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?

New Client Policy Results in Frustration of Employment

If you are an employer in the service industry, and your largest client introduces a new rule or policy that imposes new requirements on your employees, and if one of your employees refuses to comply with that new rule or policy, has the employee’s contract of employment been “frustrated” or must the employer allege that it has “cause” for termination?

In Croke v. VuPoint System Ltd, 2024 ONCA 354 (CanLII), the Court of Appeal for Ontario upheld a decision in which it was found that an employee’s refusal to comply with his employer’s client’s rule requiring proof of vaccination against Covid-19 was a frustration of contract.

This is case about Covid-19 vaccination, which is not about Covid-19.

Employers Do Not Have the Right to Terminate Employees "At Any Time"

Do Ontario employers have the right to terminate an employee’s employment “at any time” and in their “sole discretion”?

In Dufault v. The Corporation of the Township of Ignace, 2024 ONSC 1029, the Honourable Madam Justice H. M Pierce of the Ontario Superior Court of Justice sitting at Thunder Bay held that they do not.

No Implied Term in Employment for Layoff for COVID State of Emergency

By now one might have thought that the issue of whether an employer had the legal right to layoff an employee in the face of the COVID 19 pandemic would have been resolved. And yet in the case of Webb v. SDT North America, 2023 ONSC 7170, heard June 12, 2023, with further written submissions delivered September 8, 2023, and September 29, 2023, with reasons for decision released on December 19, 2023, the court was once again asked the question of whether a “COVID layoff” constituted as dismissal.