For example, in a recent Ontario decision, the court was asked to determine the damages owed to a former employee who executed an employment agreement that limited her severance to the minimum required by the Employment Standards Act, plus an additional two weeks’ pay.

At the time of dismissal, the employer requested that the employee sign a release in exchange for the two weeks’ pay, despite there being no requirement to do so within the employment agreement. In response, the employee informed the employer there was no such requirement. The employer quickly realized its error, issued an apology and immediately provided the employee with the additional pay.

In awarding the employee severance beyond what she contracted for in her employment agreement, the court reasoned that the employer’s mistaken request for a release invalidated the entire agreement and its efforts to rectify the error were made entirely in vain.

Similarly, another recent court decision from B.C. considered an employer who made several inadvertent mistakes in the employee’s termination letter. The employee pointed out the error and it was corrected by the employer without delay. Despite the employer’s immediate reversal, the court concluded there was no looking back and took the highly unusual approach of awarding punitive damages against the employer, in addition to severance.

In spite of this emerging body of decisions, a B.C. court appears to have recently bucked the trend in Blomme vs. Princeton Standard Pellet Corporation.

Blomme was a former manager with two decades of service, who was initially laid off due to COVID on April 4, 2020, with an undetermined date of recall. Following the layoff, the employee was advised that a final decision to recall or terminate her employment would be made by Dec. 31, 2020.

On Oct. 1, 2020, the employee’s lawyer sent a letter correctly pointing out that the employer had made a careless and unlawful error, as it only had until Aug. 30, 2020 under the Employment Standards Act to make its election. As such the employee was deemed to have been terminated and owed severance. The employer immediately sought out legal advice, discovered that it had been entirely in the wrong, and wrote to the employee taking ownership of its illegal but innocent mistake. In doing so, the employer advised the employee that she could return to work, which she declined on the basis that she had already been wrongfully dismissed.

Despite the employer’s error being innocent, the court sided with the employee and found she had been wrongfully dismissed. As is customary, the court then went on to assess the employee’s damages, of which she was owed none. The reason being that the wrongfully dismissed employee could not come up with a credible explanation for refusing the employer’s offer. As a true display of that employer’s good-nature, it graciously decided not to seek costs against the losing party (i.e., the former employee).

There was no question the employer’s error in Blomme was contrary to the law. However, the court decided the misstep was not fatal and the employer’s good-faith conduct ultimately saved the day.

I appreciate the policy reasons for awarding damages in response to employer misconduct. However, punishing an employer for an honest mistake that can be easily remedied appears contrary to what the Supreme Court determined over three decades ago.

Indeed, continuing to punish employers’ blameless conduct disincentivizes them from correcting their errors, and in turn, incentivizes employees to take advantage in seemingly unfair circumstances.

Only time will tell if Blomme will be the first step towards a more rational approach to honest mistakes.