Human Rights Bulletin

April, 2008

Keays v Honda
  1. Facts
  2. Honda terminated Keays because he disobeyed a direct order to meet with the occupational specialist. Was this order reasonable?
  3. Did the employer have reasonable cause not to comply with the employer's order?
  4. Was the discipline proportionate to insubordination? 
  5. Did the Trial Judge correctly calculate reasonable notice?
  6. Did the Trial Judge err in its ruling of bad faith conduct?
  7. Did the Trial Judge err in finding that Keays was entitled to punitive damages for discrimination?
  8. Did the Trial Judge err in concluding that Honda's conduct was sufficiently reprehensible to warrant punishment?
  9. Did the Trial Judge err in assessing the quantum of damages?
  10. What factors should be considered in fixing the quantum of a punitive award?

Supreme Court Blog about Case

 

9. Did the Trial Judge err in assessing the quantum of damages?

YES

The majority of the Court of Appeal ruled that the trial judge over-calculated the quantum of the punitive damages. They reached this conclusion by comparing Honda's misconduct in the Keays case to Pilot Insurance's misconduct in a precedent case (Whiten v. Pilot Insurance Co., [2002] 1 S.C.R. 595, 2002 SCC 18) in which an insurance company accused a homeowner of burning down his own house. 

The two main differences in those cases were:

  1. Whereas the misconduct in the Whiten case had lasted two years, that in the Keays case only lasted 7 months. 

  2. Whereas Pilot Insurance continued to harass its client,  in the face of repeated findings that the fire was accidental; Honda had "advice, albeit wrong and based on incomplete information, that caused it to question the respondent's disability and it had, for almost a year, accommodated his absences" (114) 

However, although Honda's misconduct was shorter and less abusive than Pilot's misconduct, it was more reprehensible than misconduct in typical wrongful dismissal cases because:

  1. it was planned and deliberate

  2. it targeted an employee who was particularly vulnerable

  3. the employer knew it had a duty to accommodate the employee

 Given the compensatory damages awarded for essentially the same misconduct, and given the lack of evidence of any pattern of abuse within Honda, the majority decided to reduce the punitive damages from $500 000 to  $100, 000

 

In the Whiten Case, Binnie J listed seven factors to consider in fixing the quantum of a punitive award:

1) Duration of the Misconduct

2) Whether or not the misconduct was planned and deliberate

3) The Vulnerability of the Employee

4) Whether or not the misconduct was malicious and high-handed

5) The need for deterrence

6) the totality of  other penalties including compensatory damages imposed on the defendant

7) the punitive damage award must be proportional to the advantage wrongfully gained