Mental distress awards in wrongful terminations

Toronto civil litigator, Maija Pluto, says her client’s win in a wrongful dismissal case demonstrates a developing trend for courts to award damages for mental distress in addition to costs for wrongful dismissal when they find vulnerable employees have been unfairly treated.

In the matter of Thambapillai v Labrash Security Services Ltd., 2016 ONSC 6068 (CanLII), Pluto successfully argued that her client, a 71-year old security guard, had been unfairly terminated from his position where he had worked from 2003 until July 2015.

His employer refused to pay notice or severance as required by the Employment Standards Act, Pluto explains.

“This was very distressing for our client who did not have enough savings to retire on and was the sole provider for his family,” she tells

Pluto, an associate with Gaertner Baron Professional Corporation, says the events leading up to the lawsuit began in November 2014 when Labrash provided Mr. Thambapillai with a letter stating that his employment would be coming to an end within a few months and they would advise him once they had a firm date.

“He was never given a date and he remained employed until July 25, 2015, at which time he was fired on the spot,” she says.

Pluto asked the court to consider a stream of evolving jurisprudence that was last addressed by the Supreme Court of Canada in Honda Canada Inc. v. Keays, [2008] 2 SCR 362, 2008 SCC 39 (CanLII), where a plaintiff was awarded damages from mental distress caused by his employer.

“We submitted that Labrash failed to provide adequate notice, termination pay and severance to this vulnerable employee, all of which amounted to unfair conduct deserving of damages for both mental suffering and wrongful dismissal,” she says.

The judge agreed, and damages of $24,576.00 were awarded. Goldstein said there is no reason to retain the distinction between “true aggravated damages” that result from a separate cause of action and moral damages stemming from conduct in the manner of termination.

In his decision, Justice Robert F. Goldstein of the Ontario Superior Court agreed, noting that employers have an obligation of good faith and fair dealing with employees.

“The obligation takes into account the power imbalance that generally exists between employers and employees,” the decision states. “The obligation also takes into account that the point at which an employee is dismissed is often traumatic and the employee is vulnerable. Breach of the obligation may well be compensated by damages.”

The ruling, Pluto says, serves as a cautionary tale to employers, reminding them of their legal requirements as well as their moral obligations.

“This decision is a welcome reminder to employers of their obligation of good faith and fair dealing with employees at the time of termination,” she says.

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