Honesty in termination meetings is never optional

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Drago Krmpotic started working in the maintenance department for two companies in television broadcasting in 1987.

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Soon after he was promoted to the position of building maintenance supervisor and performed in that role for almost 30 years.

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At the age of 59, Krmpotic was terminated by his employers, just hours after returning to work from a back surgery. Krmpotic needed the surgery in part after a number of workplace injuries he experienced over the years of his employment.

At the time he earned $72,864 annually. On the termination date, he was offered 16 months of pay. Krmpotic turned the offer down and sued for wrongful dismissal and other damages.

At his trial in 2022, the judge found Krmpotic to be a “loyal, responsible and trusted employee.”

Kmpotic was awarded 24 months of reasonable notice, based on his age, length of service and the nature of his work, which was found by the court to be physically demanding. In addition, he was awarded $50,000 in aggravated damages for the bad-faith manner of his termination.

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The employers appealed the trial decision to the court of appeal of Ontario arguing in part that Krmpotic did not adequately make efforts to mitigate his damages and that he was not entitled to the $50,000 in aggravated damages for the manner of his dismissal.

On the issue of mitigation, the court of appeal rejected the employer’s evidence finding that Krmpotic could not do comparable physical work during the notice period as he was 59, fresh off surgery and was supported with credible evidence from his wife and son as to his condition.

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The court of appeal also upheld the aggravated damages award. While the employer argued that Krmpotic was terminated for financial reasons, the company refused to produce its financial statements to support that claim. Notably, the court found that one does not need a psychiatrist’s report to establish all “mental distress.” The law recognizes a spectrum: beyond the normal sting of dismissal counts when it’s caused by bad-faith conduct.

Appeal ultimately dismissed

The court could not ignore that Krmpotic was terminated within hours of returning from surgery and found that the employer breached their collective duty of honesty and candour to him when they were not forthright regarding the reason for his termination.

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Ultimately the appeal was dismissed and Krmpotic’s award of 24 months of notice and $50,000 in aggravated damage was upheld. He was also awarded $12,000 in costs on the appeal.

There are a number of takeaways for both employers and employees that should be considered from this case.

For employers:

– Be honest at termination. If you provide a business reason as support for the termination, be ready to back it up with company documents. Dodging disclosure and timing a firing right after medical leave can be tantamount to bad faith.

– Aggravated damages do not require a medical diagnosis. If your conduct during termination causes distress beyond the usual, you may have to pay for it.

– Mitigation isn’t a free pass. When a role is physically demanding and the employee has a medical condition, courts will accept credible lay evidence of incapacity.

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For employees:

– Long service and specialized physical work can justify 24 months’ notice, even where there may be comparable employment available.

– If the termination process is misleading or insensitive, aggravated damages are in play – even without medical expert reports.

– Document your limits and attempts to work. A failed, good-faith return-to-work effort can defeat arguments regarding a failure to mitigate.

– When it comes to termination, candour and honesty in the termination, discussion isn’t optional, it’s the law!

Have a workplace issue? Maybe I can help! Email me at sunira@worklylaw.com and your question may be featured in a future column.

The content of this article is general information only and is not legal advice.

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