Court slams HR department for unfair performance review

Company ordered to pay $20,000 in punitive damages
By
|hrreporter.com|Last Updated: 04/08/2003

When an employee suffers dire consequences as a result of an unfair performance appraisal, the HR department is as much at fault as the manager who gave the appraisal. In a recent British Columbia Supreme Court decision, the HR department’s failure to advise a manager ended up costing the company $20,000 in punitive damages, in addition to damages for wrongful dismissal.

Donald Marlowe worked for Ashland Canada Inc. for four-and-a-half years as a sales manager. Each year, he exceeded his sales targets. Nevertheless, in his final performance appraisal, his manager gave him the lowest possible overall rating. Many of the allegations and criticisms in the appraisal were false.

The motive for such a “harsh, vindictive and malicious” review, according to Justice I.H. Pitfield, was to deny Marlowe a bonus and to force him to quit. In fact, Marlowe continued to work for Ashland until he was fired, allegedly for cause.

Justice Pitfield determined that Marlowe had been wrongfully dismissed. He also ordered Ashland to pay Marlowe $20,000 in punitive damages for the unfair appraisal and the impact it had on Marlowe. Marlowe lost his bonus, his job and a chance for a new position when a potential employer called Ashland for a reference.

The judge was particularly critical of Ashland’s HR department: “The department should have been able to advise [the manager] … of the manner in which he should proceed … A substantial company such as Ashland with a human resources department … should be expected to refrain from the kind of employment practices it pursued in relation to Mr. Marlowe.”

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