This lawsuit follows a mother’s recent successful fight to win EI sickness benefits while on maternity leave. Natalya Rougas was diagnosed with breast cancer during maternity leave in 2010, and was awarded the maximum 15 weeks of sickness benefits in addition to her combined 50 weeks of maternal and parental benefits. The award amounted to about $6,000, or $400 a week.

So what happened with allocating combined maternity/parental and sickness benefits to mothers on leave?

Currently, the Employment Insurance Act allows for more than one type of special EI benefit (maternity, parental, sickness and compassionate care EI benefits) to be claimed during a benefit period while on a related leave of absence from work. However, the maximum number of weeks for combined special EI benefits is 50 in a 52-week benefit period, but can extend to 65 weeks when combined (except for biological mothers who could be eligible for combined EI benefits for 71 weeks). Proof of entitlement is required for each type of special EI benefit.

As stated by Service Canada, this means that mothers who have given birth could potentially receive EI sickness benefits for up to 15 weeks, EI maternity benefits for up to 15 weeks, and EI parental benefits for up to 35 weeks, and EI compassionate care benefits for up to 6 weeks, as long as they meet the entitlement conditions for each type of benefit requested.

Unfortunately, and according to Jennifer McCrea and Carissa Kasbohm who are spearheading this class action, the law was not applied properly. The government has denied the EI sickness claims of an estimated 30,000 mothers since 2002, the year the government amended the Employment Insurance Act to extend EI sickness benefits to women who become ill during pregnancy or maternity and parental leave.

Stephen Moreau, the lawyer who represented Rougas, and is now acting on behalf of McCrea, argues that the EI commission’s “narrow” reading of the 2002 legislation meant that only women who claimed sickness benefits during pregnancy were deemed eligible. The Toronto lawyer, at Cavalluzzo Hayes Shilton McIntyre & Cornish LLP, says that the problem is not with the law but with the staff who refuse to apply the law or apply it inconsistently.

The class-action lawsuit was filed January 19, 2012 in Federal Court and is awaiting certification to proceed.

What is a class-action lawsuit?

Class actions are lawsuits in which the claims and rights of many people, defined as having common but no identical interests, are decided in a single court proceeding brought by representative plaintiffs, or representatives of the class. A motion must be brought before a Canadian Court of Justice, and the action must meet the following five conditions in order to be certified to proceed as a class action:

• The pleadings show a cause of action
• There is an identifiable class of persons that could be represented by a representative plaintiff
• The claims of the class members raise common issues
• A class proceeding is deemed the preferable procedure for the resolution of common issues
• There is a representative plaintiff, or plaintiffs, who would fairly represent the interests of the class

Any settlement reached in a class action must be approved by the court as being fair, reasonable and in the best interests of class members.

Ontario, British Columbia, Alberta, Quebec, Saskatchewan, Manitoba, New Brunswick, Nova Scotia and Newfoundland and Labrador are the provinces in Canada with class proceedings legislation in effect. In any event, the Supreme Court of Canada has recently ruled that court procedures allowing representative actions can be interpreted so as to allow for class proceedings.

This case has not yet gone to trial before the Federal Court in Canada and there has been no judicial decision made on the merits of this lawsuit.

Yosie Saint-Cyr
First Reference Human Resources and Compliance Managing Editor

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A January 25, 2012, British research study published in PLoS ONE Journal indicates that people who work 11 or more hours a day have double the odds of becoming depressed compared with those who don’t work overtime. But why is this important for us as employers to know?

Common mental illnesses, such as depression, are an important public health concern. According to projections by the World Health Organisation, depressive disorders will be the leading cause of disease burden in high-income countries by 2030. In addition to human misery, mental illnesses often result in substantial work impairment and lost work days. Closer to home, according to the Mental Health Commission of Canada, mental illnesses and mental health issues are the leading cause of short- and long-term disability in Canada. The cost of dealing with these issues is in the range of $51 billion per year, with almost $20 billion of that amount coming from workplace losses.

