If an employer falsely alleges fraud as cause for termination, should the dismissed employee be entitled to an extension of the notice period; some form of moral and/or punitive damages; or both?
Twenty years ago, an Old El Paso commercial featured a young girl attempting to settle a dispute between her siblings over whether the family should have soft or hard taco shells. Her solution? “Por qué no los dos?” Or, “Why not have both?”
I found myself asking the same question when discussing Wilsher v. Olympic Wholesale, 2026 ONSC 3620 (CanLII), on a recent episode of Water Cooler Justice. In that case, the Honourable Justice S. Woodley awarded a dismissed employee 19 months’ pay in lieu of notice, plus a further 14 months for the employer’s bad faith. The court declined to award aggravated or punitive damages.
The problem? The Supreme Court of Canada abandoned the “Wallace bump” in 2008. But does that mean an employer’s unfounded allegation of fraud can never justify both a longer reasonable notice period and a separate damages award? I do not think so.
