In wrongful dismissal cases in Canada, punitive damages awards are available only in exceptional situations. That’s what the Supreme Court of Canada said in 2008 in Honda Canada v. Keays. The employer’s conduct in the course of termination must be proven to be harsh, vindictive, reprehensible, and malicious. Despite this high threshold, a number of recent trial decisions show how Canadian courts are becoming more open to providing employees with punitive damages awards. read more…
As we reported in an article last year, courts across the country are generally following the Supreme Court of Canada’s decision in Keays v. Honda Canada: Punitive damages should be awarded only in exceptional cases, and moral damages should be limited to actual losses resulting from the employer’s conduct. That has left Canadian courts assessing employees’ actual losses. But the result can be a double-edged sword. Other damages may flow â€“ as was the case when the British Columbia Court of Appeal ruled in Marchen v. Dams Ford Lincoln Sales Ltd. that an apprentice who was wrongfully dismissed was entitled to $25,000 for loss of his apprenticeship.
In November 2002, Dams Ford Lincoln Sales Ltd. (Dams) entered into an apprenticeship agreement with a Mr. Marchen. Under the agreement, Marchen was to work and take courses to become a qualified automobile collision repair journeyman. In exchange, Dams was to provide adequate training, so far as the facilities and the scope of the business would permit. The training program was expected to take approximately four years. Dams wasn’t required to keep Marchen employed for the entire period but only so long as work was available.
Keays vs. Honda One Year Later: Have Canadian Courts Changed Their Approach to Punitive and Bad Faith Damages?
It has been just over a year since the Supreme Court of Canada (SCC) issued its decision in Keays v. Honda Canada Inc. (Read our analysis of the court’s decision in that case). That decision mandated a change in Canadian courts’ approach to awarding damages in employment cases. Damages for bad faith conduct by the employer (Wallace damages) and punitive damages were to be awarded only in exceptional circumstances.
So just what have Canadian courts been doing since? Has their approach to such damages really changed? A review of the decisions in the past year suggests they have.