Employers would do well to remember that they have a positive duty to respect the dignity of those who work for them and that if they are informed of seriously problematic conduct that they must take steps to have it stopped.  In Quebec, this positive duty is reflected both in Civil Law (Art. 2087 C.C.Q.) and in the provisions regarding psychological harassment (Art. 81.18 et seq.), of the Labour Standards ActFailure to respect such basic obligations both during the employment relationship or in the manner in which the employment relationship is severed, can result in very substantial damages against the employer.  Although an Ontario case, Boucher v. Wal-Mart Canada Corp. and Pinnock, 2014 ONCA 419 is certainly a template for employers of what not to do.  As the Ontario Court of Appeal pointed out, Boucher had worked for Wal-Mart for almost ten (10) years when she was promoted to the position of Assistant Manager under a Mr. Pinnock:

“[2] At first Boucher and Pinnock worked well together.  Their relationship turned sour, however, after an incident in May 2009 in which Boucher refused to falsify a temperature log.  Pinnock then became abusive towards her.  He belittled, humiliated and demeaned her, continuously, often in front of co-workers.  Boucher complained about Pinnock’s misconduct to Wal-Mart’s senior management.  They undertook to investigate her complaints.  But in mid-November 2009 they told her that her complaints were “unsubstantiated” and that she would be held accountable for making them.  A few days later, after Pinnock again humiliated Boucher in front of other employees, she quit.  A few weeks later she sued Wal-Mart and Pinnock for “constructive” dismissal and for damages.”

While the Court of Appeal reduced the punitive damages from $1,000,000 against Wal-Mart to $100,000, the total award of compensatory, aggravated and punitive damages alone, leaving aside notice pay and the employer’s vicarious liability for the actionable wrongs of its managers, amounted to $300,000 plus.  Add to that its responsibility for $140,000 in trial costs and the final sum should make employers take notice.  Had Ms. Boucher been a higher echelon employee the bill might have been considerably higher.

In any wrongful dismissal claim, compensatory, moral and punitive damages may be awarded against the employer where the employer engages in conduct during the course of dismissal that is truly unfair or in bad faith.  This is true in Ontario and Quebec.

On the one hand, the Court viewed Pinnock’s misconduct as bringing about Boucher’s mental anguish.  On the other hand the unfair way that Wal-Mart dealt with Pinnock’s misconduct, i.e. failing to discipline him and ignoring Boucher’s complaints against him, brought about what the Court viewed was her “constructive dismissal”.  Wal-Mart (i) took no steps to bring an end to Pinnock’s misconduct; ii) did not take Boucher’s complaints seriously finding them unsubstantiated despite substantial evidence that they were well-founded; (iii) failed to enforce its own workplace policies which on their face were designed to protect employees; and iv) threatened Boucher with retaliation for making her complaints.  Viewed as vindictive acts, the Court noted “these considerations show that Wal-Mart’s own conduct justified a separate and substantial award for aggravated damages”, in addition to its vicarious liability for Pinnock’s actions

The lessons for employers:

  1. When supervisors engage in conduct that is truly blameworthy such as harassment of someone who reports to them, they must be disciplined, and evidence of discipline that dissuades continuation of the offending behaviour must remain on file; 
  2. While baseless accusations of harassment made by employees against supervisors can and should be sanctioned, make sure that proof of the absence of any reasonable basis for the accusation is clear and present.  Otherwise expect this to be viewed as “retaliation”. 

Employers who fail to heed these warnings can expect the costs to be extremely expensive!