Publication
TITRE
Court of Appeal Releases Its Decision in Keays v. Honda
DATE
11 octobre 2006
EXPERTISE
On September 29, 2006, the Ontario Court of Appeal released its long-awaited decision[1] in the appeal of the trial judge's award in Keays v. Honda Canada Inc. As we reported to you in April 2005, the trial judge awarded 15 months' notice, an additional nine months' notice for bad faith damages, and $500,000 in punitive damages to an employee who was found to have been wrongfully dismissed and subjected to discriminatory and harassing behaviour. The damages award was one of the stiffest penalties ever imposed in an employment law case in Canada. Although the Court reduced the punitive damages award to $100,000, and also reduced the costs awarded, it affirmed the remainder of the trial judge's decision. The Court's decision sends a strong message to employers that they should act cautiously when dealing with vulnerable employees, particularly those who are disabled.
THE FACTS
Kevin Keays worked as an associate in the Quality Engineering Department at Honda. After several years of exemplary employment, Keays began experiencing problems with his health which resulted in intermittent absences from work. These absences were described as disruptive to Honda because of its "lean" operations. When Keays' health further deteriorated, he left work and received short-term and long-term disability benefits for a period of approximately two years. Keays was diagnosed as having chronic fatigue syndrome.
Upon his return to work, Keays' absences continued. As a result of these absences, Keays was "coached" by way of written report, which was the first step in Honda's attendance management program. Keays' absences continued to be scrutinized and Honda imposed a requirement on Keays to submit a medical note to validate every absence, although employees suffering from "mainstream" illnesses were not subject to a similar requirement. Eventually, Honda came to doubt the legitimacy of Keays' disability and requested that Keays meet with its occupational medicine specialist for an assessment. When Keays refused to attend such a meeting until he received clarification of the purpose, methodology and parameters of the assessment to be conducted, Honda accused him of insubordination and terminated his employment after 14 years' service. Keays sued for wrongful dismissal.
The trial judge held that Honda had acted "unreasonably" when it directed Keays to see its occupational medicine specialist and had engaged in a "planned and deliberate" attempt to terminate Keays. According to the trial judge, Honda's treatment of Keays constituted discrimination and harassment in employment contrary to the Ontario Human Rights Code, which constituted an independent actionable wrong. In light of what it characterized as bad faith, outrageous and high-handed behaviour on the part of Honda, the trial judge awarded Keays 15 months' pay in lieu of notice and an additional 9 months' pay as a result of the "bad faith" manner of the termination. Concluding that Keays had experienced discrimination and harassment by Honda, the trial judge also awarded $500,000 in punitive damages. According to the trial judge, this amount was necessary in order to deter and denounce Honda's conduct.
The trial judge also ordered Honda to pay Keays over $600,000 for legal costs associated with the litigation. Honda appealed these decisions.
THE COURT OF APPEAL'S DECISION
The Court unanimously affirmed the trial judge's ruling that Honda did not have just cause to dismiss Keays. Noting that the accommodation process must "display more open-mindedness and less prejudgment if disabled employees are to be accorded the dignity and equality to which they are entitled," the Court held that Honda had acted unreasonably when it ordered Keays to attend a meeting with the occupational medicine specialist without clarifying the purpose of the meeting. The Court upheld the notice period awarded by the trial judge, including the extended notice awarded on account of Honda's bad faith conduct, which totalled 24 months.
The Court also upheld the trial judge's finding that Honda's breach of the Ontario Human Rights Code constituted an independent actionable wrong. Although it was appropriate to award punitive damages in the circumstances, the majority of the Court held that the trial judge relied on findings of fact that were not supported by the evidence. The facts did not support the finding of "a protracted corporate conspiracy" because Honda had accommodated Keays' increasingly more serious disability over several years, contrary to the trial judge's conclusion that Honda had engaged in malicious or outrageous conduct for up to five years. Further, Honda had not "r[u]n amok as a result of their blind insistence on production 'efficiency' at the expense of their obligation to provide a long-time employee with reasonable accommodation." Recognizing that punitive damage awards in other wrongful dismissal cases had been far more modest than the trial judge's award and had rarely exceeded $75,000, the majority of the Court reduced the punitive damages awarded against Honda to $100,000. In the majority's view, the punitive damages awarded by the trial judge did not accord with the fundamental principle of proportionality.
Justice Goudge dissented in part, disagreeing with the majority on the quantum of the punitive damages. According to Justice Goudge, it was reasonable for the trial judge to see the need for deterrence as significant, since employers must "take seriously their responsibilities in accommodating employees with disabilities." On this basis, Justice Goudge would not have interfered with the punitive damages awarded by the trial judge.
