An Ontario case recently awarded an employee $200,000 in punitive damages and also a further sum of $100,000 in moral or aggravated damages for emotional harm.[1]

The Facts

The case was a text book example of how not to conduct a termination. Serious allegations of wrongdoing were made against the employee without an apparent investigation as a preparatory step.

The plaintiff held the position of Chief Building Officer in a municipality.  He had started a private design company with the employer’s full consent. The trial judge had found that he was also allowed to conduct inspections on buildings which he, himself, had designed. This would, without doubt, be a conflict of interest in most cases, but here the employer had consented to this standard of conduct and hence it could not be used as grounds for just cause.

The real issue in debate was whether the plaintiff had deceived his employer by hiding his involvement on two particular buildings which he had designed and inspected.

Not only was this issue decided against the employer, the Court also was of the view that certain employees in the City had “set up” evidence to entrap the plaintiff.

The manner of termination was horrendous. The plaintiff had been asked to attend a meeting for a reason unknown to him, given a prepared termination letter and introduced to the police. He was then interrogated by the employer, and was then the subject of a misleading press release which incorrectly suggested that the plaintiff was barred from designing buildings in the local township.

Employers’ View

The employer’s conduct in this instance violated every rule of common sense. A simple neutral investigation not only would have avoided any claim for incremental damages, but likely would have avoided the termination altogether. These claims can easily be avoided by proper preparation.

Employees’ View

This case is illustrative of the significant awards of incremental damages which are becoming more and more common place where there has been significant unfair conduct by the employer.

These facts were particularly unattractive which led to the punitive and aggravated award. Punitive damages are intended to punish for reckless and malicious behaviour. This award of $200,000 is certainly towards the upper end.

Aggravated damages require an underpinning of bad faith conduct and are intended to serve as compensation for injured feelings.

In either case, an employment contract defining the severance sum will have no impact on these claims.

Get Advice and Know Your Rights

For advice on this issue and all employment law matters, contact the offices of Toronto employment lawyers Grosman Gale Fletcher Hopkins. We regularly advise workplace parties on a wide range of legal workplace issues. Contact us online or by phone at 416 364 9599 to schedule a consultation.

[1] Johnston v Municipality of Arran-Elderslie The employee was also awarded an agreed severance payment of roughly $71,000 representing 6 months salary. The latter sum was not an issue in the case.