The Supreme Court of British Columbia has found that MacKay Contracting Ltd. wrongfully dismissed a probationary employee after failing to assess his suitability for the job in good faith. In a detailed judgment, the court also awarded aggravated and punitive damages for the manner of the termination, including a directive that the employee remain confined to a hotel in Cuba without being informed of the allegations against him.
The employee, K.L., had been hired to work as a site supervisor on a construction project in Moa, Cuba, under a contract between MacKay and Sherritt International Corporation.
Although his employment contract with MacKay included a three-month probationary period, the court found that the company breached its duty of good faith by terminating him without a proper investigation into complaints made about his off-duty conduct.
“MacKay did not act fairly, it did not act with reasonable diligence in assessing the plaintiff’s suitability, and its decision was not based on an honest, fair, and reasonable assessment,” the court wrote. “The result … was to deprive the plaintiff of a reasonable opportunity to display his suitability.”
Quick dismissal based on hearsay
K.L. had worked less than two weeks on site when he was informed, via text message, that he was being removed from the project site and instructed to stay at his hotel. The decision came after two other employees emailed MacKay’s senior management raising concerns about K.L.’s alleged conduct. The complaints included claims of poor judgement, inappropriate remarks, and conversations about prostitution and drugs.
The court noted that no one sought K.L.’s response before a decision was made to remove him from the worksite and begin termination proceedings.
“It is clear that the plaintiff was terminated based on MacKay’s acceptance of allegations … [that] were false,” the court wrote. “MacKay made a decision almost immediately, refused to tell the plaintiff what was going on … and then told him that it did not matter what the truth was.”
Although the termination letter described the dismissal as being for “unsuitability,” the court accepted K.L.’s evidence that he was told it was for misconduct. That, combined with MacKay’s decision not to pay him for days worked after October 24, confirmed that the termination was grounded in the allegations against him.
Indefinite contract and short-service notice
The court rejected MacKay’s argument that the employment contract was for a fixed one-month term. The agreement stated the employment would be “continuing indefinitely,” subject to termination. The one-month schedule listed in the contract was found to refer to the rotation cycle of the project, not the length of the employment.
Relying on the decision in Ly v. Interior Health Authority, the court applied the legal framework for terminating probationary employees. While an employer does not need to establish just cause during probation, it must provide a fair and honest assessment of the employee’s suitability, including an opportunity to demonstrate fitness for the role.
The court found that none of these requirements were met. “Based on the evidence at trial, those allegations were false,” it stated. “MacKay must … rely on the truth of the allegations. In my view, that is the sort of purpose for which … hearsay would be inadmissible.”
As a result, the court awarded K.L. damages based on the remainder of his rotation in Cuba plus two additional four-week work cycles—approximately 4½ months of pay at $1,000 per day.
Aggravated and punitive damages awarded
The court also found that the manner in which K.L. was dismissed justified additional compensation. After the initial allegations, K.L. was instructed to remain at his hotel and warned that he could face arrest if he left. He was not informed of the nature of the complaints or the reasons for his removal. The court accepted that this caused K.L. significant mental stress.
“Mr. Bleier told the plaintiff that there were concerns about his safety, and that if he left the hotel, he might be arrested,” the court noted. Combined with vague warnings about “issues with the secret police,” this created a situation that caused prolonged anxiety.
For this conduct, the court awarded $25,000 in aggravated damages.
In addition, the court awarded $20,000 in punitive damages, citing MacKay’s refusal to pay K.L. for his remaining days in Cuba after he was pulled from the project but before he was terminated.
“That is the sort of high-handed and malicious conduct that properly attracts an award of punitive damages,” the court wrote.
Claim against Sherritt dismissed
While K.L. also brought a claim against Sherritt International Corporation as an alleged “common employer,” the court dismissed this portion of the action. It found that MacKay and Sherritt were arm’s-length companies and that Sherritt’s contractual right to request removal of MacKay personnel from the project did not amount to a relationship of common employment.
“This was a limited carving out of rights to meet … a common mutual goal of the construction management contract,” the court found. “Sherritt was not a common employer.”
Final award
In total, the court awarded K.L.:
- Damages for wrongful dismissal equal to approximately 4½ months of wages;
- Compensation for unpaid wages from October 25 to 30, 2022;
- Reimbursement of $440 in travel-related expenses;
- $25,000 in aggravated damages;
- $20,000 in punitive damages.
The court invited the parties to make written submissions on costs.
For more information, see Liivam v MacKay Contracting Ltd., 2025 BCSC 582 (CanLII).
