Court of Appeal clarifies law on wrongful dismissal and discrimination
By Mika Imai
The Ontario Court of Appeal has sent a signal to employers – it is prepared to uphold sizeable damage awards for employees whose employment rights have been violated.
In Strudwick v Applied Consumer & Clinical Evaluations Inc, a 15-year employee was awarded $246,049.92, plus $20,000 in legal costs based on wrongful dismissal, harassment and discrimination.
Vicky Strudwick, an employee of more than 15 years, was an instructor at the polling and research corporation, Applied Consumer & Clinical Evaluations Inc. (“Applied Consumer”). After Ms. Strudwick suddenly became deaf, the general manager of Applied Consumer and her immediate supervisor “commenced a campaign of abuse . . . designed to force her resignation.” The Court explained:
. . . in addition to publically belittling, harassing and isolating Ms. Strudwick in ways relating to her disability, Applied Consumer not only denied Ms. Strudwick any accommodation of her disability but also took specific steps to increase the difficulties she faced as a result of her not being able to hear.
By way of example, Ms. Strudwick’s supervisor “would purposely give Ms. Strudwick instructions in a manner that prevented her from lip reading. Then . . . call Ms. Strudwick ‘stupid’ for not understanding the instructions.”
Ms. Strudwick was also denied workplace adjustments for her disability that had no cost or for which she offered to pay (e.g. turning her desk so she could see people approaching). Applied Consumer eventually terminated Ms. Strudwick, publically, and refused termination pay when she declined to sign a release.
A number of lessons can be learned from this decision.
- Mount a defence, any defence
- Applied Consumer did not defend the legal action against it and therefore lost the right to challenge the evidence Ms. Strudwick presented. When Applied Consumer later tried to overturn that ruling, it was unsuccessful.
- Companies can be held legally liable for the actions of individuals in control of the company
- Applied Consumer tried to argue that the general manager and immediate supervisor should be liable to Ms. Strudwick, not the company. In rejecting this position, the Court discussed the directing role of the general manager and supervisor and the fact that they were both active participants in and failed to stop the harassment of Ms. Strudwick.
- Proof of financial hardship can limit damages
- Most damages are compensatory, meaning they are not meant to punish the defendant company. Punitive damages are only awarded where necessary for retribution, denunciation and deterrence. If a company can prove that punitive damages would have a hugely detrimental impact on it (e.g. bankruptcy), a court may decide they are not needed.
- In Strudwick, the Court of Appeal increased the punitive damages from $15,000 to $55,000, partially because there was limited evidence that the original amount ordered presented a financial strain on Applied Consumer.
- You can’t get what you don’t plead
- On appeal, Ms. Strudwick sought damages of $1,019,384.80, an amount considerably above the $240,000 (plus benefits) originally requested. The Court concluded it could not award an amount above the initial claim, stating that the proper process was for Ms. Strudwick to amend her pleadings, which she did not do.
- Skilled employees no longer get more pay in lieu of notice
- Courts used to award more pay in lieu of notice if a dismissed employee was highly skilled. This was based on the belief that such employees had a harder time finding another job.
- In Strudwick, the Court confirmed recent case law that qualifications are “largely irrelevant” to an assessment of reasonable notice.
- There is no limit on pay in lieu of notice, but it will require “exceptional” circumstances to get more than 24 months
- The Court rejected Ms. Strudwick’s argument that, given her age and disability, she was entitled to pay in lieu of notice until retirement (i.e. 125 months), finding that employers don’t guarantee work until retirement.
Millard & Company specializes in employment law, representing both employers and employees. Contact us at the number above if you would like to discuss your legal options.