Discharged employee cannot recover damages for loss of disability benefits on top of damages for wrongful dismissal

by Michael Osborne, Affleck Greene McMurtry LLP

A discharged employee cannot recover damages for loss of disability benefits in addition to damages for wrongful dismissal, the Ontario Court of Appeal held in a decision issued on January 10, 2006. Awarding such damages would constitute double recovery, the court said.

Alcatel Canada Inc. induced Mary Egan to leave Bell Canada after nearly twenty years’ employment, but less than two years later, fired her. About three months later, Ms. Egan became disabled and remained so for one year.

Ms. Egan sued Alcatel for wrongful dismissal. The trial judge awarded her nine months’ salary, but declined to award disability pay as well.

On appeal, the Court of Appeal upheld the trial judge’s finding that Alcatel induced Ms. Egan to leave her employment with Bell Canada. However, the trial judge should have awarded salary for the period during which Ms. Egan was not disabled, and damages in lieu of disability pay for the entire year during which she was disabled.

Published January 11, 2006