Income Damages Awards – What is the Difference?

The Supreme Court of Canada’s decision in Honda Canada Inc. v. Keays, 2008 SCC 39, underscored the importance of employment lawyers being well-versed in personal injury or tort litigation.  In this decision (at paragraph 59), the court clarified that moral damages arising from the manner of dismissal can include damages for mental distress, damages that generally flow from tort or an actionable wrong.

Silvera v. Olympia Jewellery Corporation, 2015 ONSC 3760, a decision of the Ontario Superior Court of Justice, provides a good illustration of this point.  This case involved not only a wrongful dismissal, but also the torts of assault and battery.  This case also shows how separate damages awards can be made, all of which represent income, but at the same time do not constitute double or triple recovery.

Facts of the Case

In August 2008, the plaintiff, Ms. Silvera, began employment with the defendant company, Olympia, as a receptionist/assistant administrator.  She reported to the other defendant, Mr. Morris, who was the company’s operations manager.

In the fall of 2009, Mr. Morris sexually assaulted Ms. Silvera by groping her chest.  The incident brought back to Ms. Silvera repressed childhood memories of sexual abuse by her stepfather.  As a single mother, Ms. Silvera felt trapped in her job because she needed the income to support her daughter.

A few months later, Mr. Morris once again sexually assaulted Ms. Silvera.  This time, he grabbed her buttocks as she was standing near a workstation.  Not long after the second assault, on February 19, 2010, a third sexual assault took place when Mr. Morris attempted to put his hands in Ms. Silvera’s shirt.

On February 23, 2010, Ms. Silvera needed an emergency tooth extraction and had to take some time off work.  On March 8, 2010, Mr. Morris called Ms. Silvera into a meeting at the office and accused her of going away for the weekend instead of using the time to recuperate and also accused her of abusing drugs.  He demanded a detailed letter from her dental surgeon confirming her condition and sent her home.

On March 12, 2010, Ms. Silvera called Mr. Morris to inquire if she still had a job.  Mr. Morris responded that she was fired as of March 10, 2010 and that a termination letter had been sent to her home.  Surprisingly, the letter described Ms. Silvera’s behavior and attitude as contemptuous.

Damages Awarded

Not surprisingly, due to Mr. Morris’ assaults, Ms. Silvera suffered significantly.  She stopped caring about her appearance, which lead to weight gain.  She drank alcohol to numb the pain of the memories of abuse.  She felt guilt, shame and self-blame, and had prolonged bouts of crying.  Even her relationship with her daughter suffered.

Her psychologist diagnosed her with chronic Post-Traumatic Stress Disorder and Major Depressive Disorder, both of which had a detrimental effect on not only her interpersonal functioning, but on her work functioning as well.

In the end, the court awarded Ms. Silvera damages totaling $206,711.93 as against Mr. Morris and Olympia, and $90,344.63 as against Olympia alone.  Of these amounts, $7,475.50 was for pay in lieu of notice, $33,924.75 was for future loss of income, and $57,869.13 was for past loss of income.  While all three heads of damages represent income, they do not compensate for the same loss.

Damages for pay in lieu of notice represent the income that a person would have earned if the employer had given reasonable notice to the employee of the termination of employment.  These damages flow from a breach of contract and specifically, an employment agreement.

On the other hand, past and future loss of income represent income that a person would have earned if he had not been injured.  Past loss of income constitutes income that would have been earned from the time of the injury to the date of the judgment awarded following a trial.  Future loss of income or loss of future earning capacity constitutes the estimated or projected income from the time of the trial onwards, often to the age of retirement.  These damages generally flow from tort, such as assault or battery (which themselves are two different causes of action).

Practical Considerations

The take-away from this case is that an employment litigator requires knowledge in a variety of areas of law, including contract and tort litigation, human rights, disability insurance and pensions.  Having competent employment counsel can mean the difference between compensation only for pay in lieu of notice, and compensation for that and much more.

This article is intended only to provide general information and does not constitute legal advice. Should you require advice specific to your situation, please feel free to contact me to discuss the matter further.