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Bad Faith in Termination: What Triggers Extra Damages in BC
Losing your job is never easy. But when a dismissal is handled unfairly, British Columbia law allows employees to claim more than just basic severance. Employers who engage in bad-faith termination may face significant legal consequences, including moral damages for the harm caused by their actions.
Whether you are an employee questioning how your termination was handled or an employer concerned about legal exposure, understanding how bad-faith termination works is essential.
This article explains what bad faith termination means in BC, how probation and notice apply under the Employment Standards Act (ESA) and common law, and what behaviours can trigger additional damages under Canadian case law.
What Is Bad Faith Termination in BC?
Bad faith termination occurs when an employer dismisses an employee in a way that is dishonest, unfair, or unnecessarily harmful. The duty to act in good faith has been recognized in Canadian law since Wallace v. United Grain Growers Ltd. (1997). Later, Honda Canada Inc. v. Keays (2008) clarified that extra damages require proof of actual harm, such as mental distress or reputational damage.
Examples of bad faith conduct include:
- Making false allegations of serious misconduct
- Terminating an employee in a humiliating or public way
- Misrepresenting the reason for dismissal
- Refusing to provide a Record of Employment (ROE), affecting EI eligibility
- Giving misleading or damaging references
Probationary Employment and Termination in BC
Employers sometimes believe probationary employees have no rights, but that’s not true. While the ESA states that employees with fewer than three months of service are not entitled to statutory notice or severance pay, this does not give employers a free pass.
During probation:
- Employers must still act in good faith and communicate honestly.
- Employees cannot be dismissed for discriminatory reasons under the Human Rights Code.
- Courts expect employers to provide training, feedback, and a fair opportunity to succeed before terminating.
Even a probationary dismissal can lead to liability if handled unfairly.
As Christopher Achkar, employment lawyer and founder of Achkar Law, explains:
“When a termination is handled in bad faith, the consequences can extend far beyond lost wages, it can lead to significant additional damages. Whether you’re an employer managing a dismissal or an employee facing one, getting proper legal advice early can make all the difference.”
Just Cause Termination in BC
Some employers try to avoid severance obligations by alleging “just cause.” However, in BC, just cause is reserved for very serious misconduct, such as theft, harassment, violence, or repeated dishonesty.
- Poor performance or minor mistakes do not meet this standard.
- The employer bears the burden of proving just cause.
- If just cause cannot be proven, the termination is treated as “without cause,” requiring notice or severance.
If false allegations of misconduct are made, employees can seek wrongful dismissal damages, and potentially moral damages, in addition to notice.
Severance Pay in BC: ESA Minimums vs. Common Law
The ESA sets out the minimum termination entitlements:
- After 3 months: 1 week’s notice or pay
- After 1 year: 2 weeks
- Plus 1 additional week per year of service, up to 8 weeks
However, BC courts often award much more under common law, based on factors such as:
- The employee’s age
- Length of service
- Nature of the position
- Availability of comparable employment
If the termination is carried out in bad faith, additional compensation may be awarded beyond severance and common law notice.
What Triggers Extra Damages?
Courts may award moral damages if the employer’s behaviour during termination causes unnecessary harm.
Common triggers include:
- Dishonesty: Giving false reasons for dismissal
- Humiliation: Escorting employees out unnecessarily
- Confusion: Failing to clearly communicate the termination
- Career harm: Refusing to provide references or misrepresenting employment history
If this conduct results in mental distress, reputational damage, or financial loss, BC courts may order significant additional damages.
Examples of Bad Faith Termination in BC
Employee example: A probationary worker is dismissed without explanation. Later, they discovered the employer falsely accused them of dishonesty. Even though the ESA notice doesn’t apply, this could lead to a wrongful dismissal claim due to reputational harm.
Employer example: A manager fires a long-term employee for “performance issues” without prior warnings and announces the dismissal publicly. This conduct could trigger moral damages in addition to common law notice.
How to Protect Yourself
Employees should:
- Keep written records of termination meetings
- Ask for written reasons for dismissal
- Speak to an employment lawyer before signing any release
Employers should:
- Document performance issues and use progressive discipline
- Handle terminations privately and respectfully
- Avoid exaggerating or misrepresenting reasons for dismissal
How an Employment Lawyer Can Help
A skilled employment lawyer in British Columbia can:
- Assess whether a dismissal was handled in bad faith
- Calculate potential severance pay and common law entitlements
- Represent employees in wrongful dismissal or moral damages claims
- Help employers minimize liability and avoid costly disputes
Fired in Bad Faith?
Get Legal Help Before It’s Too Late
If you believe your dismissal was handled dishonestly, unfairly, or in a way that caused you harm, you may be entitled to significantly more than basic severance. Employers can face major financial consequences if they cross the line, but acting quickly is critical to protecting your rights.
At Achkar Law, we help employees pursue wrongful dismissal and bad faith termination claims and guide employers in handling terminations lawfully and respectfully.
The article in this client update provides general information and should not be relied on as legal advice or opinion. This publication is copyrighted by Achkar Law Professional Corporation and may not be photocopied or reproduced in any form, in whole or in part, without the express permission of Achkar Law Professional Corporation. ©