 |
Damages for Bad Faith, Mental Distress and Personal Injury
In addition to wrongful dismissal damages, which are supposed to pay a dismissed employee the compensation that would likely have been earned had he or she remained at work during the notice period, employees are able to claim additional damages for personal injury, which are referred to as employment-related “torts.”
Bad Faith Dismissal
It is now clearly established that, employers have an obligation of good faith and fair dealing when terminating an employee, the breach of which may be compensable with additional damages, known as “bad faith damages.”
Until recently, the landmark case addressing bad faith dismissal was Wallace v. United Grain Growers Ltd. Here, the employee had been deliberately accused of misconduct in order to avoid paying him severance, which the court considered “playing hardball” or acting unfairly. In its decision, the court chose to extend the period of reasonable notice for the unfair conduct of the employer, which set the precedent that employers “…ought to be candid, reasonable, honest, and forthright with their employees and should refrain from engaging in conduct that is unfair or is in bad faith by being, for example, untruthful, misleading, or unduly sensitive.” Where employers breach this obligation, employees would then be entitled to additional damages.
As examples, courts have awarded bad faith damages where an employee was terminated on the basis of false allegations of misconduct and poor job performance (Antonacci v. Great Atlantic & Pacific Co. of Canada); where an employer terminated an employee via email and then alleged the employee had resigned (Farrell v. Workgroup Designs Ltd.); and where an employee was terminated while on disability leave (Prinzo v. Baycrest Centre for Geriatric Care).
Recently, the law of bad faith dismissal was modified by the Supreme Court of Canada. In Keays v. Honda Canada Inc., the Court decided that it should no longer award bad faith damages by extending the notice period. Instead, an employee must prove he or she suffered actual damages from the bad faith conduct and that these damages were a foreseeable, predictable result of the employer’s actions.
Aggravated Damages
The courts will allow compensation to employees suffering additional injuries to dignity or pride arising from the manner of termination, which are also known as aggravated damages. Such injuries include loss of reputation, insult, annoyance, aggravation, nervous shock, inconvenience, or other emotional or sentimental suffering.
There are strict requirements for employees to qualify for aggravated damages. First, employees must prove that the harm they suffered from the wrongful dismissal was reasonably anticipated by the employer. Second, an employer’s conduct must also constitute a separate cause of action, otherwise known as an independent actionable wrong. In this way, the employer must not only have dismissed an employee, but it must have also committed some other offence that the court considers worthy of compensation.
Intentional Infliction of Mental Suffering
When an employer deliberately and intentionally harms an employee, it may amount to the intentional infliction of mental suffering. To be successful, the employee must prove that the employer intended to produce harm, that the conduct was outrageous, and also that a visible and provable injury has been suffered.
Punitive Damages
Unlike aggravated damages, which serve a compensatory function, punitive damages are meant to punish the wrongdoer and serve as a disincentive for others not to act in such a manner. Punitive damages may be awarded where an employer’s misconduct is objectively blameworthy, or considered so malicious that it is deserving of punishment for offending the court’s sense of decency.
Damages for Injury to Reputation
While generally quite rare, in a few Canadian employment law cases, courts have awarded an employee damages for injury to his or reputation. As well, courts have awarded damages for defamation for libel and slander in wrongful dismissal cases.
Negligent Misrepresentation
Employers may embellish or even misrepresent the job description during the hiring process in an attempt to make the job look more attractive to prospective employees. In doing so, employers risk legal consequences if the employee relies on the representation, accepts the position, and then finds out that the job does not match its rosy description. In these circumstances, employers may be liable for the tort of negligent misrepresentation, which is a statement made carelessly or unreasonably that is relied upon by an employee who then suffers damages.
Sexual Harassment
Sexual harassment encompasses a wide range of unwelcome conduct of a sexual or gender-related nature including, but not limited to, verbal comments, unreasonable solicitations, gestures or physical conduct. Employees who are subject to sexual harassment have a variety of options available to them, including a human rights claim a lawsuit or other statutory complaint.
Read our employment law articles about Damages for Bad Faith, Mental Distress and Personal Injury for more information.