Wrongful Dismissal Damages for Career Setback

Categories: Blog, Employment Law

In the last several years our top court (the Supreme Court of Canada) has tinkered with the amount of damages that should be awarded to employees who are terminated in an unenlightened way.

Lawyers were divided on whether the intent of the Supreme Court was to reign in damage awards or open the door to larger awards.  The most recent case known as Keays v. Honda has been applied on several occasions.  Many of these decisions have not awarded additional damages for employer misconduct in the termination process citing the Keays decision as the reason.

However, very recently the Alberta Court of Queen’s bench has made a decision relying on Keays to award a dismissed broker over one and a half million dollars due the damage caused to his career and reputation by the termination.  In the case the brokerage house (Merrill Lynch) terminated the broker (Soost) for cause.  The court found there was no cause.  It determined that the termination in these circumstances should have been known to be “mortally wounding” to the career of the broker.  This is a fresh look at old issue which has not in the past received favorable consideration by the courts.

Terminations not only result in a temporary loss of earnings they can often impair careers.  There is a stigma associated with a termination – particularly from an employer with a “good reputation”.  Even if the employer does not disclose the reason for a termination (employers are not legally required to) employees dismissed for what the employer considers to be cause have a very difficult time explaining why the employment came to an end.  This case, if upheld on appeal or not appealed, will require employers to be more careful in terminating employees for cause.