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Award in Punitive Damages Reduced for Employer’s Misconduct in Wrongful Dismissal of Employee with Chronic Fatigue Syndrome
October 30, 2006

The Ontario Court of Appeal significantly reduced a record award of $500,000 in punitive damages to $100,000 for an employer’s misconduct in the wrongful dismissal of an employee with Chronic Fatigue Syndrome (“CFS”).

The employer, Honda Canada, initially responded to the employee’s frequent absences, which were caused by CFS, by disciplining him. Honda later requested that the employee meet with its occupational medicine specialist, but refused the employee’s request for clarification as to the purpose of the meeting. When the employee declined to meet with the physician, he was terminated for disobeying the employer’s direction.

The trial judge upheld the employee’s claim for wrongful dismissal. He found that Honda’s conduct was a reprehensible and abusive attempt, spanning five years, to avoid its responsibilities to accommodate the employee’s disability. The trial judge awarded the employee 15 months’ salary and added a further nine months for the “egregious bad faith” displayed by Honda in dismissing him. Finally, in view of what was described as Honda’s outrageous and high-handed treatment of its long-term employee, Honda was ordered to pay a record $500,000 in punitive damages.

Honda appealed. The Court of Appeal upheld the trial judge’s decision except for the amount of punitive damages. The Court held that the evidence did not support damages of such magnitude, Further, the trial judge erred in finding that the employer’s misconduct spanned five years, since the conflict over the employee’s absences began only seven months prior to his dismissal. In arriving at the reduced figure, the Court took into account the 24 months’ severance awarded, the lack of persistent abuse by Honda and the relatively short duration of the misconduct.

Keays v. Honda Canada Inc., [2006] O.J. No. 3891