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Punitive damages? behaviour has to be atrocious

Punitive damages are rarely awarded in wrongful dismissal cases in Canada. Before the court will even consider it, it has to be proven that the employer has acted atrociously.  The problem is, almost everyone who has been terminated thinks the entire thing is atrocious. Sandy’s story helps clarify just how bad things have to get before the ire of the court will be sufficiently provoked for punitive damages to be awarded.
 
Sandy had worked for a small music store for 30 years when she was diagnosed with cancer. She was the store manager and dedicated to her work and only took a month off for her surgery and treatment.
 
For the next six months, she worked reduced hours as she recovered and the employer made no objection until one day a bailiff arrived with a letter at her house from her employer’s lawyer. It pompously alleged that she had been remiss in her duties by failing to work a minimum number of hours and had been coming in late and leaving early. If she didn’t start working regular hours immediately she would be fired. No one had said boo about such a concern at work.
 
She went into work the next day and then the doctor put her on a three-month medical leave, a leave she probably should have been on for the last six months instead of helping out this thankless employer.
 
Just before she was due to come back to work, she had another bailiff at her door with a letter from the law firm indicating that since she had applied for long term disability while she was off and her position had been “abolished”, she was terminated. It went on to state that the employer was going to deduct from any monies still owing to her, amounts for her absenteeism and late arrivals and early departures before she went off ill.
 
Sandy had over $46,000.00 in an employee profit sharing account that the employer refused to pay out until 20 months after her termination when her lawyer brought a motion before a judge. She never received an accounting. The employer failed to pay outstanding wages, vacation pay and bonuses owed to Sandy until a judge ordered them to do it.
 
At trial, Sandy had reports from a psychiatrist confirming that the letters she received from the law firm by a bailiff on behalf of an employer to whom she had been loyal for 30 years triggered depression and trauma. The judge found that she deserved better than having a bailiff deliver letters full of untruths while she was recovering from cancer without the employer having even the decency to speak to her. She was awarded $35,000.00 for the failure of the employer to treat her with good faith and fairness.
 
The employer failed to pay out profit sharing, wages, vacation pay and bonuses until forced to by a judge 20 months after her termination. It failed to provide Sandy with an accounting for the profit sharing monies and tried to use her banked vacation to pay itself back for her absences during the six months she was working. The employer had not docked Sandy for those absences for that six-month period but decided belatedly it would. When Sandy was off ill and applied for disability, the employer refused to fill out the form the insurer needed to process the application. It failed to provide her with a record of employment for months after it was due, denying her access to Employment Insurance.
 
The judge at trial found all of this behaviour to be reprehensible and high-handed and Sandy was awarded $20,000.00 in punitive damages in addition to the $35,000.00 for bad faith treatment in the manner of her termination and 22 months’ pay in lieu of notice.
 
The judge in Sandy’s case found that her treatment was intentional and malicious, not just reckless or negligent. That’s hard to prove and although Sandy succeeded it is rare that an employee can prove the intentional misconduct required for punitive or bad faith damages to be awarded.
 
As published in The Hamilton Spectator, October 31, 2011
 
Ed Canning
Ed Canning
P: 905.572.5809
ecanning@rossmcbride.com