Aggravated Damages — Ontario Employment Law
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About Aggravated Damages
When an Ontario employee is dismissed, they are typically entitled to damages for lack of reasonable notice (or pay in lieu). However, in some cases, the way an employee is fired can cause harm that goes beyond the financial loss of the job. This is where aggravated damages come in. Aggravated damages are a separate, additional award intended to compensate an employee for the mental distress—such as humiliation, anxiety, or depression—caused by an employer's bad faith or unduly insensitive conduct during the termination process. It's crucial to understand that these damages are not for the normal stress of losing a job. Instead, they address the extra harm inflicted by the employer's behaviour. Under Ontario common law, employers have a duty of good faith and fair dealing in the manner of dismissal. Breaching this duty can give rise to a claim for aggravated damages, which are also frequently referred to as 'moral damages' or 'Honda damages' after the landmark Supreme Court of Canada case, Honda Canada Inc. v. Keays. Examples of conduct that might lead to such an award include being untruthful, embarrassing or humiliating the employee, spreading false allegations, or terminating someone while they are vulnerable on sick leave. Unlike punitive damages, which are meant to punish the employer for outrageous conduct, aggravated damages are purely compensatory. They focus on the actual harm and suffering experienced by the employee. The amount awarded depends heavily on the severity of the employer's actions and the documented impact on the employee's mental health. Because the line between normal distress and compensable mental distress can be fine, understanding how these situations are assessed by courts is key, and the specific facts of each case determine the outcome.
Frequently Asked Questions
What is the difference between aggravated damages and punitive damages in Ontario?
Aggravated damages compensate you for mental distress caused by the employer's bad faith conduct during dismissal. Punitive damages are not compensatory; they are intended to punish the employer for malicious or outrageous conduct and deter others from similar behaviour. It is possible, though rare, to be awarded both.
How much are aggravated damages usually worth?
There is no set amount. Awards in Ontario often range from $15,000 to $75,000, but can be higher in extreme cases. The court assesses the severity of the employer's conduct and the extent of the employee's proven mental distress to determine a fair figure.
Do I need a doctor's note to prove mental distress for aggravated damages?
While not strictly mandatory, medical evidence from a doctor, psychiatrist, or therapist significantly strengthens a claim. It provides objective proof of the harm you suffered, linking it to the employer's actions and making your claim more credible than testimony alone.
Is being fired in a cold or impersonal way enough to get aggravated damages?
Generally, no. The law recognizes that termination is inherently unpleasant. Aggravated damages are reserved for conduct that goes beyond the pale—actions that are untruthful, unduly insensitive, humiliating, or in bad faith, causing harm beyond the normal upset of job loss.
What is the time limit to sue for aggravated damages in Ontario?
A claim for aggravated damages is part of a wrongful dismissal lawsuit. In Ontario, you generally have two years from the date of your termination to file a civil claim under the Limitations Act, 2002.
When should I consult an employment lawyer about my dismissal?
If your termination involved more than just being let go—for example, if you were publicly humiliated, accused of things you didn't do, or the company was exceptionally cruel in how they treated you—it's wise to speak with a lawyer. They can help determine if the employer's conduct breached the duty of good faith and if a claim for aggravated damages is viable.
Common Scenarios
- A long-term manager is terminated for 'performance issues' that were never previously raised, just weeks after she reported a senior leader for harassment.
- An employee is called into a termination meeting and falsely accused of theft in front of junior colleagues before being escorted out by security.
- While on a documented medical leave for anxiety, a sales representative is terminated via a courier letter that claims 'job abandonment' and cuts off her health benefits immediately.
- An employer promises an employee a promotion to convince them to stay, only to eliminate their position two months later and provide a severance offer far below their entitlements.
- During a wrongful dismissal lawsuit, an employer maintains baseless allegations of serious misconduct against a former employee, causing significant reputational damage and emotional harm.
What You Should Know
- Keep a detailed, contemporaneous record of the termination meeting, including who was present, what was said, and how you were treated.
- If the dismissal causes you significant mental anguish, seek support from a medical professional. Their records can serve as critical evidence for an aggravated damages claim.
- Do not confuse aggravated damages with punitive damages. Your claim should focus on the mental harm you personally suffered due to the employer's conduct, not on a desire to punish the company.
- Remember that the standard for aggravated damages is high. You must demonstrate that the employer's conduct during the dismissal was in bad faith or unduly insensitive, causing harm beyond the normal distress of job loss.
- If you believe your employer's conduct warrants a claim for aggravated damages, it's essential to seek legal advice promptly to understand your rights and the strict two-year limitation period for filing a claim.
Featured Cases
S. v. Royal Bank of Canada
2026 ONSC 3841 (CanLII) · 2026-06-30S. v RBC: 16 Months Notice for Wrongful Dismissal
This wrongful dismissal case involved a financial planner terminated for alleged cause, which the court set aside after finding the employer's investigation inadequate and biased. The court awarded sixteen months' reasonable notice and damages for aggravated mental distress and bad faith in the manner of dismissal, while rejecting the employer's mitigation defence.
