Osadca v. Recyclenet Corporation Mental Distress Damages

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The Case for Mental Distress Damages: Defining “Reasonable”: Osadca v. Recyclenet Corporation, 2015 ONSC 4717

Termination for many employees is a traumatic event. A person’s identity has often been associated with the type of work they do. When their time with a company comes to an end, often times in an unexpected manner, it can be a humiliating experience for that individual with long lasting effects stemming beyond the financial hardships which are commonly associated with termination. The question then becomes, when does “regular hardship” become hardship warranting legal damages, referred to as damages for mental distress? The Ontario Superior Court of Justice answers this question in the case of Osadca v Recyclenet Corporation, 2015 ONSC 4717.

The Facts

Mr. Osadca began working for Recyclenet in September 1999 as a salesman, primarily dealing with the selling of internet services, advertising, linking purchasers and sellers of recyclable materials, servicing customers and training sales staff. Mr. Osadca continued in this role until his termination in March 2007. Prior to his termination, Mr. Osadca primarily worked from home because of a medical condition; he was an epileptic, a fact known to Recyclenet.

In March 2007, Mr. Roszel, Mr. Osadca’s supervisor, visited his home unexpectedly and terminated him. At the time of termination, Mr. Osadca had understood that he was doing well in his position and that his employment was secure. He had recently married in 2005 and had felt confident enough to buy a house and take on a mortgage. Mr. Osadca’s termination came as a complete shock to him. Upon his termination, Mr. Osadca received $12,112.50 USD and $152.50 CAD as final payments from Recyclenet.

Following his termination in his own home, Mr. Osadca felt blindsided, humiliated, embarrassed, angry and scared. He could not eat or sleep. Mr. Osadca sought help from a therapist once a week for 11 weeks, but could not continue because he could not afford to do so.

Because of his medical condition, Mr. Osadca could not find another position where he could work from home that paid similarly to his previous position. From earning $70,763.00 in 2005 and $89,760.00 in 2006, Mr. Osadca’s income decreased to $3,640.00 in 2007 and $11,992.00 in 2008.

The Issues

The court was thus presented with two (2) issues:

1) Whether Mr. Osadca was entitled to more notice than he received; and,
2) Whether Recyclenet’s conduct in the termination of Mr. Osadca warranted damages.

The Decision

The court found that Mr. Osadca was entitled to significantly more notice than what he received at the time of termination. Specifically, given his tenure with Recyclenet, the court found that Mr. Osadca was entitled to 8 months’ notice for his termination. In addition, as a result of his medical condition, the nature of his employment, as well as the fact that he never worked for any other employer, the learned justice awarded Mr. Osadca with an additional 4 months’ notice, bringing the total amount of notice to 12 months. The monetary value of Mr. Osadca’s notice was determined to be $80,216.50, a significant sum compared to the amount he received at the time of termination.

On determining whether Recyclenet’s conduct warranted damages, the court said yes, noting that Recyclenet’s conduct in this case was unfair and in bad faith, and had caused Mr. Osadca considerable mental distress. In its reaching its decision, the court noted that Mr. Osadca was not given a reason for his termination, citing how he had felt vaguely accused of dishonesty without having been provided any proof of the allegations, or a chance to defend himself. As such, the learned justice ruled that the facts of this case supported a finding of undue insensitivity and unfair statements and awarded damages in the amount of $7,500.00 for mental distress, as well as $1,650.00 representing the cost of psychotherapy that Mr. Osadca underwent, a cost which was clearly incurred as a result of Recyclenet’s conduct.

Termination is difficult for anyone. However, the above case represents a smaller portion of instances wherein special damages are warranted. It is important to be aware of your legal rights in the instance of a termination, particularly when that termination has effects on you (i.e physical, mental) which stem beyond the usual stress associated with the loss of a position.

Contact Monkhouse Law today for a free consultation to see if you have a legal remedy available to you.

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