$100,000 in punitive and mental distress damages not reasonable: Court
An Ontario court has reduced wrongful dismissal damages against an employer who fired an employee for abusing sick leave, finding $100,000 of the $500,000 award was unreasonable.
In 2003, the Greater Toronto Airports Authority (GTAA) was experiencing excessive absenteeism and abuse of sick leave by employees. One of the measures it adopted to address the problem was to put employees suspected of abusing sick leave under surveillance. Any employee found to be abusing her sick leave would be terminated.
On Oct. 31, 2003, a 47-year-old fleet co-ordinator with 23 years of service injured her knee while climbing out of a utility vehicle. She took a couple of days off and returned to work while planning to have physiotherapy. However, the therapy didn’t help and, since her job involved a significant amount of walking and driving, she had arthroscopic surgery on her knee on Feb. 19, 2004. Her orthopaedic surgeon gave her a medical note instructing her to take four weeks off work for recovery.
The employee was living with another GTAA worker who was suspected of abusing his sick leave. This worker was under surveillance by the GTAA and the injured employee was also observed when they were together. The injured employee was seen running errands and driving around, which were supposedly against her medical restrictions.
The GTAA felt the employee was being dishonest about the severity of her injury. Additional surveillance revealed her doing things beyond the restrictions of the doctor’s note and the GTAA wanted her to “come clean.” The employee was told if she apologized she would be given another chance, but the employee refused to admit to any wrongdoing. The GTAA concluded the employee was being dishonest and on March 24, 2004, the employee was terminated for violating the GTAA’s code of conduct, which listed dishonesty, falsifying attendance and making false statements as grounds for termination on a first offence.
An arbitrator from the Ontario Arbitration Board found the GTAA had a preconceived notion that the employee was being dishonest and it didn’t properly investigate by obtaining and following legitimate medical opinions on the difference between her everyday restrictions and her work restrictions.
Employee awarded $500,000
The arbitrator also found the GTAA acted in bad faith and such treatment of a 23-year employee with no previous disciplinary issues was unacceptable. It was likely her association with the other worker under suspicion coloured the GTAA’s dealings with her and her situation was not assessed on its own merits, said the arbitrator.
The GTAA was ordered to pay the employee $50,000 for mental distress caused by its treatment of her, another $50,000 in punitive damages as well as compensation for six years of lost wages since her termination and another two years of future economic loss up to her retirement, worth about $400,000.
The GTAA appealed to the Ontario Divisional Court, arguing the damages were excessive. It also argued the amount for lost wages were unreasonable because the employee was only seeking damages and did not choose to return to work through reinstatement.
$100,000 of the damages overturned
The court found the award of punitive damages was unfair, as the GTAA was not informed before the hearing of any evidence upon which the union was basing its claim for punitive damages and therefore it was not able to respond. This was of particular concern to the court since it noted punitive damages in a dismissal case like this were rare. Based on this unfairness, the court set aside the $50,000 in punitive damages.
The court also found the $50,000 for mental distress was unreasonable because the arbitrator didn’t differentiate between the pain and suffering the employee suffered from her knee injury and the distress caused by the manner of dismissal. The employee’s knee injury had been aggravated because she had to choose psychotherapy for a period instead of physiotherapy, but this should not have been included in damages for a breach of the collective agreement, said the court.
“To the extent that damages for mental distress are based on the manner of dismissal, this does not encompass damages from a physical injury that was aggravated because of delays in physiotherapy,” said the court. “Moreover, there is no mention of any medical evidence to support the conclusion that the (employee’s) knee injury was aggravated because of the dismissal and the few weeks without physiotherapy.”
The court also found reinstatement was not a reasonable solution due to the GTAA’s accusation of dishonesty and poor treatment of the employee.
The court agreed the GTAA acted in bad faith in the manner of dismissal, which caused the breakdown of the employment relationship. Since it was reasonable to assume an employee with 23 years of service and the associated benefits in a unionized environment would stay in her job until “at least early retirement,” the court found the award for past and future lost wages was reasonable.
