Caskanette v. Bong-Keun Choi Dentistry Overturned on Appeal

Last year, I blogged about a decision at the Small Claims Court which I found to be troubling.  In the case of Caskanette v. Bong-Keun Choi Dentistry Professional Corporation, the Small Claims Court determined that both parties contributed to the breakdown of the employment relationship, no warnings or progressive discipline was issued, but the employer nonetheless had just cause to terminate.  I considered the decision to have a number of problem areas, and considered the result to be likely attributable, at least in part, to the fact that Ms. Caskanette did not have the assistance of a lawyer.

In a decision last week, unreported as of yet, the Divisional Court overturned the decision on appeal.  This time, Ms. Caskanette had the assistance of counsel - Paul Brooks of Lerners' London office.

In my earlier commentary, I raised several concerns with the decision:  The trial judge's non-application of the 'duty to warn' referenced case law that was easily distinguishable; the employer's conduct in trying to 'set up' a case for case was deeply inappropriate; and the expectation that Ms. Caskanette apologize proactively for her part in the dispute was at odds with the fact that she was never given a meaningful opportunity to apologize.

However, I noted that, while appellate review might be appropriate, it is a high test, as appellate courts tend to defer to trial courts on decisions of just cause.

The Decision

Justice Mitchell of the Divisional Court overturned the trial decision primarily on the basis of the failure of the trial judge to apply the 'duty to warn'.  As I argued in my blog, relief from that doctrine was not available on these facts.  The employer should have warned.

Justice Mitchell put it thusly:

It is trite law that an employer has an obligation to communicate its concerns to its employee and provide the employee with an opportunity to redress the wrongs committed including provide an apology if the circumstances warrant one.  While we can speculate what Ms. Caskanette may have done if provided with an opportunity to apologize, we will never know because that opportunity was not presented to her.  The employer holds most, if not all, the high cards in the employer/employee relationship hand.  It has long been recognized that there is an unequal bargaining power between an employer and its employee.  The employer has a duty to warn the employee that his or her conduct is unacceptable and to provide an opportunity to correct the misconduct.  The duty to warn and the duty to apply progressive discipline are inextricably interwoven and are imposed on an employer so as to minimize the power imbalance. [Citations omitted]

This is a truly excellent summary of the law of progressive discipline.  I'll probably end up working it into my own submissions in the future.  (If any lawyers want a copy of the decision...I kind of expect CanLII to report it in due course, but if it doesn't, feel free to email me for a pdf.)

However, that didn't entirely get Ms. Caskanette to the finish line, because the Deputy Judge also appeared to find that the culminating incident immediately prior to the termination was, in and of itself, gross insubordination sufficient to ground a just cause argument.  This is a finding calling for significant deference.  Justice Mitchell recognized this (while questioning the evidence underlying the finding), but regarded it as highly dubious that the insubordination could be characterized as "gross", and noted:

Even in circumstances of gross insubordination, an employer must provide the employee with an opportunity to atone.

Justice Mitchell may actually be going a step too far on this statement.  Just cause requires a contextual approach, and so it's hard to say as a universal proposition that gross insubordination always deserves an opportunity to atone, but it's generally true.  Given the Deputy Judge's failure to refer to the governing precedents setting out the contextual approach, I think Justice Mitchell's treatment of this as a reversible error is a safe one.

Finally, on the topic of the culminating incident - when the employer demanded that Ms. Caskanette return to work, and she didn't - Justice Mitchell concluded that it was immaterial because the employer had already decided to terminate the employment relationship.

It is difficult to conceive how Ms. Caskanette's failure to return to work for the purpose of presenting herself for termination could be construed as insubordination.  It was not the intention of the Chois to demand her return to work so that she might perform her duties as a receptionist.  As the trial judge found, the intention was to fire her.

