Employers: Don't Ask for More When Paying Statutory Severance!

Court Awards $25,000 in Punitive Damages Against Employer Over Statutory Entitlements

In Thompson v. Revolution Resource Recovery Inc. (2025 BCSC 8), the BC Supreme Court ordered a $25,000 punitive damages award against an employer for tying statutory termination payments to a release agreement.

Case Overview

Revolution Resource Recovery Inc. (“Revolution”) terminated Ms. Thompson, a Key Accounts Manager with 3.5 years of service, offering a $7,782.92 cheque covering her accrued wages and four weeks of severance. The catch? Cashing the cheque required her to waive all claims against the company.

Ms. Thompson refused, asking for her statutory entitlements under the Employment Standards Act (ESA) to be paid within 48 hours via direct deposit. Revolution ignored her request and subsequent letters. Instead, it sent a cease-and-desist letter accusing her of retaining confidential information and threatening legal action.

Revolution never paid her statutory entitlements directly. Ms. Thompson eventually deposited the cheque but sued for reasonable notice under common law and punitive damages.

Court’s Decision

The Court ruled in Ms. Thompson’s favour. It found Revolution’s conduct — tying statutory payments to a release and refusing to provide required information — was unfair and aimed at pressuring Ms. Thompson into accepting its terms.

While the cease-and-desist letter was deemed reasonable, the Court noted that Revolution’s failure to meet its ESA obligations, paired with Ms. Thompson’s financial and personal vulnerabilities, amounted to a breach of its duty of good faith.

The $25,000 punitive damages were meant to penalize Revolution for its “reprehensible” behaviour and deter similar conduct by other employers.

Key Lessons for Employers

1. ESA Compliance Is Non-Negotiable: Employers must pay terminated employees’ wages and statutory entitlements unconditionally within 48 hours of termination in BC.

2. No Strings Attached: Payments cannot be used as leverage to secure release agreements.

3. Prompt Correction Is Crucial: Employers should quickly address any non-compliance when notified.

4. Cease-and-Desist Letters: These are unlikely to attract punitive damages if based on reasonable concerns.

This case serves as a reminder that attempts to sidestep ESA requirements or exploit employees’ vulnerabilities will not be tolerated.