What the study tells us

The study was funded by the British Medical Research Council, British Heart Foundation, Stroke Association, United States National Heart Lung and Blood Institute and the US National Institute on Aging. Several authors participated, led by Dr. Marianna Virtanen of the Finnish Institute of Occupational Health and University College London.

The study followed 2,123 middle-aged civil servants for six years. Most of the civil servants, 52 percent, worked a regular workday. Another 37 percent averaged 9- or 10-hour days and 11 percent clocked 11 hours or more. All of the subjects were considered mentally healthy when they started the study. After six years, just over three percent were diagnosed with clinical depression. Those who worked an average of at least 11 hours a day showed up to 2.5 times the risk of a major depressive episode compared with those working a standard seven- to eight-hour day, the researchers found.

“Although occasionally working overtime may have benefits for the individual and society, it is important to recognize that working excessive hours is also associated with an increased risk of major depression,” says Dr. Virtanen.

Although they do not yield exactly the same results, several other ongoing studies in various countries concur, suggesting that long working hours may increase the risk of various adverse outcomes, including psychological distress and symptoms of depression and anxiety, decline in cognitive function and new-onset sleep disturbances. However, others have yielded a completely opposite point of view.

For example, in a follow-up of Canadians over 1–2 years, working 41 hours or more per week compared to 35–40 hours was associated with a higher rate of new-onset major depressive episode among women but not among men. Another study with a 24-year follow-up did not find any association between “overtime work” and incidence of depressive disorder, including cases of subclinical depression.

It is important to note that as all civil servants are white-collar workers, it remains to be seen whether the recent findings can be applied to blue-collar workers and employees in the private sector. There is a need and a call for additional studies, including research to examine whether interventions designed to reduce working hours would alter depression risk in working populations.

In addition, plausible explanations of why long working hours are associated with the development of depression cannot be drawn directly from the study. There are too many outside factors such as work-family conflicts, difficulties in unwinding after work, or prolonged increased cortisol levels (level of the hormone cortisol in the blood). The effect of long working hours on mental health may also be different in women and men. To date, the exact cause of depression is not known, but it is widely assumed that it is multifactorial involving genetic, biological and psychosocial factors.

A Canadian perspective

A new study by the Institute for Work & Health on Canadian workers published in American Journal of Public Health also finds that increases in job demands can increase the risk of depression. Depression has in fact a work-related component.

The study examined the effects of changes in job control (the ability to make decisions and use skills at work), psychological demands (the pace and mental intensity of work) and social support on subsequent depression. Using the National Population Health Survey, researchers looked for these effects among 3,735 Canadians who were ages 25 to 60 in 2000–01, and who worked at some point in both 2000–01 and 2002–03. One key finding: increases in psychological demands are more important than declines in job control for the onset of depression in Canadian workers.

What can employers take from these studies?

Work-related depression, mental illness and stress arises where work demands of various types and combinations (e.g., overtime, heavy workload) exceed the person’s capacity and capability to cope. For example, a person might feel under pressure if the demands of their job (such as hours or responsibilities) are greater than they can comfortably manage. Other sources of work-related stress or mental illness include conflict with co-workers or bosses, constant change and threats to job security, such as potential redundancy.

It is important to note that employees are not all the same. What one person may perceive as stressful, however, another may view as challenging. It will all depend on their job, their physical and emotional make-up, their health, personal life and other factors. Also, what may be challenging at one point may become stressful when certain factors change or time elapses.

It is important for employers to recognize work-related stress and mental illnesses such as depression as a significant health and safety issue. A company can and should take steps to ensure that employees are not subjected to unnecessary stress at work.

Employers should think of cutting down on the need for overtime by reorganizing duties or employing extra staff. Encourage an environment where employees have more say over their duties, promotional prospects and safety. Take into account the personal lives of employees and recognize that the demands of home will sometimes clash with the demands of work, and make sure that everyone is properly trained for their job, among other measures. Also, employers should not stigmatize the issue of mental illness, but invite employees to openly discuss the issue by implementing a stress management program where all employees can participate.