I might respectfully disagree with Justice Mitchell on this point.  Unless the intention to terminate had been in some way communicated to Ms. Caskanette - such that she knew that this would be the result of her return to work - I can't imagine how that intention could be relevant to the expectations upon the employee in the circumstances.  If I ask an employee to come into a meeting during regular working hours, generally speaking, I'm entitled to expect that employee's presence.  Whether that meeting is to discuss a file, or discuss the employee's remuneration, or to discipline the employee, or to terminate the employment relationship, that expectation remains unchanged.

At law, the question is whether or not just cause exists.  If it exists - if the employee engaged in such misconduct as to warrant termination for cause - the extent to which the misconduct factored into the employer's actual motivation to terminate is, in most cases, totally irrelevant.  I've seen cases where a poor employee was initially terminated on relatively shaky performance grounds, but where significant misconduct (such as embezzlement, for instance) was discovered after the termination.  An employer, in such a scenario, is perfectly entitled to rely on the after-acquired cause rationale to justify the termination, even though they weren't aware of it when the decision to terminate was made.

(Mind you, my view continues to be that this was badly mishandled - that the expectation that she work on her historical day off should have been communicated to her well in advance - and I'm not sure it's insubordination, in most contexts, for an employee to reject a schedule change on the spot that has her come in immediately on her day off.)

Additional Damages

I like Justice Mitchell's commentary on punitive, aggravated, and exemplary damages here:

The defendants' conduct, albeit misguided, unprofessional, misinformed and insensitive at times, does not meet the high-water mark necessary to justify a monetary award.

Pretty accurate statement of the law, under the circumstances.  Many plaintiff-side lawyers take issue with the fact that it is almost unheard of to award any damages against an employer these days even for significant violations of the employer's duty of good faith and fair dealing - perhaps the "high-water mark" is too high - but Justice Mitchell is certainly right about the law as it stands.

Costs

You may recall that Ms. Caskanette had a hefty costs award made against her - $5500 to the corporate defendant, and $1250 to each of two personal defendants, plus $325 in disbursements, plus HST.

This was, in part, due to the fact that the two personal defendants should never have been named, and furthermore that she engaged in unnecessary pre-trial motions, etc., driving up costs.

While Ms. Caskanette's success on the appeal against the corporate defendant obviously results in a reversal of that costs award, she did not appeal the dismissal as against the personal defendants (and rightly so).  Her counsel asked the court to set aside that costs award nonetheless, and Justice Mitchell refused, finding that the trial judge had the discretion to make that award, and that it was appropriate under the circumstances.

Personally, I wonder if there might be a better pitch to be made for a Sanderson Order (or a Bullock Order) - the Small Claims Court Rules on costs make costs payable by the unsuccessful party or parties to the successful party or parties.  The reversal on the appeal means that Ms. Caskanette is no longer the unsuccessful party; rather, she is now the successful party, and the corporate defendant was the unsuccessful party.  Accordingly, there's a fair argument that the success on the appeal makes the costs of the successful defendants presumptively payable by the unsuccessful defendant, instead of the plaintiff.

Of course, there's still a very significant discretion on the court in costs-related matters, and under the circumstances, where the personal defendants should never have been named and costs were driven up unnecessarily by the plaintiff, it strikes me as unlikely that the court could have been moved off of the result here.

Conclusion

It bears remembering that this was a low dollar value case - the judgment she obtained was $7,575.  (To Justice Mitchell's credit, she exercised her discretion to grant judgment in the face of the trial judge's errors, adopting the Deputy Judge's assessment of damages, rather than sending it back down to be re-heard.  Certainly the right call.)

But by succeeding in the appeal, Ms. Caskanette not only obtained that judgment, but also reversed a large part of the costs award ($5,850 plus tax), obtained her own disbursements from the trial (interestingly, the Justice Mitchell did not award her the costs to compensate her for her own inconvenience, typically capped at $500), and will presumably get a costs award in connection with the appeal.

*****

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The author is a lawyer practicing in Newmarket, primarily in the areas of labour and employment law and civil litigation. If you need legal assistance, please contact him for information on available services and billing.