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Ex-Honda employee’s odyssey ends with “large whack” of punitive damages

In March, the Ontario Superior Court awarded Kevin Keays 24 months pay in lieu of notice and $500,000 in punitive damages after Honda Canada Inc. fired him because he was suffering from chronic fatigue syndrome (CFS) and was frequently absent from work.[1] The amount of punitive damages is likely a record in employment cases in Canada .

Employers have an obligation to accommodate disabled employees to the point of hardship. This case shows a willingness on the part of courts to deliver a “large whack”[2] in the form of punitive damages against employers that do not.

Mr. Keays was one of first employees at Honda’s Alliston , Ontario plant. He was present when the first car came off the assembly line and was, the trial judge found, a dedicated Honda “associate”. But shortly after he started with Honda, he was afflicted by CFS, and even spent two years on long term disability.

After his return from long term disability, Honda began to take a hard line with him, beginning a process that could lead to his being fired for absenteeism. When he sought accommodation for his disability – a right under the Ontario Human Rights Code – he was met with “stone walling” by Honda’s management. Honda’s in-house doctor threatened to return him to the production line, and Honda insisted that he get a note from his doctor every time he was absent from work. Finally Mr. Keays retained a lawyer who wrote a “conciliatory in the extreme” letter in an attempt to reach an accord. Honda responded by refusing to accept the legitimacy of his absences and demanding that he meet with a second doctor Honda retained. Honda refused to clarify the purpose of this meeting and Mr. Keays refused to attend, whereupon Honda fired him.

The judgment is replete with adverse findings against Honda. They include:

  • Mr. Keays was a dedicated Honda employee for almost 14 years.
  • Mr. Keays had just cause to refuse to meet with the doctor. Honda’s demand that Mr. Keays meet with the doctor was not made in good faith, but as a prelude to terminating his employment.
  • The threat by the company doctor that Mr. Keays would be returned to the production line was “ an act of gross insensitivity bordering on the unprofessional” which provided grounds for Mr. Keays to insist on a clarification of the purpose of the meeting with the second doctor.
  • Honda refused to deal with Mr. Keays’ lawyer. Honda’s in-house lawyer even attempted to persuade him to reject his lawyer’s advice, a “blatant breach” of the Rules of Professional Conduct.
  • Honda sent a letter to Mr. Keays implying his condition was “bogus”, a “‘callous and insensitive’ misrepresentation of the medical information available to Honda at the time”.
  • “Honda’s misconduct was planned and deliberate and formed a protracted corporate conspiracy against Mr. Keays”
  • Honda’s intent was to deprive Mr. Keays of the accommodation that he was entitled to under the Human Rights Code.

One aspect of McIsaac J.’s reasoning is unfortunate. He increased the notice period because Mr. Keays bought into Honda’s relatively flat management structure and egalitarian approach, with the result that his termination “had the same impact on him as it would have on a member of senior management, up to and including the president”. McIsaac J. this increased the notice period beyond that warranted by Mr. Keays relatively junior position.

McIsaac J.’s decision creates a disincentive for employers to adopt flat management structures, egalitarian approaches, or other approaches that better motivate and empower their employees, because they may be penalized for these worthy initiatives by longer notice periods.

Published May 16, 2005

[1] Keays v. Honda Canada Inc., [2005] O.J. No. 1145 (S.C.J.)

[2] Whiten v. Pilot Insurance Co. , [2002] 1 S.C.R. 595 at ¶118

W. Michael G. Osborne
Affleck Greene McMurtry LLP

W. Michael G. Osborne

Michael Osborne is a former Partner of Affleck Greene McMurtry LLP

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