If your employer in Newfoundland and Labrador fires you in a cruel, dishonest, or humiliating manner, you can sue for “bad faith” or aggravated damages. This is separate from your standard severance pay. By hiring an employment lawyer to file a claim in the Supreme Court, you can secure significant extra financial compensation for the mental distress they caused you.
Getting laid off or terminated is universally acknowledged as one of the most stressful events in a person’s life. Under normal circumstances in St. John’s, Gander, or Labrador City, your employer must treat you with a basic level of dignity and respect when ending your employment. Unfortunately, some companies cross the line into vindictive behaviour, choosing to publicly embarrass their workers, lie about the reasons for termination, or falsely accuse them of crimes to avoid paying a fair severance package. 💰
Canadian employment law does not tolerate cruel terminations. The Supreme Court recognizes that employers hold a massive position of power over their staff. When an employer abuses this power by acting in “bad faith” during the dismissal process, the courts will punish them. By demanding aggravated damages (historically known in Canada as “Wallace damages”), your law firm can force the employer to financially compensate you for the humiliation and emotional trauma they intentionally inflicted. ⚖
Step-by-Step Guide to Proving Bad Faith Damages in NL
You cannot claim bad faith damages simply because you are sad about losing your job. You must prove that the employer’s specific actions were exceptionally untruthful, misleading, or unduly insensitive. Whether you were marched out of an office in Mount Pearl or slandered in Corner Brook, follow these steps.
Step 1: Document the Cruel Termination Details
The foundation of a bad faith claim is evidence of the employer’s outrageous behaviour. Did they fire you in front of your entire team instead of in private? Did they unnecessarily call security or the Royal Newfoundland Constabulary to escort you out like a criminal? Write down exactly what was said, who witnessed it, and save any abusive emails or text messages from your manager. 📝
Step 2: Identify False Allegations of “Cause”
One of the most common forms of bad faith is when an employer fabricates a fake reason to fire you without severance. If they suddenly accuse you of theft, fraud, or gross incompetence without any proof, simply to pressure you into accepting a zero-dollar exit, your lawyer will aggressively use this in your claim. Maliciously attacking your professional reputation is a massive legal misstep for any company. 👤
Step 3: Gather Medical Evidence of Mental Distress
To win aggravated damages, you generally need to prove that the employer’s cruel actions directly caused you severe emotional harm. Standard sadness is not enough. You must visit your doctor or a psychologist. Medical records diagnosing you with clinical depression, severe anxiety, or insomnia directly linked to the traumatic termination are vital to proving your case in court. 🏥
Step 4: File a Claim at the Supreme Court
Bad faith damages cannot be awarded by the provincial Labour Standards Division; they must be won through the civil court system. Your law firm will draft a formal Statement of Claim to file at the Supreme Court of Newfoundland and Labrador. This document will demand your standard common law severance pay, plus an additional sum (often $10,000 to $50,000+ CAD) specifically for the bad faith damages. 📄
How Much Does it Cost in Newfoundland and Labrador?
Taking a ruthless employer to task for bad faith conduct usually requires a strategic financial approach.
- Supreme Court Filing Fees: The basic government fee to file a civil claim in the Supreme Court is currently $132 CAD.
- Contingency Fees: Because a successful bad faith claim can result in a large payout, many employment lawyers will take your case on a contingency basis, meaning they take 25% to 33% of your final settlement, charging you nothing upfront.
- Hourly Rates: If you hire a lawyer hourly for a complex, prolonged litigation battle, expect rates between $250 and $500 CAD per hour.
- Medical Reports: Paying your doctor or psychologist to write a formal legal report detailing your mental distress may cost you $150 to $500 CAD.
How Long Does the Process Take?
Pursuing bad faith damages generally makes the legal process longer, as employers are often stubborn about admitting cruel behaviour. A standard severance negotiation might finish in 4 weeks, but a claim involving aggravated damages usually requires filing a lawsuit. Most of these cases still settle out of court during mediation within 4 to 8 months. However, if the company refuses to settle and you must proceed to a full trial, it can take 1 to 2 years for a judge to issue a final decision. ⌛
| Type of Compensation | What Does It Cover? | How is it Calculated? |
|---|---|---|
| Common Law Severance | Replaces lost wages while you look for a new job. | Based on age, years of service, and salary. |
| Aggravated (Bad Faith) Damages | Compensates for extreme mental distress caused by cruelty. | A lump sum dollar amount decided by the judge. |
| Punitive Damages | Punishes the employer for highly malicious, illegal acts. | A rare, high-value penalty to deter future bad behaviour. |
Frequently Asked Questions (FAQ)
What exactly was the “Wallace bump”?
Historically, Canadian courts punished bad faith by adding extra months of severance to your package (the Wallace bump). Today, courts no longer add months; instead, they award a specific, separate dollar amount known as aggravated or moral damages.
Can I sue for bad faith just because my severance package is small?
No. Simply offering a lowball severance package is not automatically considered bad faith. To get aggravated damages, the employer must have engaged in active deceit, cruelty, or abusive behaviour during the actual termination process.
What if they tell my new employer I was fired for theft?
If an employer maliciously lies about the reason you were fired to your coworkers or potential new employers, you can sue them for bad faith damages, and your lawyer can also file an additional lawsuit against them for defamation of character.
Do I have to go to court, or can my lawyer settle it quietly?
The vast majority of these cases are settled quietly. Employers hate public embarrassment. When your lawyer presents strong evidence of their cruel behaviour, the company will usually agree to a large financial settlement if you sign a strict Non-Disclosure Agreement (NDA).
Can I claim bad faith if they cancel my health benefits instantly?
Cutting off your health benefits the moment you are fired (especially if you are undergoing serious medical treatments) can absolutely be argued as high-handed, insensitive conduct contributing to a bad faith damages claim.
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