Offices in Ottawa and Perth
(613) 722-1500

CONTACT US (613) 722-1500

Wally’s Comeback? Bad-Faith in Termination Leads to an Enhanced Notice Period

Wally’s Comeback? Bad-Faith in Termination Leads to an Enhanced Notice Period

By:

Mann Lawyers

Posted October 3, 2023

The recent decision from Ontario’s Superior Court Justice (“SCJ”), in Griffon Integrated Security Technologies et al. v. Valley Associates Inc. et al., 2023 ONSC 2200 [Griffon] has brought with it some reasoning reminiscent of a slightly older time in Canadian employment law. Specifically, the reasoning in Griffon partially adopted the abandoned approach of extending reasonable notice periods to dismissed employees where the employer engaged in bad-faith behaviour within the termination process.

Wallace and Honda

Until 2008, the leading decision on bad-faith conduct in termination, and how said conduct affected a reasonable notice period, was the Supreme Court of Canada (“SCC”)’s decision in Wallace v. United Grain Growers Ltd., 1997 CanLII 332 (SCC), [1997] 3 S.C.R. 701 [“Wallace”]. In short, Wallace outlined that where an employer engaged in bad-faith conduct while terminating an employee, said employee would be entitled to an enhanced reasonable notice period. This principle has been colloquially dubbed the “Wally Bump Up.”

In 2008, the SCC, in Honda Canada Inc. v. Keays [Honda], 2008 SCC 39, entirely revamped the approach to awarding bad-faith termination damages within the context of wrongful dismissal cases. In Honda, the SCC created a new framework in which reasonable notice periods were no longer extended for bad-faith conduct by an employer. Instead, Honda outlined that where an employer engaged in bad-faith conduct during a termination, there would be a required assessment of potential separate aggravated and/or punitive damages to both compensate the employee and punish the employer if necessary. Since Honda, the Wally Bump Up was no longer good law.

Griffon

Despite the Wally Bump Up being bad law, the decision in Griffon seems to adopt the approach for extending reasonable notice periods from Wallace.

The key facts and outcomes of Griffon are summarized as follows:

  1. The terminated employee was a Vice President and General Manager with 12 years of service.
  2. The employee was terminated without cause and without notice while battling colon cancer.
  3. The employee sued the employer for wrongful dismissal.
  4. Throughout litigation, the employer took a “scorched earth defence”, aggressively pursuing after-acquired cause with no evidence to support same, and launched a meritless counterclaim.
  5. The employee was awarded 20-months of pay in lieu of reasonable notice and $75,000.00 in punitive damages.

The outcome of Griffon is not surprising as these cases are relatively common. However, what was surprising was Justice MacLeod’s reasoning at paragraph 17, which states as follows:

“[17] The plaintiff did not seek to prove aggravated or moral damages independent of the pay in lieu of notice. The brutality of the dismissal, however, can be considered in determining the notice period because the completely unfounded allegations of dishonesty would have rendered it far more difficult for the plaintiff to find alternative employment.”

This reasoning was also used in paragraph 15 to support a 20-month notice period. On the one hand, the court in Griffon is saying that bad-faith conduct can increase a notice period. This would be a classic example of the Wally Bump Up and is bad law. However, on the other hand, the court further justifies the extended notice period by stating that employment was rendered more difficult to find as the direct result of the bad-faith conduct. This subsequent reasoning would be more in line with the purpose of a reasonable notice period at law, but still uses bad law as its foundation.

Conclusion

Griffon does not overtly “bump up” the reasonable notice period by a specified number of months due to the bad-faith conduct of the employer. However, it does take such conduct into account when deciding that a lengthier notice period should be awarded. This reasoning would run contrary to the SCC’s guidance in Honda. This is especially interesting as punitive damages were also awarded in Griffon through a wholly separate analysis as required by Honda. This may have potentially led to a situation where the employee was rewarded twice for the bad-faith conduct of the employer without even seeking an award to compensate him for same.

This blog post was written by Filip Szadurski, a member of our Employment Law and Commercial Litigation teams.  He can be reached at 613-369-0382 or at filip.szadurski@mannlawyers.com.

More Resources

Blog |
Wills, Trusts and Estates
By: 
Clients frequently ask how often they should update their Wills. We generally suggest that when clients sit down to do the oh so fun task[...]
Blog |
Real Estate
By: 
A tax sale is a sale process used by a municipality, in order to recover property tax arrears that have remained outstanding for at least[...]
Blog |
Wills, Trusts and Estates
By: 

Posted March 21, 2024

If someone wishes to make a Will or appoint a Power of Attorney, they must have the requisite capacity. The determination as to whether someone[...]
Blog |
Business Law
By: 

Posted March 13, 2024

A not-for-profit corporation incorporated pursuant to the Not-for-Profit Corporations Act (Ontario) (”ONCA”) is required to maintain certain records regarding the corporation, its members, directors and[...]
Blog |
Business Law
By: 

Posted March 5, 2024

With India having touched down on the surface of the moon last year, an impressive achievement by all accounts, we are reminded of the dozens[...]
Blog |
Family Law
By: 
Co-parenting with your ex-partner can be challenging. It involves constant coordination and communication about various aspects of your children’s lives. Whether it is about schedules,[...]
Filip Szadurski

Filip Szadurski

I focus my practice on Employment, Labour, and Human Rights Law, while also functioning as an active member of the firm’s Commercial Litigation and Environmental Law groups. I graduated from Osgoode Hall Law School in 2020 and was called to the Ontario Bar in 2021. I have a passion for helping employers and employees with their litigation needs at any level of court or tribunal. I also pride myself on supporting employers and executive employees with the review of their employment contracts, compensation packages, and workplace policies with the goal of avoiding unnecessary future litigation. Additionally, I have a Provincial Offences Act defence practice, assist senior management employees and employers through their workplace investigations, and am a trained workplace investigator. My investigation work includes provincially controlled workplaces subject to the Employment Standards Act and Occupational Health and Safety Act; federal domains subject to the Canada Labour Code; and, specialized agencies, such as those subject to the Police Services... Read More

Read More About Filip Szadurski

Subscribe to Our Newsletter

"*" indicates required fields

Name*
Consent*
This field is for validation purposes and should be left unchanged.