Facts
K has been an employee of Honda Canada Inc. for approximately 11 years. In 1997, he was diagnosed with chronic fatigue syndrome. Initially his employer allowed him to take part in the company’s disability program, which allowed employees to take absences from work as long as a doctor’s note is provided, and that the medical note states that the absence is related to the employee’s disability. However, as K’s absences increased, the company became concerned and asked K to meet with the company’s medical specialist to evaluate and see how the company can better accommodate K at work. On the advice of K’s counsel, K declined to meet with the company’s medical specialist. K was subsequently dismissed.
At the trial level, the trial judge determined that K was entitled to a notice period of 15 months, but increased and awarded K a notice period of 24 months due to the manner K was dismissed. In addition, K was awarded punitive damages in the amount of $500,000 and costs on a substantial indemnity scale. At the appellate level, the Court of Appeal reduced the costs premium and decreased K’s punitive damages amount to $100,000.
Issues
Whether an award of 15 months notice period is reasonable pursuant to the principles and factors set in Bardal?
Whether further damages should be awarded to the 15 months notice period due to Honda’s conduct and manner in dismissal?
Whether punitive damages should be awarded as Honda has allegedly contravened section 5 of the Ontario Human Rights Code, and engaged in discriminatory conduct?
Law & Analysis
The principles in determining what constitutes reasonable notice of termination is set out In Bardal, which states, reasonableness of notice is accessed on an individual basis by reference and regard to “the character of the employment, the length of service of the servants, the age of the servant and the availability of similar employment… [and] experience, training and qualifications of the servant.” Following the factors set out in Bardal, the trial judge’s initial calculation of 15-month notice period is entitled to deference.
Damages awarded for the manner of dismissal must be available if it meets the circumstances as set out in Wallace, which states the manner of dismissal must be “unfair or is in bad faith by being, for example, untruthful, misleading or unduly insensitive.” The present court finds no justification for an award of damages for Honda’s conduct in dismissal.
It was decided at this present court, that the ruling for punitive damages should be set aside, as Honda has not engaged in discriminatory conduct, and the manner of dismissal does not meet the strict requirements in Whiten. Honda was not found to have engaged in an “actionable wrong”, nor was the company found in breach of its fiduciary obligation.
Decision
The appeal is allowed in part and the cross-appeal is dismissed. Damages for Honda’s conduct in dismissal and punitive damages are set aside. Costs on this appeal and cross-appeal is awarded to Honda, and the cost premium set aside.
Disclaimer
This content is intended as general information only, and should not be construed as substitution for proper legal advice.
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