Hefty damages for pain, suffering after job loss make jump from TV to real life

By Howard Levitt and Gregory Sills

Employers now must walk a tightrope where inadvertent minor improprieties expose them to significant additional penalties

Television dramas would have one believe that “damages for pain and suffering” are commonly awarded by courts. Until recently, that sentiment would have been misleading, certainly in employment law.

Historically, awards beyond severance were exceedingly rare in wrongful dismissal cases. This is no longer true as Canadian courts are placing an increasing emphasis on an individual’s hurt feelings when losing their job, even when the termination is “without cause” — the vanilla of terminations in the employment world.

Take, for example, the recent decision in Teljeur vs. Aurora Hotel Group, where an Ontario court awarded the terminated employee $15,000 in additional damages because the employer did not provide written notice of termination or pay the minimums under the ESA or outstanding expenses quickly enough. The employee did not have to produce medical evidence of mental distress contrary to most earlier judgements.

Similarly, in Moffatt vs. Prospera Credit Union, a British Columbia court awarded an additional two-and-a-half months’ salary to an employee because the employer accidentally miscalculated amounts owed in the termination letter. Additional damages were awarded in spite of the fact that the error was corrected the moment it was brought to the employer’s attention.

In Russell vs. the Brick LP, the employer was required to pay an additional $25,000 in damages for failing to explain the terminated employee’s rights under the Employment Standards Act in the dismissal letter. A similar rationale was applied in Morrison vs. Ergo-Industrial Seating Systems Inc., where another $25,000 was awarded to the terminated employee who was also not expressly advised of those rights.

Employers now must walk a tightrope where inadvertent minor improprieties expose them to significant additional penalties.

Increasingly, employers are facing situations where dismissed employees makes farcical claims that they have suffered extreme mental anguish as a result of the way in which their employment came to an end, often because they “only” received what their contract entitled them to. Invariably, many of these employees claim to be the victims of workplace harassment, often because their supervisor requested that they actually do their job. One firm appears to plead ageism or racism in every single employment claim, alleging their clients were fired for being too old if older and too young if not.

Up until now, it has been our practice to advise clients that the vast majority of such claims are without merit, not warranting serious consideration, likely included as only a negotiating tactic or to justify general damages at a mediation. But given the recent trend of the courts, employers generally should proceed with more caution, as should we.

Unfortunately, we anticipate that we are far from the point at which the pendulum swings back to where awards of additional damages are predicated on something more than hurt feelings and entitled attitudes. Though we anticipate that the hyper-sensitive employee will continue to benefit for the foreseeable future, reason will ultimately triumph.

For now, the writing on the wall is this: employers are held to a higher standard than employees throughout the termination process. Employers, when making changes to the workforce, should follow the age-old carpenter’s adage: measure twice and cut once.

That means that before acting on any decision to let employees go, companies and their counsel should know and ensure compliance with all legal requirements at a granular level, as they apply to each employee independently. This includes ensuring that potential complicating issues are identified at the outset. Glossing over specifics before the termination can (and will) open the door to increased liability after the fact.