Hansen v. Altus Energy Services Partnership, 2010 ABQB 820

Court of Queen ’ s Bench of Alberta Citation: Hansen v. Altus Energy Services Partnership, 2010 ABQB 820 Date: 20101222 Docket: 1003 07286 Registry: Edmonton Between: Timothy L. Hansen Plaintiff - and - Altus Energy Services Partnership, Altus Energy Services Ltd. and Nusco Northern Manufacturing Ltd. Defendants _______________________________________________________ Reasons for Judgment of the Honourable Madam Justice J.H. Goss _______________________________________________________ BACKGROUND [ 1 ] This is an action for wrongful dismissal brought by the plaintiff, Timothy Hansen (hereinafter referred to as “Hansen”) against his former employer. The trial proceeded by

Summary Trial on the basis of affidavit evidence. The defendants conceded that the court could decide the disputed questions of fact on affidavit evidence and that it would not be unjust to decide the issues in such a way. [ 2 ] The defendants applied for an adjournment to file a further affidavit sworn by the defendant’s Chief Financial Officer as to the financial health and outlook of the defendants. Counsel argued that it had been difficult to obtain information and instructions from the defendants earlier. No evidence or further particulars of this difficulty were provided or argued.

The affidavit of Al Stowkowy, President and Chief Operating Officer of Altus Energy Services Partnership was sworn November 12, 2010.

[ 3 ] The plaintiff opposed the application and provided an overview of all of the attempts made to receive the defendants affidavit, to accommodate questioning on affidavit and to provide his undertakings prior to the date scheduled for

Summary Trial. The Notice of Motion for

Summary Trial was filed on September 10, 2010, some two months prior. Resolution of the matters before the court for

Summary Trial are of some urgency and of considerable importance to the plaintiff as he has been unable to find alternate employment since his termination. [ 4 ] The adjournment application was denied. The issues for the trial and the case to be met by the defendants were apparent from the pleadings and the plaintiff’s affidavit sworn August 27, 2010. The basis for granting an adjournment was not made out by the defendants.

FACTS [ 5 ] The plaintiff, Hansen, was terminated from his indefinite contract of employment with Altus Energy Services Partnership (hereinafter referred to as “Altus”) without advance notice and without just cause on February 23, 2010. This is not disputed by the defendants. Hansen was 50 years old when he was terminated. [ 6 ] Hansen is a professional engineer having graduated from the University of Alberta in 1981 with a Bachelor of Science Degree in Civil Engineering.

From 1981 to 1987 he worked for Dominion Bridge Company Limited (hereinafter referred to as “Dominion”) where he ultimately became manager of its Pumpjack Division. [ 7 ] In 1987, Nusco Pipe & Supply Ltd. (hereinafter referred to as “Nusco”) acquired the Pumpjack Division from Dominion and asked the plaintiff to continue to manage the Pumpjack Division under Nusco’s ownership. On or about June 15, 1987, Hansen began his employment with Nusco, hired on an indefinite basis with no written employment contract.

The plaintiff was able to negotiate 3 weeks of paid vacation instead of the typical 2 weeks for new employees in recognition of the fact that he had been entitled to 3 weeks vacation as an employed of Dominion. [ 8 ] In 1994 the plaintiff was given the title of Engineering Manager of Nusco’s Nisku facility (hereinafter referred to as the “Nisku facility”) where Hansen shared the responsibility of overseeing the Nisku facility’s day-to-day operation, together with the Plant Manager.

As Engineering Manager the plaintiff was responsible for overseeing the daily work of engineers, draftspersons and the quality control, purchasing and clerical personnel to meet production needs, establish engineering and manufacturing standards and create and maintain an annual consolidated budget.

Hansen also became an integral part of the management team for the company’s manufacturing division which developed and maintained an annual business plan for the Nisku engineering group. [ 9 ] Due to a corporate reorganization in approximately 2002, the Nisku facility was operated under a new corporation, Nusco Supply & Manufacturing Inc. In 2006 the Nisku facility and manufacturing operation were acquired by Altus Energy Services Ltd. and ultimately operated as the “Nusco Manufacturing” Division of Altus.

At the same time, Nusco Northern Manufacturing Ltd. was established to operate a new manufacturing facility in Bonnyville (hereinafter referred to as the “Bonnyville Facility”). As part of the 2006 reorganization, Altus Energy Services Ltd. also acquired Nusco Northern Manufacturing Ltd. and Altus was established as a partnership between Altus Energy Services Ltd. and Nusco Northern Manufacturing Ltd. Ultimately, Nusco Northern Manufacturing Ltd. was operated as the “Nusco Manufacturing” Division of Altus.

During and after the corporate restructuring the plaintiff continued to be employed on an indefinite basis in the same role. [ 10 ] In September 2008 Hansen was promoted to the role of General Engineering Manager (Facilities) for Altus wherein he was responsible for managing the work of the technical group, consisting of engineers, draftspersons and quality control, purchasing and clerical personnel for both Nusco Manufacturing and Nusco Northern Divisions of Altus at both the Nisku and Bonnyville facilities.

