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ARTICLE · 12 MARCH 2019

Employer's Just Cause Assertion Backfires, Results In $1,000,000 In Liability

The employer asserted just cause on the basis of an alleged fraud.

CanadaEmployment and HR

Ontario's Court of Appeal recently upheld a trial decision in which an employer's tactical pursuit of a just cause defence and counterclaim backfired catastrophically and resulted in a cumulative award of over $1 Million.

In Ruston v Keddco MFG (2011) Ltd, the plaintiff was terminated from his position as President of the corporation.  The employer asserted just cause on the basis of an alleged fraud.  The employer threatened the plaintiff that if he brought a wrongful dismissal claim, the employer would counterclaim and make the proceedings very expensive.

When the plaintiff sued alleging wrongful dismissal, the employer relied on the alleged fraud in defence and counterclaimed for $1.75 Million in damages.

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