Home Constructive Dismissal Longtime farm worker awarded nearly $440,000 in wrongful dismissal case

Longtime farm worker awarded nearly $440,000 in wrongful dismissal case

by HR Law Canada

A former farm labourer and manager has been awarded $434,980 in damages following a wrongful dismissal suit against his employer of 40 years, including a $250,000 retirement allowance and both aggravated and punitive damages.

The Ontario Superior Court of Justice ruled in favour of S.S., who alleged constructive dismissal after being abruptly laid off and later dismissed without appropriate compensation by Riverglen Farms and Gary Farms, among other defendants.

The employer in this case failed to file a defense against the claims, despite numerous opportunities, leading to an undefended trial, wrote Justice G.D. Lemon in the ruling. It did note that the defendant attended court on the morning of the hearing, asking time to file a defence. But the court rejected that request, citing the history of the proceedings.

“I write these reasons for (S.S.) and (the defendants) to explain why I am not ordering as much as (S.S.) was hoping but ordering far more than (the employer) might have expected,” the court said.

A long, loyal employment period

S.S., who had worked for the defendants since 1979, was initially laid off without notice or pay on Jan. 22, 2019. At that time, his annual salary was about $55,000. He continued to assist with farm tasks without pay, based on assurances that the layoff was temporary.

However, on May 4, 2019, he was constructively dismissed when significant and fundamental changes to his job duties were announced without notice or compensation.

Justice Lemon highlighted that S.S. was led to believe his employment would continue indefinitely, only to be terminated without reasonable notice.

Claims and damages

The claims for damages included wrongful dismissal, unpaid wages, retirement allowance, aggravated damages, and punitive damages. The court found in his favour on multiple counts:

Wrongful dismissal: S.S. was awarded $109,980 for wrongful dismissal, reflecting 24 months of salary in lieu of notice. This amount was justified by his long service, age, and the unlikelihood of finding comparable employment. He was seeking 36 months’ notice, but the court said there was “no case law precedent” to support that time period.

Retirement allowance: Sometime around 2006 or 2008, S.S. had expressed concern to his employer about not having a retirement benefit or “safety net.” The employer told him he would be well taken care of, that he would have eight to 10 per cent of non-voting shares of Riverglen, and that the “big money is at the end” when the company was sold.

S.S. was awarded $250,000 for a promised retirement allowance. The court accepted his testimony that he had been induced to continue his employment based on assurances of a retirement benefit.

“He relied on that promise; otherwise, he would have gone into a different trade or would have asked for a raise,” the court said, citing his testimony.

“(S.S.) worked long hours at a reducing income. It would only be reasonable that he would be properly recompensed by the agreed-upon retirement allowance,” the court said. “The defendants benefitted from that employee incentive and contract term.”

Unpaid wages: An additional $5,000 was awarded for unpaid wages from Jan. 18, 2019, to May 4, 2019, when S.S. continued to work without remuneration.

“I have no hesitation in grating this request,” the court said.

Aggravated damages: S.S. was granted $50,000 in aggravated damages due to the mental distress, frustration, and erosion of self-esteem caused by the defendants’ conduct.

He testified that he had to sell the family home and move into his parents’ basement because of the termination. S.S. also said he looked up to his employer and now feels betrayed by him.

“I took the man’s word for it and that to me, a man’s word, maybe I live in the old world, but a man’s word is a man’s word and that — when you lose that — my boys know that, when you lose that you lose who you are. He was kind of my, not idol, but you know, kind of a guru type thing, and I looked up to him. I really did. I looked up to him when I worked for him and he meant a lot to me.”

S.S., discussing how he looked up to his employer.

“The manner of termination left (S.S.) with the embarrassment of having been betrayed and cheated by the man he had trusted for many years,” the judgment stated.

Punitive damages: The court also awarded $20,000 in punitive damages, criticizing the employer’s “malicious and outrageous” behaviour, including the failure to pay even the minimal wages for work performed post-layoff.

For more information, see Scarrow v. Walkey et al, 2024 ONSC 3876 (CanLII).

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