Yosie Saint-Cyr
First Reference Human Resources and Compliance Managing Editor

© 2012 First Reference Inc. All Rights Reserved. | Permalink | One comment |

CANlabel screenshot

The Canadian Centre for Occupational Health and Safety (CCOHS) has released its CANLabel tool to help organizations that handle chemicals comply with requirements under Canada’s Workplace Hazardous Materials Information System (WHMIS), the United States’ Occupational Safety and Health Administration Hazard Communication Standard (OSHA) and the Globally Harmonized System of Classification and Labelling of Chemicals (GHS). It’s a subscription service, but you can test drive a demo version to see if it suits your needs.

Last week I sat through a CCOHS web demo of the application alongside an outline of the GHS. It looks like a worthwhile product; definitely worth giving the demo a try. The key features are:

• WHMIS, OSHA and GHS formats
• Hazard classifications drive phrase options
• Automatic translations of standard phrases to French and Latin American Spanish
• The ability to customize phrases
• Compatibility with off-the-shelf adhesive stationary
• Multiple label sizes

The GHS “Purple Book” is essentially ready. If you use labels that comply with WHMIS and/or OSHA already, you can continue to do so, but you should be aware that the transition to GHS is underway—sort of. The implementation has been pushed back a couple of times, from 2008 to 2011 to unsure, and the government seems in no rush to discuss the issue; no law to implement the GHS has been tabled. Nonetheless, legal and regulatory changes are the final steps, and the CCOHS is trying to get business’ attention.

One thing I found interesting is that the GHS is not going to be fully harmonized.

Our hazard classification system will be a combination of WHMIS and GHS. In fact, GHS will become part of WHMIS. According to Environmental Compliance Insider, if your organization “manufactures chemicals, it will have to reclassify those chemicals under the GHS rules, and generate GHS-compliant labels and SDSs [Safety Data Sheets]. If your company uses such chemicals, you’ll have to get updated SDSs for those chemicals and ensure that new GHS-compliant labels are on them.” And train employees where appropriate.

Another limit on harmonization is that countries may pick and choose the parts of the GHS that they use.

Canada Occupational Safety Magazine says we shouldn’t be too hasty to act though. One WHMIS expert recommends companies not start classification or reclassification, but start learning the rules. Another is less convinced, warning companies against being “too proactive.” There is simply too little information on which to base any change.

Add a phase-in period and we’re unlikely to see GHS implemented until 2017. For more information, read the linked articles and this Globally Harmonized System “OHS Answer” from the CCOHS.

Tell us about your experience with the CANLabel system and feel free to leave questions about the GHS in the comments!

Adam Gorley
First Reference Internal Controls, Human Resources and Compliance Editor

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The Ontario Human Rights Tribunal recently examined an application before it and an earlier statement of claim made in civil court by the same person, and concluded that the claims were virtually identical. They were based on the same facts, made the same allegations and sought similar remedies. Subsection 34(11) of the Ontario Human Rights Codeprevented the tribunal from hearing the application.

Essentially, the tribunal prevented the duplication of claims in different forums and dismissed the human rights application.

The applicant filed an application with the Human Rights Tribunal, alleging discrimination and reprisal against her employer on the ground of disability and sex. She claimed that her employer treated her unfairly and ultimately dismissed her when she tried to return to work following a short-term disability leave.

Then it became known that the applicant had already made a wrongful dismissal claim in civil court against the employer. Therefore, the employer filed a request with the tribunal that the application be dismissed because there was an ongoing civil court action concerning the exact same matter.

Subsection 34(11) of the Human Rights Code states that a person cannot make an application under the Code if a civil proceeding has been commenced in court, a court has already determined the issue of whether the right was infringed, or the matter has been settled.

