Courts’ Intolerance for Employers’ Post-Termination Behavior
A recent Ontario Superior Court decision reminds employers that they can be held liable for damages resulting from their conduct following termination of an employee. For instance, the Courts may award aggravated or moral damages and punitive damages against an employer
where the Courts find the employer’s conduct to be “unfair or is in bad faith by being, for example, untruthful misleading or unduly insensitive”, as held in Honda Canada Inc, v Keays, 2008 SCC 39,  2 S.C.R. 362. This conduct must have taken place during the employee’s termination.
In Wyllie v Larche, 2015 ONSC 4747, the Courts stated the reason for awarding punitive damages against the Defendant employer was to “punish and denunciate inappropriate or unfair conduct”. In particular, the Courts have awarded punitive damages against employers who have failed to abide by legislation, in particular the Alberta Employment Standards Code and Canada Labor Code.
For instance, in Wyllie, punitive damages were awarded against the employer for failing to comply with the Canada Labour Code, R.S.C, 1985. Additionally, in Nelson v 977372 Ontario Inc., 2013 CanLII 41983, the Plaintiff employee was awarded punitive damages as a result of the employer’s blatant disregard for the Employment Standards Act [ESA], when they refused to pay the employee his vacation pay and last week of pay, despite legislation stating they were to do so. Lastly, in Fogelman v IFG, 2021 ONSC 4042, punitive damages were awarded against the employer, when they failed to provide the employee with his minimum entitlements under the ESA, even after the employee’s lawyer proposed to settle the matter pursuant to the ESA. Fogelman, went on to say that, the Courts owe a greater duty to protect employers’ entitlements, during “harsh economic times”. In other words, when the economy is not doing well, as is the current state of Alberta’s economy, due to the COVID-19 pandemic, employers owe a greater duty to abide by legislation that protects employees.
It is evident that the Courts have little to no tolerance, when it comes to employers acting contrary to legislation that protect employees. This applies to conduct both leading up to and following termination. Therefore, there does not need to be an employer-employee relationship, in awarding damages against an employer, especially in today’s economic climate.
Author: Justin Kwon