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Fired worker gets 2 years pay and $235,000 more

Posted by on Jun 12, 2011 in Compensation, Moneyville | 0 comments

By Sheryl Smolkin

Read this article and comments at Moneyville.ca

When Canac Kitchens fired Luis Romero Olguin he got $235,000 in short and long term disability benefits in addition to 22 months of severance pay and punitive damages.

Olguin was employed by Canac for 24 years when he was fired in 2003 without cause at age 55 as part of a restructuring and mass layoff. He was offered the statutory minimum of 32 weeks of pay, plus benefits for only eight weeks.

He was able to get another job with Cartier Kitchens for a much lower salary, but the Cartier compensation package did not include short or long term disability benefits.

In late 2004, Olguin was diagnosed with throat cancer and subsequently underwent numerous surgeries, chemo and radiation treatments. As a result he was totally disabled and no longer able to continue working.

Ontario Superior Court Justice Echlin found that Olguin was entitled to 22 months of common law notice based on annual cash compensation of $71,000. From that award he deducted the 32 weeks of termination pay received from Canac and his earnings at Cartier.

However, to place Olguin in the same position as if Canac had given him the required 22 months of working notice (in which case his disability coverage would have continued) the judge ruled that he should receive 17 weeks of short term disability payments and long term disability benefits until age 65. In total the disability award added up to about $235,000.

The judgment specifically noted that Canac chose not to make alternative arrangements to provide its loyal, long-service employee with replacement disability coverage and then gambled that he would get another job and stay well.

In addition, when they lost the gamble, they litigated the matter for over five years and unsuccessfully argued that Olguin was obligated to purchase a replacement disability policy. The decision also listed a series of related cases previously decided by the Ontario Superior Court in which Canac had “played hardball” with other laid off employees.

Therefore, it is not surprising that Justice Echlin awarded Olguin an additional $15,000 in punitive damages as a result of Canac’s “malicious, reckless, outrageous and high-handed treatment” plus $90,000 for legal expenses.


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