Two recent rulings by the employment courts regarding exemplary damages have re-established the importance of fair action on the part of the employer.
The employment court has wide discretion to issue an award for damages ranging from the minimum amount of compensation offered for redundancy to the maximum of two years' wages. In the recent cases of Koulla Charalambous v LSG Handling Limited and Janet Panayides v The Junior School, two separate courts stated the most important factors they consider before granting damages over the minimum standard. These factors are:
- the amount of daily wages and the general income of an employee;
- the duration of employment;
- the employee's age;
- any contingent loss of his or her future career prospects;
- any material damage suffered by the employee;
- the parties' (the employer and the employee) general behaviour and conduct; and
- the real circumstances under which the employment has been terminated.
The burden of proof regarding the award of exemplary damages rests on the employee who must show that he or she is entitled to higher damages.
In these two cases the courts took into consideration:
- the high quality of the applicants' services during their employment;
- the fact that they often worked overtime;
- the fact that their supervisors often awarded them for the successful completion of their tasks and the high quality of their services;
- the long duration of their employment (19 and 20 years respectively);
- their age at the time of their dismissal; and
- the loss of any future career prospects.
Additionally, the courts considered as essential the circumstances under which the dismissal took place and more specifically the fact that no previous notice or warning was ever delivered to either of them concerning any inappropriate fulfilment of their duties. Based on the above and given the fact that the applicants' dismissals were illegal, the employment court awarded to both exemplary damages.
These cases highlight the importance to employers of following a structured 'good faith' approach to staff dismissals with the possible offer of ex gratia compensation to minimise the possibility of an award of aggravated damages.
For further information on this topic please contact George Z Georgiou at George Z Georgiou & Associates LLC by telephone (+357 22 763 340), fax (+357 22 763 343) or email ([email protected]).