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How the Courts Account for Lost Career Income and Opportunities for People Falsely Fired

posted 3 years ago

A vast range of new damages just opened up for many terminated Canadians.

Let’s say you are an investment banker falsely fired for cause and now suspended indefinitely while the securities commission investigates. More often than not, you are unemployable regardless of the investigation’s result.

Or perhaps you are an apprentice, training to be a mechanic, fired on some flimsy pretence, your career aspirations rendered asunder. Or an articling student, accounting clerk or other incipient professional who is fired and now can’t (at least for a time) obtain a professional licence, and, in any event, unemployable because of the profession’s tight network.

If any of these employees had their jobs for only a short time, they would likely be entitled to only a few months, at most, of wrongful dismissal damages. But does that compensate them for what they have actually lost: the potential extinction of their aspirations and dreams, in some cases after years of previous study to obtain their designation? These damages can be lifelong. This is particularly the case in a job requiring licensing.

For example, most regulators require a report when a broker or investment banker is fired and they may then suspend that executive pending a full regulatory hearing, a hearing which, win or lose, may make that investment banker unemployable in their trade.

The same would apply to airline pilots or any program requiring any form of certification where being fired for cause before certification is obtained can be fatal to their incipient career.

But the result of a case last month in the British Columbia Court of Appeal opens up a vast range of new damages for many terminated Canadians.

The case involved Melissa Ojanen, an articling student fired for cause (wrongfully, as it turned out) by Vancouver-based Acumen Law Corp., the stress of which resulted in her failing the bar admissions exam, so that by the time the matter reached the court three years later, she had still not been called to the bar and the stigma of cause impacted her future prospects.

The Court of Appeal noted that the basic measure of damages is to put an employee in the position that she would have occupied had she had not been dismissed, as long as the damages from that firing are “within the reasonable contemplation of the parties” at the time that she was initially hired.

Ojanen would have qualified for admission to the bar as a lawyer if she passed her bar exam. The court found that she had no reasonable prospect for employment in the legal profession while the allegations brought against her in the litigation were being pursued.

The court proceeded to state the following, which should be of great interest to many Canadian employers and employees:

“Historically, damages in a wrongful dismissal action are limited to the loss suffered as a result of the employer’s failure to give proper notice … Damages for wrongful termination are no longer so limited. The law now recognizes ‘that some employment contracts involve more than the provision of services for remuneration and that damages flowing from a wrongful dismissal may take that fact into account.’”

The question becomes: what was within the reasonable contemplation of the parties when they entered the contract hiring the employee?

As a result of Ojanen’s dismissal, she lost the opportunity to become a lawyer. Assuming successful completion of her articles, she would have been qualified for admission to the bar as a lawyer and would have been paid as a lawyer. The trial judge correctly found that because of the wrongful termination of her employment, together with the allegations made against her in this proceeding, she had been unable to pursue that career.

It would have been within the reasonable contemplation of the parties when they entered the contract that if the appellants wrongfully terminated the women’s employment, she would lose the opportunity to become a lawyer and lose the opportunity to be paid as such. At a minimum, her entry into the profession would have been delayed.

The trial judge found “the obvious probable consequence of the termination, lawsuit, and (Acumen lawyer) Mr. (Paul) Doroshenko’s report to the Law Society was to render Ms. Ojanen unemployable in the legal profession for so long as the allegations against her remained in play.”

The court found that as a result of the appellants’ conduct, Ojanen’s ability to find employment in the legal profession had been delayed for more than three years. The court then awarded damages for the lost opportunity, in addition to damages for wrongful dismissal. In assessing the amount, the court provided a recipe for how such damages are to be calculated.

“The assessment must consider the likelihoods of various possibilities as well as positive and negative contingencies. For example, on the negative side, Ms. Ojanen might have never passed (the bar exam) and thus never become a lawyer even if she had not been wrongfully dismissed. Even if called, she might have chosen not to practise law. Not all called lawyers go on to practise law.

“On the other hand, Mr. Doroshenko, less than three months into Ms. Ojanen’s articles, was sufficiently impressed with her abilities that he made clear he wanted her to remain with the firm after her articles and that there would be plenty of work available to her. She received a favourable performance review just before commencing (her call to the Bar). Her calculations, based on $1,000 weekly earnings, are modest.

“I am satisfied that Ms. Ojanen has established on a balance of probabilities that she is entitled to an award for loss of opportunity. The award cannot be calculated with mathematical precision. In the circumstances of this case, I would award her $100,000 for loss of earning capacity.”

Many employees who lose a job also lose a career and the opportunity for much greater income in the future. That is even more likely if they are terminated for cause and that fact becomes known, and it is always true when that job was leading to a licensing requirement.

I expect to see much litigation on this going forward. Employers should begin anticipating such claims in their contracts of employment with many employees.

Got a question about employment law during COVID-19? Write to Howard at [email protected].

Howard Levitt is senior partner of LSCS Law, employment and labour lawyers. He practices employment law in eight provinces. He is the author of six books including the Law of Dismissal in Canada.



THIS ARTICLE ORIGINALLY APPEARED IN THE FINANCIAL POST AND IS REPRODUCED HERE BY PERMISSION OF THE AUTHOR: https://financialpost.com/fp-work/howard-levitt-how-the-courts-account-for-lost-career-income-and-opportunities-for-people-falsely-fired



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