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Publication

TITRE

Treat Your Employees (and Ex-Employees) Well ... or It Will Cost You!

DATE

27 mars 2006

EXPERTISE

Droit de l'emploi et du travail

The following cases demonstrate an alarming upward trend in the potential liability of Canadian employers who fail to deal fairly with current and even former employees. The claims addressed in each of these cases are novel, but the price-tag imposed by the court in each case is particularly eye-opening. These cases provide a useful lesson to employers in Canada about the price they may pay if they do not ensure that their dealings with employees and former employees are fair.

COURT AWARDS $950,000 FOR NEGLIGENT INFLICTION OF MENTAL SUFFERING FOR HARASSMENT AT WORK

Sulz v. Attorney General of Canada et al, 2006 BCSC 99 (CanLII)

A former RCMP constable was awarded $950,000.00 for negligent infliction of mental suffering as a result of workplace harassment by her commanding officer. The harassment mostly took the form of rude and derogatory comments about her work performance. In February 1996, the plaintiff was diagnosed with a major depressive disorder. She stayed off work on medical leave and eventually agreed to initiate a medical discharge. By the date of trial, the plaintiff remained unable to cope with any regular employment.

To succeed in her claim for damages for negligent infliction of mental suffering, the plaintiff was required to prove that the defendants owed her a duty of care, that the duty of care was breached and that damages or injury resulted from the breach.

The court had no difficulty concluding that the plaintiff's commanding officer, the defendant Smith, owed her a duty of care. He was required to ensure that she worked in a harassment-free environment. He breached that duty of care. His frequent angry outbursts had a negative effect on the detachment generally and on the plaintiff in particular. The evidence showed that prior to her problems at work, the plaintiff was "a healthy, capable woman". Although she may have been more vulnerable to Smith's aggressive command style than others would have been, the court held that the defendants "must take their victim as they found her". Smith's actions resulted in the damages and injuries that the plaintiff suffered.

The court awarded general damages of $125,000, past and future wage loss of $825,000, for a total of $950,000. The court declined aggravated damages noting that the damages to the plaintiff's dignity and self-respect were taken into account in arriving at the general damage award. Punitive damages were also declined. The court found that the defendants' conduct was tortious but not so egregious as to call for punitive damages.

COURT AWARDS FORMER EMPLOYEE $200,000 FOR TORT OF INDUCING BREACH OF CONTRACT

Drouillard v. Cogeco Cable Inc., [2005] O.J. No. 3166 (SCJ), 2005 CanLII 26316 (ON S.C.)

The plaintiff was employed by Cogeco in the Windsor, Ontario area for about 15 years. He resigned, on good terms with his employer, in December 1999 to pursue interests in the United States. He returned to Windsor about two years later hoping to resume his former career as a cable technician, this time, working as an independent contractor. He was surprised to find that Mastec Canada, the largest employer of independent contractors in the field, would not hire him to work on Cogeco products. Cogeco held a virtual monopoly on the cable business in and around the Windsor area. After confirming that Cogeco had taken the position that it did not want him working on any of its equipment, the plaintiff filed this action for interference with economic relations.

To establish his claim, the plaintiff was required to prove that Cogeco intended to injure him, that it interfered with his business by illegal or unlawful means, and that he suffered economic loss as a result of the interference.

The court found no evidence that the plaintiff's employment by Mastec would in any way adversely affect Cogeco's business. It concluded that Cogeco's conduct was predominantly intended to injure the plaintiff. Cogeco was unable to present any evidence of reasonable cause for its demand that the plaintiff not work on any Cogeco equipment. Accordingly, the action amounted to an illegal act or one "without legal justification". Finally, the plaintiff was able to provide evidence that he had suffered an economic loss resulting from the interference.

General damages for the tort of inducing breach of contract are considered to be "at large", that is, their assessment is "a matter of impression and not addition". The court awarded $62,465.00 in general damages and $137,535.00 damages for loss of income, for a total damage award of $200,000.00.

COURT AWARDS 24 MONTHS' NOTICE AND $500,000 IN DAMAGES

Keays v. Honda Canada Inc., [2005] O.J. No. 1145 (SCJ), 2005 CanLII 8730 (ON S.C.)

The plaintiff started work for Honda in 1986. From 1996 to December 1998, the plaintiff was off work and in receipt of disability benefits. In 1998, at about the same time as he was diagnosed with chronic fatigue syndrome, his long-term disability benefits were terminated.

When his benefits were terminated, the plaintiff returned to full-time work, but continued to have attendance problems as a result of his medical condition. Honda required the plaintiff to have his physician validate each of his absences. In early 2000, Honda's occupational medicine therapist requested a meeting with the plaintiff. The plaintiff refused to meet with the specialist until the purpose of the meeting was clarified. Honda's response was to terminate the plaintiff for insubordination. The plaintiff sued for wrongful dismissal.

The trial judge found in favour of the plaintiff. He concluded that, even if the request to see Honda's physician was a reasonable order, the plaintiff had a reasonable excuse to disobey the order. The plaintiff had been "hounded" over his absences despite having a perfectly legitimate excuse and had been wrongly terminated from his LTD benefits. The court concluded that even if the plaintiff had been insubordinate, the penalty of discharge was disproportionate to the misconduct. The plaintiff had dedicated his entire working career to Honda and had done his best to identify and control his medical condition. The plaintiff had been wrongfully dismissed.

The trial judge awarded 15 months' pay in lieu of notice and additional damages for bad faith in the manner of the dismissal. There was evidence that, as a result of Honda's manner of termination, the plaintiff's condition was aggravated. Honda refused to discuss the plaintiff's concerns and continued to threaten him with termination unless he met with their medical expert. The court also found that Honda engaged in reprisal, contrary to the Ontario Human Rights Code. As a result, the trial judge extended the notice period to 24 months in total.

In addition, the court awarded $500,000 in punitive damages based, in part, on the fact that Honda's misconduct was planned and deliberate; its conduct persisted over a period of five years; it withheld pertinent evidence until the twenty-second day of trial; and it knew that the plaintiff valued his employment and was dependent on that employment for disability benefits.

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:

John B. West, National Chair (416) 216-3976
jwest@ogilvyrenault.com