The Ontario Court of Appeal has released its decision in Brito v. Canac Kitchens, an appeal
from an Ontario Superior Court of Justice decision that we
discussed in an
earlier post. In its decision, the Superior Court awarded an
employee significant damages for lost short-term and long-term
disability benefits as well as $15,000 in ancillary damages due to
the "hardball" approach that the employer took in
terminating the long-service employee.
As you may recall from our
earlier post, the employee in this case, Mr. Luis Romero Olguin
was terminated by his employer, Canac Kitchens (Canac), after 22
years of service at the age of 55. He was terminated without cause
and provided with the statutory minimum amount of 8 weeks' pay
in lieu of notice and continuation of benefits for the same period.
Shortly after being terminated, Mr. Olguin was diagnosed with
cancer which rendered him totally disabled and unable to
work. He brought an action for wrongful dismissal, including
a claim for damages in lieu of disability benefits. In addition to
the award of ancillary damages mentioned above, the trial judge,
Justice Echlin, awarded Mr. Olguin 22 months' pay in lieu of
notice and over $200,000 in damages in lieu of short-term
disability (STD) and long-term disability (LTD) benefits, including
the present value of the remainder of his LTD entitlements to his
Canac appealed the award of damages in respect of LTD benefits
and the award of ancillary damages.
Court of Appeal Decision
The Court of Appeal was unwilling to overturn Justice
Echlin's decision that Mr. Olguin met the definition of totally
disabled under Canac's sponsored disability benefits plan and,
accordingly, the award of damages for lost LTD benefits was upheld.
The Court of Appeal's view was that the evidence presented at
trial by Mr. Olguin was sufficient, if accepted, to support Justice
Echlin's conclusion that Mr. Olguin met the evidentiary burden
to establish total disability. As the trial judge appeared to have
accepted Mr. Olguin's evidence (Canac did not call any medical
evidence to support its own position), the Court of Appeal upheld
Justice Echlin's decision on this issue.
Canac also tried to argue that Mr. Olguin failed to mitigate his
damages by not undertaking job re-training efforts or looking for
alternative employment after his STD benefits expired.
However, Justice Cronk for the Court of Appeal made it clear,
somewhat obviously, that "there can be no obligation to
mitigate damages by finding alternate employment where the employee
is totally incapable of working."
Canac was, however, successful in its appeal of the award of
$15,000 in ancillary damages. Justice Cronk characterized the
award of "ancillary" damages as punitive damages. As Mr.
Olguin did not claim punitive damages in his statement of claim, or
during the trial, the Court of Appeal found that it was not open to
the trial judge to make such an award. Interestingly, as Mr. Olguin
was largely successful on appeal, he was awarded $20,000 in
Despite the fact that the employer in this case was successful
in having the award of "ancillary" damages overturned on
what may be viewed as a technical ground, this decision still
leaves open the potential for an employee to be awarded punitive
damages where the employer takes a "hard ball" or
bare-minimum approach to terminating a long-service employee
Also, as we discussed in our previous post, this case serves as
a reminder that courts will impose liability on employers where
employees are terminated without cause and are not "made
whole" during the reasonable notice period. Accordingly,
employers who provide employees with only their minimum statutory
entitlements upon termination (without a contractual basis for
doing so) risk being found liable for additional amounts, including
any lost benefits where the employee becomes disabled during the
common law notice period. Damages in lieu of LTD benefits during
the notice period can be quite costly. In fact, the most
significant part of the award in this case was the award for
damages in lieu of LTD benefits as a result of Mr. Olguin becoming
disabled during the common law notice period. As Mr. Olguin did not
have access to the benefits, by reason of the Company's
actions, the Court effectively required Canac to step into the
shoes of its insurer with respect to Mr. Olguin's LTD
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Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
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