The tribunal carefully examined the claims at the tribunal and at court, and concluded that the applicant relied on the identical facts, alleged that the same types of employment-related disability and gender rights were violated, and sought similar remedies.

The tribunal noted that the provision in the Code is there to prevent this kind of duplication from occurring, and the applicant was barred from bringing her application to the tribunal. As a result, the tribunal application was dismissed.

Employers should be aware of this decision. When a claim is brought against them in multiple forums, employers are recommended to be proactive in limiting the duplication of proceedings. As can be seen in this case, a request to dismiss an application at the tribunal is appropriate in situations where the same matter is in progress or has already been dealt with in court. It is important to prevent an employee’s forum-shopping before it gets out of hand and various decisions are made on the same matter. This requires the employer to be aggressive by bringing the request to dismiss before the tribunal as soon as possible.

Christina Catenacci
First Reference Human Resources and Compliance Editor

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The parties can negotiate a settlement that is based upon some form of salary and benefit continuance or a lump sum payment. In the event of salary continuance, tax withholdings will apply as they would in the normal course when the individual was actively working. However, if a settlement is paid as a lump sum (and this can be divided into several payments), then it can be treated as a retiring allowance under the Income Tax Act, which provides for different tax treatment. Despite the name, a retiring allowance does not only arise in relation to an individual’s retirement; rather, it relates to an amount received by a taxpayer:

(a)  On or after retirement from an office or employment in recognition of long service; or

(b)  In respect of a loss of office or employment (including damages).

The Canada Revenue Agency has clarified that, “where a payment of damages arising from loss of employment includes an amount in respect of the period of reasonable notice, this amount will be considered a retiring allowance.” The withholdings to be applied are as follows:

• For amounts up to $5,000: 10 percent
• For amounts between $5,000 and $15,000: 20 percent
• For amounts over $15,000: 30 percent

(The amounts are different in Quebec.)

It is also important to note that retiring allowances are not subject to withholdings for CPP or EI.

Dismissed employees can avoid tax withholdings altogether if they have retiring allowance amounts paid directly into an RRSP or RPP. For pre-1996 employment, there is an automatic eligibility of $2,000 per year. For pre-1989 employment, there is a further $1,500 per year. In addition, if individuals have room currently available in their RRSPs, they can contribute up to that amount. Employers that are asked to transfer amounts into an individual’s RRSP are required to make reasonable inquiries to confirm that there is sufficient room available.

While it is possible to pay a retiring allowance in several instalments, it is important to distinguish such payments from regular salary continuance. The payments should not be made on the usual payroll schedule, or in similar amounts. Finally, a recent change in procedure provides that retiring allowances are to be reported on T4 slips, rather than T4A slips.

It is often possible to make some payments more tax-effective in other ways. First, any money that is paid to reimburse the dismissed employee for legal fees incurred is not counted as income. It is advisable for an employer’s counsel to receive written confirmation that any amounts allocated to this heading do not exceed the actual amount of legal costs incurred by the individual.

Furthermore, where there is a legitimate basis, a portion of the settlement can be allocated toward payment of general damages, which are also not treated as income. Such damages can be based upon, for example, allegations of breaches of the applicable human rights legislation. There must be a legitimate basis for such a claim, and the amounts allocated must be reasonable. It is always open to the CRA to investigate such payments and make its own determination regarding the appropriateness of the allocation.

The other issue that often arises in the settlement of a wrongful dismissal claim is the repayment of employment insurance payment benefits. Section 45 of the Employment Insurance Act requires that a claimant repay employment insurance benefits received when a former employer pays a judgment or settlement in respect of the subject employment. Moreover, section 46 of the Act provides that it is the obligation of the employer to withhold an amount equal to the employment insurance benefits received by the claimant from any judgment toward settlement. Therefore, the employer or payor will have an obligation to make appropriate inquiries in order to determine whether any employment insurance benefits were received, and if so, the amount to be held back for repayment. This often surprises counsel that do not practice regularly in the area of employment law. As a matter of practice, counsel should be clear during the negotiations that any payments discussed will be subject to withholding for repayment of EI benefits.

