Wrongful Dismissal Damages in Employment Law

When a dismissed employee sues their former employer the potential cost to the employer can often be estimated early on in the process. This can help both the employee and the employer reach a satisfactory settlement. In certain cases however the unexpected happens and an employee’s claim becomes far greater than originally anticipated. The recent employment law case of Brito v. Canac Kitchens demonstrates how an employee’s damages can expand in a wrongful dismissal claim.

In the majority of cases an employee who is wrongfully dismissed by their employer is entitled to reasonable notice damages. These damages represent the amount of notice that the employer should have given to the employee that they were going to lose their job. In most wrongful dismissal cases the majority of the damages awarded are reasonable notice damages in the form of a continuing salary during the notice period. The notice period may last anywhere from a few weeks to 24 months. During the notice period employers are responsible not only for an employee’s salary but also for the other benefits an employee received, including long-term disability benefits if applicable.

In the Canac Kitchens case, about 16 months after being laid off, the plaintiff, a dismissed employee of Canac Kitchens, underwent surgery for laryngeal cancer and would have became eligible for the long-term disability benefits formerly provided by his employer. At trial, the judge found that the plaintiff had become disabled during the reasonable notice period that his employer ought to have, but did not, provide. Because the employer had chosen not to continue the plaintiff’s long-term disability benefits during the notice period the employer was held liable to compensate the employee for his lost benefits. This finding by the judge more than doubled the damages award provided to the employee. In addition, the judge described Canac’s conduct as “reckless, outrageous, and high-handed” and an additional award of $15,000 was provided to the plaintiff as ancillary damages. The Canac Kitchens case is an excellent example of how what may seem to be a simple dismissal case can become very costly to an employer when an employee becomes disabled during the notice period. To read the entirety of the decision click here.

Frequently Asked Questions

Short-Term Disability Insurance: What should you do when a claim is denied?

I have been off work since May 2016 and have been trying to obtain short-term disability insurance since then. My doctor has provided me with three sick notes since then and at our last appointment she told me not to work. However, my application for short-term disability insurance has been denied. I’ve given the disability insurer the notes from my doctor and I’ve gone through the appeal process but have been denied again. My employer is now asking when I will return and I’ve booked an appointment with my doctor to see what she thinks. What should I do?

‍It is not uncommon for disability insurers to deny an initial application for short-term disability benefits. Often the reason cited for the denial is a lack of medical evidence of a disability. If the only documentation you have provided to the insurer are sick notes from your doctor it is usually of assistance to obtain further medical records from your doctor including something documenting your diagnosis. Often, after receiving such additional documentation an insurer will approve an application for disability benefits. If you continue to be denied benefits, it is likely time to consult with legal counsel. Also short-term disability benefits typically end within 6 months even if you are approved. Ensure you know when these benefits end and decide with your doctor whether you should be applying for long-term disability benefits if they are available to you.

With respect to returning to work you are entitled to rely on your doctor’s advice. If your doctor tells you not to work this should be documented in a doctor’s note and provided to your employer. Forcing you to return to work when your doctor says you’re sick is in breach of human rights legislation and it’s unlikely that your employer will insist on your return to work in the face of your doctor’s advice.

Are managers and supervisors ineligible for overtime pay?

I recently changed roles at work. My new title is “Accounts Manager” and I am responsible for all the company’s accounts payable and receivable. I also help other staff price our products and develop new accounts. I am very happy about my new role but my job used to be “9 to 5” and now I have to work late and on weekends. I asked my boss about overtime but was informed that managers and supervisors do not receive overtime pay. Is this true?

For most employees in Ontario overtime hours start after 44 hours of work in a week. For every hour worked in excess of 44 hours an employee is supposed to receive time and a half.

Under the Employment Standards Act there are exceptions to the general rule including that managers and supervisors do not receive any overtime compensation. For this “manager exception” to apply, an employee generally needs to be performing work that involves the supervision of other employees in a leadership role as opposed working in general administrative duties. Also, the exempt employee must be working in the manager role the majority of the time while at work - not just every now and then. The fact that someone’s job title includes the word “manager” or “supervisor” does not determine their entitlement to overtime pay. Rather, it depends on what the actual duties of the employee are.

Although many job titles, such Accounts Manager, include the word “manager” this does not necessarily mean you don’t get overtime pay. If your job does not involve supervising other employees this is a good indication that you may be entitled to overtime compensation. For more information you can seek legal counsel or examine the Ministry of Labour’s website at http://www.labour.gov.on.ca/.

I was injured on the job. Should I claim workplace insurance vs. my right to sue?

I was injured in a car accident while driving to drop off a package for my employer—I almost never drive as part of my job. I work in an office as a clerk. The other driver was charged. Now I am off work and need physiotherapy. My doctor says I may have a permanent injury to my back. I have received a Notice from the Workplace Safety Insurance Board (WSIB) requesting that I elect whether or not I want to receive benefits.

‍Can I sue the other driver and receive benefits?

‍No. In Ontario injured workers who receive WSIB benefits forego their right to sue on their own behalf. You may choose to elect not to receive benefits and preserve your right to sue a third party in some limited circumstances. In Ontario, employees who are insured under the Workplace Safety Insurance Act scheme are not permitted to sue their own employer for injuries sustained while working. Depending on the nature of your job, you may not be able to sue another worker or employer either.

However, if you are injured in a vehicle collision and the responsible driver is not a worker as defined in the Act then you may elect whether or not you wish to receive WSIB benefits or pursue the at fault driver. That is a complicated decision.

Generally speaking, the more serious the injuries you have sustained the more likely you will be better off foregoing WSIB benefits and pursuing the at fault driver. However, if there are questions about liability (if you are wholly or partially at fault), or if there is a question about your ability to successfully recover damages in a tort action the WSIB scheme may be the best option for you.

Deciding whether or not to elect to receive WSIB benefits is complicated, and best made with the assistance of a Lawyer with experience in such matters. Experienced Lawyers are available to consult with you, often without obligation to you.