Courts may award punitive damages when an employer’s behavior towards an employee was “high-handed, malicious and reprehensible”. The purpose of awarding punitive damages is to punish the employer and deter similar future conduct.
As for what kind of behavior is held by the courts to be worthy of punitive damages, consider the case of Lounsbury v. Dakota Tipi First Nation.
The employee, Lounsbury, was employed by Dakota Tipi First Nation as a health services coordinator pursuant to a contract which commenced in June of 2005. A second written agreement was entered into for a fixed term from April 1, 2007 to March 31, 2012. On October 15, 2007, the employee received written instructions from the employer to have any correspondence or memo that is to be distributed to any co-workers or clients approved by both Chief Pashe and Council prior to it being distributed. On November 3, 2007 the employee sent a Fact Sheet to the Chief and Council requesting its approval, in accordance with the employer’s instructions, and directed staff to distribute it for her if approval was given. After approving the Fact Sheet that same day, Councillor Pashe directed another employee, Melanie Pashe, to distribute the Fact Sheet. After the Fact Sheet was distributed, the employee was notified that she was terminated. The employer claimed that the employee was terminated because she allegedly breached her contract by sending out the Fact Sheet without obtaining approval.
On November 7, 2007, the employee distributed a petition to the 325 citizens of the Dakota Tipi First Nation in an attempt to justify the termination of the employee by having a majority of the citizens sign the petition, even though she had been terminated four days prior. However, the petition was only signed by only 59 of the citizens, falling short of the “clear majority” requirement.
At this time, the employee commenced a claim with the Manitoba Court of Queen’s Bench for wrongful dismissal.
The court ruled that the employee had not breached the contract, as she had taken the necessary steps to obtain approval of the correspondence, and was not the individual who distributed the document.
Additionally, the court awarded the employee $10,000.00 for punitive damages on the basis that the employer was not simply acting in bad faith but rather their entire defence “was premised on lies”. The court listed 17 instances of “high-handed, malicious and reprehensible” behavior that the employer engaged in, including but not limited to “unceremoniously throwing the plaintiff off the reserve on the basis of a trumped-up petition, posting disturbing comments on Facebook at 3:26 p.m. on June 8, 2010, immediately after the defendant’s case collapsed due to Chief Pashe’s admitted lying on the stand, refusing to remove the Facebook posting, making threats to the plaintiff by Councillor Pashe and damaging the plaintiff’s reputation in a small community where she had worked for a number of years and was a well-known member of the public.”
Points of Interest
Both employers and employees should be mindful of this decision as it stands as an example as to what types of conduct are held by the Courts to be “high-handed, malicious and reprehensible“ and worthy of an award of punitive damages.
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For more details, see: Lounsbury v. Dakota Tipi First Nation, 2011 MBQB 96 (CanLII)
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- “Terminate with Care or Beware” (Published in Markham Business Magazine.)