Supreme Court Makes an Impact: Honda Within its Right to Listen to its Own Doctors
Howard Levitt Financial Post: Wednesday, July 16, 2008. All Rights Reserved.
In Canadian legal history, there have been only 11 Supreme Court of Canada cases in non-union employment law. When that court writes a decision, it intends it to make an impact. The recent decision in Keays v. Honda Canada does, although its significance has been grossly mischaracterized and misunderstood: Keays was peridocially absent with chronic fatigue syndrome for several years. Honda, noting that his doctor's notes were becoming increasingly limited, ordered him to see its specialist. It warned failure to do so would result in dismissal. On the advice of legal counsel, Keays demanded to know "the purpose, methodology and parameters of the assessment." When he persisted in refusing the assessment, Honda fired him.
The trial judge awarded 15 months severance, nine months in Wallace damages, $500,000 in punitive damages – a high-water mark in employment law – and increased costs.
The Court of Appeal reduced the punitive damages to $100,000.
The Supreme Court of Canada, however, struck out Wallace, punitives and extra costs, leaving only the basic 15 months severance. It is reasonable to assume Keays' legal costs are many times what he ultimately ended up with.
Reports on the case have focused on the removal of punitive and Wallace damages, suggesting they are now much more difficult to achieve. That is wrong. Moreover, they have misunderstood significant aspects of the case:
Wallace damages changed The court noted, nearly always an employee can sue only for the lack of sufficient notice or severance, not for pain associated with dismissal. Such damages can be sued for only in rare cases where both parties understand at the time of hiring that a future dismissal could lead to extraordinary damages.
However, the notion awards can be made for damages contemplated at the time of hiring creates a greater opportunity for creative employee counsel to obtain Wallace and aggravated damages. Wallace damages also can be based on the manner in which the employee was terminated, such as defaming them, lying about why they were fired or firing them to avoid their pension vesting.
Ignoring employee's counsel The trial judge faulted Honda for dealing directly with Keays after he requested negotiations be with his lawyer. But the Supreme Court noted, as long as the employee was employed "parties are always entitled to deal with each other directly." This underlines employers need not allow employee's lawyers to attend internal management investigations.