The Ontario Court of Appeal has upheld an award of $1.8 million in damages for a former financial executive, despite rejecting his claim for constructive dismissal.
According to the ruling, the executive, a loan underwriter, sued his former employer in 2017, alleging he was forced to retire months ahead of his planned end date due to a toxic work environment.
In the original summary judgment ruling in 2023, the judge found that the executive had voluntarily retired early and was not constructively dismissed, meaning no entitlement to a severance package. However, the judge still awarded him significant unpaid wages, including almost $100,000 for unused vacation, $525,000 in unpaid bonuses, and $1.2 million in stock options.
On appeal, the employer argued that the judge awarded damages that had not been properly pleaded (set out in court documents) and disallowed the employer’s allegations of just cause regarding the executive’s handling of loans. The just cause allegations had originally appeared in a dismissed counterclaim.
However, the Appeal Court sided with the executive, finding that (a) the motion judge’s award of damages was based on considerable evidentiary records, and (b) it would be an abuse of process (improper legally) to allow the employer to “repackage the material facts” of its dismissed counterclaim to try to support a just-cause defence.
The Court of Appeal pointed out that the motion judge’s award of damages would not be affected by a finding of just cause, since they were paid on entitlements to unpaid wages and equity, not severance.
