Supreme Court strikes down damages award in Honda case

Compensation for failure to accommodate and wrongful dismissal reduced to back pay

Ottawa (30 June 2008) - The Supreme Court of Canada has struck down a significant award of punitive damages to an employee who was wrongfully dismissed by Honda Canada.

Kevin Keays was originally awarded a record $500,000 for violations of his human rights, an amount that was later reduced on appeal to a still record $100,000. He had also been awarded 24 months salary, nine months of which was for punitive damages.

However, in a landmark 7-2 decision watched by employers across the country, the country's highest court has ruled that Keays is not entitled to any punitive damages at all.

The decision wipes away the remaining $100,000 award as well as the nine months additional back pay he was granted. His final settlement will be 15 months in back pay, the top court ruled.

The decision upheld the lower court finding that Honda failed to accommodate that Keays was suffering from chronic fatigue syndrome. The employee and the company were in conflict over frequent absences from work and related issues. He was fired when he refused to obey a Honda order to be examined by a company doctor.

While the decision represents a victory for Honda on the issue of punitive damages, it does not resolve the question of how many similar wrongful dismissal cases may end up in the courts.

Normally, such cases are resolved by arbitration, which is regulated by the provinces, or by human rights commissions. Such tribunals are subject to strict limits on the awards they can make. Courts are not.

Justice Michel Bastarache said punitive damages might be acceptable in other circumstances but that they should be limited to exceptional cases.

Keays worked at Honda's assembly plant in Alliston, Ont., for 14 years. His court case began in 2005. The Ontario Supreme Court judge who originally ruled in his favour found that "Honda committed a litany of acts of discrimination and harassment."

NUPGE

The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 340,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring that our common wealth is used for the common good. NUPGE