As we know, the vast majority of disputes arising out of dismissals are resolved. It is important for counsel to understand some of the legal issues that can arise, and ensure that they do not expose their clients to any unnecessary liability.

Stuart Rudner
Miller Thomson LLP

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On January 31, 2012, The National Occupational Classification (NOC) 2011 was jointly released for free by Statistics Canada and Human Resources and Skills Development Canada (HRSDC). Its organization is based on the dual criteria of Skill Type and Skill Level, supporting more relevant labour market analysis.

As part of NOC 2011, you will find new occupational groups, such as that for Allied primary health practitioners; merging groups where there has been increasing similarity in the job titles and the work performed, such as in combining Administrative clerks and General office clerks into General office support workers; merging groups, particularly in manufacturing, where they have been declining in size; and moving occupational groups or specific job titles to different skill levels to reflect changes in job requirements, as illustrated in the movements of midwives, pharmacy technicians and water and waste treatment plant operators.

In addition, changing terminology, new technology in the workplace and the rise of new specializations have been reflected in the addition of numerous job titles, such as oil and gas contractor, mystery shopper, physician assistant and seismic buried facilities locator. There is also a new variant of the classification to better support the analysis of highly aggregated data.

The NOC will be jointly revised by HRSDC and Statistics Canada every five years to incorporate information on new occupations. Every 10 years, structural changes that affect the coding framework, such as the addition of new classes, will be considered.

Yosie Saint-Cyr
First Reference Human Resources and Compliance Managing Editor

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On January 24, 2008, the Supreme Court of Canada refused to hear the case of a British Columbia mother seeking to change the Employment Insurance Act and employment standards legislation to allow maternity leave for adoptive parents. In refusing to hear the case, the Court upheld the 2007 federal Court of Appeal ruling Tomasson v. Canada (Attorney General) that adoptive mothers do not qualify for maternity benefits because they do not undergo the “physiological and psychological experience” of pregnancy and childbirth.

Under employment standards legislation, birth mothers can take a total of 52 weeks of leave when they combine maternity (17 weeks) and parental leave (35 weeks), and are entitled to receive a total of 50 weeks of EI benefits (combination of 15 weeks of maternity and 35 weeks of parental EI benefits) for that period. However, the same benefits are not available to adoptive mothers. Adoptive mothers only receive 37 weeks of parental leave and 35 weeks of EI benefits.

Recently, the media reported that a movement to challenge the law to provide equal EI benefits to adoptive parents is gaining momentum. The discrepancy in the law is something advocates like the Adoption Council of Canada are hoping will be addressed when the House of Commons standing committee on human resources tables a long-awaited report on adoption in the next few weeks.

To understand why the federal government continues to differentiate between birth mothers and adoptive mothers when allocating EI benefits, you need to take a closer look at the Tomasson case.

Federal Court of Appeal ruling: Tomasson v. Canada (Attorney General)

The main issue in this case was whether the provisions of the Employment Insurance Act, which grants maternity benefits only to biological mothers, discriminates against adoptive mothers and violates their rights under section 15(1) of the Canadian Charter of Rights and Freedoms.

The Charter states that:

Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination and, in particular, without discrimination based on race, national or ethnic origin, colour, religion, sex, age, or mental or physical disability.

Tomasson argued that the purpose of maternity benefits is to recover from the birth and to bond with the child. She asserted that although she did not need to recover from the birth, she required the time to bond with and attach to the child. She provided evidence regarding the typical attachment process between mother and child, including a child who is adopted early in infancy. Tomasson showed that the process of attachment for children who are adopted early in infancy is similar to that of typical attachment.

