B.C. court awards largest punitive damages ever in employment case

A jury in Prince George, B.C., has awarded a plaintiff approximately $809,000 in damages over a wrongful dismissal. Included in that amount is the largest punitive damages award in an employment law case in Canadian history.

Larry Higginson worked at a sawmill in Burns Lake, B.C., for 34 years until October 2009, when he was fired without severance pay. Hampton Lumber Mills Inc., based in Portland, Ore., had acquired the sawmill from Babine Forest Products Inc. in November 2006.

Higginson sued for wrongful dismissal, claiming he was terminated as an attempt to avoid paying severance to long-term employees. The companies, joint defendants in Higginson v. Babine Forest Products Ltd., argued they had just cause for dismissal.

Murray Tevlin, a senior lawyer at Vancouver employment law firm TevlinGleadle, which represented Higginson in the case, says, “Instead of just firing him after 34 years of faithful service, [the companies] made up a false allegation of cause for dismissal, [which] means that the employee has committed a fundamental breach of the employment contract by doing some outrageous act.”

Tevlin also says that before this “bogus allegation of cause,” the companies tried to make Higginson’s job miserable in order to cause him to quit.

“We were able to produce evidence that [the companies] were doing this because it’s a small town and people talk to each other . . . and certain admissions were made,” says Tevlin.

The firm also gave evidence that the companies were implementing an institutional scheme to avoid paying severance to other employees, he says.

Following a three-week trial, the jury decided that there was no cause for dismissal and awarded Higginson $236,000 in compensatory damages for wrongful dismissal and $573,000 in punitive damages for the companies’ conduct in terminating him.

Since Prince George is a mill town, Tevlin says members of the jury were probably able to relate to Higginson’s situation.

“People know what it’s like to lose your job when you’re in the management at a mill,” he says.

Also, the fact that the companies said Higginson gave them cause for dismissal could destroy his whole social standing in the community, he adds.

This case will affect the way other companies treat their employees and help drive more reasonable settlements and hopefully keep actions out of court, predicts Tevlin.

“Punitive damages are not compensatory, they are intended to punish the defendant hoping that it will cause the defendant to change its behaviour in the future and hoping that other similarly situated defendants will also not follow this course of conduct,” he says.

The defendants have not filed an appeal as of yet, but Tevlin says it’s not uncommon for companies to do so.

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