The Supreme Court of Canada’s 2008 decision in Honda Canada Inc. v. Keays1 generated some confusion amongst employment lawyers and the courts below because Honda was silent with regards to the evidentiary requirements that would be placed on a dismissed employee in order to prove that he or she suffered from mental distress – specifically, whether the employee is required to produce medical evidence of mental distress.

There was initially a lack of consensus in the decisions that were released shortly after Honda. For example in 2009 the Ontario Court of Appeal (the “Court”) released two, apparently conflicting, moral damage decisions: Brien v. Niagara Motors Ltd.2 andSlepenkova v. Ivanov.3

In Brien, the Court of Appeal considered whether the two months’ notice awarded for moral damages for bad faith dismissal in the trial decision could survive in light of Honda. At trial, the judge had awarded Wallace damages because the employer had failed to pay the plaintiff her statutory entitlements upon termination pursuant to the Employment Standards Act, 20004 improperly alleged that it had cause to terminate the employee; made allegations of misconduct only after the termination of the employment relationship; and had failed to provide the letter of reference. On appeal, the Court applied Honda and held the employer’s misconduct could have justified an award of moral damages, however, as the dismissed employee had failed to “seek medical attention, professional assistance or undergo any therapy for mental distress”, the employee had failed to demonstrate that she had suffered mental distress that would entitle her to compensable damages.

In contrast, in Slepenkova, a different panel of the Court upheld the decision to award moral damages for bad faith dismissal. The trial judge had held that the employer had acted in bad faith when he sent a pager message to his other employees disparaging the dismissed employee’s reputation and awarded Wallace damages. Despite the fact that the trial judge made no reference to the employee suffering from mental distress, the Court held that the trial judge’s finding “… was sufficient to sustain the [moral damage] award, even in light of the Supreme Court of Canada’s decision in [Honda]…”.  The Court found that the employee had suffered from mental distress but did not specify what evidence it had relied upon to reach this conclusion.

In another early decision by the Ontario Court of Appeal, McNevan v. AmeriCredit Corp.5, the majority of the Court held that the employer’s conduct did not amount to bad faith. However, in dissent, Justice Juriansz wrote that, once bad faith conduct has been proven, when determining whether or not a dismissed employee has suffered from compensable mental distress the “issue is simply whether the employee suffered mental distress beyond the ordinary within the contemplation of the parties”. 6

More recently, in Elgert v Home Hardware Stores Ltd.7, the Alberta Court of Appeal overturned a jury award of $200,000 for mental damages awarded to a dismissed employee who had been terminated for cause after a seriously flawed internal investigation that concluded, incorrectly, that he had sexual harassed another employee. However, in setting aside the award of moral damages, the Court stated that, although Home Hardware’s conduct would justify an award of moral damages, the plaintiff had not provided any evidence that he suffered from mental distress. Significantly, regarding the need for medical evidence, the Court wrote:

Although a plaintiff does not necessarily have to provide medical evidence to show that he has suffered actual damages as a result of the manner in which he was terminated, the trial judge correctly noted that there must be more than a scintilla of evidence.

In the 2011 decision Canada (Attorney General) v. Tipple,8 the Federal Court of Appeal considered a judicial review application of a public sector adjudication in which the adjudicator had awarded the complainant $125,000 in moral damages. The Court set aside the quantum of the award finding, at paragraph 60, that it was “not within a range of possible, acceptable outcomes which are defensible in respect of the facts and law”. However, although no medical evidence had been provided, the Court held that some amount of moral damage award was appropriate based on the evidence before the adjudicator. The Court indicated, however, that the lack of medical evidence was one factor pointing to a lower damage award.

There is no mention of medical evidence being lead to link the employers’ bad faith dismissal to the mental distress alleged by the plaintiffs in Zesta Engineering Ltd. v. Cloutier9 or Karmel v. Calgary Jewish Academy10, two decisions that awarded significant moral damage awards ($75,000 and $200,000 respectively). There is, however, a passing reference to the plaintiff taking medication for depression prior to his dismissal at para. 70 of Karmel.  

There are also practical problems with the need for medical evidence. In Honda, the Supreme Court of Canada distinguished “mental distress” caused by the bad faith manner of dismissal and the normal “hurt feelings” that has resulted from the dismissal itself. Although this might first appear as a clear legal distinction, it is a distinction that is fraught with difficulties. The reality is that the loss of one’s employment can be emotionally devastating even if the termination process was conducted in a fair and professional manner. To ask a physician to reliably distinguish between mental distress caused by the manner of dismissal and mental distress caused by the dismissal itself may be asking too much – particularly given that both causes of mental distress were the result of the same event. Therefore, the need to distinguish between mental distress that may have been caused by the dismissal itself and mental distress caused by the manner of dismissal is likely to cause ongoing confusion for doctors, lawyers and judges.

In conclusion, it would appear that there is a growing consensus that medical evidence is not mandatory to successfully claim moral damages, although other evidence of mental suffering is required. Nevertheless, although not mandatory, medical evidence will support an award of moral damages and may be particularly useful if the dismissed employee is claiming a significant moral damage award.

If you want legal advice that is specific for your case, book a consultation today.

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Chapter Index

  1. Honda Canada Inc. v Keays, 2008 SCC 39; 
  2. Brien v. Niagara Motors Limited, 2009 ONCA 887 (C.A.); 
  3. Slepenkova v. Ivanov, 2009 ONCA 526 (C.A.); 
  4. Employment Standards Act, 2000, SO 2000, c 41; 
  5. McNevan v. AmeriCredit Corp. 2008 ONCA 846; 
  6. Ibid, at para. 110; 
  7. Elgert v Home Hardware Stores Ltd., 2011 ABCA 112; 
  8. Canada (Attorney General) v. Tipple, 2011 FC 762; 
  9. Zesta Engineering Ltd. v. Cloutier, 2010 ONSC 5810; 
  10.  Karmel v Calgary Jewish Academy, 2015 ABQB 731;