Duhaime's Law Dictionary

Wallace Damages Definition:

Increased damage award in a wrongful dismissal case because of the manner in which the dismissal was handled by the employer.

Canada only.

Also Wallace bump or Wallace bump-up.

Named after the description of the head of damages in Wallace v United Grain Growers where Canada's Supreme Court recognized that dismissals which occur in bad faith or where the employer bullies the employee through the dismissal, will call for unique damages, which practitioners and judges have taken to calling Wallace damages.

Justice Iaccobucci described the nature of the injury inflicted upon the employee at ¶103 of Wallace:

"(W)here an employee can establish that an employer engaged in bad faith conduct or unfair dealing in the course of dismissal, injuries such as humiliation, embarrassment and damage to one’s sense of self-worth and self-esteem might all be worthy of compensation depending upon the circumstances of the case. In these situations, compensation does not flow from the fact of dismissal itself, but rather from the manner in which the dismissal was effected by the employer."

In Gismondi, the Ontario Court of Appeal used these words in warding Wallace damages:

"Returning to the question of bad faith or unfair dealing, it seems to me what is common in all of the examples provided in Wallace and other cases...is the presence of something akin to intent, malice or blatant disregard for the employee. It is conduct that could be characterized as callous and insensitive treatment ... or ... playing hardball."

In Goodzeck, Justice Charbonneau wrote:

"In dealing with damages for the lack of notice, I must also consider the issue of whether the Plaintiff is entitled to further damages arising from the manner in which the termination was carried out. Courts sometimes refer to this type of additional damages as the Wallace bump”, referring to Wallace v. United Grain Growers, where the Supreme Court of Canada recognized that callous and insensitive treatment, as well as bad faith conduct in the manner of dismissal are things that can be compensated for by adding to the notice period that would otherwise apply."


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