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Wallace Damages has two components

wallace damages

In Headley v City of Toronto ( 2019 ONSC 4496 ) Sanderson J. awarded 18 months notice to a 40 year old Shift Supervisor at a homeless shelter who had been employed for 15 years.

Having found that the Plaintiff was unjustly dismissed due to false allegations of theft, the judge also awarded Wallace damages on two separate grounds:

First, $15,000 for the mental distress raising from the manner of dismissal.

Second, $50,000 for the tangible financial loss caused by the manner of the dismissal as the false accusations of theft impaired his ability to find comparable employment. This is what the judge said:

Wallace Damages for loss of income

402      I am satisfied that the unfair allegations that Headley had committed theft, the City’s unfair dismissal on unsubstantiated suspicion of theft, fraud and wilful dishonesty, Anstett’s refusal to respond to his calls so he could request a letter of reference from his immediate supervisor and the inevitable cloud created by that unfairness have foreseeably led to tangible financial loss of income in the ensuing years. Hopefully this Judgment will dispel that cloud.

403      Almost seven years have passed since the termination. Despite having made what I have found were reasonable efforts, Headley has not succeeded in finding a comparable managerial position. At the time of the trial he was still earning roughly half the total income he was earning in June 2012. With the cloud lifted, I expect that Headley will now be able to find a comparable managerial position.

404      I have found that his employment history before the termination illustrates that he was highly motivated, consistently employed, often for more than 40 hours per week. He also volunteered and provided mentoring to others. But for the unfairness in the manner of his termination, including the unfounded allegations of theft, fraud and dishonesty, I find Headley would have had little difficulty obtaining a comparable managerial position and earning comparable income to the income he earned prior to June 25, 2012.

405      Given the guidance given by Iacabucci J. in Wallace that “if the manner of termination affects employment prospects” it may be worth of considerably more compensation” and given the direction of Bastarache J. in Keays that such damages are to be awarded, not by an arbitrary extension of the notice period but through an award that reflects the actual damages, this Court must attempt to assess the actual damages/tangible financial loss caused by the unfair manner of dismissal.

406      The financial consequences to Headley and his family of the manner of his termination have been significant.

407      Bearing in mind the need to avoid duplication by reason of his receipt of damages as a result of the dismissal under the previous heading, I award $50,000 for tangible financial loss caused by the unfair manner of his dismissal.

Lawyers often seem to forget this important aspect of Wallace Damages as they tend to focus on the mental distress element of the case. This case shows that it may be much more profitable to focus how the manner of the dismissal adversely affected the plaintiff’s employability. I remember  reading about a US case in which the dismissed employee claimed damages for self defamation. In that case he had been falsely accused by his ex employer of theft. The Plaintiff claimed that when he went on job interviews after his dismissal and was asked why was he fired, he was forced to tell the truth by saying “I was falsely accused of theft.” Not surprisingly, although the interviewer might have appreciated his candour, that comment turned out to be a job killer. His damages were the lost opportunity to land another job.

Barry B. Fisher LL.B.

Barry B. Fisher, LL.B., is a mediator and arbitrator of both employment and labour relations matters. He offers three forms of ADR based on clients’ needs: Mediation, Arbitration and Med/Arb. Barry is from the evaluative school of mediation and brings his over 30 years' experience as an employment lawyer and legal author to the dispute. In addition to his knowledge of the legal issues involved in these disputes, he also has a deep understanding of the psychological factors that motivate both employees and employers. By combining these two skills, Barry is able to achieve a settlement rate of over 80% of the disputes that he mediates.

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