Are Past Severance Package Details Relevant to an Employee who was Terminated for Cause?

Written on behalf of Peter McSherry

Upon termination from their employment, some employees may be offered a severance package that will provide them with some financial support as they seek alternative work. Employees who are terminated after many years of service may anticipate that their severance package will provide substantial support. However, when an employee is terminated without cause, the employer does not have to provide the employee with notice or payment in lieu of notice.

In a recent decision from the Ontario Superior Court of Justice, the Court heard from a long-term telecommunications company employee who claimed that her employer wrongfully dismissed her after she was terminated with cause. During the discovery process, she sought documentation relating to severance packages offered to other long-serving employees who were terminated without cause. The employer refused to provide such information, which led to the employee commencing legal action.

Employer refuses to answer questions during discovery

In civil matters, the discovery process is designed to allow all of the parties to learn what evidence the other parties will rely on at trial and allows the parties to understand the strength of their arguments and/or the case against them. Sometimes the parties may choose to settle during the discovery phase.

It is normal for the discovery process to take time, and information may be divulged months or years apart, depending on the length of the litigation and the pre-trial process. In Saarinen v. Rogers Communications Ltd., the employee sought answers from the employer with respect to two questions asked on July 16, 2020 and October 11, 2022 respectively. However, these went unanswered by the employer. Specifically, the employee asked the employer to:

“Produce the termination packages of all employees (names of said employees may be redacted to only provide first initials) who had more than 25 years of service and were terminated without cause by the (employer) during the period of January 2017 to December 2019.”

The employer answered by stating they “refused, termination packages are subject to confidentiality provisions.”

Employer refuses to answer second question asked by employee

The employee asked a follow-up question in October 2022, asking the employer to:

“advise of the (employer’s) Human Resources department’s practice in determining in January 2019 what termination packages would be offered to employees who were terminated without cause and did not have a written employment agreement, who made a said determination, and whether there were any general guidelines, written or otherwise used regarding:

i. Length of notice;

ii. Claw-back use;

iii. Short-term incentive inclusion;

iv. Long-term incentive inclusion;

v. Pension;

vi. Other benefits;

vii. Outplacement;

viii. Legal fees; and/or

ix. Other.

The employer again refused to provide the requested information. Instead, the employer stated that because the employee was terminated for cause, the “practices of HR for termination packages when employees are terminated without cause is irrelevant.”

Was the requested information relevant?

The employee told the Court that the questions were not relevant because the employee was terminated for cause. However, the Court did not accept this submission as a proper basis for refusing to answer the disputed questions. The employer argued that even if the employee was found to have been terminated without cause:

“(1) the common law notice entitlements on termination are an individualized assessment based on the plaintiff’s individualized Bardal factors; and (2) what the defendant may have unilaterally offered to other terminated employees is irrelevant to the assessment of the plaintiff’s rights based on the Bardal factors.”

The Court agreed that it was well-established that the common law entitlement to payment in lieu of notice is determined on a case-by-case basis. Therefore, the requested documents would not have been relevant if the employee’s request was based solely on a common law entitlement. However, in these circumstances, the employee’s claim went beyond the common law notice entitlement. The employee claimed that she had been wrongfully dismissed and, based on the implied terms of her contract and the employer’s policies, she was entitled to a 24-month compensation package with no mitigation requirements. The Court determined that this portion of the employee’s claim made her two questions relevant.

Employer claims that answers are protected by settlement privilege

The Court then considered the employer’s argument that even if the questions pertained to relevant material, their answers were protected by settlement privilege. Although the Court acknowledged that there are circumstances in which communications between an employer and employee are covered by settlement privilege, this did not apply to the case at hand. Further, the employer failed to introduce any evidence to support their claim that the answers to such questions were privileged. Moreover, the Court found that the employer failed to object on this basis until late in the process.

As a result, the Court held that “there is no evidence in the record asserting that the sought-after communications and information are privileged.” The Court ordered the employer to provide answers to the questions posed by the employee. Additionally, the Court awarded the employee with costs equal to $6,540.67.

Contact Employment Lawyers Peter. A McSherry in Guelph for Advice on Wrongful Termination Claims and Severance Package Entitlements

Guelph employment lawyer Peter A. McSherry has extensive experience reviewing severance packages and representing terminated employees in wrongful dismissal claims. Our employment law team will assess your unique circumstances and provide you with advice and information to help you make informed decisions when working towards dispute resolution. To speak with a member of our team regarding your wrongful dismissal claim, contact us by phone at 519-821-5465 or reach out to us online to schedule a consultation.