Executive Summary: Key Legal and Evidentiary Issues

• Mahi was dismissed without cause from his executive role after relocating internationally on behalf of the employer

• The employer attempted to enforce a shareholder deduction despite Mahi's bankruptcy disqualifying him from owning shares

• The trial court found the dismissal abrupt and unjustified, awarding salary, reimbursements, and moral damages

• The employer’s counterclaim alleging abuse of procedure was rejected for lack of supporting evidence

• On appeal, the employer challenged the findings on dismissal, expenses, damages, and deductions

• The Court of Appeal upheld all findings, citing no palpable or overriding error in the trial judge’s reasoning

Facts of the case

Mahi was employed by St-Georges Structures et Civil inc. as Vice-President for Strategic Alliances. He was tasked with establishing the company’s Moroccan subsidiary, St-Georges International Bureau d’Études inc., and relocated to Morocco in late 2017 to execute this mandate. His contract was of indeterminate duration, and he played a key role in developing the international branch. On January 3, 2019, Mahi was terminated without any formal warnings or allegations of serious misconduct. The termination letter cited the closure of the Moroccan office as justification, along with vague references to performance issues.

Following his dismissal, Mahi filed a civil suit seeking nine months’ notice in lieu of termination, reimbursement for professional expenses, recovery of a $40,000 salary deduction linked to a failed shareholder agreement, and moral damages for the harsh and sudden manner in which he was let go. The deduction was initially intended to cover a share purchase, but Mahi’s bankruptcy rendered him ineligible to hold shares under Quebec law. The employer nonetheless applied the deduction without refunding the amount or adjusting the agreement.

Trial court decision

The Superior Court ruled in Mahi’s favour. The judge found that the employer failed to demonstrate serious cause for dismissal and did not provide prior notice or corrective steps. The court awarded Mahi nine months of salary in lieu of notice, reimbursement for costs related to recovering personal effects from Morocco, compensation for work-related expenses like meals and car rentals, and a partial return of the $40,000 deduction due to the employer’s improper application of the shareholder clause. The court also awarded $10,000 in moral damages, emphasizing the employer’s cavalier and humiliating handling of the termination, including an unjustified injunction filed shortly after Mahi’s dismissal.

The employer’s counterclaim for alleged abuse of process was dismissed for lack of merit.

Appeal and outcome

The employer appealed, contesting the awards and arguing that the dismissal was justified and that the trial judge erred in assessing the moral damages and disallowed deductions. The Court of Appeal found no reversible error. It held that the lower court had thoroughly examined the facts, correctly applied the law regarding wrongful dismissal, and reasonably exercised its discretion in awarding moral damages and reducing the deduction. The appeal was dismissed in full, and the trial judgment was upheld.

The Court reaffirmed that dismissals must be conducted in good faith and with procedural fairness, especially in international or executive contexts. It also reinforced the principle that contractual deductions linked to shareholder agreements must be applied reasonably and in accordance with legal constraints. The appellate decision confirms trial courts' discretion in balancing compensation, damages, and procedural fairness in employment disputes.