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| Joel Fairbrother |
This case is important for a number of reasons: (1) it discusses the use of streamlined trials where just cause has been alleged; (2) it considers the obligations of employees and employers regarding employee misrepresentations; (3) the provisional assessment of reasonable notice is somewhat novel; and (4) the case considers entitlement to bonus where the employee only worked for a portion of the bonus year.
Facts
The following were some of the key facts summarized by the court:
- The plaintiff employee Tudor was hired at the employer Accurate Screen into the position of VP, Business Development.
- The plaintiff was not induced into the position — he applied to it and sent his resumé.
- The job posting for the VP, business development role stated that ideally, the applicant would have an MBA.
- The plaintiff’s resumé indicated that his masters of business administration (MBA) was “expected in 11/2023” and was “currently ongoing.” At the time of applying, he had not taken any MBA courses and was not enrolled in any MBA courses.
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- The plaintiff did not explicitly state that he had an MBA or that he was in school for the MBA program. His explanation for the references to the MBA on his resumé was that he was planning on enrolling. He advised the employer he intended to enrol in a “mini MBA programme” and told the employer he had commenced the initial process for registering for the program for April 2023 but had not explicitly told the employer how little he had done towards obtaining an MBA. All he had done was create an online account with McGill University.
- The employer’s evidence was that they would not have hired the employee if they had understood he was not going to obtain an MBA in November 2023, and that they did not discuss education during interviews because they trusted the resumé and considered it demeaning and unprofessional to inquire into the accuracy of an executive’s resumé.
- After being hired, the employee was able to do some of his assigned tasks but struggled with some tasks they had thought he would have been able to handle.
- About six months after being hired, the employer questioned his progress through the MBA program. His responses to the inquiries were evasive, but within a few weeks he did tell the employer he was not enrolled in and had not completed the MBA program.
- The employer terminated his employment a few weeks later — around seven months after he started — alleging just cause. He was 37 years old at the time. He sued for wrongful dismissal and reasonable notice.
- The employer argued it had just cause to dismiss the employee for misrepresenting his educational qualifications during the hiring process.
- The employee argued that an MBA was not a job requirement and that he had not been dishonest with the employer about his MBA status.
- The employee was unemployed for a relatively short period of four months after dismissal.
- The case proceeded by way of streamlined trial. Prior to the streamlined trial itself, the parties had obtained a court order from Justice Malik outlining what evidence the parties could rely on and how much time they each had to argue their case at the streamlined trial. The parties relied on affidavits, transcripts from cross-examinations and an agreed statement of facts.
Analysis/conclusion
Justice Yamauchi noted that a streamlined trial was ordered in this case despite there being credibility contests, which the court said may have prevented it from proceeding under the old summary trial rules. The choice of the streamlined trial procedure appears to have been by consent of both parties. Here were the court’s comments on this:
[73] The parties satisfied Justice Malik that a streamlined trial was the way in which to deal with this matter, such that they met the two-part test articulated in Rules r 8.25(1). As mentioned earlier, the parties disagree on certain facts. Under the old summary trial rules, this might have caused Justice Malik not to allow the parties to proceed with a streamlined trial. […]
[…]
[75] Rules r 8.25(3) appears to contemplate that there might be disputed questions of fact when it said, “A streamlined trial shall not be considered as a disproportionate process solely because … issues of credibility may arise.” In the case at bar, the parties raised certain issues of credibility in their written and oral arguments. As will become clear in what follows, this Court concluded that it was able to make the necessary findings of fact on the record before it and the parties’ oral submissions sufficient to deal with the fundamental issues that are before it.
[…]
[75] Rules r 8.25(3) appears to contemplate that there might be disputed questions of fact when it said, “A streamlined trial shall not be considered as a disproportionate process solely because … issues of credibility may arise.” In the case at bar, the parties raised certain issues of credibility in their written and oral arguments. As will become clear in what follows, this Court concluded that it was able to make the necessary findings of fact on the record before it and the parties’ oral submissions sufficient to deal with the fundamental issues that are before it.
In analyzing whether Accurate Screen had just cause to dismiss Tudor, the court was focused on the level of culpability Tudor had for his representations about the status of his MBA.