K. v. Kingston Area Taxi Licensing Commission
2025 ONSC 4706 (CanLII) · 2025-08-14Constructive Dismissal: 24 Months Notice & Aggravated Damages
This is a merits decision in a wrongful dismissal case where the plaintiff alleged constructive dismissal due to a hostile work environment, including micromanagement, harassment, and bad faith contract negotiations. The court found that the defendant's conduct fundamentally breached the employment relationship, establishing constructive dismissal and awarding damages for the manner of dismissal.
Krmpotic v. Thunder Bay Electronics Limited
2024 ONCA 332 (CanLII) · 2024-05-02This is an appeal from a wrongful dismissal trial decision involving an employee with almost 30 years of service who was dismissed without notice. The Court of Appeal affirmed the trial judge's findings that both companies were jointly and severally liable for damages and upheld the award of aggravated damages for bad faith dismissal, despite the absence of medical evidence for mental distress.
K. v. Controlex Corporation
2023 ONSC 7045 (CanLII) · 2023-12-13Wrongful Dismissal: 18.5-Year Executive Awarded 24 Months Notice
A wrongful dismissal case involving a senior executive with 18.5 years of service who was summarily dismissed without cause. The court awarded 24 months' notice in lieu of reasonable notice, along with $50,000 in aggravated damages for bad faith conduct and $50,000 in punitive damages for malicious behavior. Substantial indemnity costs of $192,112.19 were also awarded due to the employer's failure to defend the action.
Humphrey v. Mene Inc.
2022 ONCA 531 (CanLII) · 2022-07-15Wrongful Dismissal: COO Awarded 12 Months Notice
This appeal concerns a wrongful dismissal action where a COO with three years of service was terminated without cause. The Court of Appeal upheld the 12-month notice period awarded by the motion judge but reduced the damages to six months' compensation due to the employee's failure to mitigate by rejecting a comparable senior management position. Additionally, the court affirmed awards of $50,000 in aggravated damages and $25,000 in punitive damages based on the employer's bad faith and reprehensible litigation conduct.
P. v. L.
2022 ONSC 1378 (CanLII) · 2022-03-01P. v. L.: Constructive Dismissal & Accommodation
This case addresses whether the plaintiff was constructively dismissed or resigned following workplace conflict and changes to employment terms. The court applied the test for constructive dismissal, requiring a fundamental alteration of essential contract terms or intolerable working conditions, referencing Farber v. Royal Trust Co. and Shah v. Xerox Canada Ltd. The plaintiff also alleged failure to accommodate a mental health disability under the Human Rights Code and sought aggravated and punitive damages, but no evidence of bad faith or egregious conduct was found to support such damages.
N. v. IBM Canada Ltd.
2021 ONSC 6853 (CanLII) · 2021-10-14Wrongful Dismissal: 24-Year Employee Awarded 22 Months Notice
This wrongful dismissal case involved a senior employee with 24 years of service who was terminated at age 48. The court awarded 22 months' salary in lieu of reasonable notice and $40,000 in aggravated damages due to the employer's insensitive manner of dismissal, while rejecting claims for punitive damages and discretionary bonuses.
Humphrey v. Mene
2021 ONSC 2539 (CanLII) · 2021-05-04Constructive Dismissal: COO Awarded 12 Months Notice
This case addresses constructive dismissal and wrongful dismissal involving a 32-year-old COO with three years of service. The court found the employer's conduct constituted constructive dismissal and repudiation of the employment agreement, rendering the 'Without Cause Termination Provision' void for lack of fresh consideration. The court set reasonable notice at 12 months, reduced the damages by one month's compensation for unreasonable mitigation, and awarded $50,000 in aggravated damages for mental distress and $25,000 in punitive damages for the employer's malicious conduct.
Hucsko v. A.O. Smith Enterprises
2020 ONSC 2498 (CanLII) · 2020-04-22This is a wrongful dismissal case involving claims for damages, including aggravated and punitive damages, following the plaintiff's dismissal. The case also addresses the allocation of costs under Rule 49.
M. v Dynacast Ltd.
2019 ONSC 7146 (CanLII) · 2019-12-17Constructive Dismissal: 28 Months Notice Awarded
This case addresses whether the employer's unilateral reassignment of the plaintiff to a lower-status position with significant changes to duties and compensation constituted constructive dismissal. The court applied the Potter test and found the plaintiff entitled to 28 months' notice. Additionally, the court awarded $25,000 in aggravated damages due to the employer's bad faith conduct and determined that income from inferior employment and self-employment during the notice period was not deductible from damages.
C. v. Aero Auction Sales Inc.
2019 ONSC 4766 (CanLII) · 2019-08-13Wrongful Dismissal: Senior Executive Awarded 12 Months Notice
A wrongful dismissal case involving a senior executive who was terminated after almost seven years of employment. The court awarded 12 months' reasonable notice and $75,000 in aggravated damages for bad faith termination, while also addressing the director's personal liability under the Ontario Business Corporations Act for transferring assets to avoid paying the judgment.
