You don’t need to be a fashionista to appreciate the value of being able to recognize current trends. Having a good sense of where the wind is blowing will often let you be proactive and ahead of the curve. While this blog won’t give you any top fashion advice, we do strive to recognize and understand HR law trends in order to provide employees and employers with strategic counsel based on the latest developments.
One such development is that the damages awarded in wrongful dismissal cases are growing. Notice periods are getting longer, even for short term employees, and courts are open to awarding moral, aggravated and punitive damages, even with no medical evidence in support of the harm claimed.
Finger on the Pulse
We’ve canvassed recent notable decisions illustrating this trend, and provided the highlights:
Krmpotic v Thunder Bay Electronics Limited
In Krmpotic v Thunder Bay Electronics Limited, 2024 ONCA 332, the employee was 59 years old and held a physically demanding position. He was dismissed without cause after 29 years of service, and just hours after returning to work from medical leave due to a back injury. He was provided with 16 months of pay in lieu of notice.
He sued the employer, claiming he was entitled to:
- a longer notice period because of his physical inability to work; and
- compensation for bad faith damages.
The Court awarded him:
- an extended notice period of 24 months, on the grounds of his medical history and testimony; and
- $50,000.00 in aggravated damages for mental distress, even without supporting medical evidence showing a diagnosable injury.
The Court of Appeal upheld the decision, noting that: “...there is a spectrum along which the manner of dismissal has caused mental distress that does not reach the level of a diagnosable psychological injury.”
Griffon Integrated Security Technologies et al. v Valley Associates Inc. et al.
In Griffon Integrated Security Technologies et al. v Valley Associates Inc. et al., 2023 ONSC 2200, a 65-year-old senior executive, with 12 years of service, was dismissed without cause while on leave for cancer treatment, which the employer was aware of. Unsurprisingly, the employee sued. Surprisingly, the employer filed a counterclaim and alleged after-acquired cause, accusing the employee of fraud and financial wrongdoing. The Court found that the employer’s claims were completely baseless and its conduct reprehensible.
Accordingly, the Court awarded the employee:
- 20 months of notice, partially because of the “brutality” of the dismissal – the employer cut off his benefits and made unsubstantiated accusations – and because of his limited job prospects; and
- $75,000.00 in additional damages, as the Court slapped the employer with punitive damages due to its conduct throughout the whole affair.
Teljeur v Aurora Hotel Group
In Teljeur v Aurora Hotel Group, 2023 ONSC 1324, a 57-year-old with just over 3 years of service was dismissed without cause. The employer did not provide written notice at the time of dismissal, but later met with the employee to discuss severance. The employee recorded the meeting, where the employer promised to issue a written notice, as required under the Employment Standards Act, 2000 (the “ESA”), and a specific amount of severance pay.
The employer:
- never provide written notice;
- provided a lower amount of severance than promised;
- failed to reimburse his expenses; and
- failed to issue a correct Record of Employment.
Moreover, the employer delayed in providing him with his ESA termination pay, which must be paid per a prescribed timeline.
As a result, the employee suffered economic and mental distress. The Court awarded him:
- 7 months of notice; and
- $15,000.00 in moral damages on account of the employer’s bad faith conduct.
The Upshot
For employers, this trend emphasizes the importance of both having strongly drafted employment agreements, and reviewing them regularly, and of implementing terminations properly. Pre and post dismissal conduct, as we can see, can inflate the damages an employee is entitled to, and lead to greater exposure for liability. As crucial as they are, strong contracts are but one element in minimizing obligations and liability on termination. We can help you implement terminations and steer you clear of any potential pitfalls.
For employees, this trend stresses the importance of seeking legal counsel if you have been, or think you will be, dismissed. Even if your severance package looks good, you may be leaving more money on the table than you think! Employees tend to assume that employers know what they are doing when they dismiss them, and so let the issue slide. Employees would do well to consult counsel, particularly when they have concerns about their employer’s conduct. We can assess your situation and advise you as to what a reasonable offer is, and whether you are entitled to compensation for other damages or not.
Speaking of trends, here is an adage that we do not foresee going out of style any time soon: “If you think you need an employment lawyer, you probably do!”