The Court stated that the purpose of maternity benefits is:

• To protect women who work from the economic costs of pregnancy and childbirth while they recover from the birth
• To ensure biological mothers experience no disadvantage when they return to the workforce

It is not to encourage bonding or attachment.

The Court also pointed to previous cases stating that it is not necessarily discriminatory to treat biological mothers differently from other parents, including adoptive parents. Although adoptive parents undergo challenges in adopting and caring for their children, these challenges are not as severe and distressing as the physical and psychological challenges facing biological mothers.

The Court applied the test of discrimination and found the following:

• The comparator groups were biological mothers and adoptive mothers
• There was indeed differential treatment between the two groups of mothers within the Employment Insurance scheme
• The differential treatment did not have a purpose or effect that was discriminatory within the meaning of the equality guarantee as set out in the Charter
• It was impossible to find that in enacting maternity benefits provisions in the Act, Parliament demeaned adoptive mothers or cast any doubt on their worthiness as human beings
• In addition, the needs of adoptive parents were accommodated when Parliament enacted parental benefits

Consequently, the distinction in the Employment Insurance provisions was not discriminatory against adoptive parents. In fact, the maternity leave provisions ensure the equality of women who suffer the disadvantage in the workplace due to pregnancy-related matters. The distinction created was legitimate because it sought to accommodate the needs of pregnant women in the workforce as a disadvantaged group. Thus, the distinction did not violate the Charter, and Tomasson’s appeals were dismissed.

Conclusion
Certain groups of individuals can be and are required to be treated differently in order to ensure equality. In this situation, there was a legitimate purpose to the Employment Insurance provisions in order to ensure equality. The test of discrimination was applied; Tomasson was not successful. Consequently, adoptive parents have access to parental benefits, and biological parents have access to both maternity and parental benefits within the Employment Insurance scheme.

Yosie Saint-Cyr
First Reference Human Resources and Compliance Managing Editor

© 2012 First Reference Inc. All Rights Reserved. | Permalink | One comment |

Undoubtedly, the employee was upset that the employer had simply left the termination letter on the seat of his bus. He read the letter providing him with five weeks’ working notice, drove the bus to the terminal, left work permanently and subsequently sued for wrongful dismissal.

The trial judge found that the five weeks’ notice was found to be inadequate, but the employee had repudiated his employment contract by failing to work after notice was given. As a result, the employee was not entitled to any damages.

However, the Court of Appeal disagreed with the trial judge’s decision and found that the employer breached the employment contract by failing to give adequate notice of termination. Also, this breach gave the employee a cause of action for damages in lieu of reasonable notice.

In light of the circumstances, the period of reasonable notice for which damages could be recoverable was the period of reasonable notice to which the employee was entitled, less the period of notice actually given during which the employee could have and should have worked and been paid.

The Appeal Court made a point of stressing that the employee’s failure to work during the notice period was a repudiation that brought to an end the employment relationship and the ongoing rights and obligations of the parties under it. Yet that repudiation did not take away the employee’s cause of action for damages in lieu of notice or the employer’s right to have the employee’s services during the notice period that was given because those rights had accrued before the repudiation.

Consequently, the employee was awarded five months’ notice after deducting the notice he could have worked and be paid. The Court assessed the typical factors, including the age of the employee (61), the length of his tenure (five years), his work history as a professional forester, and his attempts to find alternative employment after the termination (little success).

Do you agree that employees who leave permanently and who do not work the notice period should still be able to sue for damages for reasonable notice? Do you think it is a reasonable compromise that the amount of notice is reduced by the notice that should have been worked?

Christina Catenacci
First Reference Human Resources and Compliance Editor

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Unfortunately, since the consultation period is over, the draft of the standard is no longer available online. You can still obtain a copy by calling the CSA Standards or any of their partners championing the development of the Standard.

Luckily, Cheryl A. Edwards and Shane Todd from Heenan Blaikie LLP have prepared a very in-depth analysis of the proposed Standard and you can view it here.

