The plaintiff, a senior communications consultant, was wrongfully dismissed after one year of employment.
A jury awarded her 12 months' notice (including a three-month Wallace extension for bad faith) and $75,000 in punitive damages.
The employer appealed.
The Court of Appeal upheld the 12-month notice period, finding the employer's conduct in maintaining cause allegations and withholding commissions justified the Wallace extension.
However, the court set aside the punitive damages award, finding no independent actionable wrong and that the generous compensatory award was sufficient to deter the employer's conduct.
The court also ordered a new trial on the limited issue of whether the plaintiff's compensation included revenues from the Montreal office, as the trial judge had unfairly precluded the employer from leading evidence on this point.