Two recent Ontario decisions delved into the murky waters of
when punitive or aggravated damages should be awarded in cases of
wrongful dismissal. In both cases the employer's stance on
whether just cause existed for the dismissal factored into the
ultimate award on damages. The following will explain the
differences in each case but first it is important to understand
the difference between aggravated and punitive damages in the
employment context.
The seminal case on punitive and aggravated damages was decided
by the Supreme Court of Canada in Honda Canada Inc. v. Keays. Previous case law
has defined aggravated damages as requiring a separate actionable
wrong (i.e. separate from dismissal without cause) or as
"moral damages" for the manner in which an employer
handled the termination itself. A majority of the Supreme Court
determined that aggravated damages, whether viewed as a separate
actionable wrong or as damages relating to the manner of
termination, should
