Labour and Employment Law Blog

The BC Supreme Court (the “Court”) recently awarded $25,000 in punitive damages in response to an employer failing to comply with the Employment Standards Act (the “ESA”) when dismissing an employee.

In Thompson v. Revolution Resource Recovery Inc., 2025 BCSC 8 (“Revolution”), the employer dismissed an employee with just over three years service and provided her a cheque for unpaid wages, vacation and four weeks severance (one week more than the employee’s statutory entitlement pursuant to the ESA). The cheque came with a letter which stated, in part: “By accepting this payment, you acknowledge that you have no claims against Revolution Resource Recovery…”.  The employee wrote to the employer advising that she did not accept the severance offer and requesting to be paid her statutory entitlements in accordance with the ESA. The employer did not respond.

Ultimately, over a month after her dismissal, the employee cashed the cheque. By way of background, the employer was aware that the employee was in a difficult financial situation due to costs associated with care for her mother with dementia and lower commissions in her final months of employment.

The Court found that the employee had not accepted the employer’s release, and the employer wrongly terminated the employee. In awarding punitive damages for failing to pay the employee their statutory entitlements in accordance with the ESA, the Court stated:

Employers should clearly be deterred from leveraging their own non-compliance with employment standards requirements to compel financially vulnerable employees to compromise their legal positions.

Revolution is the first BC case to award punitive damages entirely based on failing to comply with the ESA. Ontario courts routinely award punitive damages for failing to comply with employment standards legislation. For example:

• Beaumont v. Beaumont, 2025 ONCA 94 - $75,000 in punitive damages for failure to pay an employee their wages during their employment;

• Scarrow v. Walkey et al, 2024 ONSC 3876 - $20,000 in punitive damages for failure to pay wages and provide notice of termination or pay in lieu; and

• Pohl v. Hudson’s Bay Company, 2022 ONSC 5230 - $10,000 in punitive damages for failure to pay wages owing within seven days of termination as required by the Ontario Employment Standards Act; and

In addition to punitive damages being awarded for failure to comply with the ESA, BC courts have awarded punitive damages where an employer does not comply with the terms of an employment agreement when dismissing an employee. For example, in

Moffatt v. Prospera Credit Union, 2021 BCSC 2463, the Court ordered punitive damages equal to 2.5 months wages in response to an employer offering a severance package that was less than the employee’s contractual entitlement on termination and misstating both the employee’s contractual termination and non-solicitation provisions in the termination letter.

Takeaway for Employers

When dismissing an employee:

• provide the employee with at least the minimum entitlements set out in their employment agreement; and
• comply with the applicable employment standards legislation in the province or territory where the employee works. In British Columbia all unpaid wages, vacation and statutory pay in lieu of notice must be paid within 48 hours of termination and an employee cannot be required to sign a release to receive their statutory entitlements.

Please reach out to a member of Lawson Lundell’s Labour, Employment & Human Rights Group should your organization have any concerns about complying with employment standards legislation or your employee’s employment contracts.