Ontario, Canada Court of Appeal Upholds Jury’s $150,000 Punitive Damage Award Against Employer

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Punitive damages are awarded against an employer in favour of an employee only if the employer engaged in wrongful acts that are outrageous, reprehensible, and offensive to ordinary standards of decent conduct in the community.  In Eynon v. Simplicity Air Ltd., 2021 ONCA 409 (Simplicity Air), an employer appealed to the Ontario Court of Appeal (OCA) a jury’s $150,000 punitive damage award against the employer.  The OCA denied the appeal.         

Background

An employee accepted a colleague’s challenge to climb a 14-foot-high chain hoist.  As he climbed down, the employee’s pant crotch was caught on a hook; his scrotum was pierced, and surgery was required.  Two different versions of what transpired next were provided in testimony at trial.

  • The employee’s version. According to the employee, he screamed in pain after the accident and requested an ambulance.  The supervisor laughed at him and refused to look at his injury or call an ambulance.  Instead, the supervisor drove the employee to another location where his own supervisor was located.  The supervisors offered to drive the employee home, but the employee insisted he be taken to a hospital.  The supervisor told the employee to say the injury occurred at home.  The employee was dropped at the hospital’s entrance, and the supervisor did not accompany him inside. 
  • The supervisor’s version.  According to the supervisor and other employer witnesses, the supervisor laughed when he first saw the employer stuck on the chain lift because he thought he just hooked his jeans.  The employee did not ask for an ambulance and there was no reason to call one based on the employee’s demeanour.  The employee refused to show the supervisor his injury when asked to.  Neither supervisor told the employee to say the injury occurred at home.  The offer to have the employee driven home was made before speaking with the employee.  Once it was known that the employee wanted to go to the hospital, the only discussion was about which hospital to take him to.  The employee told the supervisor not to come into the hospital because his father was on his way. 

Additional testimony at trial was contradictory.  The employee stated that the employer did not provide him with safety or Workplace Hazardous Materials Information System (WHMIS) training; assigned him to drive a forklift without proper certification; and failed to properly train him for the dangerous tasks he was required to perform.  The employee stated further that there was no supervisor on the floor on the day of the accident, and because he was not trained to operate the chain hoist, he did not know it was dangerous to climb it.

The employer’s witnesses testified that the employee received safety training, although he was not trained to operate the chain hoist because he was not authorized to use it.

Notably, the employee testified at trial that the accident occurred while he was engaged in “horseplay.”  He was denied workers’ compensation benefits by the Workplace Safety and Insurance Board, which decided the accident did not occur in the course of his employment.

The employee sued the employer for the injuries he suffered in the workplace. 

Punitive Damage Awards Made by Jury at Trial

At trial, in addition to awards for general damages and damages for lost wages (both reduced by 75% for the employee’s contributory negligence), the jury awarded the employee $150,000 in punitive damages without a reduction.  The trial judge’s instructions to the jury on punitive damages focused on the hour between the accident and the employee’s arrival at the hospital.    

Although it was asked to, the jury did not explain the basis of its punitive damage award.  It provided the following explanation, however, of the employer’s role in causing or contributing to the employee’s injuries:  “The [employer] demonstrated a serious lack of proper safety training, documentation, as well as creating a culture within the company whereby employees failed to place adequate importance on best safety practices.” 

Decision of the OCA

The employer appealed the punitive damages award, arguing it should be set aside for four reasons.

  1. Punitive damages should not have been left with the jury.

On this argument, the OCA held that the issue of punitive damages was properly left with the jury because the trial judge “referred to the factors relevant to the determination of a proportionate amount of punitive damages.”  Specifically, the trial judge provided proper instruction to the jury about the circumstances in which it could award punitive damages; the purpose of awarding punitive damages; when punitive damages are generally awarded; and the fact that damages should be awarded only in an amount no greater than necessary to rationally accomplish their purpose. Furthermore, the trial judge identified aspects of the employer’s conduct that were relevant to the claim for punitive damages and evidence provided by the employer’s witnesses denying or explaining that conduct. 

The OCA also held that there was sufficient evidence that a properly-instructed jury, acting reasonably, could have awarded punitive damages, including the evidence that the supervisor directed the employee to falsely report that he was injured at home, which alone would warrant the award.  Those directions by the supervisor contravened s. 22.1 of the Workplace Safety and Insurance Act, 1997, and the jury could properly regard those directions as misconduct offensive to the ordinary standards of decent conduct expected of an employer and as highly reprehensible.

  1. The trial judge erred in his instructions on punitive damages and should have provided a range for the quantum of punitive damages.

The OCA held that the trial judge’s instructions adequately equipped the jury to assess the employer’s conduct and, furthermore, “[a]bsent the agreement of counsel on a range for punitive damages, it would have been improper for the trial judge to suggest one to the jury.”  Trial counsel for the employer did not ask for the jury to be given such guidance, nor did he provide it himself. 

  1. The employer should not be liable for punitive damages for the conduct of its employees.

The OCA noted that the conduct of the employees occurred in the course of their employment as the employer’s supervisors who were left in charge of the workplace in the absence of the employer’s owners.  It held that there was no question that the supervisors’ conduct was the conduct of the employer, and that their actions occurred within “a culture within the company whereby employees failed to place adequate importance on best safety practices.”

  1. The punitive damages award should be reduced by contributory negligence.

In response to this argument, the OCA held that “[t]he employee’s contributory negligence leading to the accident was properly not part of the determination of whether punitive damages were warranted.”

Bottom Line for Employers

Simplicity Air puts employers on notice that if the conduct of a supervisor in their workplace demonstrates that the supervisor has little regard for the safety of an employee, the supervisor’s conduct may be considered the employer’s conduct, potentially resulting in liability for significant punitive damages.

In upholding the jury’s award of punitive damages, the OCA noted that the supervisor’s actions occurred in a company where the culture did not place adequate importance on best practices relating to safety.  Accordingly, employers are encouraged to provide adequate safety training to their employees and create an overall safety-conscious company culture. 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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