What happens if I am terminated due to restructuring but the company
hires somebody to fill my position when I am gone?
This is a question I get asked
very often. An employee is terminated
due to restructuring, but they hear through the grapevine that their position
has actually been replaced. The case of Andrachuck v. Bell Globe Media Publishing
Inc. dealt with this exact issue, as well as a limitation issue, a human
rights issue and whether or not the plaintiff was able to claim punitive
damages. The facts are quite
simple. Leslie Andrachuck was a senior
level employee with the Globe & Mail since July 21, 2001. On January 2, 2004, she advised her employer
that she intended to take maternity leave.
Eleven days later, the Globe & Mail terminated her due to
reorganization. A few months after she
was terminated, a younger male was hired to perform many of the same functions
she had performed in her former position.
On July 5, 2005, the younger male was promoted to the position of Senior
Marketing Manager, a job with the same responsibilities that Leslie had had
before she went on maternity leave. On
July 15, 2005, Leslie first learned that the younger male manager had filled
her position, and it had not in fact been eliminated by the Globe & Mail as
had been indicated to her at the time she was terminated.
The plaintiff sued the Globe
& Mail on February 20, 2006. She
plead that the termination and replacement with a male employee was based on
gender, age and pregnancy discrimination on the part of the defendant. She plead that the Globe & Mail engaged
in fraudulent concealment regarding her replacement which prevented her from
discovering that she had been discriminated against. She claimed compensation in total for seven months
salary plus an award of punitive, aggravated or exemplary damages.
Three questions that were asked
by the Globe & Mail to the Court were:
1.
Is the plaintiff barred by the limitation period?
2.
Is the plaintiff allowed to due for discrimination?
3.
Has the plaintiff plead a cause of action for which
punitive damages may be awarded?
With respect to question number
one, the Judge set out that the termination was January 13, 2004. She sued the defendant on February 20, 2006,
more than two years after she was terminated.
The key in this case was that she found out only on July 15, 2005 the
true nature of the injury to her, and that a lawsuit would be warranted. The Judge noted that Leslie knew nothing of
the action until she found out that the male had replaced her position. She had relied on the Globe & Mail’s
representations that terminating her was due to reorganization. Between the date of dismissal and the date of
discovery, she believed that the Globe & Mail was dealing with her in good
faith. The Judge noted that a limitation
period should not begin to run until the date of discovery (July 15,
2005). The Judge noted, “The defendant
should be precluded from relying on any limitation period commencing at the
date of actual dismissal due to its fraudulent concealment of a sham
reorganization and bad faith conduct.”
The second issue was whether the
allegations of discrimination can be struck.
Typically, in employment law, allegations of discrimination that do not
form the basis of a law suit should be dealt with using the applicable human
rights legislation or social standards.
This comes from the seminal case of Seneca
College v. Vhadauria where the Court determined that the plaintiff was
precluded from pursuing a lawsuit when human rights legislation contains a
comprehensive enforcement scheme for violation of its terms. The existence of a code, the purpose of which
is to remedy the effects of discrimination, forecloses any civil action based
directly upon breach. Despite this, the
Court of Appeal has expressly upheld pleadings that contain allegations of
discrimination that are tied to wrongful dismissal actions. Discrimination should not be pleaded as an
independent cause of action lawsuit, but rather in support of a wrongful
dismissal claim. In this case, it had
been pleaded to characterize the conduct of the defendant with respect to the
claim of wrongful dismissal as reprisal, contrary to the Employment Standards Act.
The Judge found that he was satisfied in the circumstances that the
plaintiff had a wrongful dismissal as a reprisal under Section 74 of the Employment Standards Act and
discrimination is offered to support the wrongful dismissal as a reprisal claim
– the dismissal of an employee exercising her right to take a maternity leave.
With respect to the third issue,
the defendant did not agree that the plaintiff’s lawsuit was deserving of
aggravated or punitive damages. The
Judge found that in this case, the plaintiff’s claim of aggravated (Wallace) and punitive damages is based
on the allegations of fraudulent concealment and dismissal as reprisal. The lawsuit was about an employer failing to
be reasonable and honest with regard to their decision to terminate. The Judge decided that it was best left to a
Court on the full evidentiary record at trial.
It would better be up to a jury to decide this.
In this case, the plaintiff,
Leslie, advised the Globe & Mail that she wished to take maternity leave
and they fired her, advising her that they were restructuring her
department. A few months later, a male
replaced her position in the same department with the same
responsibilities. The Court recognized
on the motion that besides there not being a limitation issue that her lawsuit,
based on discrimination, was tied into a wrongful dismissal lawsuit and allowed
her to proceed.
A note to employers would be to
never advise an employee that they were being terminated due to restructuring
and then further replace that employee’s position, especially if that employee
is fully allowed to take leave under the Employment
Standards Act. It is important to be
very straight and candid with your employees and if you wish to terminate an
employee, it must be done properly, with the proper amount of reasonable notice
paid to that employee.
For an employee, if you have been
terminated due to restructuring and your position has been replaced, then you
may have a basis for Court action, especially if you are pregnant and about to
take maternity leave.
If you have any questions, issues
surrounding this case or if you have an issue similar to this case, please do
not hesitate to call Matt Lalande at 905-639-8894 or email him at matt.lalande@haber-lawyer.com.