Executive Summary: Key Legal and Evidentiary Issues

• The plaintiff claimed constructive dismissal after the employer failed to pay wages due to a governance-related account freeze.

• Damages were assessed on affidavit evidence following a default judgment, as the defendants failed to appear or respond.

• A 24-month notice period was awarded based on the plaintiff’s long tenure, senior role, and difficulty finding comparable employment.

• Aggravated damages were granted for mental distress caused by unfounded accusations and poor treatment during dismissal.

• Punitive damages were awarded to deter high-handed conduct, especially false allegations of theft made by the employer.

• The court reduced general damages to account for mitigation income earned in secondary roles after termination.

Facts and outcome of the case

Carolyn Silva was employed by the Kensington Community Centre Association (KCCA) as its office manager for 26 years. Her employment was effectively terminated on September 1, 2020, when the KCCA could no longer pay her due to a governance dispute that led to frozen bank accounts. Despite assurances from various board factions that the issue would be resolved, Ms. Silva was never formally dismissed, creating uncertainty around her employment status. During this period, she experienced exclusion from workplace communication, unprofessional conduct, and accusations of insubordination. She continued working unpaid for a period out of trust in KCCA’s leadership.

Ms. Silva subsequently discovered that the KCCA, or individuals claiming to act on its behalf, informed external bodies that she was no longer employed. She was also contacted by police regarding accusations of theft and later named in a civil lawsuit by one faction of the KCCA alleging fraudulent conduct. These events, along with the employer’s failure to pay her entitlements, caused significant emotional and reputational harm.

The plaintiff commenced an action on February 28, 2023, seeking damages for wrongful dismissal, mental distress, punitive damages, unpaid wages, and costs. After the defendants failed to respond, the court granted default judgment. The application to assess damages was based solely on affidavit evidence, as permitted by civil rules.

The court found that Ms. Silva was constructively dismissed when KCCA failed to pay her wages. Her compensation was calculated based on her previous earnings, with adjustments for mitigation income. The court awarded her 24 months’ notice due to her age, length of service, specialized role, and challenges in securing comparable work, especially after facing false allegations.

General damages for wrongful dismissal were calculated at $92,946.55 after deductions for mitigation. The court declined to award additional damages for unpaid post-termination work, as those hours were already covered in the wrongful dismissal award. Aggravated damages of $30,000 were granted for the emotional harm caused by the employer’s bad faith conduct, including false accusations and lack of proper communication during termination. The court also awarded $40,000 in punitive damages, finding that KCCA’s conduct warranted denunciation and deterrence.

Prejudgment interest of $17,699.21 and costs of $12,359.72 were also granted. The total award to Ms. Silva amounted to $193,005.48. The court permitted liquidation of KCCA funds held at a credit union to satisfy the judgment and directed that related freezing orders be modified accordingly.