In Quebec, Section 1621 of the Civil Code of Quebec
allows for punitive damages to be awarded where it is permitted by
law and states a non-exhaustive list of criteria to be considered
when evaluating the amount. More particularly, the amount of
damages should not exceed what is sufficient for the purpose of
On November 3rd, 2011, the Superior Court of Quebec
in Chalifour v. IBM Canada
ltéegranted a former senior executive
$35,000 for moral damages and $300,000 for punitive damages
relating to intentional interference with his dignity and with his
reputation in connection with his constructive dismissal. The
amount awarded in this case is among one of the highest ever in the
context of a dismissal in Canada.
In this case, the employee had worked for IBM since 1995 and
held the position of "Senior Director" since 2004. In
this role, the employee had between 100 to 250 people under his
supervision, led a team of 15 executive project managers and
managed an income portfolio of 400 million dollars per year.
In September 2006, the employer removed him from his position
and demoted him following a misunderstanding during a business
trip. Until then, the employer never mentioned any weaknesses in
his performance nor the possibility of a change in assignment.
Moreover, the employer even confirmed that the employee would hold
the same position until the end of 2007. The employee refused the
new position offered and soon after, was diagnosed with cancer.
During his sick leave, the employer decided to announce his
replacement and transferred him to a newly created position. The
employer also refused to disclose the salary related to this
position. In addition, in this new position, the employee would no
longer be responsible for an income portfolio and would only have
two employees under his direct supervision. The employee refused
this new position and filed a harassment complaint with the
managing director of IBM, a complaint that was not investigated
until a second letter was sent.
Following unsuccessful attempts of settling this matter, the
employee received a letter from his employer confirming his
voluntary resignation as a result of his refusal to return to work.
The employee filed an action for constructive dismissal.
Considering the substantial changes to the conditions of the
employment agreement, the Superior Court of Quebec concluded that
this was a situation of constructive dismissal. The date at which
the employee was forced to hold the second position offered was the
date the employee was dismissed.
Citing Standard Broadcasting Corporation
Limited v. Stewart, the Superior Court
granted the employee 24 months of indemnity in lieu of notice. In
determining the indemnity, the court considered the employee's
abandonment of his former company in 1995 to join IBM, the fact
that a senior position cannot be easily found elsewhere and the
absence of serious cause in the dismissal. Evidence also showed
that despite the efforts to find a job in his field, the employee
was forced to restart the company he had previously abandoned.
The court also granted an amount of $35,000 for moral damages
for the humiliating, degrading and offensive nature of the
dismissal, and for the prejudice caused by the employer who
interfered with the employee's search for contracts for his
As for justifying the award for punitive damages, the Superior
Court of Quebec found that the employer based itself on the
employee's health, without medical evidence, to impose a
position that was an insult to his dignity and his reputation. The
Superior Court of Quebec reiterated the importance of the objective
of deterrence in the awarding of punitive damages by referring to
the criteria stated in Québec (Curateur public) v.
Syndicat national des employés de l'hôpital
St-Ferdinandand Béliveau St-Jacques v.
Fédération des employées et employés de
services publics inc. As a result, an amount
of $300,000 was awarded for punitive damages because, in the
opinion of the court, in order to have a real effect of deterrence,
the amount of damages awarded must reflect the employer's
ability to pay. Finally, considering the precarious situation that
the employee would face if IBM were to appeal the decision, the
court also granted partial provisional execution of the decision,
notwithstanding an appeal, for an amount of $350,000.
Amount awarded for punitive damage
We would like to remind you that in , a case we
addressed in July 2008, the Supreme Court of Canada refused all
amounts requested for punitive damages by overturning a punitive
damage award of $100,000 by the Ontario Court of Appeal following a
controversial award of $500,000 in the first instance. Generally,
the amounts awarded for punitive damages related to dismissals are
less than $10,000.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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