This is a review of the law on punitive damage awards in employment law cases. The issue of aggravated damages is reviewed here.

An award of punitive damages requires a finding of an “actionable wrong”. Such remained the law, as noted in the 2002 decision of Whiten, referenced above, in which case it was found that a breach of the contractual duty of good faith would meet the foundational requirement for such an award. To be clear, there was still a requirement of such an independently actionable wrong, yet one which may be met by the breach of such a duty. This test remains. ¹

Punitive damages will be awarded only in exceptional cases and will “receive the most careful consideration and the discretion to award them should be most cautiously exercised”. ²  The conduct in question must be “harsh, vindictive, reprehensible and malicious”, as well as “extreme in its nature and such that by any reasonable standard it is deserving of full condemnation and punishment”. ³

Punitive damages must be necessary for the purposes of "denunciation, deterrence and retribution, once the damages for conduct in dismissal were awarded”, given that the same conduct underpins the awards under both heads of damages.⁴

Quantum of Punitive Damages

This issue was considered by the Ontario Court of Appeal in Boucher v Wal-Mart. At trial, the jury had awarded aggravated damages against the company of $200,000, and a punitive damage award of $1 million. It also granted a tort claim of intentional infliction of mental suffering of $100,000, $150,000 in punitive damages, each against the manager, for which the corporation was found at trial to be vicariously liable.

On appeal, the punitive damages awards of $1 million and $150,000 were reduced to $100,000 and $10,000 respectively.

Apart from the test as set out above, the plaintiff must demonstrate that, having in mind the extent of the aggravated damage award, an award of punitive damages when added to the aggravated sum, “is rationally required to meet the objectives of retribution, deterrence and denunciation”.

The appellate court noted that the aggravated damage award, in itself, represents a “significant denunciatory and punitive message and likely will have a deterrent effect”. Further when contrasted with similar cases in which punitive damages were awarded, the misconduct in this instance fell “far short of the gravity and duration of other cases awarding significant punitive damages”. ⁵

The Court stated that in the immediate case, Wal-Mart also had been found liable for “significant compensatory damages”, the conduct lasted 6 months and that it did not set out to cause the plaintiff’s resignation.

For these reasons, it followed that $100,000 in punitive damages plus the compensatory damages would together suffice to denounce and deter the conduct.

There was no reference to Wal-Mart’s capital position which is considered to be a factor in the setting of punitive damages.