Two new cases have been released, each of which speak to the calculation of damages in wrongful dismissal matters. The first, is an important example of a relatively new principle of employment law damages. The second, is a callback to a previous era of employment law damages and should be treated with significant caution.
Silva v. RBC – Loss of Earning Capacity Damages
In Silva v. Royal Bank of Canada, the Court found that RBC wrongfully dismissed an employee after an internal investigation process that was characterized as unfair and biased.
The result was an unusually large award, including reasonable notice damages, aggravated damages, punitive damages, and an order requiring correction of a regulatory filing that had impaired the employee’s ability to continue in the financial services industry. However, most notably, the Court also ordered damages for “loss of earning capacity” – not a category of damages that has been previously awarded in Ontario.
The plaintiff worked with RBC for almost 12 years and was 47 years old when dismissed. She was a successful financial planner that built a $150 million book of business.
Her employment relationship with RBC deteriorated after she was forced to move from one branch to another, and RBC sought to transition many of her clients based in the former branch to other planners. The Court found that the client reassignment was not clearly documented and occurred abruptly; many clients resisted the change, with approximately 50 ultimately given back to Silva.
After this incident, the relationship between Silva and management worsened. She received negative ratings after years of positive reviews, challenged compensation decisions, and raised concerns that she was being retaliated against. RBC ultimately dismissed her for cause in April 2018, relying on allegations that she had forwarded confidential client information to a personal email account, processed certain trades before obtaining signed documentation, and asked clients to backdate documents.
The Court concluded that RBC did not establish just cause. Importantly, the decision was not simply about whether the alleged conduct technically breached policy. The court examined context, proportionality, the employee’s long and successful service, the seriousness of the alleged misconduct, and the fairness of the employer’s investigative process. The Court also found the investigation had become an exercise in “ammunition gathering”, rather than a balanced search for the truth.
The court also found that the regulatory consequences of the dismissal were significant, as the termination triggered reporting obligations to the relevant regulator. The regulatory notice stated that she had been dismissed for cause and investigated for compliance concerns. The court accepted that this effectively prevented her from returning to comparable work in the industry. RBC was ordered to correct the notice.
Silva was awarded nearly $1.92 million for “loss of earning capacity”, due to RBC’s conduct – stating that the filing of the regulatory notice meant that Silva had no reasonable prospect for employment in the financial planning profession.
Silva is a reminder that alleging just cause remains one of the highest-risk decisions an employer can make. Courts expect employers to assess misconduct fairly and in context. Even where policy breaches have occurred, dismissal for cause will not necessarily be justified. Employers must also be able to demonstrate that the workplace investigation was impartial and procedurally fair.
For employers operating in regulated sectors, the case carries an additional warning. Termination language and regulatory filings can have career-ending consequences, and the resulting exposure may include damages well beyond the usual wrongful dismissal framework.
Wilsher v. Olympic Wholesale – The Return of “Wallace” Extensions of the Notice Period
In Wilsher v. Olympic Wholesale Company Limited, the Ontario Superior Court of Justice awarded a former Night Shift Supervisor an extended period of reasonable notice, plus an additional 14 months for the employer’s alleged bad faith conduct in the manner of dismissal, for a total award equivalent to 33 months’ notice.
The decision is noteworthy because the Court appeared to award damages for bad faith conduct in a manner inconsistent with the Supreme Court of Canada’s 2008 decision in Honda Canada Inc. v. Keays, which ruled that the then framework for such damages – an extension of the notice period – was no longer applicable.
In this case, the plaintiff was a supervisor with 17 years of service. The employer terminated his employment for cause after concluding he had engaged in “time theft” by adjusting employee timesheets to “top up” hours in certain circumstances.
The Court rejected the employer’s just cause position. It found that the impugned timesheet practice was not concealed, had existed for many years, had been used by other supervisors, and was not a practice from which the plaintiff personally benefited.
The Court also criticized the employer’s investigation and termination process, including the way the allegations were put to the employee. The Court concluded that this misconduct justified an extension to the notice period, in accordance with the Supreme Court of Canada’s 1997 decision in Wallace v. United Grain Growers. However, the Court did not mention the Supreme Court’s 2008 correcting decision in Keays, which directed courts to treat damages for bad faith dismissal conduct as a separate compensatory remedy, rather than an arbitrary extension of the reasonable notice period. In this way, Keays expressly overturned Wallace.
For those reasons, our firm believes the decision is of limited precedential value and should not be read as a broad shift in Ontario employment law. The case should be best understood as a cautionary example of how poor documentation, inconsistent enforcement, and an imperfect investigation can undermine a just cause position—not as authority for the proposition that courts should routinely extend reasonable notice periods to punish alleged bad faith conduct.
FIRM NEWS
We welcome our new Associate, Teniola (Teni) Odetoyinbo, who started with us on July 13, 2026. She is a great addition to our team and she looks forward to working with all of you in the near future!