According to the Mental Health Commission of Canada, mental illnesses and mental health issues are the leading cause of short- and long- term disability in the country. The cost of dealing with these issues is in the range of $51 billion per year, with almost $20 billion of that amount coming from workplace losses.

Thus, it will be interesting to see how the government, advocacy groups, associations like the CSA, mental health agencies and private sector will assist employers with solutions, resources and tools to deal with this important issue.

Previously posted on Slaw.

© 2012 First Reference Inc. All Rights Reserved. | Permalink | Make a comment |

To summarize, Tipple was a successful private sector executive who was hired by the Federal Department of Public Works and Government Service Canada (PWGSC). Less than a year after Tipple was hired, he and one of his colleagues travelled to Britain to engage in a number of official meetings. They missed a number of the meetings, and the Globe and Mail published a series of articles that were critical of the trip, suggesting it was unnecessary, a waste of tax dollars and that Tipple and his colleague had not properly carried out their duties while on the trip.

An investigation by the department found that Tipple had done no wrong and that the missed meetings were the result of miscommunications between other departments. However officials at the PWGSC also refused to allow Tipple to correct the record. Shortly thereafter, Tipple was laid off, with PWGSC relying on a clause in his contract that allowed the department to lay him off if his work was “completed sooner than expected.” Tipple’s work was ahead of schedule.

However, the Parliamentary Secretary to the Public Works Minister later suggested that Tipple had been let go as a means of holding him accountable for the trip to Britain.

Tipple filed a grievance pursuant to the Public Service Labour Relations Act. The adjudicator who heard the case awarded Tipple approximately $960,000 (including interest) for lost wages, performance bonuses and benefits on the basis that official reasons given were intended to hide the real justification for the termination—reprisal.

Interestingly, the adjudicator also awarded further amounts pursuant to Honda. Tipple was awarded $125,000 because the termination had been conducted in a bad faith manner. The Adjudicator stated:

[The employer] acted in a disingenuous and callous manner in terminating Mr. Tipple’s employment.  The evidence shows that Mr. Marshall had lulled Mr. Tipple into a false sense of security.  I find that such conduct was unfair or was in bad faith by being untruthful, misleading and unduly insensitive to Mr. Tipple.

Tipple testified that the dismissal had caused him to suffer from “lack of confidence, hurt feelings, low self-esteem, humiliation, stress, anxiety and a feeling of betrayal.” The adjudicator found that these personal and mental health effects justified the award of moral damages.

The adjudicator also awarded damages in the amount of $250,000 for loss of reputation. This is another interesting point that I will address in a blog in the future.

The Federal Government appealed both the awards for moral damages and for damage to reputation. The Federal Court did not completely eliminate the $125,000 award, but it did remit the matter back to the adjudicator to “reconsider and reduce” the amount.  The Court held that the amount was “significant” and was approximately triple previous awards for psychological injury relating to bad faith behaviour.

In particular, the Court found that the award was not reasonable based on the evidence presented. The adjudicator had failed to explain the basis for his arriving at $125,000; had relied solely on Tipple’s testimony with regard to the damage; and there was no indication in the decision that the psychological injury was “significant, long lasting, and ongoing.” As such, the Federal Court ruled that the amount was to be reduced and reconsidered by the adjudicator.

This ruling is significant in that it sets out some guidelines, and also clearly creates an implied range for the assessment of moral damages.

Based on the comments of the Federal Court, employers can conclude that a risk for moral damages will be present where bad faith behaviour is present, even if there is an absence of any long-lasting psychological injury. Further, it can be expected that such damages could fall in the range of $20,000–45,000.

However, this area of the law is still emerging and there will likely be much uncertainty associated with it until we have a sufficient number of cases from appeal courts in a majority of jurisdictions.

Andrew D. Taillon
Cox & Palmer
Barrister & Solicitor

© 2012 First Reference Inc. All Rights Reserved. | Permalink | 2 comments |