The Supreme Court of Canada has said that $500,000 in punitive damages should not have been awarded to a former Honda Canada employee who had been fired for chronic absences.

In a 7-2 ruling, the court said that the firing of Kevin Keays, who suffered from chronic fatigue syndrome, "was in no way an egregious display of bad faith justifying an award of damages for conduct in dismissal."

Writing for the majority, Justice Michel Bastarache went on: "Punitive damages are restricted to advertent wrongful acts that are so malicious and outrageous that they are deserving of punishment on their own. The facts of this case demonstrate no such conduct."

The court also reduced the amount of back pay Keays was awarded from 24 months to 15 months.

Canadian Manufacturers and Exporters, an advocacy group for Canada's manufacturing and exporting industry, applauded the decision for acknowledging that employers have rights when they choose to fire an employee.

In early 2000, Honda fired Keays after he refused to meet with a company doctor. Keays had been diagnosed with chronic fatigue syndrome in 1997, had gone on disability until his benefits ran out in 1998, and then returned to work.

Keays enrolled in a company program that required him to provide a doctor's note to explain that his frequent absences were due to his disability. However, his employers at Honda wanted him to visit a doctor of their choosing, who had reviewed Keays's chart and found no reason for his continued absences.

Honda fired him when he refused to visit that doctor.

Keays sued the company after he was terminated and was awarded punitive damages of $500,000, as well as 24 months of back pay. The award was the biggest in the history of Canadian employment law.

However, the Ontario Court of Appeal later reduced the punitive damages to $100,000.

Ian Howcroft, a vice president for Canadian Manufacturers and Exporters, said the ruling clarifies how and when damages can be awarded.

"This is a clear victory for employers and demonstrated that Honda had acted properly in its dealings with Mr. Keays,'' Howcroft told The Canadian Press.