Diagnosable Psychological Injury Not Required for Award of Aggravated Damages: ONCA

Can a ‘little white lie’ about the reason for an employee’s termination of employment result in an award of aggravated damages? What if the employee is unable to demonstrate a diagnosable psychological injury?

In Krmpotic v. Thunder Bay Electronics Limited, 2024 ONCA 332, the Court of Appeal for Ontario held that mental distress is a broad concept; it includes a diagnosable psychological condition arising from the manner of dismissal but is not limited to that. In the Court of Appeal’s assessment, “There is a spectrum along which a person can suffer mental distress as a result of the manner of dismissal.”

It just got considerably easier for employees to obtain aggravated damages from the manner of dismissal.

Meritless Implication that Former Employee was Involved in Murder Results in $100,000 in Aggravated and Punitive Damages

Can an employee be awarded aggravated damages for his employer’s bad behaviour if that bad behaviour precedes his termination?

While for a long time the prevailing wisdom was that aggravated and punitive damages could only be awarded for behaviour “during the course of dismissal”- which are the words used by the Supreme Court of Canada in Wallace- recent case law seems to suggest that such timing may not be necessary.

For example, in Koshman v. Controlex Corporation, 2023 ONSC 7045, the Honourable Justice Charles T. Hackland of the Ontario Superior Court of Justice held that the employer’s bad behaviour in the two months preceding an employee’s summary dismissal could substantiate an award of aggravated damages.

And, if that wasn’t enough of a hook to get you to keep reading, what if I mentioned that the employer’s poor behaviour included its telling clients that it believed that the former employee may be implicated in murdering the company’s founder?

Employees Cannot Sue for Constructive Dismissal Caused by Chronic Mental Stress: WSIAT

Can an employee in Ontario sue for constructive dismissal, if the reason the employee was forced to leave employment was because of chronic mental stress, caused by workplace bullying or harassment?

According to a 2019 “right to sue” decision from the Ontario Workplace Safety And Insurance Appeals Tribunal, Morningstar v. Hospitality Fallsview Holdings Inc. (Decision No. 1227/19), 2019 ONWSIAT 2324 (CanLII), the answer is “no.”

Aggravated Damages Awarded for Heightened Frustration and Anxiety After Employer Fails to Investigate Workplace Harassment Allegations

Does the failure to respond to a request for a workplace harassment investigation warrant an award of aggravated damages, where the employee is later terminated for complaining about such harassment?

In Bassanese v. German Canadian News Company Limited et al., 2019 ONSC 1343 (CanLII), the Honourable Justice Lorne Sossin of the Ontario Superior Court of Justice found that it does.

Frustration Does Not Require an Act of an Employer

Does frustration of contract for illness or injury require an act of an employer?

In Hoekstra v Rehability Occupational Therapy Inc., 2019 ONSC 562 (CanLII), Justice Alissa K. Mitchell of the Ontario Superior Court of Justice ruled that it did not.

In the same decision, the court ruled that the simple failure of the employer to pay the dismissed employee his minimum statutory entitlements on termination was not enough to trigger an award of punitive damages.

Punitive Damages Awarded for Failure to Conduct Harassment Investigation

What are the consequences for terminating an employee’s employment (for just cause no less) rather than investigating a legitimate complaint of harassment? In the case of Horner v. 897469 Ontario Inc., 2018 ONSC 121, which proceeded before the Honourable Mr. Justice W.D. Newton by way of an undefended trial, the answer was $20,000 in aggravated damages, plus $10,000 in punitive damages over and above the wrongful dismissal award.

No Aggravated Damages Absent Evidence of Mental Distress: Divisional Court

(c) istock/MarkLevant

Can a trial court award aggravated damages to an employee who claims wrongful dismissal absent a finding of actual mental distress being suffered by that employee? That was the question answered by the Honourable Mr. Justice Robert N. Beaudoin, sitting as a judge of the Ontario Divisional Court, in the case of Walker v Hulse, Playfair and McGarry, 2017 ONSC 358 (CanLII).

Ottawa Small Claims Court Awards $4,000 in Punitive Damages after Employer Falsely Alleges Just Cause

Truth or Consequences was an American television show originally hosted on NBC radio by Ralph Edwards (1940–1957) and later on television by Edwards (1950–1954), Jack Bailey (1954–1955), Bob Barker (1956–1975), Bob Hilton (1977–1978) and Larry Anderson (1987–1988). The television show ran on CBS, NBC and also in syndication. The premise of the show was to mix the original quiz element of game shows with wacky stunts.

The title “Truth or Consequences” serves as an appropriate introduction to the issue of what happens when an employer concocts reasons for termination after being served with an employee’s claim of wrongful dismissal.

The question answered by this post is: What is the penalty to an employer for concocting an allegation of theft in order to justify an allegation of just cause for termination? In a case from the Ottawa Small Claims Court, Budge v Dickie Moore Rental Inc, 2017 CanLII 468 (ON SCSM), the answer was $4,000 in punitive damages.

