A critical issue in employment law is what effect the Supreme Court of Canada's decision in Keays v. Honda Canada Inc. (2008), 294 D.L.R. (4th) 577 has with respect to damages for bad faith during, and at the termination of, employment.
Does Keays extend the potential damage award so that, in bad faith cases, there is no Bardel damage limit (yes, a month a year has not been accepted by the Courts but it's practically there) or does Keays wipe out Wallace damages except in the most extreme cases? The Court of Appeal has declined to rule on this point several times.
Again today, in McNevan v. AmeriCredit Corp., 2008 ONCA 846, the Court has not interpreted Keays except very inferentially.
The Court did examine the trial decision at length expressly in terms of Wallace. Perhaps that suggests that Wallace still governs, albeit as refined by Keays? The question is open.
The Court held:
After oral argument and while this decision was still under reserve, the Supreme Court of Canada released its decision in Keays. The court altered the approach to bad faith damages holding, at para. 59, that "in cases where damages are awarded, no extension of the notice period is to be used to determine the proper amount to be paid." Rather, bad faith damages are to be compensatory based upon actual damages the employee suffers.
[63] At this court's request, counsel made further written submissions based upon Keays. In their submissions, the parties were divided as to whether this court should consider Keays and the legal propositions it stands for. I need not resolve that debate due to my conclusion that the record does not support a finding that AmeriCredit acted in bad faith in its dismissal of McNevan. There can no justification for an extended notice period under Wallace, or a separate damage award under Keays, without a finding of bad faith.
James Morton
1100 - 5255 Yonge Street
Toronto, Ontario
M2N 6P4
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