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Employment Law — Aggravated Damages and Bad Faith

Posted by wjadmin — filed in Employment Law

Although the Honda Canada Inc. v. Keays 2008 SCC 39 decision is not a recent decision at the time of posting this comment, it is a still an extremely important one.  Employment lawyers get asked all the time about aggravated damages and bad faith conduct by employers when employees are terminated.  The previous leading case, the Wallace decision of 1997, had  evolved over time.  The SCC revisited the principles and clarified that decision in the Honda decision.

The Court affirmed the long standing principles of what constitutes reasonable notice of termination, courts should consider the character of the lost employment, the employee’s length of service, the age of the employee, and the availability of similar employment having regard to the experience, training and qualifications of the employee.

Generally, damages are not available for the actual loss of a job or for pain and distress as a consequence of being terminated.  Nevertheless, damages resulting from the manner of dismissal will be available where the employer engages in conduct during the course of dismissal that is “unfair or is in bad faith by being, for example, untruthful, misleading or unduly insensitive”.  These damnages should be awarded through an award that reflects actual damages rather than by extending the notice period.

It went on to clarify aggravated and puntive damages in the employment law context.  Specifically, it stated that a breach of human right legislation could constitute an actionable wrong leading to puntive damages.

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