Employers should be careful how they deal with employees they are terminating throughout the process. It is a traumatic time for anyone, whether they deserve it or not. Some case law indicates that if an employer is untruthful, misleading or unduly insensitive in the course of the dismissal, it may lead to damages separate and apart from any pay in lieu of notice or wage loss. Also, if the employer frivolously attacks the employee’s reputation with declarations made at the time of dismissal, these aggravated damages may follow.
Alison thought she had a case for aggravated damages. She had been with the company for three years in a sales manager role when she gave a PowerPoint presentation to her two bosses. She was unhappy with her job and wanted the company to create a new position for her as director of operations. In the PowerPoint presentation, she mentioned her conflicts with another manager. The PowerPoint presentation included statements like “It’s time to move on” and “I need to move away from the role of sales manager as it develops into its current iteration.” It said she wanted to stay with the company and be part of the future, but she had to change positions for her mental and physical health. Her bosses were confused. They were not sure if she was resigning or not. One boss asked her if she was resigning or if she wanted to be put on some sort of paid or unpaid leave. She clarified that she was not resigning, but about a week later, she was terminated.
Alison claimed that her dismissal occurred while she was house-sitting abroad and left her scrambling to secure alternate medical coverage. It also exacerbated her known illness. She said that the boss’ suggestion that she had resigned or should be placed on leave was made in bad faith, unfair and caused her significant distress.
In order to get those aggravated damages, Alison had to prove something beyond the normal distress and hurt feelings that invariably accompany losing a job. The case law says Alison had to prove a serious and prolonged disruption that transcends ordinary emotional upset or distress. Conduct can be insensitive but not amount to the unduly insensitive conduct required to attract aggravated damages. The fact that an employer could have handled the termination better does not, in itself, mean these damages will be awarded.
One example where aggravated damages were awarded included a termination interview where a long-term employee was told that their conduct was shameful and they were an embarrassment. They were told they could resign or be put on unpaid leave pending termination. They were not terminated until a month later. Aggravated damages were awarded.
The judge in Alison’s case empathized with the employer. They floundered in the termination process but were confused by her presentation. On the one hand, she said she was not happy and wanted to leave her role with the company, but also said she wanted to stay with the company but for them to make a new role for her.
The court found Alison’s employer was not unduly insensitive and the anxiety she suffered was of the normal level for someone who has been terminated and has to search for alternative employment and health insurance.
Alison got the payments required by her employment contract for the termination but nothing more. An unexpected termination always feels awful. Worse when it appears to be performance related. It is a blow to one’s sense of self-worth and dignity. Even though Alison was not successful in her claim for aggravated damages, employers should be careful. They should always put the feelings and dignity of the employee being terminated first. It is not only the right thing to do, it is the prudent thing to do.