Aggravated Damages for Bad Faith Termination: A Recent Example

Takeaway: In awarding aggravated damages, the courts will consider the entire termination process, including any investigative or preparatory steps.

In a recent decision, Bassanese v German Canadian News Company Limited et al, 2019 ONSC 1343, the Ontario Superior Court of Justice confirmed that failure to investigate a complaint of workplace harassment can constitute “bad faith” termination. As we discussed in an [earlier post], a terminated employee can be entitled to additional or “aggravated” damages if the termination was carried out in bad faith. “Bad faith” refers to the manner of termination, not the reason for termination.

The plaintiff, Ms. Bassanese, worked for the German Canadian News (“GCN”) as an office administrator. She experienced harassment and abuse in the workplace over a long period. The perpetrator was a fellow employee, Mr. Dhanani. Eventually, Ms. Bassanese complained to GCN’s president, who explained that the company was “short-staffed” but pledged to refer the matter to the head of human resources. However, no action was forthcoming, despite further inquiries by Ms. Bassanese.

The situation worsened. Two months after Ms. Bassanese first complained, Mr. Dhanani slapped her across the face three times. Ms. Bassanese filed a police report the same day. By the end of the day, she was terminated. In response, she brought claims against GCN and Mr. Dhanani (the latter settled out of court). Ms. Bassanese sought damages against GCN for assault and battery and intentional infliction of mental suffering, aggravated damages for bad faith termination, punitive damages, and compensation in lieu of reasonable notice of termination.

Since GCN failed to file a statement of defence, the company was therefore deemed to have admitted the truth of Ms. Bassanese’s factual claims. The Court then awarded Ms. Bassanese 1) nineteen months’ compensation in lieu of notice and 2) $50,000 in aggravated damages. Ms. Bassanese’s other claims were unsuccessful.

Importantly, the award of aggravated damages related to (among other things) the employer’s failure to investigate Ms. Bassanese’s complaint. In effect, the Court treated this failure as part of the termination, even though it preceded the termination by two months. The takeaway is that, in assessing the manner of termination, the courts will consider more than just the moment of termination. The entire termination process, including any investigative or preparatory steps, must be conducted in good faith.