Executive Summary
Date Published: 18 January 2023
Written by: Howard Levitt & Eduard Matei
A recent court decision from British Columbia provides a textbook case of what employers should not to do when terminating employees. In Chu v China Southern Airlines, the Supreme Court of British Columba awarded an elderly employee more than $200,000 in damages in response to the employer’s “abusive”, “vicious”, and “profoundly harmful” conduct. Mr. Chu was a 68 year old marketing and business development manager when his employer, China Southern Airlines, terminated him for “just cause”. His employer alleged that Mr. Chu had failed to perform his duties and had further engaged in time theft. In the time leading up to his termination, however, Mr. Chu’s employer also engaged in a pattern of questionable conduct. This included demoting Mr. Chu to an entry-level front line position as an airport worker without adequate training, substantially reducing his pay, and repeatedly and unfairly disciplining Mr. Chu in humiliating and publicly embarrassing ways. Mr. Chu understandably retained counsel and brought a claim for wrongful dismissal.
At trial, the trial judge ordered China Southern Airlines to pay severance to Mr. Chu in the amount of $58,053. However, the Court did not stop there. The Court also ordered that the employer pay $50,000 in aggravated damages and $100,000 in punitive damages in response to its “harsh, vindictive, reprehensible and malicious” conduct in the time before and after it terminated Mr. Chu. As a side note, China Southern Airlines also made the interesting decision to drop legal counsel and have two legally untrained officers at the airline represent it. This ultimately cost the company a significant amount of money and embarrassment. In this article, Howard Levitt and Eduard Matei explain the lessons to be learned by employers from the recent decision in Chu v China Southern Airlines.