The Supreme Court of the Northwest Territories has awarded the former Director of Finance and Administration for the Town of Hay River eight months’ salary in lieu of notice following his termination without cause.
Justice MacPherson determined that the Town’s initial offer of six weeks’ pay was insufficient, emphasizing that statutory minimums under the Employment Standards Act do not override common law requirements for reasonable notice.
“The Employment Standards Act expressly provides that it sets out minimum standards that employers must meet and preserves rights at common law,” the judge stated.
Background of the case
W.H.H. was employed by the Town from April 14, 2014, until his termination on Oct. 13, 2015. At the time of his hiring, he was 67 years old and brought with him an extensive background in finance and administration, including senior management roles in both Canada and the United States.
During his tenure, a significant event occurred: a strike by Town employees from Feb. 5 to Aug. 14, 2015. As a management employee, W.H.H. continued to work, shouldering increased responsibilities due to the reduced workforce. Despite the challenging circumstances, no performance issues were communicated to him during this period.
On Sept. 7, 2015, shortly after the strike ended, the Senior Administrative Officer (SAO) informed W.H.H. that his position was being restructured and that the Town would be advertising for a Director of Corporate Services. According to W.H.H., he was effectively told to look for employment elsewhere. The SAO, who resigned shortly after, testified that while he suggested it might be a good opportunity for W.H.H. to seek other employment, he did not explicitly terminate him.
After weeks of seeking clarification about his employment status, W.H.H. received a termination letter on Oct. 13, 2015. The letter stated: “The Town of Hay River has decided to terminate your employment, without cause, effective immediately. This is based largely on your request to be terminated by the Town.” The characterization that he had requested termination was disputed by W.H.H.
Legal issues and court findings
The court addressed three main issues:
Appropriate notice period: The Town argued that the Employment Standards Act and a municipal by-law limited the notice period to two weeks. The court rejected this, noting that “neither the Employment Standards Act nor the By-Law apply to limit damages.” The judge referred to the Bardal factors for determining reasonable notice, considering the character of employment, length of service, age, and availability of similar employment.
Mitigation of damages: The Town contended that W.H.H. failed to mitigate his damages by not applying for jobs in Hay River. The court found that he made reasonable efforts by applying for positions in nearby communities and that “there was no evidence led that would suggest there was a job available for which he had not applied.”
Aggravated and punitive damages: While acknowledging that the termination was “unfortunate and poorly handled,” the court did not find evidence of bad faith or malicious conduct that would warrant additional damages.
The court ordered the Town to pay:
- Eight months’ salary at the adjusted rate, acknowledging that W.H.H. should have received a step increase after his first year.
- Damages equivalent to the value of his employment benefits for eight months.
- Pre-judgment interest pursuant to the Judicature Act.
“The failure of the employer to conduct an evaluation should not be used against the Plaintiff,” the judge noted regarding the salary increase that W.H.H. did not receive due to the Town’s oversight.
For more information, see Harris v Town of Hay River, 2024 NWTSC 47 (CanLII).
