In Canada, employers have an obligation of good faith and fair dealing in the way they dismiss an employee. If an employer breaches their duties to an employee, and the employee suffers mental distress as a result, the employer will be liable for aggravated damages, also known as mental distress damages.
The recent case of Younesi v Kaz Minerals Projects B.V, 2021 BCSC 614 demonstrates that even modestly insensitive criticism of an employee which triggers mental distress due to the employee’s particular sensitivity will lead to an award.
In that case, the Employee was employed as an Engineering Manager for just under three months before he was terminated without cause. During the termination meeting, after being pressed by the Employee for the reasons for the termination, the employer’s representatives said that:
- The Employee didn’t have the respect of senior management;
- He was not a good engineer;
- He was not a good manager; and
- He was an embarrassment to the company.
The court held that these statements during the termination meeting were unduly harsh, insensitive, and insulting and that it was an attack on the employee’s competence. As far as the employee was concerned, this was the first that he had heard of these alleged shortcomings.
In determining liability and quantum, the court also considered and applied the “thin skull rule”, which imposes liability for a plaintiff’s injuries even if they are unexpectedly severe owing to a pre-existing condition. This runs counter to the general contract law damages rule that only the “reasonably foreseeable” consequences of a contract breach are recoverable.
The court found that the Employee was a “very proud person” and that the manner of termination had a lasting impact on him. The Employee testified that he took the termination very hard and that he struggled with eating and sleeping afterwards. While the Employee’s evidence of mental distress was modest and did not include medical evidence, the court stated that it was sufficient to support a finding that he had suffered serious and prolonged distress.
The court noted that generally awards for aggravated damages range from $25,000 to $35,000 in more serious cases. The court ultimately awarded the Employee $12,500 for aggravated damages.
During the course of termination, employers should avoid insulting or criticizing an employee’s competence, particularly where there has been no attempt at correcting or coaching those issues. This is particularly true when terminating without cause. If the employee presses for details of the reasons for termination, this case indicates the employer should still refuse to provide negative feedback. Employers should be especially careful with employees who are potentially more sensitive to such feedback. Employers should also ensure a witness is present and take diligent notes during such meetings to ensure that there is a clear record of the conversation.
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