B.C. Court of Appeal affirms ‘distinct’ difference between aggravated, punitive damages in employment law cases

The building housing the Supreme Court and the Court of Appeal of British Columbia, on right, in Vancouver. Photo: Getty Images/Canva

There’s a big difference between aggravated and punitive damages in employment law, a notion that was affirmed by the Court of Appeal for British Columbia in a recent ruling.

In Café La Foret Ltd. v. Cho the employer appealed a ruling that it wrongfully dismissed a worker who was accused of sexual harassment. That worker was awarded five months’ notice and a “global award of $25,000 for aggravated and punitive damages.”

“Aggravated and punitive damages are distinct remedies,” the appeal court said. “They have different objects and require distinct analyses.”

Aggravated damages are compensatory and are intended to address the mental distress experienced by an employee resulting from the manner of termination, it said.

“Punitive damages are intended to punish the employer for its egregious or outrageous behaviour and serve only the objectives of retribution, denunciation, and deterrence,” it said, citing the 2008 Supreme Court of Canada ruling in Honda Canada Inc. v. Keays.

The case involved Café La Foret Ltd. and the dismissal of its head baker, SC, previously reported on by HR Law Canada. But the appeal court didn’t reduce the award of $25,000 — it simply slotted it under the head of aggravated damages.

It cited the fact the employer attempted to “lever” an admission from SC by withholding his ROE, knowing that the admission would work to his prejudice in other contexts.

The manner in which SC was dismissed “destroyed his self-respect, made him feel betrayed, and cause him depression and insomnia.” He testified he was afraid of meeting new people and was convinced his employer was trying to send him to jail.

Background

SC, 60, worked as a head baker at Café La Foret from December 2017 to November 2020, except for a brief period. Born and raised in South Korea, he had limited proficiency in English and had worked exclusively in Korean-owned businesses in Canada.

He was accused of sexual harassment by an assistant baker, NL, who worked under him.

According to the court records, on Nov. 9, 2020, security footage from Café La Foret’s kitchen showed SC touching NL twice without her consent. The judge concluded that his actions constituted harassment and were “intentional, unwarranted, and non-consensual.”

The touching, although brief, caused NL emotional distress.

Dismissal and legal repercussions

Following NL’s complaint, the general manager of the café spoke with both parties involved. Subsequently, SC was told not to attend work the next day. Days later, Café La Foret terminated his employment after he refused to sign an affidavit admitting to misconduct.

In the original court ruling, the judge awarded SC $15,600 for wrongful dismissal, as well as a global award of $25,000 for aggravated and punitive damages. Café La Foret appealed the decision, citing several points of contention including the judge’s assessment of SC’s honesty and the nature and extent of the harassment.

The appeal

On appeal, the court maintained the original judge’s decision that there was insufficient cause for termination.

The original judge’s findings about SC’s actions and honesty were supported by the record. However, the appellate court agreed with Café La Foret that the original judge erred in issuing a global award for both aggravated and punitive damages, which are distinct legal remedies.

The appellate court upheld the $25,000 award for aggravated damages alone, noting that punitive damages were not required in this case.

Café La Foret’s conduct was described as “highly blameworthy” in the original judgment. The employer had refused to issue a Record of Employment to SC unless he signed an affidavit that would place him in legal jeopardy.

For more information, see Café La Foret Ltd. v. Cho, 2023 BCCA 354 (CanLII)

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