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Employers often wonder what the consequences might be if they don’t do everything their lawyer tells them to or, if they don’t get a lawyer at all and just “wing it” when hiring, firing, or dealing with workplace issues like harassment complaints or requests for accommodation. 

Of course, it depends. Not every employee is going to be litigious, but a fair number are. It’s generally pretty easy for employees to get legal consultations and a lawyer to take their “wrongful dismissals” on contingency. The barrier to entry can be quite low.  

So, what can an employer expect? In today’s post, we will go through the various types of employer-worst-case-scenario employment law damages.

Notice Damages

Absent just-cause for dismissal, employees are entitled to reasonable notice of their termination. Notice can be determined by the employment contract, but in many cases, there will be no valid contract and the employee will be entitled to notice in accordance with the common law. Common law notice can be as much as 24 months of the employee’s total compensation – including benefits, bonuses etc. Check out last week’s post for more on notice, benefits, bonuses and commissions.

Notice damages are by far the most important and common in terminations cases. 

Damages for Breach of Contract

If the employee was promised something under their employment contract, for example, employment for a fixed term or pay at a certain level, and the employer does not live up to those promises, the employee will have a claim for breach of contract. A claim for breach of contract will generally be for the difference between what the employee got and what the contract promised. Employees who have had their pay cut as a result of COVID-19 slowdowns could have breach of contract claims. 

Human Rights Damages

Where an employee feels that they have been discriminated against based on a prohibited ground – race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex, sexual orientation, gender identity, gender expression, age, record of offences, marital status, family status or disability – they may be entitled to human rights damages for injury to their dignity, feelings and self-respect. 

Aggravated Damages for Mental Distress  

Employers have a duty of good faith with respect to the termination of an employee. While it is expected that feelings will be hurt – and there will be some degree of mental distress – from the mere fact of being terminated, should the employer’s termination conduct be somehow unfair, insensitive or “in bad faith,” this can attract additional damages. 

Here is a judge-made list of employer behaviour that has resulted in aggravated damages:

• telling other employees or the employee’s family that the dismissed employee is stupid or incompetent 
• dismissing the employee within a day or two of a major family event or trauma
• telling others unfounded, embarrassing or demeaning reasons for the dismissal without an honest belief as to their truth
• attacking the employee’s reputation by declarations made at the time of dismissal
• misrepresenting the reason for dismissal to deprive the employee of a pension benefit or another right 

(Smith v Vauxhall Co-Op Petroleum Limited, 2017 ABQB 525 (CanLII), <http://canlii.ca/t/h6qg9>)

Punitive Damages

Punitive damages are damages intended not to compensate the employee for some harm, but to punish the employer for their conduct. These are rare, because – thankfully- conduct that is harsh, vindictive, reprehensible, malicious and deserving of condemnation and denunciation is pretty rare. Punitive damages awards can be big because they need to be big enough to have a deterring impact on the employer. 

Legal Fees or Costs

Employee demand letters usually come with an ask for legal fees. The reasoning goes that had the employer treated them fairly they would not have needed a lawyer and would not have needed to incur this cost. 

If an employee is successful in a court action, the employer will generally have to pay “costs” which will be a portion of the employee’s legal costs to bring that action to court. 

Other Losses

The above list is not exhaustive. Employers can also be on the hook for things like the employee’s costs associated with looking for a new job, or their medical or counselling bills incurred to deal with the trauma the employer caused them. 

Takeaways

Everything starts with a good contract! With a properly drafted contract, setting out what an employee will get if terminated without cause, an employee should never have a need to take action against an employer. 

Employers face a lot of tough situations and a lot of tough choices. Employee complaints, requests for accommodation or performance issues all have the potential to lead employers into hot water. When in doubt, ask your employment lawyer! 

Get in touch for a consultation and to find out how we can help!