An Employer Can ‘Take Back’ a Termination Package if it Discovers Just Cause
October 14, 2009 By: Christopher C. Rootham Read Time: < 1 minute

In Doucet v. Spielo Manufacturing Inc1 a trial judge in New Brunswick ordered an employee to pay back a twelve-month termination package to his former employer when that employer discovered just cause for termination.

The employee was hired to be responsible for obtaining contracts to provide online gaming systems to lottery corporations. When his division was not performing well, he was terminated on a without cause basis and provided a twelve-month termination package. The employee filed a claim for wrongful dismissal against his employer for a twenty-four month notice period. The employer counter-claimed against the employee, alleging that it had discovered just cause for dismissal (essentially, that the employee had been the true owner of a consulting firm that advised bidders of how to obtain contracts with the employer and that he had accepted a $56,000 consulting fee from a successful bidder for whom he did no work) and that it should be repaid the termination package already provided.

The trial judge concluded that the employer had "after-acquired cause" for termination (particularly the "kickback" worth almost $56,000). The trial judge – without further reasoning – then allowed the counterclaim for the employer to recover the entire severance package paid.

1[2009] N.B.J. No. 217

This content is not intended to provide legal advice or opinion as neither can be given without reference to specific events and situations. © 2021 Nelligan O’Brien Payne LLP.

Service: Employment Law

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