When dismissing an employee, the employer is expected to treat the employee fairly and respectfully, and in good faith. Acting in bad faith can attract awards of damages in addition to the damages normally awarded for wrongful dismissal.
Moral Damages
Moral damages are one such category of additional damages. Moral damages can be awarded where the Court is satisfied that the manner of dismissal caused the employee mental distress that was in the contemplation of the parties. Moral damages are not awarded through an extension of the reasonable notice period, but rather through a separate award that reflects the actual damages suffered. Moral damages are distinct from aggravated damages or punitive damages, which are also awarded as separate awards, rather than through extensions of the reasonable notice period.
Teljeur v. Aurora Hotel Group
In the recent Court decision of Teljeur v. Aurora Hotel Group the Court awarded $15,000 in moral damages to a dismissed employee, as a result of the employer’s bad faith conduct.
In support of the award of moral damages, the Court cited what it found to be “a number of disturbing aspects about the plaintiff’s termination”:
- Despite orally communicating to the employee that his employment was being terminated, no written notice of termination was ever provided to him. Providing written notice is a requirement of Section 54 of the Employment Standards Act, 2000 (the “ESA”). Moreover, the employee requested notice in writing on three separate occasions, and the employer agreed to do so. Nonetheless, no written notice was ever provided.
- The employer did not pay the employee his statutory entitlements within the deadlines specified by the ESA. Section 11(5) of the ESA states that such payments must be made no later than the later of: (a) seven days after the employment ends; and (b) the day that would have been the employee’s next pay day. Even though the employer eventually paid these amounts to the employee, the Court cited the late payment as a factor in favour of an award of moral damages.
- The employer failed to pay the employee the amount $16,680.03 on account of reimbursement of out-of-pocket expenses that the employee incurred on behalf of his employer prior to the termination of his employment. While the employer disputed whether interest should be charged on that amount, they had no reasonable basis to deny payment of the principal amount.
- At the termination meeting, the employer advised that it would be paying the employee eight weeks of severance. Despite that assurance, the employer only paid the employee his ESA Termination Pay, which amounted to just three weeks.
Court Findings
The Court found that in these circumstances, the employer acted in ways that were “untruthful, misleading or unduly insensitive.” The Court thus found the manner in which the employee was dismissed constituted a breach of the employer’s duty of good faith and fair dealing. Further, the Court concluded that it would be within the reasonable contemplation of the employer that its manner of the employee dismissal would cause mental distress.
The Court has previously held that to justify an award of moral damages, there needs to be some evidence to support the mental distress suffered by the employee, but this does not necessarily need to be proven by medical evidence. In the Teljeur case, while no medical evidence was produced to document the stress suffered by the employee, the Court accepted that the employer’s actions “added significant stress to his life on top of the stress he was experiencing as a result of being terminated.”
As a result of the above factors, the Court granted the employee:
- moral damages of $15,000,
- an award of damages for wrongful dismissal, and
- damages representing the outstanding expense claim that the employer had failed to reimburse.
Conclusion
This case is a reminder that Courts will not look on employers favourably if they are seen to have committed acts of bad faith or dishonesty during termination of an employee. If you are an employer that is planning to dismiss employees, our firm can help you ensure that you comply with your legal obligations.
If you are an employee and you believe you have been treated in bad faith, our firm can help you assess whether you have a claim for additional damages against your employer, above and beyond the damages normally awarded for wrongful dismissal.
If you have any questions about your situation or if you would like to get legal advice, please feel free to contact us.
