In Cottrill v. Utopia Day Spas and Salons Ltd., 2018 BCCA 383, the Court of Appeal overturned a $15,000 award for aggravated damages to a terminated employee on the grounds that there was insufficient evidence of mental distress arising from the manner of termination. The case clarifies the requirements to establish the necessary foundation for an award of aggravated damages.
Cottrill was an 11 year employee who was dismissed by her employer, Utopia Day Spa and Salons Ltd. (“Utopia”). In March, Utopia provided Cottrill with a performance evaluation that set out various deficiencies with respect to her job performance. Uptopia advised Cottrill that she would need to improve within three months or she would be terminated. Cottrill stated she cried during this meeting and had to go home early. Three months later, Utopia terminated Cottrill’s employment.
The Trial Court
At trial, Uptopia argued it terminated Cottrill for cause because of her failure to meet performance standards. The trial judge disagreed and found that Utopia gave no meaningful attention to the improvement they said they were looking for, did not provide Cottrill with an explanation as to why her attitude was deficient or why it believed it had cause for her termination, and did not provide Cottrill with an opportunity to respond. The trial judge found that Cottrill’s dismissal was not for “serious or gross incompetence” that would constitute the plaintiff repudiated the contract. It awarded damages for wrongful termination.
The court also found that Utopia lacked good faith and fairness in the manner of termination. In addressing Cottrill’s claim for aggravated damages, the trial judge accepted Cottrill’s evidence that she had felt numb and could not take anything in at her termination meeting. This evidence was the basis for the trial judge’s finding that Cottrill had experienced emotional distress that went beyond distress arising from the fact that she was dismissed. Cottrill was awarded $15,000 in aggravated damages. Uptopia appealed the award.
The Court of Appeal
On appeal Justice Goepel, in an unanimous decision, clarified the law on aggravated damages. An award for aggravated damages resulting from the manner of dismissal requires both that the employer’s conduct during the course of dismissal was unfair or in bad faith, and that the manner of dismissal caused the employee mental distress. The test for mental distress is a high bar to meet: the evidence must demonstrate mental distress that is a personal injury, and that goes beyond ordinary emotional upset or distress on termination, and is a serious trauma or injury.
While the trial judge found that Utopia’s termination of Cottrill was unfair, it found that Cottrill had not provided sufficient evidence to support a finding of mental injury. There was no evidence of Cottrill’s mental state from her friends, family or third parties, such as medical professionals, nor did Cottrill provide any evidence of mental injury herself. Justice Goepel found that Cottrill’s reactions at the two meetings were, at their highest, transient upset. The Court allowed the appeal and set aside the award for aggravated damages.
The test for mental distress is a high bar to meet: the evidence must demonstrate mental distress that is a personal injury, and that goes beyond ordinary emotional upset or distress on termination, and is a serious trauma or injury.
Please see the Court of Appeal decision here:
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