Substantial Punitive Damages Awarded for Employer Conduct

Written on behalf of Peter McSherry
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A recent decision from British Columbia has awarded a substantial sum of punitive damages. Such an award is intended to punish for outrageous and intentional wrongdoing. It is usually quite difficult to obtain. On this occasion, the trial judge set the damage award at $110,000.

Aggravated damages are also additional damage sums which are awarded to compensate for emotional distress for conduct which is unfair and contrary to the obligation of fair dealing. This claim also succeeded in the amount of $25,000.

The Facts

The employee had suffered health problems which led to his absence from work. An application for short term disability benefits followed, which was denied. He appealed this decision. While this was pending, the company terminated his employment. He discovered the fact of his termination when his wife’s claim for medical benefits had been denied due to his termination.

His claim against the company was defended on the basis that he had abandoned his employment.

The Award

The claim for severance was limited to the terms of his employment contract which was found to be enforceable. Such a contractual term limiting severance, however, has no impact on the court’s ability to award aggravated and/or punitive damages.

The conduct of the company in the manner of termination was found to be unfair and the court concluded that this led to the employee’s severe mental distress. This resulted in the award of aggravated damages of $25,000.

The award of punitive damages was allowed in the sum of $110,000. This was awarded because:

  1. The manager had been dishonest with respect to the reason for termination;
  2. The company knew that the employee had been suffering from emotional distress and instead of acting with consideration, treated him callously;
  3. There was still a need for deterrence;
  4. The award of $110,000 was not excessive when compared to the sum the employee would have received absent the employment contract.

The latter point is remarkable. Usually, the court will assess the quantum of punitive damages as factored on the sum of other compensatory damages. Here the court used the comparator of the sum which would have been awarded, absent the contractual term. An appeal may follow. Stay tuned.

Get Advice and Know Your Rights

Modern case law is clear that the unfair conduct of the employer at the time of termination will lead to an award of aggravated damages and indeed a possible award of punitive damages. Get advice. Know your rights. Contact the offices of Guelph employment lawyer Peter McSherry. We can guide you through the issues, help you understand your rights, and defend your position. Contact us online or by phone at 519-821-5465 to schedule a consultation.