17 January 2022

2021 in Labour Law (Part 1 of 3): Can Labour Shortages Reduce the Amount Employers Must Pay in Cases of Wrongful Termination in Quebec?

By: Gabriel Di Genova

In a recent decision, the Court of Quebec identified ongoing shortages in the labour market as a potential reason to reduce the indemnity due by an employer to a wrongfully terminated employee.

In Cossette c. Les Entreprises B. Chouinard, 2021 QCCQ 12029, the plaintiff was hired on a part-time basis by the defendant in 2017 as a sales associate of electronics and computer equipment. Throughout the course of her employment (approximately one and a half years), the plaintiff was in the process of gender transitioning. The employment of the plaintiff was suddenly terminated by the defendant in late 2018, and the plaintiff filed a claim against her former employer, alleging that the termination of her employment was due to discrimination on the basis of gender identity or expression, a protected class under s. 10 of the Charter of Human Rights and Freedoms (Quebec).

The plaintiff alleged that losses in the amount of $16,062.50 (subsequently amended to $15,000) had been incurred, representing several months of lost salary. The Court concluded, based primarily on the basis of testimonial evidence, that the termination was likely due to the employer defendant’s lack of tolerance of the employee plaintiff’s gender identity and transition. The Court ordered the employer to pay to the plaintiff moral and punitive damages for the violation of a human right, as well as an indemnity for lost wages.

While the Court of Quebec sided with the terminated employee on the merit of the claim, the Court awarded to the plaintiff less than seven percent of the amount sought by the latter as an indemnify for lost wages. The Court took judicial notice of the ongoing labour shortage in Quebec, and concluded that the employee could have taken measures to find alternative employment faster:

[60] L’évaluation qui a été faite par la Commission au niveau des dommages matériels, pour la perte de salaire des mois de novembre et décembre 2018, soit 1 000 $, semble réaliste aux yeux du Tribunal.

[61] En effet, dans un contexte où se pointait déjà, à l’époque, la pénurie de main-d’œuvre et que nous étions à la veille de la période de Noël, tout porte à croire que madame Cossette aurait pu se retrouver un emploi à temps partiel plus rapidement que ce qu’elle a fait. (underlining added)

Accounting for ongoing labour shortages, especially in the retail sector, the decision rendered in Cossette suggests that a wrongfully terminated employee in Quebec may see losses it can recover from a former employer significantly reduced where such employee fails to show it acted promptly to attempt to find employment elsewhere. The decision further suggests that, even in the case where an employer is found by a court to have wrongfully terminated an employee, such employer may be able to successfully argue for a reduction of the amount of the indemnity claimed by such employee for loss of income, where such employee failed to take the necessary initiative to find alternate employment following such employee’s termination.

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