Simon's Megalomaniacal Legal Resources

Employment - Damages (2)

. Humphrey v. Mene Inc.

In Humphrey v. Mene Inc. (Ont CA, 2022) the Court of Appeal considered cross-appeals on a wrongful dismissal case, here on the issue of aggravated damages:

[61] An award of aggravated damages can be made in wrongful dismissal cases where an employer engages in conduct that is “unfair or is in bad faith by being, for example, untruthful, misleading or unduly insensitive”: Wallace v. United Grain Growers Ltd., 1997 CanLII 332 (SCC), [1997] 3 S.C.R. 701, at para. 98; Honda, at para. 57. Typically, as here, the assertion is that there was bad faith in the manner of dismissal. However, the “normal distress and hurt feelings resulting from dismissal are not compensable”: Honda, at para. 56. Assessing aggravated damages is “an imprecise, fact-specific exercise”, entitled to deference on appeal: Colistro v. Tbaytel, 2019 ONCA 197, 145 O.R. (3d) 538, at para. 60, leave to appeal refused, [2019] S.C.C.A. No. 173; Doyle v. Zochem Inc., 2017 ONCA 130, 2017 C.L.L.C. 210-030, at para. 14; and Strudwick, at para. 33.

. Humphrey v. Mene Inc.

In Humphrey v. Mene Inc. (Ont CA, 2022) the Court of Appeal considered cross-appeals on a wrongful dismissal case, here on the issue of mitigation:

[53] I begin with the observation that the burden is on a defendant to establish a failure to mitigate damages. The question is “whether [the employee] has stood idly or unreasonably by, or has tried without success to obtain other employment”: Red Deer College v. Michaels, 1975 CanLII 15 (SCC), [1976] 2 S.C.R. 324, at p. 331. Whether a terminated employee has failed to take reasonable steps to mitigate, and the effect of this failure on the quantum of damages, are typically questions of fact, subject to review for palpable and overriding error: Beatty v. Best Theratronics Ltd., 2015 ONCA 247, 27 C.C.E.L. (4th) 177, at para. 10, leave to appeal to S.C.C. refused, 36476 (October 8, 2015).

[54] Mene’s first argument is based on a false premise: that any mitigation delay, other than what is legitimately an “adjustment period”, should result in an automatic reduction in the notice period. There is no precise formula for determining the reasonableness of an employee’s mitigation efforts or the effect of any delay in mitigation on the employee’s damages. Here, the motion judge concluded that given the way Ms. Humphrey was treated, it was difficult to fault her for not starting her job search immediately, although waiting six months to send out applications was too long: at para. 163. The motion judge’s assessment of the reasonableness of Ms. Humphrey’s efforts, and the effect of Ms. Humphrey’s delay in applying for jobs on the damages to which she is entitled, reveals no error in principle or palpable and overriding error of fact. Although a reduction of only one month is very generous, the motion judge’s assessment of the appropriate reduction is entitled to deference.

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[57] With respect, the motion judge set the bar too high on the issue of mitigation in addressing this evidence. Comparable employment does not mean identical employment. It means “a comparable position reasonably adapted to [the plaintiff’s] abilities”: Link v. Venture Steel Inc., 2010 ONCA 144, 259 O.A.C. 199, at para. 73, leave to appeal to S.C.C. requested but appeal discontinued, 33690 (April 30, 2010); Dussault v. Imperial Oil Limited, 2019 ONCA 448, 2019 C.L.L.C. 210-053, at para. 5. It was sufficient for Mene to rely on evidence that Ms. Humphrey had been offered a senior management position with compensation that was comparable to or greater than what she earned at Mene. The motion judge erred in finding that “Mene has not provided the Court with persuasive evidence or analysis on whether this position was comparable”: at para. 165

. Humphrey v. Mene Inc.

In Humphrey v. Mene Inc. (Ont CA, 2022) the Court of Appeal considered cross-appeals on a wrongful dismissal case, here on the issue of the Bardal factors determining the length of termination notice:

[32] This court recognizes the “fact-specific and contextual approach to the period of reasonable notice, limited by a range of reasonableness”: Strudwick v. Applied Consumer & Clinical Evaluations Inc., 2016 ONCA 520, 349 O.A.C. 360, at para. 40. As Favreau J.A. recently noted, “[t]his court should not interfere lightly with a court’s determination of a common law notice period. Such a determination requires the court below to weigh multiple factors and assess the circumstances of each case on the basis of its unique circumstances”: Antchipalovskaia v. Guestlogix Inc., 2022 ONCA 454, at para. 56.

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[44] Mene submits that, in considering and applying the Bardal factors, the motion judge relied too heavily on Ms. Humphrey’s title as COO, and did not take into consideration her relatively short period of employment and young age at the time of her dismissal.

