The case involved the termination of a fixed-term employment contract and included a rare award of aggravated damages and a penalty award under Rule 20(5) of the Small Claims Rules. It provides a good example of the types of damages which may be awarded against an employer that proceeds with a counterclaim against a former employee without having a reasonable basis for doing so.
The employer in this case alleged that it had cause for the employee’s dismissal, but the Court disagreed and instead found that the employee was entitled to payment for the remainder of his fixed-term contract.
The employee was also awarded additional aggravated damages. Aggravated damages are not commonly awarded in employment cases.
The Court also assessed a penalty against the employer under Rule 20(5) of the Small Claims Rules. Rule 20(5) states:
“A judge may order a party to pay the other party up to 10% of the amount claimed or the value of the claim or counterclaim if the party made a claim, counterclaim or reply and proceeded through trial with no reasonable basis for success”
It is rare for the Court to award a penalty under Rule 20(5); in this case, however, the court found that a penalty was appropriate because: “much of the pertinent evidence [urged by the employer]…was inadmissible hearsay”, because the employer had failed to disclose relevant documents on time, because the employer failed to provide relevant caselaw, and because the employer proceeded to trial: “with no reasonable basis for counterclaim”.
A copy of the decision can be found here.