Keays damages in wrongful dismissal

The Court of Appeal has now given a decision that may clarify when Keays damages are available in a wrongful dismissal context.  Although brief the decision in  Brien v. Niagara Motors Limited, 2009 ONCA 887 supports the proposition that Keays damages are only available in the context of mental distress.  This author has argued that such damages are more widely available, and I continue to think the proper reading of Keays is for broader damages, however, Brien is suggestive that the contrary view is more correct:

 

[3]              The second issue is whether the two months award for Wallace damages ($8,826.56) can survive the decision of the Supreme Court of Canada in Honda Canada Inc. v. Keays, 2008 SCC 39, which was released following argument but before the reasons in this case were released by the trial judge. In our view, the appeal must be allowed on this ground. Although the appellant’s conduct in wrongfully alleging misconduct against the respondent was improper, any claim for punitive damages based on that conduct was abandoned before the trial. While the respondent’s misconduct in this respect could have led to a proper award of mental distress damages as defined in Keays, the mental distress that the respondent suffered upon her termination and the manner of that termination was not of the nature and scope to qualify for compensatory damages in accordance with that decision, as the respondent did not seek any medical attention, professional assistance or undergo any therapy for her mental distress.