Preface

• Author: Geoffrey England
• Pages: 15-15

PR EFAC E

The writing for this edition was completed in late May 2008. At the end

of the editorial process — and, regrettably, too late to incorporate into

this edition — the Supreme Court of Canada handed down its ruling

in Honda Canada Inc. v. Keays.1 This case is important in two respects.

First, it holds that if an employee is dismissed in bad faith and suffers

consequential psychological harm, compensation for such harm must

be awarded under the usual principles of contract law regarding the

award of damages, namely that such harm must be in the reasonable

contemplation of the parties at the date the contract was made. Previ-

ously, the courts generally extended the period of reasonable notice

of termination to account for bad faith dismissal under the Wallace

doctrine, examined in Chapter 9 of this book. The Supreme Court’s

new ruling means that Wallace extensions can no longer be given in

these circumstances. Second, the Supreme Court quashed the award of

$100,000 in punitive damages ordered by the Ontario Court of Appeal.

In so doing, the Supreme Court signalled that punitive damages should

only be awarded in exceptional circumstances where the employer’s

conduct is f‌lagrantly egregious. The reader is alerted, therefore, that the

Keays decision signif‌icantly modif‌ies Chapter 9 of this book in relation

to Wallace extensions and compensation for wrongful dismissal.

1 2008 SCC 39.

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