Tuesday, March 19, 2013

Employer Checklist for Avoiding Punitive Damages

     It used to be that punitive damage awards in employment related cases was something that only happened in the U.S.  However, decisions such as Pate and MacNeil from the Court of Appeal for Ontario established that employers must be mindfull of the potential for such claims.  Here is a simple checklist of things to avoid.

1.     Avoid reporting criminal conduct to the police based on speculation or bad faith;

       Many employers are of the mistaken belief that simply reporting a crime to the police will not lead to potential civil liability.  This is not entirely correct.  An employer can be found to have initiated criminal proceedings even thought they did did swear the information charging the employee with a crime.  The question as to whether the employer can be found to have "initiated criminal proceedings" as that term is used in the malicious prosecution jurisprudence depends on whether the crime is of the type where the facts can be said to be pecuiliarly within the knowlede of the party seeking police assistance.  Courts have concluded that employers did not "initiate criminal proceedings" by mere reporting in cases involving complicated frauds requiring complex investigation in order to acertain the facts (Mahon   v.  Rahn [2000] 4 All E.R. 42).   

2.     Avoid asserting cause based on sexual or other forms of harassment in the absence of a fair and thorough investigation supporting the allegation - especially where your own polices call for such;

3.     Obtain legal advice touching on the strenght of the allegations of cause and the potential costs associated with an action from the employee prior to dismissal.  Where the allegations of cause involve criminal conduct you will want to consult with a lawyer with knowledge of criminal and tort law.

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