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British Columbia Employer Advisor Keeping Employers Posted on Developments in Labour and Employment Law

Investigations and Terminations That Cost – Part II

Posted in Investigations, Litigation, Termination, Wrongful Dismissal
Earl Phillips

Last week we looked at the flawed investigation leading to the termination of a long service employee.

This week, we look at the problems with the termination process.

Stephanie Vernon spent her entire working life – 30 years from the age of 19 – working for the Liquor Distribution Branch. A particularly sensitive employee made a complaint about Vernon. The employer decided to terminate after an investigation.

The employer told Vernon that her conduct was shameful and an embarrassment to the Branch. They gave her a short period of time to consider offering her resignation instead of being fired. They offered her a reference if she resigned. The court concluded that the meeting “was badly handled” and “could not have been more insensitive”.

When Ms. Vernon refused to resign, she was suspended without pay. The employer sat on the termination recommendation for a month, and then waited another 10 days before communicating the termination decision by a letter couriered to Ms. Vernon.

Vernon was devastated by the termination and was diagnosed as suffering adjustment disorder with mixed anxiety and depressed mood caused by the allegations against her and the manner of her dismissal.

The court awarded 18 months compensation – the maximum allowed in the public sector – plus $35,000 in aggravated damages for the harm caused by the manner of dismissal.

More controversially, she was also awarded $50,000 in punitive damages for the offer of a reference if she resigned. In the court’s view:

… to offer Ms. Vernon a reference letter, conditional on her resignation, was reprehensible and departed to a marked degree from ordinary standards of decent behaviour. If Ms. Vernon’s conduct was sufficiently serious that the LDB had the right to summarily dismiss her without notice, it would have been improper for the LDB to give her a reference letter.  To offer a reference letter as a carrot to resign, is, in my opinion, conduct which is properly the subject matter of retribution, deterrence and denunciation.[1]

We never recommend putting a “resign or be fired” option to an employee, and agree it should not have been done in this case. But whether it should result in punitive damages, and especially the notion that dismissal for cause makes any form of reference letter improper, is open to question.

[Vernon v. British Columbia (Liquor Distribution Branch), 2012 BCSC 133]


[1] Vernon v. Liquor Distribution Branch, 2012 BCSC 133