The decision of the Ontario Court of Appeal in Eynon v Simplicity Air is a significant decision on punitive damages in Canada. The Court upheld a $150,000 jury award of punitive damages in favour of an employee. This decision warns employers that if those left in charge of the workplace create a culture within the company where employees have little regard for the importance of safety practices in the workplace and engage in highly reprehensible misconduct, they can be held liable for significant punitive damages regardless of an employee's contributory negligence leading up to an accident.
The Facts
The respondent employee, after being challenged by a colleague, had climbed a 14-foot-high chain hoist. Upon descending, his pants got caught on a hook near the bottom of the chain and another hook had pierced his scrotum, requiring him to have surgery. According to the employee, after the accident, a supervisor laughed at him, refused to look at his injuries, and refused to call him an ambulance. He was then driven to a second location to speak with the service manager, who was the employee's direct supervisor. The service manager arranged for the employee to be brought home, but the employee insisted that he be taken to a hospital. According to the employee, he was told by both supervisors to say that his injury happened at home.
The supervisor and other witnesses for the appellant provided a different version of events. The supervisor admitted that he laughed when he first saw the employee stuck on the chain, but there was no reason to call an ambulance based on the employee's demeanour. Both supervisors denied telling the employee to say that the injury occurred at home.
The jury assessed the general damages at $75,000 and lost wages at $9,000, which were both reduced by 75 percent for the employee's contributory negligence in causing his injuries. The jury assessed punitive damages against the employer in the amount of $150,000.
...the supervisors' instructions to the injured employee to falsely report that his injury happened at home... |
Held
The Ontario Court of Appeal dismissed the employer's appeal and upheld the jury's punitive damages award. The Court held that the trial judge had properly instructed the jury on when they could award punitive damages and provided the relevant factors for the jury to consider in determining a proportionate amount of punitive damages. In this case, there was sufficient evidence that a properly instructed jury, acting reasonably, could have awarded punitive damages. In fact, the supervisors' instructions to the injured employee to falsely report that his injury happened at home, alone warranted an award of punitive damages.
The Court deemed the conduct of the supervisors to be considered as the conduct of their employer as it occurred in the course of their employment and occurred within “a culture within the company whereby employees failed to place adequate importance on best safety practices.”
Although the punitive damage award was in excess of the upper limit of recent awards, the ONCA held that the jury's punitive damages award was not so inordinately large that it exceeds what is rationally required to punish the appellant. There was also no basis for reducing the punitive damages award based on the contributory negligence of the employee because the punitive damages award should be based on the supervisors' misconduct after the accident and not on the circumstances leading up to the accident. The court held that this is entirely proper as punitive damages are awarded to penalize a defendant's misconduct and not to compensate the plaintiff.
