We use cookies to give you the best online experience. By using our website you agree to our use of cookies in accordance with our cookie policy. Learn more here.Close Me
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
employment context.
$572,000 in Punitive Damages Awarded to Employee by
Jury
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
compensatory damages.
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
Judge
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
marriage.
Judicial Punishment A Possibility in Right (Wrong)
Circumstances
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
punished.
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 content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The recent Superior Court decision of McCready v. De Dwa Dehs Nyes provides interesting observations about the rights of independent contractors upon termination.
The Federal Court of Appeal recently weighed in to reconcile competing tests on the proper way to determine whether an individual is a contractor or truly an employee.
Some organizations subscribe to the close your eyes and think good thoughts school of drafting, when it comes to non-competition agreements in employment contracts.
A British Columbia arbitrator has denied an application by the United Steelworkers for an interim injunction that would prohibit Teck Coal from performing random drug and alcohol tests at several coal mines until the union’s grievance of that policy could be addressed.
Employment, Labour and Immigration Law in Canada - Chris Andree 
