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Employment

Employment Dismissal Damages

Honda Canada and the end of Wallace bumps.

Honda v Keays (2008) restated the law on damages for the manner of dismissal in Canadian employment contracts. Wallace-style notice extensions are abolished. Mental-distress damages flowing from the manner of dismissal are recoverable as ordinary contract damages on Hadley v Baxendale principles where reasonably foreseeable. Punitive damages remain available only for conduct departing markedly from ordinary standards of decency (Whiten v Pilot Insurance).

Key principles

  • Mental distress recoverable
    Where reasonably foreseeable on Hadley v Baxendale principles.
  • Wallace bump abolished
    No notice extension for bad-faith dismissal.
  • Punitive damages threshold
    Whiten — independent actionable wrong or particularly egregious conduct.

Cases (1)

Honda Canada Inc v Keays

landmark
[2008] 2 SCR 362
Supreme Court of Canada· 2008· Contract