Dhatt v. Kal Tire Ltd., 2015 BCSC 1177 (CanLII) is a recent case from the Supreme Court of British Columbia which provides insight into the calculation of damages when an employee is terminated without just cause. The plaintiff was an automotive mechanic. He worked for Sears Canada (Sears) from 1987 to 2004. In 2004, the defendant (Kal Tire) purchased Sears’ assets. After the sale, the plaintiff continued to work for Kal Tire. In 2010, Kal Tire moved to another nearby location and the plaintiff was involved in moving equipment from the old location to the new location. During that transition, the plaintiff was accused of stealing a battery charger and was terminated as a result.
The plaintiff claimed that he had no intention to steal the battery charger and took it because he thought the employer had discarded it as garbage.
After the dismissal, the plaintiff was unable to find another job. He became depressed by the loss of his job, began to abuse alcohol, and threatened suicide. The plaintiff went on to sue Kal Tire for wrongful dismissal. After considering the circumstances of the termination, the court found that the plaintiff did not act dishonestly and there was no just cause for dismissal. In result, the plaintiff’s claim for wrongful dismissal was successful and damages were awarded for:
- the reasonable notice period that the plaintiff ought to have been provided prior to being dismissed;
- the long term disability benefits that the plaintiff should have received; and
- aggravated damages.
In determining the reasonable notice period, a number of factors are considered, including the length of the employment and the availability of similar employment. An issue that arose in this case was whether the plaintiff should receive credit for his time working at Sears. Here the plaintiff was only employed by the defendant Kal Tire for six years. However, the plaintiff had worked for many years with the previous employer (Sears), whose assets were subsequently bought by Kal Tire. Given the circumstances, including the fact that the plaintiff’s employment was continuous during the sale, the court held that the plaintiff should be given credit for his years of service with Sears. The total length of employment was thus approximately 23 years. In result, the court concluded that the plaintiff should have received 21 months of reasonable notice, which amounted to a damages award of $104,483.20.
Long term disability
In this case, the circumstances were such that the plaintiff became disabled during the 21 month notice period. He became unable to work as a result of depression and substance abuse, and this continued for a significant time after the 21 month notice period. The issue, then, was whether the plaintiff was entitled to damages for lost long term disability benefits under his old policy and, if so, for how long. The court reviewed the relevant law and held that the plaintiff was entitled to receive damages for long term disability benefits that he “would have received under the contract of employment during the reasonable notice period”. The court went on to award a further $55,000 in damages for long term disability benefits which would have been received beyond the 21 month notice period.
Aggravated damages may be awarded by the court if an employer fails to act in good faith when dismissing an employee. In this case, the court found that Kal Tire’s conduct was unfair, insensitive, and in bad faith. For instance, the plaintiff was accused of lying and stealing; and he was not given a real opportunity to respond to these serious allegations. The court concluded that an additional $25,000 award was appropriate for aggravated damages.
If you are an employee or an employer facing similar issues, contact our Dispute Resolution lawyers.
This article is intended to be an overview of the law and is for informational purposes only. Readers are cautioned that this article does not constitute legal or professional advice and should not be relied on as such. Rather, readers should obtain specific legal advice in relation to the issues they are facing.
This article was written by a lawyer formerly with Lindsay Kenney LLP.