Employers Beware: B.C. Court Awards Former Employee $25,000 in Punitive Damages for Conduct in Severance Negotiations
April 7, 2025
Article by:
Andrew Nicholl
Previously printed in the LexisNexis Labour Notes Newsletter.
The recent decision of the B.C. Supreme Court in Thompson v. Revolution Resource Recovery Inc., 2025 BCSC 8 is notable with respect to three issues: (i) the impact of age on reasonable notice determinations; (ii) the assessment of mitigation in the absence of evidence that new employment could be found if reasonable efforts to mitigate had been made; and (iii) awards of punitive damages when an employer fails to comply with minimum employment standards requirements.
Decision
The plaintiff employee was employed at Revolution Resource Recovery Inc. (the “Employer”) for a period of three years and four months as a major/key accounts manager.
The Employer attempted to argue that the plaintiff released it from the claims at issue because a severance cheque had been cashed. That argument was rejected by the Court on the basis that there was no express acceptance by the plaintiff.
The Court went on to determine the matter of reasonable notice. The plaintiff argued that eight months was appropriate. The Employer took the position that anywhere in the range of three to four months was appropriate. Six months of reasonable notice were awarded – subject of course to the ordinary principles of mitigation.
In making the notice award, the Court noted that employees in the province of British Columbia who are “dismissed within their first three years of employment are awarded proportionately longer notice periods given their short period of service”.
In response to the plaintiff’s argument that she was entitled to a lengthier period of reasonable notice because of her age, the Court adopted the reasoning from Sciancamerli v. Comtech (Communication Technologies) Ltd., 2014 BCSC 2140 to the effect that advanced age — effectively anything over 50 years old — should not always increase the notice period. Instead, the impact of age must be assessed on a case-by-case basis based on the evidence. The plaintiff’s age was held by the Court to favour “to a small degree, a longer notice period”.
How the Court treated the issue of mitigation is also noteworthy. Notwithstanding the fact that there was no evidence the plaintiff would have found new employment sooner had she reasonably mitigated, the Court held on the basis of her own evidence that “she was not sufficiently diligent” in her mitigation efforts. It was accordingly appropriate in the Court’s view to deduct one month from what would otherwise have been a six-month notice period.
The Court also concluded that an award of punitive damages was warranted in the case. The plaintiff argued that it was appropriate to punish the Employer because it had issued a single severance cheque that included her statutory entitlements and communicated that cashing the cheque would release the Employer from future claims. This was in spite of the fact that the plaintiff asked to be paid in accordance with employment standards legislation. The Court awarded $25,000 in punitive damages against the Employer and cautioned that employers “should clearly be deterred from leveraging their own non-compliance with employment standards requirements to compel financially vulnerable employees to compromise their legal positions”.
Takeaways
The Court’s approach in this case to age and mitigation in its determination of reasonable notice is both interesting and significant.
As well, the punitive damages award made by the Court provides a useful reminder to employers and their representatives when they are involved in terminating employment. It is critical that they be very careful about clearly distinguishing between an employee’s entitlement to termination notice or pay in lieu under employment standards legislation and any additional amount or amounts of money that might be offered in exchange for a release. The employer must be very clear that statutory entitlements are not conditional on the signing of a release. It must also be clear that any release being sought is in exchange for only the monies paid over and above the minimum statutory entitlements.
Andrew Nicholl is a lawyer at Roper Greyell LLP in Vancouver where he advises employers in all areas of employment and labour law, including human rights and privacy law in the workplace, and provides strategic advice regarding the management of legal issues in non-unionized and unionized environments. He can be reached at anicholl@ropergreyell.com.
For more information about Andrew and the lawyers at Roper Greyell, please visit www.ropergreyell.com.
While every effort has been made to ensure accuracy in this article, you are urged to seek specific advice on matters of concern and not to rely solely on what is contained herein. The article is for general information purposes only and does not constitute legal advice.
April 7, 2025
Previously printed in the LexisNexis Labour Notes Newsletter.
The recent decision of the B.C. Supreme Court in Thompson v. Revolution Resource Recovery Inc., 2025 BCSC 8 is notable with respect to three issues: (i) the impact of age on reasonable notice determinations; (ii) the assessment of mitigation in the absence of evidence that new employment could be found if reasonable efforts to mitigate had been made; and (iii) awards of punitive damages when an employer fails to comply with minimum employment standards requirements.
Decision
The plaintiff employee was employed at Revolution Resource Recovery Inc. (the “Employer”) for a period of three years and four months as a major/key accounts manager.
The Employer attempted to argue that the plaintiff released it from the claims at issue because a severance cheque had been cashed. That argument was rejected by the Court on the basis that there was no express acceptance by the plaintiff.
The Court went on to determine the matter of reasonable notice. The plaintiff argued that eight months was appropriate. The Employer took the position that anywhere in the range of three to four months was appropriate. Six months of reasonable notice were awarded – subject of course to the ordinary principles of mitigation.
In making the notice award, the Court noted that employees in the province of British Columbia who are “dismissed within their first three years of employment are awarded proportionately longer notice periods given their short period of service”.
In response to the plaintiff’s argument that she was entitled to a lengthier period of reasonable notice because of her age, the Court adopted the reasoning from Sciancamerli v. Comtech (Communication Technologies) Ltd., 2014 BCSC 2140 to the effect that advanced age — effectively anything over 50 years old — should not always increase the notice period. Instead, the impact of age must be assessed on a case-by-case basis based on the evidence. The plaintiff’s age was held by the Court to favour “to a small degree, a longer notice period”.
How the Court treated the issue of mitigation is also noteworthy. Notwithstanding the fact that there was no evidence the plaintiff would have found new employment sooner had she reasonably mitigated, the Court held on the basis of her own evidence that “she was not sufficiently diligent” in her mitigation efforts. It was accordingly appropriate in the Court’s view to deduct one month from what would otherwise have been a six-month notice period.
The Court also concluded that an award of punitive damages was warranted in the case. The plaintiff argued that it was appropriate to punish the Employer because it had issued a single severance cheque that included her statutory entitlements and communicated that cashing the cheque would release the Employer from future claims. This was in spite of the fact that the plaintiff asked to be paid in accordance with employment standards legislation. The Court awarded $25,000 in punitive damages against the Employer and cautioned that employers “should clearly be deterred from leveraging their own non-compliance with employment standards requirements to compel financially vulnerable employees to compromise their legal positions”.
Takeaways
The Court’s approach in this case to age and mitigation in its determination of reasonable notice is both interesting and significant.
As well, the punitive damages award made by the Court provides a useful reminder to employers and their representatives when they are involved in terminating employment. It is critical that they be very careful about clearly distinguishing between an employee’s entitlement to termination notice or pay in lieu under employment standards legislation and any additional amount or amounts of money that might be offered in exchange for a release. The employer must be very clear that statutory entitlements are not conditional on the signing of a release. It must also be clear that any release being sought is in exchange for only the monies paid over and above the minimum statutory entitlements.
Andrew Nicholl is a lawyer at Roper Greyell LLP in Vancouver where he advises employers in all areas of employment and labour law, including human rights and privacy law in the workplace, and provides strategic advice regarding the management of legal issues in non-unionized and unionized environments. He can be reached at anicholl@ropergreyell.com.
For more information about Andrew and the lawyers at Roper Greyell, please visit www.ropergreyell.com.
While every effort has been made to ensure accuracy in this article, you are urged to seek specific advice on matters of concern and not to rely solely on what is contained herein. The article is for general information purposes only and does not constitute legal advice.