Ontario’s highest court has slashed a $500,000 punitive damage award down to $100,000 in a case involving a Honda worker with chronic fatigue syndrome (CFS) who was fired after 14 years on the job.
The $500,000 award for punitive damages was believed to be the highest ever in an employment law case in Ontario.
Kevin Keays was terminated by Honda Canada Inc. on March 29, 2000. He had developed (CFS) and had been directed by his employer to meet with its occupational medicine specialist, Dr. Brennan. He declined to do so without clarification from Honda as to the purpose of the meeting, the methodology to be used, and the parameters of Dr. Brennan’s assessment.
Honda refused to provide him with such clarification, and terminated him for disobeying its direction.
Keays sued for wrongful dismissal. After a 29 day trial, the Ontario Superior Court of Justice concluded that Keays had been terminated without just cause (for more information about the trial judge’s original ruling, see below).
The trial judge fixed 15 months as the period of reasonable notice and added a further nine months for the manner of Keays’ dismissal. In addition, he ordered $500,000 in punitive damages because he found that Honda’s treatment of Keays constituted discrimination and harassment, was contrary to Ontario human rights legislation and was both outrageous and high-handed. Finally, he awarded Keays costs on a substantial indemnity basis, together with a premium.
Honda appealed the court’s ruling.
What the Court of Appeal said
The Court of Appeal said Keays had indeed been dismissed without cause and had no problem with the lower court’s decision to award 15 months’ reasonable notice.
It also said the court’s decision to tack on an additional nine months’ for the manner of the dismissal (also known as
damages) was also reasonable, even though it was on the high end of the scale.
But where the court disagreed with the lower court was the amount of punitive damages. The Court of Appeal said awarding Keays punitive damages for Honda’s conduct was a “rational response on the part of the trial judge.” But $500,000 was simply too much and the Court of Appeal reduced it to $100,000.
Writing in the decision, Justice Marc Rosenberg said: “I reach that conclusion because the trial judge relied on findings of fact that are not supported by the evidence and because the award
fails to accord with the fundamental principle of proportionality.”
The trial judge said that Honda’s “outrageous conduct has persisted over a period of five years without a hint of modification of their position that Mr. Keays was the one in wrong. Justice Rosenberg called that a “gross distortion of the circumstances and amounts to a palpable and overriding error.”
The Court of Appeal also reduced court costs awarded to Keays by almost $80,000.
According to the
, Honda said it might still appeal the Ontario Court of Appeal's ruling to the Supreme Court of Canada. In a statement, Honda said it was glad the appeal court had reduced the damages.
"But in totality, we are still disappointed with the judgment and we don't believe the trial or the appeal accurately reflects an understanding of the way Honda treats its associates or conducts its business," said Jim Miller, executive vice-president for Honda Canada Inc.
More on this case in an upcoming issue
In the Oct. 11 issue of
Canadian Employment Law Today
, a partner with Miller Thomson in Toronto, will take an in-depth look at the Court of Appeal’s decision in Keays.
What happens after the trial
Damages aren’t the only things employers need to worry about — costs can also be punishing, as Honda found out to the tune of $610,000
Court "whacks" Honda with $500,000 in punitive damages
Judge blasts automaker's handling of employee who suffered from chronic fatigue syndrome
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