False allegations cost employer money
Making a strong allegation you cannot ultimately support will often make the termination more costly than it should have been. Nick got a job with an alcohol sales company as a Controller for a salary of $100,000.00 a year. About a year later he was promoted to the position of Chief Financial Officer. His salary would stay the same but he was given the opportunity to earn a $25,000.00 a year bonus. For the next 3.5 years Nick did the job with no further changes but his responsibilities kept expanding. Finally he went to the boss and outlined his achievements in the position. The boss asked him what he wanted and Nick claimed that he said he wanted an increase to $125,000.00 in salary and a $25,000.00 increase in his bonus to take it to $50,000.00. He remembered the boss said, without hesitation, “done”.
Nick’s salary was changed and the next year, as per usual the boss verbally approved the payment of the increased bonus. The boss later claimed that he assumed an amount was being paid in keeping with his memory of the meeting, a $25,000.00 bonus and had not reviewed details. That happened one more time the next year.
Nick was more than a little shocked when he learned that an employee he had mentored for 3 years was being promoted to the position of Vice President of Finance and he would now report to that position. The next time the bonus was due to be paid the boss claimed he finally noticed that Nick was paying himself the $50,000.00 a year bonus which he believed he had never approved. The boss became angry as he believed there had been zero discussion of an increase in bonus from 25 to 50,000 dollars. Nick was away from the office the afternoon following the meeting and received a text telling him not to come back until a scheduled meeting with the boss and to not access any banking information in the meantime. His work email had been deactivated. Nick asked the Vice President for a week’s vacation and she agreed. The boss emailed him a letter indicating that he was terminated immediately for just cause. He claimed that Nick had admitted that the bonus payments were unauthorized, failed to attend work and taken an unauthorized vacation. He also claimed that Nick had slipped into the office over the weekend to “remove/transmit/copy property and/or documents”. Of course Nick sued and the matter ended up at trial. The boss claimed that Nick had conceded the bonus payments were unauthorized when he avoided having a meeting with the boss. The boss thought his actions were suspicious and consistent with guilt. The boss testified that he was duped into approving the unauthorized bonus payments.
Nick had not been in the office over that long weekend but at the time he was alleged to have been there he was buying a kegger for a party he was hosting. Nick became irritable and had fits of anger. It affected his relationship with his wife. It took months for him to even begin to return to his previous self. Eventually he sought medical care and took something for his sleep and anxiety. The judge found that the boss’ evidence at trial was combative and argumentative. He evaded answering questions directly and was patronising to opposing counsel. His memory was selective. Nick was the opposite on the stand.
The judge found that the contract negotiations had in fact unfolded just as Nick had claimed and that no unapproved bonus had ever been taken. The employer had no evidence whatsoever that Nick had attended the office the weekend before his termination to take or copy documents and Nick denied it. Ultimately Nick was awarded 12 months pay in lieu of notice including bonus. It wasn’t over with that. The judge found that the employer had breeched it’s duty to treat Nick fairly and in good faith by failing to properly investigate and by advancing and maintaining meritless allegations of serious misconduct. Nick was awarded $35,000.00 to compensate him for the mental distress.
Over the years I have been consulted on more than one occasion by employers who claim to have discovered that an employee in a financial role had been overcompensating themselves. My response is always the same. Unless you can prove that the employee was taking active steps to hide the payments or benefits a judge will expect the employer to know what’s going on in their own business. Either Nick’s boss never got that advice or did not care when he heard it and it cost him.
