By: Stephanie McDonald and Baljinder (Bal) Singh Tiwana
The case of Krmpotic v. Thunder Bay Electronics Ltd., 2024 ONCA 332, sends a clear message. Long-serving, injured, or older workers must be treated with honesty and fairness. They are owed fair severance upon termination. If they are not treated this way, they may be entitled to damages.
Being fired after medical leave in Ontario is more common than many people realize. When employees return from time off to recover from illness or injury, some employers respond with termination instead of support. The law is clear: workers returning from medical leave deserve honesty, fairness, and proper severance. If an employer breaches their obligations, courts can extend the notice period and award extra damages.
The Krmpotic case also shows that courts do not always need formal medical reports. Judges can rely on honest testimony from family members to prove an employee is too sick or injured to work.
Finally, this case warns employers about offering unfair severance deals. Courts will not tolerate low offers that hide the real reasons for dismissal. Pressuring vulnerable employees into signing away their rights can backfire—and lead to even greater liability.
Facts of the Case
Mr. Krmpotic is 59 years old. He worked as a Building Maintenance Supervisor at Thunder Bay Electronics Ltd. for almost 30 years. His job was physically demanding. Years of heavy labour caused injuries, and he eventually needed back surgery.
After returning from medical leave, Mr. Krmpotic was fired within hours. Thunder Pay Electronics Ltd. claimed he was let go due to “financial restructuring.”
The company offered him 16 months’ severance. The offer required him to sign a release giving up all future legal claims. Mr. Krmpotic refused and filed wrongful dismissal lawsuit to obtain a better severance package. He also claimed aggravated damages and damages for emotional distress.
Mr. Krmpotic was not able to look for or start a new job after he was let go due to his health.
Findings at Trial
The trial judge found that Thunder Bay Electronics Ltd had not been transparent about its claim of “restructuring” and thereby:
- Acted in a manner that was “untruthful, misleading, and unduly insensitive”
- Breached its duty of good faith toward Mr. Krmpotic
- Failed to meet the standard of conduct expected from a reasonable employer: “candid, reasonable, honest, and forthright”
The Court agreed that Mr. Krmpotic met his duty to mitigate. He was not medically able to find a new job, and he was not penalized for failing to replace his employment income.
Citing Boucher v. Wal-Mart Canada Corp., 2014 ONCA, the court reaffirmed that aggravated damages are warranted when the employer’s conduct causes harm beyond the normal emotional upset of losing a job.
Judgment at Trial
Mr. Krmpotic was awarded:
- 24 months’ reasonable notice (increased from the 16 months originally offered)
- $50,000 in aggravated damages for the employer’s bad faith conduct
- No damages for mental distress, due to the absence of a diagnosed psychological condition directly caused by the termination process i.e. the manner of dismissal
The Appeal
The Ontario Court of Appeal upheld the trial decision, including the award of aggravated damages. The Court reinforced key legal principles:
- Bad faith conduct, including dishonesty or insensitive treatment during termination, justifies an award of aggravated damages
- Courts may accept credible non-expert testimony—such as that from family members—to prove physical incapacity in Ontario
- The 24-month severance period was appropriate, given Mr. Krmpotic’s age, length of service, and health limitations, which significantly reduced his chances of re-employment
Key Takeaways: Age, Health, and Notice Periods
This case highlights several important legal lessons for employees:
- Long serving and older employees are entitled to longer notice periods, especially when re-employment prospects are limited
- Injured or ill employees, particularly when injuries are work-related, must be treated with respect, fairness, and care
- Misleading justifications for dismissal, such as citing “financial restructuring” to mask discriminatory actions, can result in general, punitive and/or aggravated damages for employees
Conclusion
The Krmpotic case highlights an important truth: you do not have to accept an unfair severance offer—especially when you’re recovering from a workplace injury or dealing with long-term health challenges. You may be entitled to far more than what’s initially offered.
Know Your Rights. Protect Your Future.
If you’ve been terminated after years of dedicated service—especially due to or following health-related issues—do not sign anything before getting legal advice! You could be waiving important rights and accepting far less than what you’re owed.
At Workplace Sage Legal, we specialize in protecting the rights of long-serving, injured, and vulnerable employees. Our experienced team understands the nuances of employment law and will fight ferociously to help you receive fair treatment, proper compensation, and the respect you deserve. If you are facing a similar situation and are looking for compassionate and capable legal advice, book a consultation with Workplace Sage Legal today.
Contact us before you sign. Your health, your future, and your rights matter!
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While reasonable efforts have been made to ensure the accuracy of the content provided, it does not constitute legal advice. Prior to relying on any aspect of this article, you should consult with a suitably qualified legal professional promptly in your relevant jurisdiction, to obtain advice tailored to your individual circumstances
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