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Colleen Butler, LLB

Colleen's paper was presented May 9, 2019 as part of the education program at the Ontario Bar Association's 17th Annual Current Issues in Employment Law, considered a comprehensive program helping professionals stay current in the field.

Dealing with "General Damages"

In addition to claiming reasonable notice, there are several claims for damages a plaintiff can seek in a wrongful dismissal case. This section of the paper will focus on the recent case law as it relates to aggravated/moral damages, punitive damages, damages for breaches of the Human Rights Code and damages for the intentional infliction of mental suffering.

The Court of Appeal has recently confirmed that there is no free-standing common law tort of harassment in Ontario and thus no damages can be awarded on this basis alone[1]. Damages related to harassment in the workplace can be awarded upon establishing the tort of intentional infliction of mental suffering or if the impugned conduct warrants an award of punitive and/or aggravated/moral damages.

[1] Merrifeld v. Canada (Attorney General) 2019 ONCA 205 (CanLII)

Aggravated / Moral Damages

Aggravated damages, also known as moral damages, can be awarded where the manner of dismissal causes mental distress beyond what is normally expected when an employee is terminated. An employer owes the employee a duty of good faith and fair dealing in the course of dismissal of an employee. Damages can arise where the employer breaches this implied contractual obligation of good faith by engaging in conduct that is “unfair or is in bad faith by being, for example, untruthful, misleading or unduly sensitive”.[1] The conduct that can result in moral damages is not limited to the moment of dismissal and can include pre and post-termination conduct so long as it is a component of the manner of dismissal.[2] Moral damages are compensatory as they relate to foreseeable damages that compensate an employee for injury or harm suffered by an employer’s conduct. The compensatory nature of these damages make them distinct from an award for punitive damages, which seek to punish the employer for its conduct.[3]

[1] Strudwick v. Applied Consumer & Clinical Evaluations Inc 2016 ONCA 520 (CanLII), quoting Keays v. Honda Canada Inc. [2008] 2 S.C.R. 362

[2] Doyle v. Zochem Inc. 2017 ONCA 130 (CanLII)

[3] Galea v. Wal-Mart 2017 ONSC 245 (CanLII)

Courts will assess the following types of behaviour when determining whether the manner of dismissal warrants moral damages (this list is not exhaustive):

1. Employer attacks employee’s reputation by making declarations at the time of dismissal;

2. Employer misrepresents the reasons for dismissal;

3. Dismissal is meant to deprive the employee of a pension or other benefit or right.

Examples of employer conduct that has recently resulted in moral damages being awarded:

Employer told employees to ‘dig up dirt’ to discredit the plaintiff and justify her termination while telling the plaintiff her job was not in jeopardy, employer was extremely insensitive in its handling of the plaintiff’s sexual harassment complaint, which included pressuring the plaintiff to abandon her complaint as it would harm the reputation of the respondent and the termination was cold and brusque – plaintiff was told “we don’t need you here anymore”. Moral Damages awarded: $60,000[1]

Employer reassigned plaintiff from a senior level role to a role of little substance, plaintiff made to suffer repeated humiliation about the minimized role, employer misled plaintiff by promising her advancement opportunities but downgraded her rating without plaintiff’s knowledge and did not assist her in finding other opportunities, ceased payment of base salary and medical coverage without notice and engaged in delay tactics and late document disclosure during litigation. Moral Damages awarded: $200,000 for pre-termination conduct and $50,000 for post-termination conduct[2]

Employer told plaintiff it would look into the plaintiff’s harassment complaints in the new year and instead terminated the plaintiff by leaving a letter in her back door during the Christmas holidays. Court found the manner of termination to be “beyond cold and brusque” and was cowardly. Moral Damages awarded: $20,000[3]

Employer’s conduct in dismissal of plaintiff was unduly insensitive when it hired a manager knowing that the new hire had been previously terminated for sexually harassing the plaintiff. Moral Damages awarded: $100,000[4]

Employer attacked plaintiff’s reputation by issuing a misleading statement to the press about the reasons for termination, had police present during the termination meeting and misled and ambushed him at the termination meeting. Moral Damages awarded: $100,000[5]

The plaintiff was harassed and publicly denigrated and humiliated by his supervisor. Moral Damages awarded: $10,000[6]