Honda has indicated that it may seek leave to appeal the Court's decision to the Supreme Court of Canada.
MESSAGE FOR EMPLOYERS
Although the Court reduced the punitive damages awarded by the trial judge to $100,000, that quantum remains one of the largest punitive damages awards in an employment law case in Canada. The Court's decision suggests, however, that such an award will only be appropriate in cases in which employers have engaged in egregious misconduct over a protracted period of time.
Perhaps even more significant than the quantum of damages awarded, are the comments made by the Court, particularly Justice Goudge, regarding the importance of employers treating vulnerable employees with dignity and equality. A strong message has been sent that employers' conduct will be scrutinized by the courts. In light of the Court's comments, employers may wish to re-evaluate their attendance management programs and consider the extent to which their programs could be misperceived by third parties as arbitrary or draconian. The interplay between attendance management and accommodation of disabilities has reached a new level and if employers "get it wrong" they can expect to face significant liability.
[1]. Keays v. Honda Canada Inc., 2006 CanLII 33191 (ON C.A.)
The purpose of this document is to provide information as to developments in the law. It does not contain a full analysis of the law nor does it constitute an opinion of Ogilvy Renault LLP or any member of the firm on the points of law discussed.
For further information, please contact one of the following lawyers:
David J. (416) 216-3907
dbannon@ogilvyrenault.com
Richard J. (416) 216-1867
rcharney@ogilvyrenault.com
Sarah Crossley (416) 216-4782
scrossley@ogilvyrenault.com
Daphne Fedoruk (613) 780-1540
dfedoruk@ogilvyrenault.com
Anne K. Gallop (416) 216-4038
agallop@ogilvyrenault.com
Mary J. Gleason (613) 780-8635
mgleason@ogilvyrenault.com
Christina Grivakis (416) 216-3948
cgrivakis@ogilvyrenault.com
Michael F. Horvat (416) 216-3999
mhorvat@ogilvyrenault.com
Charles E. Hurdon (613) 780-8653
churdon@ogilvyrenault.com
John Mastoras (416) 216-3905
jmastoras@ogilvyrenault.com
Daniel R. McDonald (416) 216-2965
dmcdonald@ogilvyrenault.com
Michael G. McFadden (416) 216-3973
mmcfadden@ogilvyrenault.com
Dan G. Palayew (613) 780-8637
dpalayew@ogilvyrenault.com
Darren S. Power (613) 780-8663
dpower@ogilvyrenault.com
Yusra Siddiquee (416) 216-4062
ysiddiquee@ogilvyrenault.com
Michael Torrance (416) 216-1908
mtorrance@ogilvyrenault.com
J. David Vincent (416) 216-1859
dvincent@ogilvyrenault.com
John B. West (416) 216-3976
jwest@ogilvyrenault.com
Jordan D. Winch (416) 216-4788
jwinch@ogilvyrenault.com
Russel W. Zinn (613) 780-8672
rzinn@ogilvyrenault.com
© Ogilvy Renault LLP 2006 - All Rights Reserved
Personnes-ressources
David J. Bannon
Toronto
416.216.3907
dbannon@ogilvyrenault.com
Profil
Richard J. Charney
Toronto
416.216.1867
rcharney@ogilvyrenault.com
Profil
Sarah C. Crossley
Toronto
416.216.4782
scrossley@ogilvyrenault.com
Profil
Daphne Fedoruk
Ottawa
613.780.1540
dfedoruk@ogilvyrenault.com
Profil
Anne K. Gallop
Toronto
416.216.4038
agallop@ogilvyrenault.com
Profil
Mary J. Gleason
Ottawa
613.780.8635
mgleason@ogilvyrenault.com
Profil
Michael F. Horvat
Toronto
416.216.3999
mhorvat@ogilvyrenault.com
Profil
Charles E. Hurdon
Ottawa
613.780.8653
churdon@ogilvyrenault.com
Profil
John Mastoras
Toronto
416.216.3905
jmastoras@ogilvyrenault.com
Profil
Daniel R. McDonald
Toronto
416.216.2965
dmcdonald@ogilvyrenault.com
Profil
Darren S. Power
Ottawa
613.780.8663
dpower@ogilvyrenault.com
Profil
Yusra Siddiquee
Toronto
416.216.4062
ysiddiquee@ogilvyrenault.com
Profil
Michael Torrance
Toronto
416.216.1908
mtorrance@ogilvyrenault.com
Profil
J. David Vincent
Toronto
416.216.1859
dvincent@ogilvyrenault.com
Profil
John B. West
Toronto
416.216.3976
jwest@ogilvyrenault.com
Profil
Jordan Winch
Toronto
416.216.4788
jwinch@ogilvyrenault.com
Profil
