In Brito v. Canac
Kitchens, the Ontario Superior Court awarded
substantial damages against the employer for wrongful dismissal,
including damages for lost disability benefits, payment in lieu of
a 22-month notice period and $15,000 in punitive damages due to the
employer's "hardball" approach to the
termination of a long-service employee. The case should serve as a
warning to employers who provide only the statutory minimum amount
of notice to employees upon termination without cause and plan to
negotiate and/or litigate additional entitlements at a later
The employee, Luis Romero Olguin, had worked for Canac Kitchens
for 22 years. He was 55 years old at the time he was terminated
without cause as a result of a restructuring. Upon termination he
was given the statutory minimum amount of 8 weeks' pay in
lieu of notice, plus benefits for the same period. While Mr. Olguin
found a new job less than a month later, it was lower-paying and
did not offer disability benefits.
Approximately four months after Mr. Olguin was terminated, he
began treatment for cancer, rendering him totally disabled and
unable to work. He brought an action for wrongful dismissal,
including a claim for damages in lieu of disability benefits.
Mr. Olguin was awarded a 22-month notice period and Canac was
ordered to pay damages in lieu of short-term and long-term
disability benefits, including the present value of the remainder
of his long-term disability entitlements to his 65th
birthday. In coming to this decision, Justice Echlin observed (at
Canac consciously chose not to make
alternative arrangements to provide its loyal, long-service
employee with replacement disability coverage. Rather, it chose to
go the "bare minimum" route. It provided only the
statutory minimums in pay and benefits and then gambled that he
would get another job and stay well. When it lost that gamble, it
chose to litigate this matter for over five years. When confronted
with its potential significant exposure, it raised the argument
that Mr. Luis Romero Olguin failed to mitigate his potential
damages by purchasing a replacement disability policy.
Canac failed to establish the plaintiff's failure to
mitigate damages, and Justice Echlin found that insufficient
evidence had been led to show that comparable replacement coverage
would have been available.
In addition to the award for disability benefits, which was in
excess of $200,000, Justice Echlin awarded the plaintiff $15,000 in
punitive damages, having regard for "Canac's
cavalier, harsh, malicious, reckless, outrageous and high-handed
treatment" of the plaintiff and their "hardball
This case should serve as a reminder to employers that courts
will ensure that employees who are dismissed without cause are
"made whole" and will not be limited to statutory
minimums when doing so. In addition, Brito v. Canac
Kitchens makes clear that courts will extend liability to
forms of compensation outside the ambit of traditional
remuneration, including disability benefits. Prudent employers
should take proactive steps to mitigate these sources of liability
by, for example, advising employees of replacement disability
coverage, extending disability benefits to terminated employees
where possible, offering realistic rather than "base
minimum" separate packages or entering into employment
agreements with employees which clearly outline employees'
This decision is also relevant for employers who choose to
frequently litigate employment matters before the courts. It
appears from the reasons that Canac's continued strategy of
exposing terminated employees to extended litigation impacted the
Judge's decision in this case.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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