Awards of punitive damages in Canadian employment law cases are
not very common. Courts are usually circumspect in granting such
damages. Two recent cases, however, have awarded substantial
amounts of punitive damages - in excess of half a million dollars -
to plaintiff employees. Most recently, a BC jury awarded $572,000
in punitive damages to a former employee. These cases provide a
useful indicator of the circumstances and extent to which courts
and juries, where applicable, may award punitive damages in the
$572,000 in Punitive Damages Awarded to Employee by
In Higgenson v. Babine Forest Products
Ltd.1, a wrongful dismissal suit, a BC jury awarded
the plaintiff, a 34-year managerial employee, a global amount of
approximately $809,000. This global amount consisted of
approximately $572,000 in punitive damages and $236,000 in
There are no reported reasons for the decision because the
matter was tried by a jury. However, reports indicate that counsel
for the employer argued that Mr. Higgenson was terminated by the
employer in an attempt to avoid paying severance. Reports also
indicate that employer's counsel argued that the employer tried
to make Mr. Higgenson's job so impossible and unpleasant that
he would quit and when that did not happen, the employer made
allegations so that it could terminate Mr. Higgenson. The large
award of punitive damages indicates that the jury apparently agreed
with the employer's arguments.
$550,000 in Punitive Damages Awarded to Employee by
In Pate Estate v. Galway-Cavendish and Harvey
(Townships)2, an Ontario judge, after being
directed by the Ontario Court of Appeal to reassess an initial
award of $25,000 for punitive damages to Mr. Pate, awarded $550,000
in punitive damages to the plaintiff.
Mr. Pate was employed as a building inspector from December 1998
to March 1999, at which time his employment was terminated by the
defendant municipality employer without notice. Mr. Pate was
advised that discrepancies had been uncovered with respect to
permit fees; the employer alleged such fees were received by Mr.
Pate and not forwarded to it. Subsequent to his termination, a
criminal trial relating to those issues was heard and he was
acquitted on all charges.
In awarding punitive damages, the trial judge condemned the
defendant municipality's conduct on a number of grounds. The
Court found that one of the defendant's officers withheld
exculpatory evidence which, if disclosed, would have avoided
criminal changes being leveled against Mr. Pate. The Court was also
critical of unfounded claims in the employer's statement of
defense respecting the employee's conduct. The Court noted that
as a result of the employer's behavior, Mr. Pate's career
as a municipal official was destroyed. The Court also found that
the employer's conduct contributed to the end of Mr. Pate's
Judicial Punishment A Possibility in Right (Wrong)
These case are striking examples of conduct that should not be
engaged in or condoned by any employer. The punitive damage award
in both Higgenson and Pate Estate eclipse prior
awards in the employment context, and the global settlements or
awards in many employment cases. They are clear warnings from the
jury system and the courts that employers who engage in or permit
highhanded, arbitrary or highly reprehensible conduct may be
Employers should ensure that they have sufficient training and
measures in place to ensure that managers and other employees do
not engage in harmful conduct in their workplaces. While many
employers have policies such as a Code of Conduct, prescribing
appropriate workplace behaviours, employers may also find it
worthwhile to take further precautionary measures to ensure that
its employees and officers do not engage in such conduct. This may
include appropriate training, and protocols for ensuring that human
resources professionals, or internal or external counsel become
involved in decisions involving the dismissal of employees. While
employers may be held to be responsible in law for the actions of
their employees and officers, adequate steps can help employers
mitigate such risks.
The recent Ontario Court of Appeal decision in Holland v. Hostopia. com confirms with authority that employment contracts signed after commencement of employment will not be binding against the employee in significant respects.
The recent British Columbia Court of Appeal decision, Steinebach v. Clean Energy Compression Corp., provides a thorough overview of how the duty to mitigate impacts the assessment of damages in wrongful dismissal cases.
There is a growing body of arbitral jurisprudence upholding summary dismissal of employees who breached workplace codes of conduct, confidentiality and privacy policies by deliberately snooping into co-worker or client records without any legitimate purpose and for reasons of their own.
Pursuant to the British Columbia Workers' Compensation Act, every employer has a duty to ensure the health and safety of its workers, which includes taking all reasonable steps to prevent or otherwise minimize workplace bullying and harassment, and eliminate or otherwise minimize workplace violence.
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