In the wrongful dismissal case, Ensign v. Price’s Alarm Systems, 2017 BCSC 2137, the British Columbia Supreme Court made an aggravated damages award in the absence of any medical evidence of psychological distress arising from the termination of the Plaintiff’s employment. This is a departure from the approach the BC Courts have generally taken in the past.
The Plaintiff, Mr. Ensign, was a 63-year-old salesman. He worked for Price’s Alarm Systems (the “Employer”) for 12.5 years, having never signed an employment agreement. The Employer terminated Mr. Ensign’s employment by providing him with two months’ working notice. After providing notice of termination of employment, the Employer made three offers to re-employ Mr. Ensign in different positions and under different terms. He refused all of the offers, and sued the Employer for wrongful dismissal.
The Court determined that Mr. Ensign’s age, length of service, and poor employment prospects warranted a 12-month notice period. Moreover, Mr. Ensign was not required to accept re-employment with the Employer to mitigate his losses due to the inadequacy of the offers, Mr. Ensign’s low likelihood of success in the positions, and the erosion of trust between the two parties. Having made these findings, the Court turned to the issue of aggravated damages.
Mr. Ensign argued that the employer was not honest or forthright about various matters relevant to the termination of his employment, including the existence of a written contract of employment that limited his entitlement to notice of termination of employment, and the reason for the termination of his employment. The evidence of Mr. Ensign and his wife was that the manner in which the Employer terminated Mr. Ensign’s employment and treated him thereafter caused Mr. Ensign to suffer mental distress. Further, Mr. Ensign said that he hesitated to visit a doctor because he was worried about the impact it could have on eligibility or increased premiums for life and mortgage insurance. Consequently, there was no corroborating evidence from Mr. Ensign’s family doctor or any other physician.
The Court accepted the evidence of Mr. and Mrs. Ensign, noting that while their evidence was not corroborated by a physician or third parties, it was uncontested. Further, the Court found the Employer was “not truthful and candid” about the reason it terminated Mr. Ensign’s employment.
In the result, the Court accepted the Ensigns’ evidence, finding that the Employer had embarked on “aggressive and unmeritorious defense tactics” that strained Mr. Ensign’s marriage, impacted his ability to sleep, and caused him significant stress and emotional upset. Mr. Ensign was awarded aggravated damages in the amount of $25,000.
This is not the only recent decision in which the courts have accepted evidence of emotional distress from an employee and the employee’s spouse as the sole basis for an award of aggravated damages. For example, in Karmel v. Calgary Jewish Academy, 2015 ABQB 731, the Alberta Court of Queen’s Bench awarded $200,000 in aggravated damages to a wrongfully dismissed employee. In that case, the employer alleged just cause in the absence of any proof of misconduct against the dismissed employee. In reaching its conclusion on aggravated damages, the Court relied on the testimony of the plaintiff and his wife about how he had suffered considerably before, during, and after his sudden dismissal, without presenting any medical evidence to the Court.
Ensign and Karmel suggest that a lower evidentiary standard for aggravated damages may be gaining acceptance in the courts. Further, and on a practical level, these decisions demonstrate the risk of liability for failing to be honest and forthright in the manner of termination of an employee’s employment. Employers would be well-advised to be conservative in assessing whether they have cause, assessing reasonable notice periods, carrying out the termination and avoiding bad faith and/or misrepresentation.