B. v. German Canadian News Company Limited et al.
2019 ONSC 1343 (CanLII) · 2019-02-26Wrongful Dismissal: 19-Year Employee Seeks 19 Months Notice
This wrongful dismissal case involves a plaintiff with 19 years of service who was terminated without notice or compensation. The court applied the Bardal factors to determine the reasonable notice period, addressing whether the plaintiff was entitled to 19 months' notice and benefits. The case also examined claims for aggravated and punitive damages related to the employer's handling of workplace harassment and the manner of dismissal.
J. v. The Corporation of the Municipality of Arran-Elderslie
2018 ONSC 7616 (CanLII) · 2018-12-19Wrongful Dismissal: Chief Building Official Awarded Damages
This wrongful dismissal case involved the Chief Building Official of the Municipality of Arran-Elderslie, who was terminated without notice. The court found that the employer was estopped from relying on alleged conflict of interest due to prior conduct approving the employee's dual roles, and deemed the termination wrongful. The municipality's bad faith conduct, including a public ambush and misleading press release, resulted in an award of aggravated and punitive damages alongside contractual damages for insufficient notice.
W. v. Mex Precision Wire Corporation
2018 ONSC 6572 (CanLII) · 2018-11-06Wrongful Dismissal: 12-Month Notice Awarded to 59-Year-Old
This wrongful dismissal case involved a 59-year-old plaintiff with 12 months of employment who was induced to leave secure employment. The court applied the Bardal factors to determine a reasonable notice period of 12 months, reduced by amounts paid and mitigation. Additionally, the court awarded $10,000 in aggravated damages for the employer's bad faith conduct during dismissal, while dismissing the separate tort claim for intentional infliction of mental suffering due to insufficient medical evidence.
H. v. 897469 Ontario Inc.
2018 ONSC 121 (CanLII) · 2018-01-05Wrongful Dismissal: Aggravated & Punitive Damages Awarded
This wrongful dismissal case involved a plaintiff terminated without notice during the holiday season, alleging malicious and oppressive conduct by the employer. The court awarded aggravated damages for the manner of termination and punitive damages to deter egregious conduct, while dismissing claims for intentional infliction of mental suffering and discrimination due to lack of evidence. The plaintiff was awarded partial indemnity costs rather than the sought substantial indemnity costs.
V. v Association of Professional Engineers on Ontario
2017 ONSC 3277 (CanLII) · 2017-05-26Wrongful Dismissal: Leave to Amend for Bad Faith Damages
This is an interlocutory motion regarding a wrongful dismissal claim where the plaintiff sought leave to amend their statement of claim. The plaintiff aimed to add allegations of bad faith, harassment, and unwarranted disciplinary proceedings by the employer, seeking moral, aggravated, and punitive damages. The court granted leave to amend, finding that the proposed claims did not constitute an abuse of process or collateral attack on ongoing disciplinary proceedings.
W. v H., P. and M.
2017 ONSC 358 (CanLII) · 2017-01-17Wrongful Dismissal: Aggravated Damages Without Evidence
This is an appellate review of a wrongful dismissal case where the trial judge awarded aggravated damages despite a lack of evidence regarding bad faith or actual harm. The appeal focused on whether the trial judge erred in applying the principles from Honda v. Keays and failed to consider the evidentiary requirements for aggravated damages, specifically the need for medical evidence or proof of mental distress.
Strudwick v. Applied Consumer & Clinical Evaluations Inc.
2016 ONCA 520 (CanLII) · 2016-06-30This is an appeal to the Court of Appeal for Ontario regarding a wrongful dismissal action. The appeal addressed the trial judge's assessment of damages, including the notice period, aggravated damages for bad faith conduct, punitive damages, and damages for human rights violations and intentional infliction of mental distress. The court also reviewed procedural issues regarding damages exceeding the claim and costs.
A. v L.
2015 ONSC 3004 (CanLII) · 2015-05-25Wrongful Dismissal: 26-Year Legal Secretary Awarded 21 Months Notice
This wrongful dismissal case involved a legal secretary with 26 years of service who was terminated without just cause. The court awarded a notice period of 21 months based on Bardal factors and granted $7,500 in aggravated damages for the manner of dismissal, while rejecting the employer's arguments regarding mitigation and financial circumstances.
Boucher v. Wal-Mart Canada Corp.
2014 ONCA 419 (CanLII) · 2014-05-22Boucher v Wal-Mart: Constructive Dismissal & Damages Appeal
This is an appeal from a jury verdict in a wrongful dismissal and tort action involving constructive dismissal due to workplace harassment. The trial jury awarded $100,000 in compensatory damages for intentional infliction of mental suffering, $200,000 in aggravated damages, and $1,150,000 in punitive damages. The appeal focused on the reasonableness of these awards and the limitation of future loss of income.