Crocodile Tears Are Not Enough: Court of Appeal Confirms High Bar for Awarding Aggravated Damages

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It is well-established that an employee whose employment has been wrongfully terminated may also claim aggravated damages for injuries flowing from the manner in which they were terminated. However, while being terminated from one’s employment can undoubtedly lead to emotional upset, the law does not recognize mental states that fall short of injury. Previous court decisions have established that for the injury to be compensated, it must be serious and prolonged and rise above the ordinary hurt feelings and distress that ordinarily accompany a termination.

The Case

In the recent case of Cottrill v. Utopia Day Spa, the British Columbia Court of Appeal concluded that an employee’s evidence of her reaction to being placed on a performance improvement plan and subsequent termination was not, on its own, evidence of psychological harm.

The Respondent, Jennifer Cottrill (“Cottrill”), was employed by the Applicant, Utopia Day Spa (“Utopia”) as a skin care therapist for eleven years. In March 2015, she was given three months to improve her work performance or risk losing her employment. Despite making a significant improvement over that time period, Cottrill’s employment was nevertheless terminated for cause.  

The Decision

Cottrill brought an action against Utopia for wrongful dismissal, as well as seeking aggravated damages. The trial judge concluded that Cottrill was wrongfully dismissed because Utopia unreasonably sought to hold her to performance standards which it had not previously required of her and gave no reasonable attention to the improvement she had made. The trial judge concluded that Utopia had set Cottrill up to fail and lulled her into believing that her performance would be fairly considered.     

The trial judge also concluded that Utopia’s lack of good faith and the unfairness they exhibited in the manner in which they terminated her employment caused Cottrill emotional distress that went beyond that reasonably expected in the ordinary course of dismissal. The trial judge noted that the termination had a “profound effect” on Cottrill. The trial judge also referred to Cottrill’s testimony regarding her crying through the entire performance review meeting and having to go home early because she was so upset, as well as her going numb after being told that her employment was being terminated. As a result, Cottrill was awarded $15,000.00 for aggravated damages.

The Appeal

Utopia appealed solely on the question of whether the trial judge erred in law and principle in awarding Cottrill aggravated damages in the absence of any evidence of actual harm.

The Court of Appeal concluded that there was no evidentiary basis for a finding of mental distress caused by the manner of Cottrill’s dismissal and therefore it was an error in principle for the trial judge to make such an award.

In reaching its conclusion, the Court considered the decision in Lau v Royal Bank of Canada. In that decision, the Court of Appeal held that there was no evidentiary foundation for an award of aggravated damages because although not required, there was no expert evidence, medical or otherwise, nor was there any evidence from anyone other than the Respondent regarding the impact of the termination on his mental state.

The Court concluded that in this case, as in Lau, the only evidence as to Cottrill’s mental state came from Cottrill herself. The Court, therefore, held that:

the evidence of Ms. Cottrill’s reactions at the two meetings at its highest establishes a transient upset. It falls well short of the legal standard that requires a serious and prolonged disruption that transcends ordinary emotional upset or distress.

The Bottom Line

This case reiterates that in order to obtain aggravated damages, a plaintiff must prove that not only was the manner of their dismissal in bad faith but that the damages caused by the dismissal are more than the normal distress and hurt feelings resulting from a dismissal. There must be some real demonstrable evidence regarding the mental distress.

Whether you are an employer faced with the decision of terminating someone, or an employee who has been terminated, our team is here to assist you.

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