The Greater Toronto Airports Authority sought judicial review of an arbitration award that found it had unjustly dismissed a long-term employee and awarded significant damages, including past and future economic loss, $50,000 for mental distress, and $50,000 in punitive damages.
The Divisional Court upheld the arbitrator's decision to award economic loss and mental distress damages in lieu of reinstatement, finding it reasonable given the employer's bad faith in the manner of dismissal.
However, the Court set aside the quantum of mental distress damages because it improperly included unsupported damages for physical pain and suffering.
The Court also set aside the punitive damages award due to a denial of natural justice and the arbitrator's failure to identify an independent actionable wrong or address proportionality.
The issues of quantum for mental distress and punitive damages were remitted to the arbitrator.