Wallace Damages: Employers' Duty of Fairness to Dismissed Employees
September 29, 2003
It is well known that when an employer dismisses an employee without cause they are required to provide that employee with a notice period or pay in lieu of notice. More recently however, in addition to the standard requirements of notice, Courts have been emphasizing the obligation of employers to deal with such employees in good faith. This obligation was addressed by the Supreme Court of Canada in the 1997 case of Wallace vs United Grain Growers .The doctrine arising out of that case holds that employers have an obligation of good faith and fair dealings regarding the manner in which they dismiss employees and in their conduct prior, and subsequent to, the dismissal. This Doctrine has come to be known as The Wallace Doctrine.
While the Courts have not provided a precise definition of the obligation of good faith and fair dealings the Supreme Court did state:
“in the course of dismissal employers ought to be candid, reasonable, honest and forthright with their employees and should refrain from engaging in conduct that is unfair or is in bad faith by being, for example, untruthful, misleading or unduly insensitive.”
A few of the many examples where this doctrine has been applied include:
- Where an employer has maintained a wrongful accusation of involvement in wrong doings and communicated that accusation to other potential employers of the dismissed employee;
- Failure to inform the employee of his dismissal while the employee learned of it through an advertisement in the newspaper advertising his position;
- Where the act of dismissal was found to be “callous and insensitive” or “callous and abrupt”;
- Failure to conduct a fair investigation of any allegations of wrongdoing;
- Maintaining unfounded allegations of cause until the day that a Trial for wrongful dismissal began;
- High-handed pressure and tactics involving employees on medical leaves;
- Failure to disclose facts, which the employer knows, are material to the employee’s decision to accept the offer of employment.
The Wallace Doctrine has resulted in increasing obligations on employers to deal with their employees with fairness, honesty and in good faith. The failure to do so could result in significant additional liability on the part of the employer towards its dismissed employees.
For questions or issues relating to Employers’ Duty of Fairness to Dismissed Employees or any other Labour and Employment Law matter, please contact any member of our Labour and Employment Law Department:
| Fred Bickford | (807)625-8885 | |
| Garth O'Neill | (807)625-8887 | |
| Brad Smith | (807)625-8891 | |
| Shelley Trewin | (807)625-8890 | |
| Jennifer Lohuis | (807)625-8865 |
