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Fabricating reasons for dismissal leads to large damages award

Jurisdiction: - British Columbia
Sector: - Retail Trade

In Bailey v. Service Corporation International (Canada) ULC, 2018 BCSC 235, the BC Supreme Court rejected the employer’s argument that an employee had abandoned his employment, or that alternatively there was just cause for dismissal, when he absented himself for medical reasons for approximately 2.5 months.

The crux of the defendant’s argument was that even after the plaintiff was denied short-term sick leave coverage, he nevertheless continued to absent himself from work while also working full-time as a real estate agent.

The court rejected the claim that the plaintiff was absent without leave, finding that the defendant accepted he was taking unpaid time off work when it sent him an ROE request form and the plaintiff returned it indicating an intention to return to work.

The court also did not accept that the plaintiff had actually been working as a full-time real estate agent. It ultimately found that the defendant had looked for an excuse to dismiss the plaintiff due to his rather aggressive criticisms of management.

Unfortunately for the plaintiff, he was limited to the minimum 8 weeks’ severance under the Employment Standards Act. However, the court did award $25,000 in aggravated damages. It also found aggravated damages alone would not meet the goals of retribution, deterrence and denunciation, and awarded an additional $110,000 in punitive damages. The court used the plaintiff's theoretical common law reasonable notice damages as a yardstick for finding the aggravated/punitive damage awards were not excessive. Although this was simply the court's way of saying there was nothing excessive about the award, this is the sort of detail a lawyer considering an appeal would glom on to, as there is no actual relationship between the heads of damage being compared. 

Cases like this one where the plaintiff is bound by clear severance limiting language often do not make it to court as they represent a large risk for the employee who must rely on winning difficult to obtain aggravated and punitive damages in order to actually come out ahead. Employers will also usually neutralize the claim by paying all or most of a statutory severance period. However, with large damage awards becoming the norm, such litigation may become more common. 

A big highlight from this case includes the fact that a fairly substantial sum of aggravated damages was awarded absent expert medical evidence. And interestingly, the court also accepted, in the absence of a medical expert, that the plaintiff was ill at the time. The court arrived there by finding: that the defendant never challenged that the plaintiff was ill during the relevant time; that the plaintiff’s honest state of mind was that he was ill; and there was no evidence the plaintiff was making up an illness. The defendant also alleged to WorkSafeBC that the plaintiff’s stress was not due to his interactions with a manager, but rather was caused by his own doing, which seemed to constitute an admission on their part that the bona fides of his illness were not actually questioned. 

This decision also serves as a reminder that fabricating reasons for a dismissal can result in some hefty exemplary damages, though the award in this case is high enough to create some risk of reduction on appeal.