A recent British Columbia Court of Appeal decision found that emotional distress caused by dismissal from employment was not sufficient to merit an award in aggravated damages.

The Facts

 The employer hired the employee as a skincare therapist in 2004. In January 2015, the employer became concerned with her job performance. In March of that year, two senior management members met her to discuss these concerns. At the meeting, the employee was given a letter advising her of her performance deficiencies. The letter stated that she had three months to improve or her employment would be terminated in June. At trial, the employee testified that she cried throughout the entire meeting and had to go home early because she was so upset.

That June, the employee was called to a meeting and told that she was terminated from her employment. She was not paid any severance. At trial, the employee testified that she went “numb” during the meeting and could not take anything in.

The employee subsequently sought damages for wrongful dismissal against her employer. The trial judge found that she had been wrongfully dismissed and was entitled to eight weeks severance pay pursuant to her contract of employment. In addition, because of the manner of dismissal, the trial judge awarded the employee $15,000 in aggravated damages. The judge stated:

“The events clearly had a profound effect on the [employee]. Not only was she lulled into believing that her performance would be fairly considered, as she testified, she cried through the entire March meeting and had to go home early she was so upset and, at the June meeting, she “went numb” and could not take anything in. In the face of the dismissal for cause, she came to believe she needed to retrain for a different career. I am satisfied that the lack of good faith and unfairness exhibited by the [employer] in the manner of dismissal caused emotional distress to the [employee] that was well beyond the distress from the fact of the dismissal.”

The employer appealed the decision.

At Issue

The employer’s sole ground of appeal was that the trial judge erred in awarding aggravated damages in the absence of any evidence that the employee suffered actual harm as a result of the manner of her dismissal. The employer submitted the degree of mental suffering caused by the dismissal was not sufficient to warrant compensation.

The Decision

The court began by noting that it is an accepted principle that a dismissed employee is not entitled to compensation for injuries flowing from the dismissal itself. It acknowledged that a job loss can often cause injured feelings and emotional upset but that such feelings do not result in compensation.

It did not agree with the employee’s argument that unfairness in the manner of dismissal was sufficient in itself to ground an award for aggravated damages. It stated that the requirements for an award of aggravated damages resulting from the manner of dismissal are:

(a) a finding that an employer engaged in conduct during the course of dismissal that was unfair or in bad faith, and

(b) a finding that the manner of dismissal caused the employee mental distress.

The court found that there was no evidence from the employee or from family members, friends or third parties concerning the impact of the termination on the employee and her mental state. It also noted that no expert evidence was presented on the issue. It stated:

“The only evidence of mental distress is that [the employee] cried during the March meeting, following which she had to go home early because she was so upset, and that at the June meeting, she went numb and could not take anything in. The evidence of [the employee]’s reactions at the two meetings at its highest establishes a transient upset. It falls well short of the legal standard that requires a serious and prolonged disruption that transcends ordinary emotional upset or distress.”

As a result, the court found a lack of an evidentiary basis for the finding of mental distress caused by the manner of dismissal. Therefore, it decided that the trial judge made an error in principle by awarding aggravated damages.

Therefore, the court allowed the appeal and set aside the aggravated damage award.

For Help

The Kitchener-Waterloo employment lawyers at Petker Campbell Postnikoff have many years of experience advising non-unionized employees and employers on a variety of workplace issues, including sexual harassment and termination. Our team will walk you through the details of your dispute, advise you on your rights, responsibilities and obligations, and help you understand your options.  If your dispute cannot be settled through negotiation, we can represent you through mediation and the court process.

We represent clients throughout southern Ontario, including the communities of Cambridge, Guelph, Elmira, Brantford, Fergus, Elora and the surrounding area. Call 519-886-1204 or contact us online for a consultation.