Court Of Appeal Overturns Award Of Punitive Damages To Wrongfully Dismissed Employee

Author:Ms Kelly O'Ferrall
Profession:Stikeman Elliott LLP

The Ontario Court of Appeal has released its decision in Brito v. Canac Kitchens, an appeal from an Ontario Superior Court of Justice decision that we discussed in an earlier post. In its decision, the Superior Court awarded an employee significant damages for lost short-term and long-term disability benefits as well as $15,000 in ancillary damages due to the "hardball" approach that the employer took in terminating the long-service employee.


As you may recall from our earlier post, the employee in this case, Mr. Luis Romero Olguin was terminated by his employer, Canac Kitchens (Canac), after 22 years of service at the age of 55. He was terminated without cause and provided with the statutory minimum amount of 8 weeks' pay in lieu of notice and continuation of benefits for the same period. Shortly after being terminated, Mr. Olguin was diagnosed with cancer which rendered him totally disabled and unable to work.  He brought an action for wrongful dismissal, including a claim for damages in lieu of disability benefits. In addition to the award of ancillary damages mentioned above, the trial judge, Justice Echlin, awarded Mr. Olguin 22 months' pay in lieu of notice and over $200,000 in damages in lieu of short-term disability (STD) and long-term disability (LTD) benefits, including the present value of the remainder of his LTD entitlements to his 65th birthday.

Canac appealed the award of damages in respect of LTD benefits and the award of ancillary damages.

Court of Appeal Decision

The Court of Appeal was unwilling to overturn Justice Echlin's decision that Mr. Olguin met the definition of totally disabled under Canac's sponsored disability benefits plan and, accordingly, the award of damages for lost LTD benefits was upheld. The Court of Appeal's view was that the evidence presented at trial by Mr. Olguin was sufficient, if accepted, to support Justice Echlin's conclusion that Mr. Olguin met the evidentiary burden to establish total disability. As the trial judge appeared to have accepted Mr. Olguin's evidence (Canac did not call any medical evidence to support its own position), the Court of Appeal upheld Justice Echlin's decision on this issue.

Canac also tried to argue that Mr. Olguin failed to mitigate his damages by not undertaking job re-training efforts or looking for alternative employment after his STD benefits expired.  However, Justice Cronk for the Court of Appeal made it clear, somewhat obviously, that "there can...

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