Brewer’s bad faith firing leads to massive damages

Hrynkiw v. Central City Brewers & Distillers Ltd.

When dismissing an employee, employers must act in “good faith” and treat their employee fairly and reasonably. This rule applies even where an employer believes that they have just cause for terminating an employee.

In the recent case of Hrynkiw v. Central City Brewers & Distillers, the B.C. Supreme Court reminds employers of precisely this lesson.

This case also serves as a reminder that if an employer terminates an employee for “just cause”, it had better have a good basis for doing so.

Recklessly making accusations against an employee can result in owing significantly more in the form of aggravated or punitive damages. This is also true if an employer fails to act fairly, honestly, and reasonably towards an employee.

Overview of the Case

The plaintiff, Daryl Hrynkiw, was employed for approximately 6 years, starting as a Controller at Central City Brewers and Distillers in Surrey.

During this time, he was promoted from Controller to CFO.

In July 2018, he was suddenly terminated without notice — allegedly for just cause. The employee did not receive a severance package.

The Court’s Decision

To support its defence of just cause, and its counterclaim against the plaintiff, the company made numerous serious accusations against the employee.

Those accusations included claims of the plaintiff paying himself unauthorized bonuses, committing theft, failing to follow direction, and other misconduct.

The court found that all of these accusations were baseless. In its decision, the court awarded the plaintiff 12 months’ severance pay (reasonable notice), accrued vacation pay, and a share bonus owed to the plaintiff.

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Because of the baseless allegations of just cause raised by the employer and the negative emotional impacts, and impacts on the reputation on the employee, the court also awarded Mr. Hyrnkiw $35,000 in aggravated damages.

Aggravated damages are meant to compensate an employee where they suffered mental distress because of bad faith on the part of the employer.

Lessons for employees

Hyrnkiw is a reminder that there is a very high bar that an employer must meet to prove just cause.

This is especially the case with serious allegations like fraud or similar misconduct.

Lessons for employers

Hyrnkiw serves as a stern warning and reminder to:

• Treat employees fairly
• Carry out a proper investigation into alleged misconduct prior to deciding whether to terminate an employee
• Avoid alleging just cause where there is no or little basis to do so

Failing to follow the above can lead to increased liability to an employee. It also leads to a risk of being responsible for a significant portion of the employee’s legal fees at trial.