Two recent cases suggest that juries are prepared to punish employers for improper conduct. One long-service employee was awarded over $800,000 in a wrongful dismissal case based upon bad faith conduct. Another employee was awarded over $1.4 million on the basis of workplace harassment and violence leading to constructive dismissal.
Treating employees fairly makes sense, both from a business and legal perspective. From a business perspective, negative treatment of workers can lead to reduced morale and productivity, high turnover rates and increased risk of unionization. From a legal perspective, unfair conduct can lead to constructive dismissal claims, human rights applications, occupational health and safety complaints and claims for various types of non-pecuniary damages in wrongful dismissal actions. Two recent cases indicate that juries in Canada are prepared to impose significant financial penalties on errant employers.2
Last summer, a British Columbia jury awarded over $800,000 in damages to a long-service employee whose employer alleged cause for termination of employment.
In Higginson v Babine Forest Products Ltd. and Hampton Lumber Mills Inc. ("Higginson"), the employee worked at a sawmill for 34 years prior to the termination of his employment. According to the employee, after the sawmill was sold his new employer intentionally engaged in conduct aimed at creating a hostile and "miserable" work environment, in an attempt to force the employee to resign. He did not resign and his employer ultimately terminated his employment for cause.
The employee took the position that his employer's allegations of cause for termination were simply an attempt to avoid providing him with reasonable pay in lieu of notice. In finding for the employee, the jury in this case awarded Higginson $236,000 in compensatory damages for wrongful dismissal, plus a whopping $573,000 in punitive damages.
At the time it was decided, Higginson was the highest award of punitive damages in a Canadian wrongful dismissal case, displacing Keays v Honda Canada Inc. wherein the trial court awarded the plaintiff $500,000 in punitive damages (which was subsequently reduced to $100,000 by the Ontario Court of Appeal and overturned entirely by the Supreme Court of Canada).
In the fall of 2012, the record set in Higginson was broken by an Ontario jury. In Boucher v Walmart Canada Corp. and Jason Pinnock ("Walmart"), a former Walmart employee, Meredith Boucher, was awarded over $1.4 million on the basis of workplace harassment and violence that was found to constitute constructive dismissal.
Boucher claimed that her manager engaged in belittling and demeaning behaviour for months, such as swearing at her and calling her an idiot, as well as making her count wood pallets in front of other employees to prove that she could count. She also claimed that she was punched in the arm twice by another Walmart employee (whose employment was apparently terminated on the date of the second incident).
Boucher resigned from her employment, claiming constructive dismissal caused by an abusive work environment. Her employment agreement provided that upon termination of employment without cause, Boucher would receive two weeks of pay per year of service, which would have been equal to 20 weeks' pay based upon her 10 years of service. However, Walmart actually paid her 32 weeks of termination and severance pay.
Boucher still was not satisfied. She sued Walmart for constructive dismissal, harassment, discrimination, intentional infliction of mental suffering, and assault. In finding for the plaintiff (after deliberating for less than two hours), the jury awarded:
- As against Walmart
- $200,000 for intentional infliction of mental suffering;
- $1,000,000 for punitive damages; and
- $10,000 for assault.
- As against the manager personally
- $100,000 for intentional infliction of mental suffering; and
- $150,000 for punitive damages.
Walmart has appealed the jury's decision.
The Higginson and Walmart cases reflect a trend in the law toward protecting employees from workplace bullying, harassment and other improper conduct. A number of Canadian jurisdictions now have legislation that addresses such improper conduct (in addition to human rights legislation that exists in every jurisdiction). Employers would be well advised to heed the message that is being conveyed by legislatures and the courts, by ensuring that employees are treated appropriately during employment and at the time of termination.