Published in Markham Business Magazine, November 2008.
Having attended the Supreme Court of Canada appeal of Honda Canada Inc. v. Keays [“Honda”] on February 20, 2008 and hearing the questions that the Justices asked counsel in this case, it is not surprising that clarification was provided in three important issues for employment relationships. In the decision released on June 27, 2008, the Court explained how to calculate damages for bad faith in the conduct of dismissal, distinguished between damages for bad faith and punitive damages, and clarified an employer’s duty to accommodate a disabled employee.
In Honda, the employee sued the employer for wrongful dismissal. The Trial Judge awarded the employee twenty-four months notice, where fifteen months were for pay in lieu of notice and nine months were due to the manner in which the employee was terminated. Additionally, the Trial Judge awarded the employee $500,000 in punitive damages. The employer appealed this decision resulting in the Ontario Court of Appeal upholding the total award of notice and only reducing the punitive damages to $100,000.
On appeal to the Supreme Court of Canada, the Court decided to uphold the fifteen months pay in lieu of notice. However, the additional months for bad-faith in the conduct of dismissal and the monet