Suing for a Severance Package

Howard Levitt
National Post

Jacqui Stuart believed she had it all: a lucrative career, a reduced work week and time to spend with her children. The perfect work-life balance many employers tout, but few really want to offer. All of that changed when her employer, Navigata Communications, decided that there was "no longer room" for part-time work and fired her.

After 24 years, Stuart was Navigata's top sales executive, its most profitable and enjoying the best client relationships. In 2005, she single-handedly brought in a staggering 38% of revenues; she was rewarded with earnings of $136,000 a year, mainly in commissions. What was remarkable was that she achieved this while working only three days a week.

Events took a turn for the worst in February, 2006, when Stuart's son was diagnosed with diabetes. She negotiated a paid leave of absence to take care of him. Her employer, however, had another plan. Navigata had already decided to dismiss her but chose not to let her in on the plan.

The company asked Stuart to consider a severance package, but it deliberately led her to believe she had a choice and could return to work. During negotiations, the company offered her $50,000 although it had already prepared a final offer for more than twice that amount, forcing her to spend energy negotiating when it had no intention of offering her more than $111,000. She was led to believe the meeting at which they intended to dismiss her was a meeting to further discuss severance.

In March, 2006, Stuart was fired. To add further insult, Navigata cut off access to her computer files and cancelled her benefits two days later. Stuart fought back by suing for severance.

The court awarded her 18 months of damages in the amount of $216,666 plus legal costs. The final severance was increased by the fact that this all occurred while she was dealing with her son's serious, unexpected illness.

The court concluded Navigata breached its duty to be honest and forthright with Stuart. An additional two months pay as bad faith damages was awarded for what the court called callous and "blatant disregard" for her in hiding the fact she was going to be fired, making unreasonable severance offers and letting her think she had a choice to return.

However, Stuart was unable to prove that Navigata discriminated against her by firing her because she worked part-time due to her family situation. In fact, the company admitted Stuart was dismissed, in part, because of her part-time status. But when Stuart asked for reduced hours to spend more time with her children, Navigata accommodated her request.

Howard Levitt, counsel to Lang Michener LLP, is author of The Law of Dismissal in Canada and The Quick Reference to Employment Law, and editor-in-chief of The Dismissal and Employment Law Digest. He can be reached at hlevitt@langmichener.ca  

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