The court found that the resumé was not “fairly accurate” respecting the MBA. It was inaccurate. The court found that the employer was not obligated to make a “deep dive” to determine academic qualifications. The duty was on the employee to provide accurate information from the start. The court found that the employee made an intentional misrepresentation regarding his MBA status.
The court ultimately concluded the employer had just cause for dismissal, reasoning as follows in the final stage of just cause analysis, proportionality:
[124] […] Should the interviewer […] have to take a “deep dive” into Mr. Tudor’s represented academic qualifications? Mr. Hilsenteger felt such a “deep dive” would be demeaning to a candidate who had made representations in his Resume. This Court agrees. A potential employer should be able to take a candidate who is applying for an executive position at their word. A potential employer can reasonably be expected to be able to rely on the honesty of a potential employee concerning that potential employee’s academic qualifications.
[…]
[128] […] given his intentional misrepresentation in the Resume, neither this Court nor Accurate Screen should need to look into the substance of that programme. He had neither enrolled in nor commenced that programme despite his representation to the contrary.
[129] This misrepresentation is “sufficiently serious that it strikes at the heart of the employment relationship.” […]
[…]
[128] […] given his intentional misrepresentation in the Resume, neither this Court nor Accurate Screen should need to look into the substance of that programme. He had neither enrolled in nor commenced that programme despite his representation to the contrary.
[129] This misrepresentation is “sufficiently serious that it strikes at the heart of the employment relationship.” […]
Although the employee was not entitled to any severance as a result of just cause dismissal, the court considered what the reasonable notice period would have been if it had been a wrongful dismissal.
The court noted that the case law suggested a reasonable notice period of 2.5 months to 11 months for someone in a vice-president or equivalent job. The court awarded four months’ reasonable notice, reasoning that this is how long it took Tudor to actually find comparable employment. See “My take” for commentary on this reasoning.
The court then considered whether Tudor was entitled to a bonus for the period he actually worked between May 2023 and January 2024. The evidence was that Tudor received a portion of an annual bonus when he was hired, and the fiscal year ran to March 2024. Other executives received a bonus for that period, months after Tudor’s termination of employment.
The court awarded Tudor a prorated portion of the bonus, to cover the portion of the fiscal year he actually worked. The court directed the parties to determine what that amount was, or failing that, appear again in court.
My take
The decision finding there was just cause to dismiss the employee is not surprising to me, because the employer did seem to place value on the MBA, and the court found the employee had intentionally misrepresented the status of his MBA. I suspect the decision may have turned out differently if the court had not found the misrepresentation was intentional, but that is of course speculative.
The court’s comments about the employer’s duty to inquire were somewhat surprising to me. I am left wondering if the court would have made the same comments about the employer’s duties to inquire about education if there had been less evidence of evasive behaviour by the employee. I think the case law usually imposes at least some level of responsibility on the employer on things like this.
To illustrate what I mean, consider for instance that there have been many cases in employment law (and labour law) where an employer has attempted to assert after-acquired just cause based on misconduct they knew (or ought to have known) something about while the employee was employed, but did not investigate, discipline or reference in a termination letter. In many of these cases, the employer is prevented from relying on that misconduct to establish just cause. The reasoning varies, but I think the gist is generally that it is inconsistent for an employer to say that something is of critical importance to the employment relationship when their conduct demonstrates they had little interest in it when it actually occurred.
Finally, my comments regarding the calculation of reasonable notice: there are a high volume of cases that have held that the reasonable notice period is determined at the time of termination of employment, and not with reference to how long it actually takes the employee to get a job. It’s called “reasonable notice” because the court is deciding what it thinks would be a reasonable period to find comparable employment based on what circumstances exist at the time of termination of employment. I think giving the period of actual unemployment significant weight risks fundamentally altering the well-established reasonable notice analysis.
There are some cases where long periods of unemployment have resulted in longer notice periods. There are few cases that have found that a short period of unemployment will result in a shorter notice period in the way Tudor seems to have done. Short unemployment is typically only considered in the mitigation and damages portion of the analysis; where an employee secures a job shortly after termination, severance damages are reduced by the other source of income (from the new job), to the extent it overlaps in the reasonable notice period.
Joel Fairbrother is an employment lawyer and partner at Bow River Law LLP.
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