New case on damages

By Stuart Rudner

A few months ago, I wrote about the rising tide of damages in employment law. In that post, I noted that extraordinary damages arising out of the conduct of an employer, as opposed to damages for wrongful dismissal, are on the rise. The recent decision of the Ontario Superior Court of Justice in Shadwick v. Applied Consumer & Clinical Evaluations Inc. is a perfect example. 

In the Shadwick case, the plaintiff was a 57-year-old data entry clerk (with some additional responsibilities) with 16 years of service. Less than a year before she was dismissed, she lost her hearing. Her evidence on this, and almost every other point, was uncontested due to the fact the defendant failed to file a Statement of Defence on time and was only allowed to make limited submissions at trial with the acquiescence of the plaintiff.

The evidence was that after the plaintiff became deaf, a course of harassment, abuse and other mistreatment on the part of her employer began. She was mocked, humiliated and abused and, on occasion, asked, “Why don't you just quit?" 

In the spring of 2011, matters came to a head when the employee participated in a Toastmasters Club event. She was subsequently confronted by the general manager, berated and yelled at in front of more than a dozen other employees. Among other things, she was referred to as a “goddamn fool."

Soon after, she was fired. The employer alleged that the dismissal was for insubordination and willful misconduct in relation to what the employer described as her “goddamn stunt" at Toastmasters. The woman was handed a termination letter and offered three months of pay in lieu of notice on condition that she sign a release. When she refused, the employer refused to provide her with a cheque or any payment. 

As mentioned above, the company failed to file a Statement of Defence and did not even pay the employee for her accrued wages prior to termination. She was also delayed in obtaining employment insurance benefits due to the fact the employer completed the Record of Employment with an indication she had been dismissed for cause. 

Post-dismissal, the employee was forced to obtain psychiatric assistance as well as the assistance of a social worker, and was diagnosed with anxiety and depression resulting from the way she was treated by the company. She incurred medical expenses of close to $20,000. 

Not surprisingly, the court found the data clerk had been wrongfully dismissed. As a result, she was awarded 24 months of pay in lieu of notice. What is particularly notable, however, is that in addition to damages for wrongful dismissal, the court awarded the following: 

In addition, the court awarded her legal costs in the amount of $40,000. As a result, the employer was ordered to pay almost $100,000 in damages and costs beyond damages for wrongful dismissal. 

This case is a prime example of how our courts and tribunals are becoming more aggressive in penalizing egregious behaviour on the part of employers. It should provide some hope for employees who are mistreated, and also a clear warning to employers that such behavior is unacceptable and will have significant consequences.

Had the employer acted reasonably and simply dismissed the employee without cause, the cost of doing so would have been far less.