[45] I disagree. A fair reading of the motion judge’s reasons makes it clear that she considered all of the Bardal factors. As noted earlier, the question of the weight to be given to each factor was within her discretion, having regard to the particular circumstances of the case. The motion judge reviewed and applied the Bardal factors of age, length of service, character of employment, and availability of similar employment, having regard to the experience, training and qualifications of the employee: Bardal, at para. 21. She considered the authorities put forward by both parties and, after weighing all of the Bardal factors, she fixed the reasonable notice period at 12 months.

[46] Because no single Bardal factor should be given disproportionate weight or be treated as determinative, a short period of service will not always lead to a short period of notice: Honda Canada Inc. v. Keays, 2008 SCC 39, [2008] 2 S.C.R. 362, at para. 32; see also, for example, Sager v. TFI International Inc., 2020 ONSC 6608, 2021 C.L.L.C. 210-014 (two years and nine months of service, nine months’ notice); Sanghvi v. Norvic Shipping North America, 2020 ONSC 8068, 2021 C.L.L.C. 210-023 (three years and nine months of service, eight months’ notice); and Norgren v. Plasma Power LLC, 2018 ONSC 3186, 2018 C.L.L.C. 210-060 (23 months of service, 8 months’ notice).

[47] It would have been an error for the motion judge to overemphasize the short duration of Ms. Humphrey’s employment as a factor. See, for example, Love v. Acuity Investment Management Inc., 2011 ONCA 130, 277 O.A.C. 15, leave to appeal refused, [2011] S.C.C.A. No. 170, where this court concluded that the trial judge erred by overemphasizing the employee’s short length of service (2.53 years) and underemphasizing the character of his employment, where (as here) he reported directly to the CEO. The court substituted a notice period of nine months for the five months awarded at trial.

[48] It is important to keep in mind the object of fixing a reasonable notice period, which is to determine, in the particular circumstances of the case, how long it would reasonably take the terminated employee to find comparable employment: Lin v. Ontario Teachers’ Pension Plan Board, 2016 ONCA 619, 352 O.A.C. 10, at para. 54. In the present case, the motion judge also properly considered the circumstances of Ms. Humphrey’s termination as a factor affecting how long it might reasonably take her to find a new position. The motion judge observed that, having regard to the fact that Ms. Humphrey was terminated allegedly for cause six months after her promotion to COO, “it would be more difficult for [her] to have obtained comparable employment because she would have to explain to prospective employers why she was terminated so soon after her recent appointment”: at para. 147. This is a relevant factor: see, for example, Lin, at para. 53.

[49] In these circumstances, considering only certain factors (Ms. Humphrey’s age and length of service) might suggest that a notice period of 12 months was too high. The determination of reasonable notice, however, required an approach that considered all of the relevant circumstances as they would bear on Ms. Humphrey’s likely ability to find another comparable position. The determination of reasonable notice depends on the context and particular circumstances of the case. Mene has failed to demonstrate any legal error or error in principle in the motion judge’s approach, or any palpable and overriding error of fact that would justify interfering with her determination that 12 months was a suitable notice period. Nor am I persuaded that 12 months is entirely outside of an appropriate range in the circumstances of this case. As I will explain in the next section, however, I would reduce the damages to which Ms. Humphrey is entitled to the equivalent of six months’ compensation as a result of her failure to properly mitigate her damages.

. Humphrey v. Mene Inc.

In (Ont CA, 2022) the Court of Appeal considered cross-appeals on a wrongful dismissal case, here on the issue of punitive damages:

[79] Punitive damages in breach of contract or tort cases are exceptional: their purpose is to punish a defendant for conduct that is reprehensible, and a “marked departure from ordinary standards of decent behaviour”. Whereas damages for conduct in the manner of dismissal are compensatory, punitive damages are “restricted to advertent wrongful acts that are so malicious and outrageous that they are deserving of punishment on their own”: Honda, at para. 62. They should be awarded, in addition to the compensatory damages already awarded, when rationally required to punish a defendant to meet the objectives of retribution, deterrence and denunciation, in an amount no greater than necessary to satisfy these objectives: Boucher v. Wal-Mart Canada Corp., 2014 ONCA 419, 120 O.R. (3d) 481, at para. 79.

[80] An appellate court may interfere with a trial court’s assessment of punitive damages where (1) there is an error of law; or (2) the amount is not rationally connected to the purposes for which the damages are awarded, namely prevention, deterrence (both specific and general), and denunciation: Bank of Montreal v. Marcotte, 2014 SCC 55, [2014] 2 S.C.R. 725, at para. 98. When the quantum of punitive damages awarded is challenged, the question on appeal is “whether a reasonable jury, properly instructed, could have concluded that an award in that amount, and no less, was rationally required to punish the defendant’s misconduct”: Whiten v. Pilot Insurance Co., 2002 SCC 18, [2002] 1 S.C.R. 595, at paras. 107-108. As observed by this court in Pate Estate v. Galway-Cavendish and Harvey (Township), 2013 ONCA 669, 117 O.R. (3d) 481, at para. 202, this standard emphasizes an appellate court’s supervisory obligation to ensure that an award of punitive damages is “the product of reason and rationality”: Whiten, at para. 108.