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Litigation, Litigation

The devil is in the detail (of a dismissal).

May 17th, 2017

A recent decision of the Superior Court shows how a detail can cause a dismissal to be invalidated.

Ms. Fortin worked for a small private college, owned by her spouse. Upon his sudden death, she became the owner of all the shares of the company. Realizing her need for support in operating the college, she turned to two investors, Mr. Landry and Mr. Boisvert, who previously had discussions with her husband.

The parties quickly agreed on the purchase of the shares: each would own one third of the company. They signed a shareholder agreement and employment contracts.

But Fortin was not good at sharing power. With a rigid, paternalistic and uncompromising personality, she treated her new partners as subordinates. Literally everything became a conflict and the situation became unbearable in less than a year.

Landry and Boisvert called a meeting of the Board of Directors and, in the absence of Fortin, dismissed her as a director and terminated her as an employee.

Fortin instituted an oppression remedy which was quickly settled by the redemption of her shares.

Fortin also sued the college for compensation in lieu of her prior notice. She was claiming two years' salary (which is the maximum generally awarded by the courts). The Court finally awarded him one year's salary and gave the college a little lesson in labor law.

Indeed, Landry and Boisvert had serious reproaches to make against Fortin. They had even mentioned these recriminations in a letter sent to Fortin before his dismissal. So why did the college have to pay damages? Simply because a fundamental element was lacking in their letter as indicated by the Court:

"However, this letter does not indicate that Fortin must stop these behaviors, failing which her employment relationship would be at jeopardy. (...) there is no warning or notice that, in the absence of proper action, her employment will be terminated. In short, obviously missing was a message from the employer explaining the situation, so that she can amend her behavior accordingly. "[Informal translation]

Indeed, in the vast majority of cases, it is not enough to have sufficient grounds for dismissal. The employee must have a reasonable chance to change what caused the employer’s dissatisfaction.

This is why it is always preferable to consult a lawyer before carrying out any dismissal. The employer can then know the risks involved before taking any action.


Litigation Litigation