Ottawa Judge Awards $50,000 in Punitive Damages after Employer Fails to Provide Statutory Minimums and ROE

Is asserting just cause for termination where it is not warranted, failing to provide an employee with his Record of Employment (ROE), and/or his statutory minimums, all in an attempt to negotiate a lower severance amount, “reprehensible” conduct warranting the imposition of punitive damages? It is according to a decision of the Honourable Justice Pierre Roger of the Ontario Superior Court of Justice sitting at Ottawa: Morison v Ergo-Industrial Seating Systems Inc., 2016 ONSC 6725.

In a wrongful dismissal case in which the court was unable to award aggravated damages for bad faith on account of a dearth of medical evidence, Justice Roger nonetheless awarded $50,000 in punitive damages for “bad faith.”

Things may have just gotten easier for plaintiffs.

Doubling Down Damages – The Ontario Court of Appeal Sends Strong Message to Discriminatory Employers

What is the penalty for embarking on a “campaign of abuse”, intentionally designed to force a disabled employee to quit her job? In a June 2016 decision from the Court of Appeal for Ontario, Strudwick v. Applied Consumer & Clinical Evaluations Inc., 2016 ONCA 520, Ontario’s highest court awarded nearly a quarter million dollars plus costs following the wrongful dismissal of a long-term employee who has harassed and belittled by her employer after losing her hearing.

Court Awards $100,000 in Punitive Damages after Employer gets "Mean and Cheap" on Dismissal

There is a cliché that crime does not pay. In the world of employment law, the most heinous crime that an employer can commit is to allege just cause for dismissal where none in warranted.

In the case of Gordon v Altus, 2015 ONSC 5663 (CanLII), the Honourable Justice Bruce A. Glass threw the proverbial book at an employer – awarding the dismissed employee $100,000 in punitive damages in addition to $168,845.00 in wrongful dismissal damages – after the employer elected to get, as Justice Glass put it, “mean and cheap” by conjuring up a cause for firing in order to save money.

Failure to Pay Statutory Severance ‘Okay’ because Employer Offered to Do So

Does an employer’s offer of legally required severance pay, provided that the employee signs a full and final release, mitigate against an award of punitive damages if the employer later refuses to pay that legally required severance pay? Surprising as it may seem, in the case of Wyllie v Larche, 2015 ONSC 4747, the Honourable Justice David Price of the Ontario Superior Court of Justice said “yes, it does.”

Ontario Small Claims Court Awards Human Rights and Punitive Damages after New Mom Constructively Dismissed

There is a saying in law that “bad facts make bad law.” Of course, the opposite is also true; good facts make good law. In a clear demonstration of the latter, the case of Bray v Canadian College of Massage and Hydrotherapy, 2015 CanLII 3452 (ON SCSM) demonstrates what happens when experienced counsel appears before an experienced trial judge with some pretty decent facts.

While Bray looked at a number of issues of importance to Ontario employment law, the four most interesting features are:

1. The judge’s finding that an indefinite layoff is a constructive dismissal;
2. The judge’s finding that he had no power to award damages for an act of reprisal following a complaint to the Ontario Ministry of Labour;
3. The judge’s award of human rights damages in an Ontario Small Claims decision; and
4. The judge’s award of punitive damages for a breach of the duty of honest performance created by the Supreme Court of Canada in Bhasin v. Hrynew, [2014] S.C.C. 71.

Termination After Being Made the Subject of Workplace Investigation may Entitle Employee to Moral Damages

If an employee is made the prime suspect in a workplace investigation but is found to be not responsible for the harm that was the subject of the investigation, can the employer nonetheless terminate the employee’s employment on a without cause basis with impunity?

In refusing to grant summary judgment fixing the applicable notice period and dismissing the plaintiff employee’s claims for moral and punitive damages in a termination without cause case, the Honourable Justice Margaret Eberhard in the case of Brownson v. Honda of Canada Mfg., 2013 ONSC 896, leave to appeal refused 2013 ONSC 6974, held that the answer may be that no, the employer cannot terminate the employee’s employment on a without cause basis with impunity.

Wal-Mart Rolls Back Award of Punitive Damages

In a decision released earlier this week, the Court of Appeal for Ontario reduced an award of punitive damages against a Wal-Mart manager from $150,000 to $10,000, and against Wal-Mart itself from $1,000,000 to $100,000. In the same decision, however, the court upheld the award of $100,000 in damages for intentional infliction of mental suffering against the manager, and the award of $200,000 in aggravated damages against Wal-Mart.

Wrongful Dismissal Damages Carry Punitive Elements: ONCA

Ask most Ontario employment lawyers what the purpose behind reasonable notice is and the answer that you are likely to receive is that it is intended to afford a dismissed employee the opportunity to go from one job to another. Indeed, the calculation of reasonable notice, at least as I always understood it, is the period of time it should take an employee to find new work following dismissal.

So with those comments in mind, I was somewhat shocked when I read the Court of Appeal for Ontario writing that wrongful dismissal damages have a "punitive element" to them.

The question for readers of this blog is: did the Court of Appeal get it right?