Highest Award of Punitive Damages in Canada

Wrongful Dismissal and Punitive Damages

In Higginson v. Babine Forest Products Ltd. (“Higginson”), a jury of the British Columbia Supreme Court awarded an employee approximately $809,000.00 in damages after he was terminated without notice after 34 years of service. The employee, Mr. Larry Higginson, was employed at a sawmill operated by Babine Forest Products for more than 30 years when the sawmill was purchased by Hampton Lumber Mills Inc. After the sale, Mr. Higginson continued to work at the sawmill for approximately 3 more years until he was terminated, allegedly for cause, in October 2009 and was not provided with any notice. Mr. Higginson commenced legal proceedings against both Hampton Lumber Mills Inc. and the former owner of the sawmill, Babine Forest Products Ltd., for damages for wrongful dismissal as well as punitive damages. Following a three week trial, a jury determined that Mr. Higginson was wrongfully dismissed from his employment and that there was no merit to the allegations of cause raised by the Defendants. Mr. Higginson was awarded approximately $809,000.00, representing $236,000.00 for wrongful dismissal and $573,000.00 in punitive damages due to the Defendants’ improper conduct in terminating Mr. Higginson’s employment. This represents the largest punitive damages award in an employment law case in Canada.

Impact of Decision on Employers

Employers should ensure that they treat employees respectfully during the termination process and should not withhold notice on the basis of cause allegations that are without merit and made for the purpose of trying to minimize an employee’s notice entitlement. It appears that significant punitive damages may be awarded to employers who improperly allege cause and refuse to provide any notice on the basis of those improper allegations. It is always recommended that employers consult with Employment Law lawyers when they are considering terminating an employee and to obtain legal advice with respect to the termination process and package to be provided to the terminated employee.

Impact of Decision on Employees

Long term employees should be aware that their notice entitlements may be quite significant providing they are not bound by a termination clause restricting their common law notice. Employees should consult with an Employment Law lawyer to have termination packages reviewed before signing off on a Release to ensure they receive a fair package which takes into consideration the employee’s length of service, position and age, among other things.

Minken Employment Lawyers is your source for expert advice and advocacy on today’s employment law issues. Whether you are an employer or an employee, we can help. Contact us to see how.

For more information, see Canadian Employment Law Today by Canadian HR Reporter: “Jury hands out heavy punitive damages award against B.C. employer “, July 26, 2012; and Legal Feeds: “B.C. court awards largest punitive damages ever in employment case”, by Heather Gardiner, July 26, 2012.

See also “Highest Award of Punitive Damages in Canada” published in the Canada-United Kingdom Chamber of Commerce Newsletter, October-November 2012, and “Fired long-term employee gets more than $800,000” published in Canadian Employment Law Today.

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