Top court strips out damages in <i>Keays</i>

Supreme Court of Canada landmark ruling seen as a good for employers

The Supreme Court of Canada has struck down bad-faith and punitive damages against Honda in a landmark wrongful dismissal case dealing with disability-related absences.

In a ruling released late last month, the top court upheld the 15 months’ pay in lieu of notice awarded to Kevin Keays, who suffered from chronic fatigue syndrome. However, it struck down the extra nine months’ bad-faith damages and $100,000 in punitive damages, saying Honda did not act in bad faith when it demanded a doctor’s note for every disability-related absence and was within its rights to rely on its own medical experts.

The decision is good news for employers, said employment lawyer Stuart Rudner of Miller Thomson in Toronto. Not only can employers feel more comfortable in using attendance management programs where a disability is involved, but they will be able to get a better idea of when bad-faith damages will be awarded and how much they might be.

“Previously, Wallace damages were arbitrary, but now they will be more compensatory,” said Rudner. “Employees will have to prove a loss to get the extra damages. It’s a more rational approach.”

For in-depth coverage of the ruling, see the Aug. 11 issue.

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