Employer failed to investigate a complaint of harassment, was aware of plaintiff’s heightened frustration and anxiety as the work environment became more toxic and was terminated after making a complaint. Moral Damages awarded: $50,000[7]

Employer accused plaintiff of fraud, terminated him for cause and threatened him not to make a claim. Employer then brought a counter-claim against the plaintiff for $1.7 million in damages, which was found by the court to be a tactic to intimidate the plaintiff. Moral Damages awarded: $25,000[8]

There remains some confusion in the law about whether medical evidence is required to prove mental distress. The 2018 decision in Galea v. Wal-Mart canvassed the law on the evidence required to prove mental distress. The court held that “it would appear that the state of the law in Ontario does not require a plaintiff to lead medical evidence to make out a case for damages for mental distress in an employment context. The claim for aggravated or moral damages should be available to a claimant on all of the evidence given, including the subjective evidence of the plaintiff, provided that all other elements under the case law are met”. However, the court in Hampton Securities v. Dean (2018 decision) dismissed the plaintiff’s claim for moral damages in part because the plaintiff had not sought medical attention, professional assistance or undergone any form of therapy for her mental distress[9]. The majority of the decisions appear to support the reasoning in Galea that medical evidence is not required to support an award of moral damages. However, this is an area of law that would benefit from some clarity at the appellate level.

[1] Doyle v. Zochem 2017 ONCA 130 (CanLII)

[2] Galea v. Wal-Mart 2017 ONSC 245 (CanLII)

[3] Horner v. 897469 Ontario Inc. 2018 ONSC 121 (CanLII)

[4] Colistro v. Tbaytel 2019 ONCA 197 (CanLii)

[5] Johnston v. The Corporation of the Mnicipality of Arran-Elderslie 2018 ONSC 7616 (CanLII)

[6] West v. Mex Precision Wire Corporation 2018 ONSC 6572 (CanLII)

[7] Bassanese v. German Canadian News Company Limited et al 2019 ONSC 1343 (CanLII)

[8] Ruston v. Keddco MFG. (2011) Ltd. 2019 ONCA 125 (CanLII)

[9] Hampton Securities v. Dean 2018 ONSC 101 (CanLII)

Punitive Damages

In fixing punitive damages the court focuses on punishing the defendant’s wrongful acts that are so egregious that they are deserving of punishment on their own.

The Ontario Court of Appeal in McCabe v. Roman Catholic Episcopal Corporation[1] recently outlined the following basic principles for punitive damages:

1. Punitive damages are meant to punish the wrongful acts that are so malicious and outrageous that they are deserving of punishment on their own;

2. An “independent actionable wrong” is required;

3. An actionable wrong does not require an independent tort – ie a breach of a contractual duty of good faith can qualify as an independent wrong;

4. Awarded when the impugned conduct offends the ordinary standards of morality or decent conduct;

5. Factors such as power imbalance and vulnerability of the wronged party are to be considered; and

6. Punitive damages are the exception rather than the norm.

In the employment context, the employer’s breach of its implied duty of good faith is typically the independent wrong that is assessed when determining whether punitive damages are warranted. Punitive damages must be proportionate to other damages granted, rational to the facts, and appropriate to meet the objectives of denunciation and deterrence[2]. The courts must also consider whether the quantum of punitive damages results in double compensation to the plaintiff. The Court of Appeal in Strudwick clarified that the court can rely on the same conduct in awarding moral and punitive damages. The court held that “the same conduct often underlies the awards under both punitive and moral damages. What justifies punitive damages ultimately is the conclusion, in exceptional cases, that compensatory damages are simply insufficient to respond to the conduct being addressed”[3].

Examples where the employer’s conduct has resulted in punitive damages are:

· The employer, after demoting the plaintiff, made representations to the plaintiff about her career prospects while making decisions that detracted from or even defeated that purpose. The corporate behaviour was found to be mean. Punitive Damages awarded: $500,000[4]

Employer falsely accused the plaintiff of authorized trading and filed a Notice of Termination with the regulatory authority that was false and defamed the plaintiff. Punitive Damages awarded: $25,000[5]

Plaintiff was harassed in the workplace and the employer terminated her rather than investigate the complaint. Punitive Damages awarded: $10,000[6]

Employer attacked the plaintiff’s reputation by issuing a misleading statement to the press about the reasons for termination, had police present during the termination meeting and misled and ambushed him at the termination meeting. Punitive Damages awarded: $200,000[7]

