An Ontario Small Claims Court has ruled in favour of a former employee of a Swiss Chalet franchise, awarding him $600 in termination pay after determining that his dismissal was not conducted in accordance with the company’s own progressive discipline policy.
But the court also awarded the restaurant legal costs of $8,000, wiping out any gains for the worker.
Background
N.J., the plaintiff, was terminated from his position as a part-time cook at a Swiss Chalet franchise in Barrhaven, Ont., in September 2020. He alleged wrongful dismissal, failure to pay termination pay, bad faith, and false imprisonment, among other claims. While the court found some merit in his claim, awarding him $600 in termination pay, it rejected his claims for mental distress, bad faith, false imprisonment, and aggravated and punitive damages.
Deputy Judge Ian R. Stauffer ruled that the Swiss Chalet franchise, operated by 2582720 Ontario Limited, failed to follow its own five-step progressive discipline process before terminating N.J.’s employment. As a result, the court concluded that he was entitled to two weeks’ termination pay under Ontario’s Employment Standards Act (ESA).
“The essence of this case is that the Defendant was under an obligation to follow its own 5-step discipline process, no matter how difficult (N.J.) was behaving on September 26th,” wrote Deputy Judge Stauffer. “I conclude that the Defendant did not follow its own discipline process and therefore had not reached the point where it could terminate (N.J.) for cause.”
Key incidents leading to termination
The dismissal stemmed from two incidents on September 24 and 25, 2020. In the first incident, N.J. refused to mop the floor after clocking out, stating he was not being paid for the additional work. The second incident involved him leaving his shift early after allegedly failing to prepare enough french fries for the next shift. Management subsequently initiated a disciplinary process, which culminated in a meeting on September 26.
During the September 26 meeting, which took place in a small office at the franchise, N.J. was presented with two Corrective Action Forms detailing his disobedience in the earlier incidents. The court found that the meeting quickly escalated, with Johnson refusing to acknowledge the authority of the female managers present.
The franchise’s General Manager testified that N.J. questioned her authority to discipline him, stating, “You’re not my boss,” and demanding to speak with a male superior instead. Feeling frustrated, (N.J.) called Vice-President of Operations (W.R.), who ultimately decided to terminate (his) employment during the phone call.
N.J. argued that the meeting had been hostile and that the general manager used profanity, allegedly telling him to “sign the fucking papers.” While the court acknowledged the possibility that the manager may have sworn out of frustration, Deputy Judge Stauffer noted that the use of such language did not shock him given the context of the meeting.
Disciplinary policy not followed
One of the central issues in the case was whether the franchise adhered to its progressive discipline policy, which outlines five steps leading to termination. These steps include verbal and written warnings, with termination being the final step. The court found that while the first three steps had been satisfied, a fourth step involving suspension had not been followed before N.J.’s termination.
“Allowing the parties to cool off and return to another meeting in the near future might have resulted in a discussion leading to a plan for working together,” Deputy Judge Stauffer noted. “Had (N.J.) made it clear at that meeting that he would refuse to accept orders and directions from a female, this may very well have been conduct that gave rise to a breakdown in the employment relationship.”
However, the court concluded that the franchise had not yet exhausted its progressive discipline process and therefore did not have just cause to terminate his employment without paying him termination pay.
No damages for mental distress or bad faith
N.J. also sought damages for mental distress, alleging that his dismissal caused him to experience weight loss, difficulty sleeping, and depression. However, the court found no compelling evidence to support these claims. He secured new employment within two weeks of his termination, and there was no medical evidence presented to substantiate long-term mental distress.
“There is no independent professional who testified about the cause of (his) weight loss, sleepless nights and depression,” wrote Deputy Judge Stauffer. “No medication was prescribed for any symptoms.”
The court also dismissed N.J.’s claim of bad faith, finding no evidence that the franchise’s management acted untruthfully or unfairly during the termination process. “I agree, as defence counsel put it, that (he) was the author of his own misfortune at the meeting. He escalated the tone and would not listen to the two female managers,” the ruling stated.
False imprisonment claim rejected
One of the more unusual elements of the case was N.J.’s claim of false imprisonment, as he alleged that he had been unlawfully detained in the office during the September 26 meeting. The court found no credible evidence to support this claim, noting that N.J. was free to leave the office at any time and was not physically restrained.
“The evidence is that all three individuals were approximately the same age. (N.J.) is 5’ 11” and well-built and (the two female managers) are both 5’ 3”, each weighing about 120-125 pounds,” wrote Deputy Judge Stauffer. “I do not accept (N.J.;s) evidence that either (manager) put her hand on the door, indicating (he) could not leave the office.”
Conclusion and costs
In the end, the court awarded N.J. $600 in termination pay, which was the agreed-upon amount for two weeks of pay.
However, the court awarded costs to the defendant restaurant Swiss Chalet of $7,700 plus $309.87 for disbursements.
“This is an unfortunate case where the Plaintiff alleged many incidents of improper behaviour on the part of the Defendant’s management,” the court said.
“Save for not following its own policy, in the heat of the moment, I found no other legal liability. There was no false imprisonment or mental distress caused by the Plaintiff’s superiors. The Defendant’s employees did not act in such a manner as to attract punitive damages. There was no bad faith, but a situation of heightened emotion at a discipline meeting where the senior manager felt he had no practical option but to terminate an uncooperative employee, the Plaintiff.”
It noted that the restaurant had offered to settle for $2,000 about seven months before the trial started.
For more information, see Johnson v 2582720 Ontario Limited o/a Swiss Chalet Franchise Store #1215, 2024 CanLII 85285 (ON SCSM). Also see Johnson v 2582720 Ontario Limited o/a Swiss Chalet Franchise Store #1215, 2024 CanLII 85282 (ON SCSM).
