Morison v Ergo-Industrial Seating Systems Inc., 2016 ONSC 6725 (CanLII)
In Morrison, the employee was dismissed after 8 years’ service. He was a 58-year old regional sales manager, earning approximately $210,000 per year. In the first few years he was a “contractor,” but the Court concluded that he was a dependent contractor and as such entitled to reasonable notice (McKee v. Reid’s Heritage Homes Ltd., 2009 ONCA 916 (CanLII), 315 D.L.R. (4th) 129). The employer offered 5 months notice (including 1 month working notice). The employer (unwisely, as it turned out) alleged cause for the termination.
The Court found that he was entitled to 12 months’ notice, less mitigation. The Court did not agree that he had failed to mitigate by accepting a much lower paying position after a 6 week job search.
The Court dismissed his claim for (compensatory) aggravated damages. There was “insufficient evidence of actual damages resulting from the manner of dismissal. The plaintiff’s evidence on this point was extremely limited and really had more to do with the ordinary pain, distress, and financial stress associated with losing a job, rather than that which might result from the manner of dismissal. Otherwise, the claim was made out” (Para. 31). The Court was “not concerned with the lack of a medical report (on which time was spent during closing arguments), but rather with the lack of convincing evidence of mental distress on which I could properly assess damages resulting from the manner of dismissal” (Para. 45).
However, the Court awarded punitive damages. The Court cited, among others, the Ontario Court of Appeal’s decision in Boucher v. Wal-Mart Canada Corp., 2014 ONCA 419, at Para. 78–92, three basic requirements need to be established by the plaintiff:
“1) That the defendant’s conduct is reprehensible, “malicious, oppressive and high-handed”, and “a marked departure from ordinary standards of decent behaviour”.
2) That a punitive damages award, when added to any compensatory award, is rationally required to punish the defendant and to meet the objectives of retribution, deterrence, and denunciation.
3) That the defendant committed an actionable wrong independent of the underlying claim for damages for breach of contract (in this case, something other than breach of the implied notice provision). A breach of the defendant’s duty of good faith and fair dealings would constitute an independent actionable wrong.”
The Court concluded that the employer’s conduct met the test in Boucher:
“[53] I find the facts of this case particularly troubling. Not only did the defendant assert cause when there was no reasonable basis for such an assertion, the defendant delayed in providing the plaintiff his record of employment, and significantly delayed in paying amounts owing under the Employment Standards Act, 2000, until June 15, 2015. This had a significant financial impact on the plaintiff and the employer had knowledge of the plaintiff’s financial circumstances. Moreover, the allegations of cause, made with no reasonable basis, were made for tactical and financial gain considerations.”
The Court awarded $50,000.