2 year break in employment did not matter when calculating damages

Of review of the November 2009 Court of Appeal decision of Brien v. Niagara Motors Ltd is an interesting read. In this case the appellant employer raised three grounds of appeal from a wrongful dismissal decision which awarded 24 months severance plus Wallace (for bad faith) damages of two months.

Firstly, the employer argued to the Court of Appeal that the trial judge erred in treating the respondent employee as a 23-year employee even though there was a two-year gap in her employment after 6 years when she left to have her second child.  The employee had been invited back to work for the employer after two years.  She had exhausted her maternity leave and was not working. She did not return for family reasons.  She was not looking for another job, nor did she work anywhere else within the 2 year gap. She was reintegrated into the employer’s employment as if she had never left. The Court of Appeal noted that, for example, she immediately provided with a 2 weeks vacation within the first year without first working for 12 months as a new employee would have to. For these reasons, the COA did not give effect to this ground of appeal

The second issue is whether the two months award for Wallace damages ($8,826.56) can survive the decision of the Supreme Court of Canada in Honda Canada Inc. v. Keays, 2008 SCC 39, which was released following argument but before the reasons in this case were released by the trial judge.  For those who don’t know – the Honda case gave the employment landscape quite the tilt with respect to damages.  The Supreme Court Re-formulated the legal principles surrounding both the availability of “Wallace damages” and the manner in which they can be awarded.  The appeal was allowed on this ground. Although the appellant’s conduct in wrongfully alleging misconduct against the respondent was improper, any claim for punitive damages based on that conduct was abandoned before the trial.
While the respondent’s misconduct in this respect could have led to a proper award of mental distress damages as defined in Keays, the mental distress that the respondent suffered upon her termination and the manner of that termination was not of the nature and scope to qualify for compensatory damages in accordance with that decision, as the respondent did not seek any medical attention, professional assistance or undergo any therapy for her mental distress.

The third ground of appeal is based on the double counting of the Employment Standards Act severance payment of $20,240. This probably meant that the employee was paid statutory termination pay that was also counted into the payment in lieu of notice.  The lawyers agreed to remove this.

In the result, the appeal was allowed in part, and the damages calculation was reduced by $8,826.56 plus $20,240.

This case may be a minor precedent setter with respect to calculating damages in cases where the employee takes a stretch off work and is re-hired. In the long run, does it really matter? It is all circumstantial and factual based but it is good to remind ourselves of these cases.

If you are in the Halton regions and your company needs employment assistance please do not hesitate to give Haber & Associates a call at 905-639-8894 and ask for me, Matt Lalande.