‘Damages formerly known as Wallace’ (Legal view)

Employer’s conduct in firing worker careless, but not bad faith: Court
By Jeffrey R. Smith
|Canadian HR Reporter|Last Updated: 02/06/2009

In early 2008, the Ontario Court of Appeal addressed the concern that bad-faith damages — often referred to as Wallace damages — were being awarded too easily in its ruling in Mulvihill v. Ottawa (City).

It started a trend — which the Supreme Court of Canada reaffirmed later in 2008 in both Keays v. Honda Canada Inc. and Syndicat des employé-e-s de techniques professionnelles & de bureau d’Hydro-Québec, section 2000 (SCFP-FTQ) c. Corbeil — where bad-faith damages are less likely to be awarded, even in cases where an employer’s actions are genuinely unfair.

“Even where bad faith is found to exist, the Supreme Court in Keays added the additional requirement that employees prove they have suffered damages as a result of the bad faith before there will be any compensation,” said Stuart Rudner, a partner with Miller Thomson in Toronto who practices employment law and commercial litigation.