An Ontario judge has rejected a just cause defence raised by an employer two and a half years after the employee was dismissed. The company alleged that the plaintiff, a sales manager, made fraudulent misrepresentations about future sales revenues during his hiring process.
The judge noted that a key employer witness’s evidence was “glaringly devoid of written corroboration” and that he “often appeared as if he was making his answers up as he went along”. That witness testified, for instance, that he always jotted notes of discussions but he didn’t keep them, although he had earlier testified that he had not kept notes.
The judge stated, “The court was left with the definite impression that the defendant’s witnesses tailored their evidence to support their eleventh hour claim of just cause.”
Deciding that the employer did not have just cause for immediate dismissal, the court stated that the employee’s business plan, which he prepared and gave to the employer during the hiring process, was not a promise or guarantee of sales, but instead was a forecast of what he hoped could be achieved over the next five years. The business plan was not “fraudulent” as alleged by the employer. Further, the employer could not rely on conduct that they knew had occurred more than a year before the termination; the company had condoned or accepted the employee’s conduct.
The court awarded the sales manager, who had only two and a half years’ service, 6 months’ pay in lieu of notice.
This case illustrates that employers who wish to allege just cause for dismissal based on facts known at the time of termination should, in general, do so at the time of termination. In this case, by waiting two and a half years to allege just cause, the employer subjected its position, and its evidence, to criticism by the court.