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Queen's University

Honda 2008

Can civil courts award punitive damages for discrimination?


The Supreme Court of Canada has determined that civil courts can not award punitive damages against employers who discriminate against their employees. (more on punitive damages...)

On July 27, the Supreme Court of Canada released its landmark decision concerning Honda Canada Inc vs Keays 2008 SCC 39.   The ruling confirms that Kevin Keays, an employee with chronic fatigue syndrome,  was wrongfully dismissed after 14 years service at Honda Canada Inc. The majority determined, however, that Honda had neither acted in bad faith nor discriminated against Keays.

Even if Honda had engaged in a course of egregious discriminatory conduct leading to wrongful dismissal,  it should never be "punished" in civil court.  Because of the remedial thrust of human rights law, the wrongfully dismissed employee could, at most,  be compensated for actual loss (economic or psychological) incurred by discrimination.  (More about discrimination and damages...)

In stark dissent, the minority determined that Honda had discriminated against Keays by subjecting him to excessive scrutiny given the particular nature of chronic fatigue syndrome. An important point discussed by the dissenting judges was that the employer had not assessed whether its accommodation and monitoring of this particular employee was appropriate to this particular disability.

Discrimination was a troubling aspect of the decision to terminate K and this impacts on the good faith of the termination. While monitoring employee absences is a valid objective, there was no assessment in this case of whether the employer's method of accommodation and of monitoring K's absences addressed Ks particular disability. If variable, self-reporting conditions characterize the very nature of Ks disability, then it is arguable that the employer acted in a discriminatory manner in subjecting K to the kind of scrutiny that occurred, denying him accommodation. (119-123)

* The Ontario Human Rights Commission is clear on the need for individual assessment of employees with disabilities and it would be wise for employers to be mindful of this when assessing accommodation at Queen's.

Punitive damages quashed

In light of this reasoning, the majority overturned the Court of Appeal's finding that Honda had discriminated against Keays and quashed the associated $100, 000 in punitive damages awarded by the Ontario Court of Appeal. That court had found that Honda had discriminated against Keays when it ...

It refused to remove from his permanent file a coaching letter warning Keays not to be absent from work

It required Keays to bring a doctor's note every single time he was absent from work due to disability

It viewed with increasing skepticism the doctor's notes that he did bring to work because they seemed to repeat what Keays said rather than what the doctor diagnosed

It revoked his accommodation plan when his monthly absences became more numerous than what had been predicted by his personal doctor

It required him to meet a company doctor who did not believe Keays had a disability precluding him from being present at work and who was allegedly known for having a "hard ball" approach to chronic fatigue syndrome

The majority of the Supreme Court ruled that employers have a bona fide right to monitor absenteeism just as employees have a bona fide right to be absent from work due to disability.   They found that the coaching letter was a mechanism that had allowed Keays to learn about the attendance plan that would accommodate his disability; that the requirement to bring doctor's notes allowed him to be frequently absent from work without being terminated;  that employer's have the right to scrutinize medical documentation; that employers have the right to cancel an accommodation plan that is no longer working for the company and to require the employee to meet with a company medical specialist whose approach is based on known medical practice and whose bona fide unwillingness to believe in Keays' disability was based on the absence of any written diagnostic information in Keay's file.

Reasonable Notice damages upheld

For his employer's breach of contractual duty to provide reasonable notice in dismissal, and in consideration of factors which will make it difficult for him to find new employment,  Keays will receive the 15 months reasonable notice in back pay awarded to him by the Trial judge.  (more on reasonable notice...)

Wallace bump-up eliminated

The majority overturned a trial judge's finding of bad faith termination and its associated 9-month Wallace bump-up.  Moreover they did away with Wallace bump-ups all together, stating that from now on, employees will receive damages for mental distress only when they can prove actual psychological loss  incurred by the employer's bad faith manner of dismissal.

In this case, seven of the nine judges found that Honda had acted in good faith when it dismissed Keays and that Keays had failed to establish that his post traumatic stress disorder was triggered by the manner in which he had been dismissed (more on damages formerly known as Wallace)


Kingston, Ontario, Canada. K7L 3N6. 613.533.2000