Employees who lose their jobs have more legal options than just bringing a wrongful dismissal action, says Toronto employment and labour lawyer Doug MacLeod.
“For a long time, most terminated employees only claimed termination pay in lieu of notice of termination,” says MacLeod, principal of MacLeod Law Firm. “Over the last few years, the legal landscape has significantly changed for terminated employees.”
For example since 2008, employees have the option of seeking damages for breaches under the Ontario Human Rights Code in addition to damages for wrongful dismissal. Under the Code, a worker whose personal circumstances – such as pregnancy, sexual orientation or race – played a role in their termination, has the option of seeking damages under the code in addition to wrongful dismissal damages.
MacLeod says Ontario courts haven’t yet seen many of these claims, but the possibility of multiple employee claims is certainly factored into settlement discussions between the employee and employer following termination.
Two other legal options have arisen through tort and common law, he adds.
In recent years, some dismissed employees have had success in seeking damages related to the infliction of stress or mental anguish while employed, MacLeod says. A typical scenario is working under a supervisor whose behaviour has been especially cruel.
“If the supervisor did something that creates mental anxiety or stress, the employer could be held vicariously liable,” he tells AdvocateDaily.com.
So far the damage awards aren’t large, but the potential exists for these damages to eclipse awards made for wrongful dismissal. MacLeod points to a particularly egregious case involving a Walmart employee in Windsor.
In Boucher v. Wal-Mart Canada Corp., 2014 ONCA 419 (CanLII), a jury ordered Walmart to pay the Windsor employee $1 million in punitive damages, $200,000 in aggravated damages, constructive dismissal damages and more than $140,000 in legal fees. The Ontario Court of Appeal also found Walmart was vicariously liable for the $100,000 award against the supervisor, but reduced the punitive damages award to $100,000.
MacLeod says punitive damages have surfaced in the last couple of years, although they are somewhat rare. This arises in a situation where the court finds that the employer’s conduct was particularly heavy-handed. “It doesn’t happen very often, the bar is pretty high, but it’s possible to obtain punitive damages in the right case,” he says.
Employee side lawyers take these type of damage claims into account when formulating a litigation strategy, adds MacLeod. While damages for wrongful dismissal is income that is taxed, general damages under the code and damages for the intentional infliction of mental stress are not. Therefore, employee side lawyers include claims for special claims so settlements can be structured in a tax efficient way. MacLeod sees this as a transition period between a time where employees basically relied on wrongful dismissal claims to a time where employees are claiming additional damages for employer misconduct during and after the termination.
“It’s unclear to me whether trial judges have an appetite for non traditional damages in an employee termination situation. The Court of Appeal has clearly stated that trial judges can award significant special damages to a terminated employee but such awards are still relatively infrequent,” he says. “Only time will tell.”
