There is no doubt about it. Losing your job sucks.
It can be one of life’s major turning points.
Courts acknowledge that it is normal to feel a certain amount of distress and hurt feelings when losing one’s job. Sometimes, though, an employer’s conduct leads to even more distress.
Implicit in the employment relationship is an inequality of bargaining power. Employers tend to have a certain amount of power over employees. Employers must be mindful of how they treat employees, throughout the employment relationship and beyond. They must not misuse their power.
Our law acknowledges that an employee’s vulnerability is especially acute at the time of dismissal.
The Supreme Court of Canada stated over 20 years ago, that work is one of the most fundamental aspects in a person’s life, providing the individual with a means of financial support and, as importantly, a contributory role in society. A person’s employment is an essential component of his or her sense of identity, self-worth and emotional well-being.
This, and statements like it, has been cited in thousands of court decisions over the years. The Supreme Court of Canada has consistently acknowledged the importance of work to our identity. Not only is employment itself fundamental to our identity, but the Supreme Court of Canada has also warned that ”the manner in which employment can be terminated is equally important.”
Given the law’s recognition that work is such an integral part of our lives and our identity, it is no surprise that there can be legal ramifications to when and how an employee is dismissed.
So, what does this mean to you if you have lost your job? What does it mean if you are an employer?
For starters, this is serious stuff. These decisions have a major impact on people’s lives.
There is a cost to getting it wrong. Not handling a dismissal properly can result in an award of substantial additional damages to the employee.
The base amount awarded in a wrongful dismissal is the compensation the employee would have earned during the period of reasonable notice. A solid knowledge of employment law is required just to determine this amount. An employer who offers too low an amount is not setting anyone up, including itself, for success.
Over and above that, sometimes an employer does things, or omits to do things it ought to have done, and engages in conduct that is “unfair or is in bad faith by being, for example, untruthful, misleading or unduly insensitive.”
This is wording from another Supreme Court of Canada decision.
In cases such as these, a court may award the employee extraordinary damages, including moral and punitive damages. Other types of damages can be awarded too, such as for other causes of action in addition to the wrongful dismissal itself. Plus, the employee may be awarded a level of costs, or special costs at the end of it all. This can all add up.
In one Canadian case, a dismissed executive was awarded just under $300,000 as compensation for her salary over the reasonable notice period. She was also awarded various amounts for benefits, stock options, and other losses over the notice period.
She was also awarded $500,000 punitive damages, and $250,000 for moral damages for the employer’s bad faith conduct. This is to date a high-water mark in Canadian law.
There is a fairly recent B.C. case, however, in which an employee was awarded approximately $100,000 over the notice period. Then, the Court awarded a further $85,000 in aggravated and punitive damages.
In another fairly recent BC case, an employee’s contract limited the wrongful dismissal damages to eight weeks’ compensation. On top of this, the employee was awarded $135,000 in aggravated and punitive damages.
Of course, these types of damages are not awarded in every case single. They are extraordinary. By the same token, they are also certainly possible to achieve in certain cases.
Sadly, these damages are rarely awarded to self-represented litigants.
So employees, if you lose your job and your dismissal seems odd or particularly unfair, it may be worthwhile to immediately look into your rights.
Employers, avoid playing hardball. Avoid making stupid mistakes. Be humane. Be considerate. Treat your dismissals with care. Or, you might have some explaining to do in court.
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