No Double Recovery by Employee
A British Columbia employer has won a case to avoid double recovery of Employment Standards and wrongful dismissal damages. The decision in Roy v. Metasoft Systems Inc. is another piece of good news for employers to go with our recent post about the BC Human Rights Tribunal helping to discourage forum hopping.
Ms. Roy was a software sales associate. She complained to her employer about not getting all the commissions she thought she had earned. She threatened to file a complaint for unpaid wages with the Employment Standards Branch. The employment relationship went downhill from there and her employment was terminated about five months later. She found comparable new employment about seven months after that.
Ms. Roy was successful in a complaint under the Employment Standards Act that she had been intimidated and terminated because she exercised her statutory rights. The employer was assessed an administrative penalty of $500 and was ordered to pay "lost wages" for a six month period.
Ms. Roy then sued for wrongful dismissal and claimed damages in addition to what had been awarded under the ESA. The employer argued that any wrongful dismissal damages would have to be reduced by the ESA award.
The court agreed with the employer that both the ESA award and wrongful dismissal damages are meant to be compensatory and to make the former employee "whole", and noted that the same factors are applied when determining the amount of each. If the one was not set off against the other, the employee would get double recovery.
This is a good result for employers, but it is worth remembering that not every award under the ESA will lead to double recovery. As the court said:
The court, when considering the double recovery argument, must examine the purpose of the award granted pursuant to the ESA to determine whether it fulfils the compensatory principle for wrongful dismissal.
It is also worth remembering that similar arguments have not succeeded with respect to other payments, like pension benefits (see Waterman v. IBM).
double recovery employment standards damages wrongful dismissal damages