Clarity and Confusion in Employment Law Remedies: A Comment on Honda Canada Inc. V. Keays

By Veel, Paul-Erik | University of Toronto Faculty of Law Review, Winter 2009 | Go to article overview
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Clarity and Confusion in Employment Law Remedies: A Comment on Honda Canada Inc. V. Keays

Veel, Paul-Erik, University of Toronto Faculty of Law Review


This comment provides an overview of and critical commentary on the Supreme Court of Canada's 2008 decision in Honda Canada Inc. v. Keays. The Court's decision in Keays changes the law of employment law remedies in two important respects. First, the Court held that, where a wrongfully dismissed employee suffers mental distress as a result of a harsh or bad faith dismissal, they should be compensated directly for such mental distress rather than through the notice period "bump-up" approach adopted a decade earlier in Wallace v. United Grain Growers. Second, the Court held, contrary to earlier lower court decisions, that discrimination by an employer against an employee could not serve as an independent actionable wrong for which punitive damages could be awarded in a wrongful dismissal action. This comment will address each of these developments.

On the issue of damages for mental distress, this comment argues that the Court's new approach represents a welcome improvement in employment law remedies, because the theoretical basis for Wallace damages had become extremely unclear and, moreover, because significant practical problems had arisen with these awards. This comment then contends, however, that the Supreme Court was incorrect to justify compensatory damage awards on the basis that they should be awarded for all reasonably foreseeable losses arising from a breach of contract (that is, by subsuming these awards into a Hadley v. Baxendale framework). Rather, this comment argues that damages for mental distress in the manner of dismissal should be justified by reference to the employer's obligation of good faith in the manner of dismissal. This position is defended on doctrinal as well as normative grounds.

With respect to punitive damages, this comment argues that the Court was correct in rejecting discrimination as a basis for an award of punitive damages in wrongful dismissal cases. However, this comment then considers an alternative basis on which the Court could have awarded damages on the facts of this case. Specifically, this comment considers whether the Court should have awarded punitive damages on the basis that the defendant, Honda, committed an independent actionable wrong in attempting to dissuade the plaintiff, Keays, from consulting and seeking advice from legal counsel in relation to his dismissal.


Ce commentaire fourni une vue d'ensemble et une critique de la decision de la Cour Supreme du Canada, en 2008, dans l'arret Honda Canada Inc. v. Keays. La decision de la Cour dans Keays change la loi des recours du droit du travail de deux manieres importantes. Premierement, le Cour a determine que, dans la situation ou un salarie renvoye a tort souffre de detresse mentale severe suite au resultat du renvoi ou de la mauvaise foi de l'employeur, il devrait etre remunere directement pour la detresse mentale plutot qu'a travers la methode d'ajout a la periode de preavis etablie une decennie plus tot dans l'arret Wallace v. United Grain Growers. Deuxiemement, le Cour a tenu, contrairement aux decisions precedentes des Cours inferieures, que la discrimination par un patron contre un salarie ne pouvait pas servir comme un Tort recevable independant pour lequel des dommages dissuasifs pourraient etre attribues dans une action de renvoi a tort. Ce commentaire adressera chacun de ces developpements.

Ence qui concerne la question de dommages pour la detresse mentale, ce commentaire soumet que la nouvelle approche du Cour represente une amelioration apprecie dans les recours du droit de travail, parce que la base theorique pour les recours Wallace etait devenue extremement incertaine et, de plus, parce que des problemes significatifs se sont presentes avec ces dommages. Ce commentaire argumente toutefois, que la Cour Supreme a tort de justifier les dommages compensatoire sur la base qu'ils devraient etre accordes pour toutes pertes raisonnablement previsibles resultant d'une rupture de contrat (en incorporant ces dommages dans un cadre Hadley v.

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Clarity and Confusion in Employment Law Remedies: A Comment on Honda Canada Inc. V. Keays


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