Litigation expenses continue to increase to the point that many cases are uneconomic for dismissed employees in that the potential legal expenses are greater than the potential recovery. Employers sometimes end up paying more for legal fees than they could have paid to settle the case.
Since the Supreme Court of Canada’s decision in Honda v. Keays, dismissed employees have increasingly sought bad faith damages in severance negotiations and wrongful dismissal actions. A key issue in these claims is whether the employer’s conduct was sufficiently egregious to justify these damages. The courts are clear that not every perceived offence or instance of misconduct will give rise to a finding of bad faith.
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