In Lloyd v. Imperial Parking Ltd, the Court held that
"[a] fundamental implied term of any employment relationship
is that the employer will treat the employee with civility,
decency, respect and dignity."1 The exact standard
that the employer must adhere to depends on the particular work
environment. If that standard is breached, the employee can make a
claim for damages.
In order for a claim for mental distress to succeed, there must
be evidence of some actionable wrong apart from the issue of the
notice of termination.2 Mental distress must be the
effect of a breach of contract, such as the manner of dismissal or
the failure to give proper notice — it is not the dismissal
In Wallace, the Supreme Court of Canada held that
"damages for mental distress are recoverable if the claim...
arises from the dismissal and not from some conduct or
circumstances which occurred prior to, or after the
dismissal."3 An award for punitive damages may be
granted if the employer's conduct was harsh, vindictive,
malicious, or reprehensible toward that employee.4
The Court also held that the reasonable notice period could be
extended if the employer engaged in bad faith conduct in
the relation to the termination. However, the Supreme Court of
Canada overruled the Wallace decision in Keays v. Honda Canada
Inc.5 In Keays, the Court held that an
employer's bad faith or misconduct should be considered under
other heads of damage, such as aggravated or punitive damages
and/or mental distress.
Intentional Inflection of Mental Suffering
There are three elements to the tort of intentional
infliction of mental distress:
Flagrant or outrageous conduct;
Calculated to produce harm; and
Resulting in a visible and provable
The operative feature of this tort is intent. This tort
most commonly arises in cases where there is psychological
harassment or bullying in the workplace.
NOTE: Not every allegation of just cause that is not successful
at trial will result in a Wallace increment of damages. So
long as an employer has a reasonable basis on which to believe it
can dismiss an employee for cause, the employer has the right to
take that position without fear that failure to succeed on the
point will automatically expose it to a finding of bad faith.
Negligent Infliction of Mental Distress
In the recent case of Pieresferreira v. Ayotte, the
Court of Appeal concluded that this particular tort is no
longer available in the employment context. The decision was
based on public policy, and the way in which the continued
recognition of this tort allowed a "considerable intrusion by
the courts into the workplace."7
Damages for Inducement
Inducement occurs when an employer or its agent, convinces or
entices a person employed elsewhere, to leave their secure
employment and become an employee of their business; shortly after
the employee transitions into the new position, the employee is
This tort arises in cases where there is evidence to establish
enticement, or that the employee gave up another job, his/her own
company and business contacts, or a secure source of remuneration
in order to join a new company. The inducement must go beyond an
ordinary degree of persuasion. An employee who willingly leaves a
secure job in order to pursue a new opportunity is not necessarily
induced to do so.8
In the employment law context, contributory negligence may be
framed as a consideration of whether or not the terminated employee
has mitigated their damages.
A plaintiff claiming wrongful dismissal must take all reasonable
steps to mitigate the loss to themself and cannot recover damages
for any such losses that could have been avoided, but has failed
through unreasonable action or inaction, to avoid. Where the
plaintiff does not take steps to mitigate the loss, and these steps
are successful, the defendant is entitled to the benefit of
accruing from the plaintiff's action, and is liable only for
the loss as lessened.
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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