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2017.10.05

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THE EMPLOYERS' EDGE

No “Double Dipping” Where Trial Judge Awarded Moral Damages for Bad Faith Dismissal and Damages Based on Sexual Harassment

Practice Areas: Human Resources Support

Charitable Donation - Algoma University Business Case Competition - Feb. 18, 2015 (00103142.DOCX;1)

In Doyle v. Zochem the Ontario Court of Appeal upheld a $60,000.00 award for moral damages to an employee who was dismissed in bad faith. In addition, the employee was awarded ten (10) months’ salary in wrongful dismissal damages and $25,000.00 in damages for sexual harassment under the Ontario Human Rights Code (the “Code”).

The Employee was a plant supervisor and health and safety coordinator with the Employer for about 9 years before being dismissed. Over the course of her employment, the Employee faced sexual harassment at the workplace. The Employer was in the process of restructuring. Several employees were being considered for dismissal including the Employee. In a meeting a few days before her dismissal, the Employee raised certain safety issues. Her concerns were ignored by the Employer as they were aware of her possible termination. The Employer instead demeaned and belittled her. The Employee then made a complaint of sexual harassment, unaware of her pending dismissal. The Employer conducted a cursory investigation of the sexual harassment complaint without giving the Employee a chance to respond. The Employee was then dismissed without cause.

The Employer appealed the trial judge’s award of moral damages for a breach of the Employer’s implied contractual obligation of good faith in the manner of dismissal.

The Employer argued that the award for moral damages should be reduced to $20,000.00 because the same conduct was relied on by the trial judge to award both the bad faith and sexual harassment damages. The Ontario Court of Appeal acknowledged that there was an overlap in conduct. However, the Court noted that the conduct relating to the award of moral damages and conduct relating to Code damages for sexual harassment were not identical. The Court further noted: 

“When damages vindicate the same interests in law, the courts take care to avoid double-recovery. Moral damages are awarded as a result of the manner of dismissal, where the employer engages in conduct during the course of dismissal that is unfair or is in bad faith, that caused mental distress: Honda, at para. 57. As indicated in that decision at para 56, the normal distress and hurt feelings resulting from dismissal are not compensable.

In contrast, Code damages are remedial, not punitive in nature, and compensate for the intrinsic value of the infringement of rights under the Code. Such damages are compensation for loss of the right to be free from discrimination and the experience of victimization.”

The Court noted that in this case, the awards in question vindicated different issues in law and there was no overlap in the damages awarded although the same conduct was considered by the trial judge. Moral damages were upheld in this case as there was evidence of untruthful, misleading or unduly insensitive conduct by the Employer.

This decision serves as a reminder to employers to engage best practices when investigating complaints or terminating an employee’s employment. Further, as it is evident from this case, employees can be awarded multiple damages even if the underlying conduct for each damage award overlaps. The Lawyers at CCPartners are familiar with all aspects of human rights claims and employment law issues. Click here for members of our team who can assist you with all of your workplace employment law matters.

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