By Matthew Dewar, March 16, 2021

Coyness is a trait that does not belong in the termination process as RTO Asset Management recently learned to its chagrin.

When initially questioned whether he was having a romance with a direct report that he had hired, James Abrams flatly denied the accusations. His employer proceeded to conduct an investigation in which Abrams’s report in fact, acknowledged the relationship. When confronted with his subordinate’s statement, Abrams then admitted to the affair.

By all accounts, RTO had just cause to terminate on grounds of lack of candour and conflict of interest. It opted, however, to inform Abrams that it was dismissing him on a without cause basis. The record of employment that it issued gave similar non-culpable reasons for the termination. 

Emboldened, Abrams’s response was to sue for wrongful dismissal. Only then did RTO argue that it had cause based on his behaviours. 

In a 43-page decision, the New Brunswick Court of Appeal sided with Abrams and awarded him with 24 months of notice. The employer was bound by its written letter of termination that communicated the firing was without cause as well as its statements to Service Canada on the Record of Employment. Having chosen to terminate him without cause, it was too late to rely on just cause at trial.

The lessons of this case to employers are stark reminders on the harsh scrutiny that courts apply to the documentation of terminations of employees:

1. The Significance of the Termination Letter: You will be bound by what you put it writing regardless of the seriousness of the misconduct.
   
   
2. The Value of Directness: Be blunt in asserting the circumstances of cause in the termination letter. While it is addressed to the employee, its message is equally directed to their counsel and, even more importantly, the trial judge.
   
   
3. Severance Offers: A severance offer must be carefully crafted so that it does not compromise an employer’s ability to rely on cause in the event of litigation. Being nice can come with a price tag.
   
   
4. Records of Employment: A record of employment issued to Service Canada has legal consequences, too. Take care when issuing and ROE and complete the reasons carefully.
   
   
5. Legal Advice: The cost of legal counsel who are seasoned in employment law is a worthwhile investment in curbing unanticipated expenses of termination.

# employment law; record of employment; workplace relationships; termination letters; termination for cause; termination without cause