Special Damages in Wrongful Dismissal Cases: Two Ships Passing in the Night

by | Aug 6, 2013 | For Employers

Special Damages in Wrongful Dismissal Cases: Two Ships Passing in the Night

by | Aug 6, 2013 | For Employers

Wrongful dismissal occurs when an employer does not provide an employee with adequate notice of termination.

Wrongful dismissal cases result in two main types of damages; these are,

(i) damages for pay in lieu of reasonable notice (i.e. reasonable notice damages) (The test for establishing and assessing reasonable notice damages has been virtually the same since 1960); and,

(ii) special damages, like Wallace damages, punitive damages, and damages for the intentional infliction of mental distress. (The test for establishing and assessing special damages has changed significantly since 1997.)

Special Damages according to the Supreme Court of Canada (S.C.C.)

In 2008, the Supreme Court of Canada released its most recent major pronouncement on special damages. Many employment law practitioners believe the S.C.C . intended to severely restrict the circumstances in which special damages can be awarded in a wrongful dismissal case. In that case, the court, (i) overturned a $500,000 punitive damage award that had been reduced to $100,000 by the Ontario Court of Appeal; and (ii) overturned a Wallace damage award that was equal to 9 months of the employee’s pay.

Special Damages according to Some Trial Judges & Juries

Some trial judges and juries have had significantly different ideas about special damages.

In a 2010 decision, an Ontario trial judge noted… “if the employee can prove that the manner of dismissal caused mental distress that was in the contemplation of the parties, those damages will be awarded not through an arbitrary extension of the notice period, but through an award that reflects the actual damages” and awarded the employee $ 75 000 in “moral” damages.

In a 2012 decision, a jury ordered a B.C. employer to pay a former employee, among other things, $573,000 in punitive damages. I understand the employer appealed the punitive damages award and the parties settled before the appeal was held.

In another 2012 decision, a jury ordered Walmart to pay a former employee, among other things, $200,000 for intentional infliction of mental suffering, and $1,000,000 in punitive damages. I understand Walmart has appealed this jury award.

How to Reduce This Legal Uncertainty

The apparent disconnect between the S.C.C.’s 2008 decision and the more recent trial and jury decisions has resulted in legal uncertainty. Employee counsel see a trend towards higher wrongful dismissal awards and employer counsel believe the appeal courts will overturn the recent  special damage awards rendered by jury and trial judges.

As a result, until the appeal courts clarify the law in the area of special damages, we believe it will be more difficult to settle wrongful dismissal cases when special damages are claimed.

The material and information in this blog and this website are for general information only. They should not be relied on as legal advice or opinion. The authors make no claims, promises, or guarantees about the accuracy, completeness, or adequacy of any information referred to in this blog or its links. No person should act or refrain from acting in reliance on any information found on this website or blog. Readers should obtain appropriate professional advice from a lawyer duly licensed in the relevant jurisdiction. These materials do not create a lawyer-client relationship between you and any of the authors or the MacLeod Law Firm.

 

k

Recent Posts

Reducing Litigation Risk

In a recent case, Pohl v. Hudson’s Bay Company, 2022 ONSC 5230 (CanLII),an employer was ordered to pay a long service employee the equivalent of about 3 years pay and contribute about $ 35 000 to his legal fees. Although this was a without cause termination case, it...

read more

The material and information in this blog and this website are for general information only. They should not be relied on as legal advice or opinion. The authors make no claims, promises, or guarantees about the accuracy, completeness, or adequacy of any information referred to in this blog or its links. No person should act or refrain from acting in reliance on any information found on this website or blog. Readers should obtain appropriate professional advice from a lawyer duly licensed in the relevant jurisdiction. These materials do not create a lawyer-client relationship between you and any of the authors or the MacLeod Law Firm.

 

k

Recent Posts

Reducing Litigation Risk

In a recent case, Pohl v. Hudson’s Bay Company, 2022 ONSC 5230 (CanLII),an employer was ordered to pay a long service employee the equivalent of about 3 years pay and contribute about $ 35 000 to his legal fees. Although this was a without cause termination case, it...

read more

Toronto Office

702 - 2 Bloor Street West,
Toronto, ON M4W 3E2

Barrie Office

277 - 92 Caplan Avenue,
Barrie, ON L4N 9J2

Collingwood Office

220 - 1 First Street
Collingwood, ON
L9Y 1A1

Contact

Phone

+1 (888) 640-1728

Fax

(866) 883-8445

Email

[email protected]

Toronto Office

729 - 2 Bloor Street West, Toronto ON M4W 3E2

Barrie Office

277 - 92 Caplan Avenue, Barrie ON L4N 9J2

Collingwood Office

220 - 1 First Street, Collingwood, ON L9Y 1A1

Translate

Subscribe To Our Newsletter

Join our mailing list to receive the latest news and updates from our team.

You have Successfully Subscribed!