Canada: BC Court Of Appeal Overturns Trial Judge's Aggravating Aggravated Damages Award

Last Updated: August 2 2017
Article by Michael MacLellan

We can virtually guarantee you that a plaintiff's wrongful dismissal claim WILL allege that the employee is entitled to aggravated damages.  That is not surprising.  What is surprising is when a Court actually awards aggravated damages, as was initially the case in Lau v. Royal Bank of Canada, 2017 BCCA 253.  Fortunately, in a recent decision issued by British Columbia's Court of Appeal, the trial judge's decision was overturned, and the state of the world once again resembled normal.

Marco Lau was employed by RBC as a customer service representative starting in 2007.  He became an account manager in 2010, and in 2011 became sponsored by RBC to sell mutual funds, making him subject to certain compliance rules.  In early 2012 a client complained to RBC about Mr. Lau, and it was determined by the bank's investigation services that he was tracking sales incorrectly.  Further steps were taken by the employer, who ultimately decided to terminate Mr. Lau for just cause, at least in part due to "falsification of bank records and failing to tell the truth when questioned".  Upon termination the employer offered Mr. Lau the services of an employee assistance program, including career counselling, which he declined.

The trial judge decided on the basis of the evidence before her that the bank did not have just cause to terminate Mr. Lau's employment, and awarded him wrongful dismissal damages equal to nine months' pay, or $31,125.00.  The trial judge then additionally awarded Mr. Lau $30,000.00 in aggravated damages based on her findings of the manner of dismissal.

In cases such as the Supreme Court of Canada's decision in Wallace v. United Grain Growers Limited, [1997] 3 S.C.R. 701, courts have said that:

... in the course of dismissal employers ought to be candid, reasonable, honest and forthright with their employees and should refrain from engaging in conduct that is unfair or is in bad faith by being, for example, untruthful, misleading or unduly sensitive.

The Court of Appeal in the instant case gave examples of cases where aggravated damages would be appropriate, including attaching the employee's reputation by declarations made at the time of dismissal, misrepresenting the reasons for dismissal, or dismissal that is intended to deprive the employee of a pension benefit of other right.

Further, the Court of Appeal reviewed the principle that an employee is not entitled to be compensated for the regular hurt feelings that accompany a termination of their employment.  To get these exceptional damages, an employee would have to show that they suffered some additional injury beyond the normal distress associated with dismissal, and that the injury was caused by the employer's manner of dismissal of associated acts.

In this case, the trial judge determined that RBC's investigation into Mr. Lau was flawed, and then went on to make some disconcerting rulings, including: "I could not help put gain the impression from the slow, quiet, and almost monotone manner in which he testified, that he is depressed", and "I do not need medical evidence to prove that a false accusation of failing to tell the truth which is published can lead to mental distress".  It is worth noting that Mr. Lau did not testify that he suffered from depression or mental distress, he did not present any medical evidence, and the trial judge was not a clinical psychologist.

Mercifully, if not obviously, the Court of Appeal overturned the trial judge's decision on the basis of aggravated damages.  It held that Mr. Lau failed to establish that he had suffered any injuries beyond those to be expected in the course of termination, and failed to establish that he suffered any injuries because of the manner of his dismissal.  In overturning the lower court's decision, the Court of Appeal re-stated a number of helpful legal principles:

  • It is not open to the court to award damages for the normal distress and bad feelings resulting from the loss of employment;
  • Aggravated damages for wrongful dismissal must reflect "actual damages", as they are intended to be compensatory; and,
  • To receive aggravated damages based on mental distress, the employee is required to show that the manner of dismissal caused injury rising beyond the normal distress and hurt feelings that arise from the fact of dismissal.

The Court of Appeal held that Mr. Lau failed to make out a case for aggravated damages, and that the trial court's decision to the contrary was unreasonable.

This is the kind of common sense decision that employers should embrace.  However, don't think that your company is necessarily immune from aggravated damages awards in the appropriate case.  Employers must conduct their terminations in good faith, and be sure not to cause any additional hardship or injury to their dismissed employees by, for example, being untruthful or unduly insensitive in the manner of dismissal.

It is always a good idea to make offers to the employee that will ease their transition out of employment with your company if you can.  Things like providing positive reference letters or letters confirming employment, offering outplacement counselling, reminding employees that they can access an employee assistance program, and of course providing adequate notice of termination in cases where you are not alleging just cause, are all factors that will help demonstrate good faith, and make it less likely to expose your company to aggravated damages awards.

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

Click to Login as an existing user or Register so you can print this article.

Michael MacLellan
Similar Articles
Relevancy Powered by MondaqAI
Roper Greyell LLP – Employment and Labour Lawyers
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Roper Greyell LLP – Employment and Labour Lawyers
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions