Fired sawmill worker awarded $800,000 (Legal View)

Jury hands out $573,000 in punitive damages due to improper conduct in termination
By Ronald Minken
|Canadian HR Reporter|Last Updated: 09/10/2012

A jury in British Columbia has awarded a sawmill employee more than $800,000 after he was terminated without notice after more than three decades of service.

Larry Higginson was employed by Babine Forest Products for 34 years. When the sawmill he worked at was sold to Hampton Lumber Mills, he continued with the new employer for about three more years. He was terminated — allegedly for cause — by Hampton in October 2009.

Higginson wasn’t provided with any notice when he was terminated, so he launched a wrongful dismissal lawsuit against both Hampton Lumber Mills and his former employer, Babine Forest Products. He also sought punitive damages.

Following a three-week trial, a jury concluded Higginson had been wrongfully dismissed from his employment and there was no merit to the allegations of cause raised by the employer.

The jury awarded him $809,000 in damages, consisting of $236,000 for wrongful dismissal and $573,000 in punitive damages. The punitive damages were tacked on because of the employer’s improper conduct in terminating his employment, including unsupported allegations of cause and failing to provide Higginson with any notice as a result of the unsupported allegations.

The damages awarded in this case are believed to be the largest punitive damages award in an employment law case in Canadian history.

Jury not judge makes final decision

This ruling is noteworthy not only for the large amount of damages but also due to the fact the decision was determined by a jury rather than a judge. Most employment law cases are heard and decided by a single judge or a panel of judges at the higher levels of court. It is very rare for a party to request that an employment law matter be heard by a jury.

This is due to the high level of risk associated with having a jury of peers evaluate evidence and render judgments as compared to experienced members of the bench. As jury members are not fully versed in legal issues and points of law, unlike judges, they may not fully appreciate the nuances raised by counsel which may, in turn, lead to unexpected and perhaps even extreme results — as in this case.

Further, it is possible a jury may not view the facts in the same manner and with the same legal perspective as a judge, which can also contribute to an award that is either at the lower or upper limits of what would be expected had the matter been decided by a judge.

Jury members are more likely to draw on their own personal experiences or those of loved ones, so they may relate more easily to one party or the other and make a decision based on subjective facts rather than objective ones.

Moreover, there is a higher likelihood of such an award being appealed on the basis of a misinterpretation or error of facts and law. For this reason, parties and their counsel should carefully consider whether it is appropriate to have a matter heard by a jury versus a judge.

Lessons for employers

Employers and in-house counsel should ensure they treat employees respectfully during the termination process. They should carefully consider an employee’s notice entitlements and 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.

The British Columbia Supreme Court ruling in Higginson v. Babine Forest Products Ltd. demonstrates that significant punitive damages may be awarded to employers that improperly allege cause and refuse to provide any notice on the basis of those improper allegations. It is always recommended that employers and in-house counsel consult with lawyers when they are considering terminating an employee to obtain legal advice with respect to the termination process and appropriate package to be provided to the terminated employee.

Ronald Minken is a senior lawyer and mediator at Minken Employment Lawyers, an employment law boutique in Markham, Ont. He can be reached at www.MinkenEmploymentLawyers.ca. He gratefully acknowledges Sara Kauder and Kyle Burgis for their assistance in preparation of this article.

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