Fired long-term employee gets more than $800,000

Jury gives largest punitive damages award in Canadian employment law history

A jury of the British Columbia Supreme Court has awarded an employee more than $800,000 in damages after he was terminated without notice after 34 years of service.

In Higginson v. Babine Forest Products Ltd., the employee, 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. After the sale, Higginson continued to work at the sawmill for three more years until he was terminated, allegedly for cause, in October 2009. At the time of termination, Higginson was not provided with any notice. As a result, he commenced legal proceedings against both Hampton Lumber Mills and the former owner of the sawmill, Babine Forest Products, for damages for wrongful dismissal as well as punitive damages.

A three-week trial unfolded and a jury determined that Higginson had been wrongfully dismissed from his employment and that there was no merit to the allegations of cause raised by the employers. The jury awarded Higginson approximately $809,000 in damages, including $236,000 for pay in lieu of reasonable notice and $573,000 in punitive damages due to the employers’ improper conduct in terminating Higginson’s employment. The punitive damages were for Hapton’s misconduct in the dismissal, such as making unsupported allegations of cause and using those allegations to justify the lack of notice for dismissal. The damages awarded in this case represent the largest punitive damages award in an employment law case in Canada.

Jury trial unusual in employment law

This case is noteworthy not only for the large amount of damages awarded to the former employee, but also due to the fact that 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 rare for a party to request that an employment law matter be heard by a jury. The reason for 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 being raised by counsel, which may in turn lead to unexpected and perhaps even extreme results, as in the Higginson case.

Further, it is possible that a jury may not view the facts in the same manner and with the same legal perspective as a judge. This can in turn 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 which may cause them to relate more easily to one party or the other and to 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 learned

This decision has many valuable lessons for employees, employers and their in-house counsel.

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

From an employer perspective, employers and their in-house counsel should ensure that they treat employees respectfully during the termination process. They should carefully consider an employee’s notice entitlements 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. The Higginson case demonstrates 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 and their in-house counsel obtain legal advice with respect to the termination process and appropriate package to be provided to the terminated employee, when they are considering terminating an employee.

When it comes to deciding whether to serve a jury notice or to object to it, the parties should carefully consider whether they wish a jury to decide the case and the inherent unpredictability that may result from this.

Ronald S. Minken is a senior lawyer and mediator at Minken Employment Lawyers in Markham, Ont. He can be contacted by visiting Ronald gratefully acknowledges Kyle Burgis and Sara Kauder for their assistance in this article.

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