a breach of their promise to Mr. Teljeur during the termination meeting, but contrary to Ontario's Employment Standards Act (the "ESA"), which requires notice of termination to be provided in writing.
2. Pinestone failed to pay the promised severance – As indicated above, Pinestone promised 8 weeks of severance during the termination meeting, then failed to provide it.
3. Pinestone was late to pay Mr. Teljeur's statutory termination pay – Pinestone ultimately issued Mr. Teljeur his statutory termination pay, as required by the ESA, but was delayed in doing so and did not meet the deadline for issuing the payment required by the ESA. This meant Mr. Teljeur had to go through the holiday season with no financial support.
4. Pinestone failed to reimburse Mr. Teljeur for business expenses – Pinestone conceded it owed Mr. Teljeur $16,680.03 for out-of-pocket business expenses he had incurred. However, it had not paid it to him because there was an issue over whether interest needed to be paid on the principal amount. The judge found this unacceptable. Pinestone should have paid the principal amount, especially given that it was a significant sum and represented approximately 23% of Mr. Teljeur's annual income.
5. Pinestone encouraged Mr. Teljuer to resign – including saying he could tell staff he resigned three weeks previously, which was not accurate.

Takeaways:

This case is interesting for a couple reasons.

From a reasonable notice perspective, it suggests that absent a compelling reason to do so (e.g. a term in a contract) previous service with an employer where there is a significant break will not automatically be stitched together for the purpose of determining an employee's entitlements. Further, it re-confirms that length of service is but one factor to be considered when determining reasonable notice entitlements. In this case, Mr. Teljeur's age, seniority, and the hard market to find new work in all operated in favour of a higher notice period despite his shorter length of service.

It is also notable due to the judge's reliance upon the employee's secret recording of the termination meeting. Previously we have blogged about some of the pitfalls of surreptitious recordings in the workplace, including how it can erode trust and even give rise to cause for termination in certain circumstances. For more information, see our post: Surreptitious Surveillance in the Workplace. Yet, in this case the employee's recording was important evidence for his claim for damages. In our view, an important distinction should be drawn between generally recording workplace conversations with co-workers without permission, versus recording "private" meetings that only relate to the employee's own employment and may have legal repercussions on the employee, such as a termination meeting. Either way, we encourage employees to tread carefully and seek legal advice before recording workplace conversations without permission.

Lastly, this case is one of many recent decisions which emphasizes the importance of complete compliance with the ESA when terminating an employee. Employers would do well to make sure they understand exactly what their obligations are when terminating an employee prior to proceeding with the termination, as failing to provide an employee with their full entitlements in accordance with the ESA timelines may give rise to damage exposure.

If you have any questions or concerns about your workplace entitlements or obligations, please reach out to a member of the Lee Workplace Law team. We would be happy to answer any questions you might have.