Employer threatened the plaintiff with a counterclaim if the plaintiff sued for damages and proceeded with a counterclaim alleging fraud. The employer, partway through the trial, reduced the damages claim from $1.7 million to $1. The court found that the employer did not appear to have any intention of proving damages but rather used the $1.7 million claim to strategically intimidate the plaintiff. Punitive Damages awarded: $100,000[8]

[1]2019 ONCA 213 (CanLII)

[2] Galea v. Wal-Mart 2017 ONSC 245 (CanLII)

[3] Strudwick v. Applied Consumer & Clinical Evaluations Inc 2016 ONCA 520 (CanLII)

[4] Galea v. Wal-Mart 2017 ONSC 245 (CanLII)

[5] Hampton Securities v. Dean 2018 ONSC 101 (CanLII)

[6] West v. Mex Precision Wire Corporation 2018 ONSC 6572 (CanLII)

[7] Johnston v. The Corporation of the Mnicipality of Arran-Elderslie 2018 ONSC 7616 (CanLII)

[8] Ruston v. Keddco MFG. (2011) Ltd. 2019 ONCA 125 (CanLII)

Damages For Breaches of the Human Rights Code

Pursuant to s.46.1(1) of the Code, damages may be awarded to a plaintiff in a civil proceeding where his/her rights have been infringed under the Human Rights Code for loss arising out of the infringement, including compensation and/or restitution for injury to dignity, feelings and self-respect.

Compensation awarded for violations of the Code are remedial and not punitive. Such damages have been described by the courts to be “compensation for the loss of the right to be free from discrimination and the experience of victimization”[2]. Damages awarded for violations of the Code are separate from and do not overlap with moral/aggravated damages. Accordingly, a court will not deduct Code damages from moral damages[3].

In assessing general damages, the courts will consider a number of factors, including the humiliation suffered, hurt feelings, the loss of self-respect, dignity and confidence of the plaintiff, the experience of victimization, the vulnerability of the plaintiff and the seriousness of the offensive treatment. There is no ceiling on awards of damages under the Code and the quantum should not be set too low that it would effectively trivialize the social importance of the Code.

[1] Ruston v. Keddco MFG. (2011) Ltd. 2019 ONCA 125 (CanLII)

[2] Strudwick v. Applied Consumer & Clinical Evaluations Inc 2016 ONCA 520 (CanLII)

[3] Doyle v. Zochem 2017 ONCA 130 (CanLII)

Intentional Infliction of Mental Suffering (IIMS)

The tort of IIMS is an intentional tort and requires the employee to prove that the employer intended to cause the kind of harm that occurred or knew that harm was substantially certain to follow from the employer’s decision or conduct.

There are three elements to this tort:

1. Flagrant or outrageous conduct;

2. Calculated to produce harm; and

3. Resulting in a visible and provable illness.[1]

The first and third branches of the test are objective. The second branch is subjective. The plaintiff must prove that the defendant desired to produce the kind of harm that was suffered, the extent of the harm need not be anticipated.[2] For example, it is sufficient to establish that the defendant intended to cause psychological injury/harm and the plaintiff need not demonstrate that the defendant knew it would cause a specific diagnosis.

It is a high threshold to prove the second branch of this test as it requires evidence that the employer intended to cause harm. The recent cases demonstrate that evidence supporting an award of moral and punitive damages will not necessarily be sufficient to support a finding of IIMS. An employer who callously terminated an employee by leaving a letter at her back door over the Christmas holidays was ordered to pay $20,000 in moral damages and $10,000 in punitive damages but dismissed the claim for damages for IIMS. The court was not satisfied that the employer’s conduct was calculated to produce harm[3]. An employer’s decision to hire a manager knowing that the new manager had previously sexually harassed an employee also did not meet the evidentiary burden of conduct intended to produce harm. The court found that the employer’s conduct was flagrant and outrageous, however, the intentional element to cause harm was not proven.[4]

If the tort of IIMS is established, damages are assessed in the same manner that damages are assessed in personal injury claims. An individual can recover pecuniary losses, including medical expenses, and non-pecuniary losses, including pain and suffering and loss of amenities of life.[5]

[1] Colistro v. Tbaytel 2019 ONCA 197 (CanLii)

[2] Colistro v. Tbaytel 2019 ONCA 197 (CanLii)