In a new Ontario Court of Appeal case, the appellate court upheld the trial court’s judgment in favor of the plaintiff in the amount of $60,000 for moral damages, $55,849 for wrongful dismissal, $25,000 in human rights damages and an unusually high $424,584 legal costs award.¹

Facts

Melissa Doyle, the plaintiff employee, alleged that her manager sexually harassed her on numerous occasions and that she reported this harassment during a meeting.  She also claimed that a number of her co-workers demeaned her at that meeting and knew that the company planned to terminate her employment.  The plaintiff further alleged that the company conducted a “cursory” investigation into her sexual harassment claims.  The trial judge also determined that company management instructed other employees the “dig up dirt” about the plaintiff.  

The plaintiff also alleged that during  another meeting, management told her the company “no longer needed” her and that she acted irresponsibly  by putting the reputation of the manager on the line by claiming sexual harassment. Furthermore, the plaintiff claimed that on the day of her termination, somebody secretly took her car keys from her purse and drove her car up to the building to speed up her departure.  During this time, the company pressured her to sign a release without legal advice (in spite of language in the document that suggested having counsel review it). The employer also refused the plaintiff’s short term disability claim despite a letter from her doctor stating that she qualified for six months disability.

After these events, the plaintiff’s doctor diagnosed her with having major depressive disorder and anxiety.

Moral Damages

Moral damages may be awarded in cases where the court finds the employer caused mental distress due to bad faith, unfair or unduly insensitive behaviour in the course of terminating an employee. Moral damages do not arise from an employee’s actual termination. Instead, moral damages arise from the circumstances and behaviour surrounding the termination.

The Court of Appeal found that the trial court’s $60.000 moral damages award was justified. The  trial court judge found that the employer met the above-identified factors because the company: (1)  poorly investigated the sexual harassment allegations, (2) treated the employee coldly during the “mangled” termination process, (3) failed to give the employee cause for dismissal, and (4) brusquely and insensitively denied the employee’s disability claim. Notably, even though the plaintiff’s manager knew the company would be terminating her, he still assured her that her job was safe, even after already making –but not communicating – the decision to terminate. The trial judge, accordingly, found the employer’s dealings with the employee “completely disingenuous”.  The Court of Appeal stated that the response of the manager to the sexual harassment complaint was “insensitive to the point of verging on cruel."

The trial judge also took into account various business decisions, such as the sale of the company, the termination of four other employees around the same time as the employee, and that the company planned to terminate two additional employees.   The appellate court noted these facts were irrelevant, but stated that taking into account these irrelevant considerations did not diminish the assessment of moral damages because of the more serious aspects of the employer’s conduct.  The court found that rather than looking at various individual incidents, the court would look at the totality of the employer’s conduct. 

High Legal Fees

The appellate court based its legal fee determination on the results of a 28-day trial in which the employer made numerous allegations against the employee to try to prove cause for dismissal, despite not initially alleging cause. The costs judge chided the employer for “dredging up every incident” and dominating almost the entire trial with tangentially related evidence. The employee, for her part, also claimed upwards of $4.2 million compensation for multiple allegations, and was only successful on a small portion of her allegations, further complicating the trial and causing it to run long.

Takeaways

• Moral damages for bad faith dealings can be awarded when a court determines the conduct of employers is unduly insensitive to the employee.
• Moral damages can be awarded alongside damages under the Human Rights Code because moral damages are punitive while Code damages are remedial.
• Employers should review their procedures and policies regarding workplace and sexual harassment to ensure they are compliant with Bill 132 amendments to the Occupational Health and Safety Act effective September 2016.
• Employers should implement appropriate trainings of supervisors and employees in order to ensure that proper and thorough investigations of alleged workplace and sexual harassment take place.