When operating at full capacity, the Nisku and Bonnyville facilities were capable of producing approximately $50,000,000 worth of product annually, with an annual office budget of $2,350,000 in 2009 and a dedicated technical group of approximately 35 engineering, drafting, purchasing, quality control and clerical personnel.

In conjunction with his promotion, the plaintiff’s annual base salary was increased to $160,000, he was given a company vehicle and his annual bonus maximum was increased to 50% of annual salary. [ 11 ] Effective June 1, 2009, Altus temporary reduced the hours of operation at its Nisku and Bonnyville facilities by closing Fridays and reduced the pay to its employees by 20% to bridge a slow period. A similar reduction in salaries had happened a number of

times in the past as a measure to address periods of slow activity at the company as an alternative to terminating employees. As a part of the reduction process, Hansen’s hours and pay were also reduced by 20% from $13,333.33 per month to $10,666.66 per month.

Altus states, through its current President and Chief Operating Officer , that the wage reduction was to be for an indefinite period of time and there were no assurances that it would be increased at a later date. [ 12 ] In September 2009, Hansen was asked by his immediate boss, Norm Denoon, the Vice-President of Operations, to pass-off his regular managerial duties to others in order to assist Mr. Denoon in Mr. Denoon’s new role of overseeing all operations at Altus.

This included the Nisku and Bonnyville fabrication facilities, the construction business unit, the coatings business unit and the crane rental business unit. Hansen was advised by Mr. Denoon that they would need to analyze the financial performance and management of Altus’ business units, identify areas in need of improvement and make recommendations to enhance performance. The plaintiff’s new role was described by Mr. Denoon as a new full-time permanent position within the company although no clearly defined title, job description, list of roles and responsibilities nor remuneration were specified.

It was Hansen’s expectation that his annual salary would either remain the same or increase. [ 13 ] On or about October 1, 2009 the staff at Altus returned to full time work on the direction of Mr. Denoon. Hansen returned to full time work on October 1, 2009 with the expectation that his salary would also return to $13,333.33 per month. In mid October the plaintiff discovered that his salary had not returned to $13,333.33 per month.

Altus states, through its current President and Chief Operating Officer , that although Hansen may have returned to 5 days of work per week effective October 1, 2009, Hansen was no longer considered to be the General Engineering Manager (Facilities), he was not carrying out the duties of that role, and he did not have any significant responsibilities. He had moved to a role in which it was intended that he would assist, Mr. Denoon, the Vice-President of Operations. [ 14 ] At the end of October 2009, Mr. Denoon’s employment with Altus was terminated.

At this time Hansen had not yet clarified his new role with Altus nor his salary. He then met with the Senior Vice President (Construction), Darren Glover, to discuss his job title, responsibilities and salary. Mr. Glover stated that he would speak to Chris Haslam, the acting President and Chairman of the Board of Directors, and then get back to the plaintiff. It was agreed that Hansen would work on some small projects to keep himself busy in the interim and the plaintiff offered to continue to assist in managing the manufacturing facilities and maintaining relationships with some of Altus’s key clientele.

Hansen continued to work full time. Near the end of November 2009 Mr. Glover advised the plaintiff that the matter of his role and salary was still under review. In December 2009 Hansen received an email advising that Mr. Glover was no longer employed by the company. [ 15 ] On December 8, 2009 and again on December 16, 2009 the plaintiff contacted Mr. Haslam, the then acting President and Chairman of the Board of Directors, to discuss his roles and responsibilities within Altus.

At this point Hansen was no longer requested to attend management meetings nor to sit in on conference calls dealing with corporate changes. Hansen had no idea what role Altus wanted him to play, no idea why his salary had not yet been adjusted to reflect his return to full time hours and no idea who he reported to or who to turn to for guidance or answers.

The plaintiff did not receive a call back or any other communication from the then acting President and Chairman of the Board of Directors regarding his inquiries. [ 16 ] In late December 2009 Hansen was advised by email that Altus had hired a new President and Chief Operating Officer , Al Stowkowy, effective January, 2010. In early January 2010, the plaintiff called Mr. Stowkowy and requested a meeting to discuss his roles and responsibilities within Altus. Hansen was advised by Mr. Stowkowy that he would not have time to discuss it until the end of the month. In early February, Hansen reminded Mr.

Stowkowy of the need to discuss the situation and a week later the meeting was set up for February 23, 2010. [ 17 ] On February 23, 2010 Hansen was advised by Mr. Stowkowy that Altus was terminating his employment effective immediately. Mr. Stokowy gave the plaintiff an envelope containing his termination letter and severance, calculated by Altus based on an annual base salary of $160,000.00. Hansen was advised that his benefits had been terminated that day and he was asked to turn over his keys to his office and to his company vehicle.

ISSUES Base Salary [ 18 ] The plaintiff claims $11,692.00 in under-payment of base salary for the period of October 1, 2009 to February 8, 2010 in that

he continued to be paid at 80% his salary, $10,666.66 per month, after having returned to full time work on October 1, 2009. Hansen addressed this issue with Altus immediately upon discovering it and continued to try to address the issue as the management of Altus continued to change. At no time had the plaintiff been advised that his salary was being reduced due to a change in duties or at all and at no time did he acquiesce in a reduction of his salary, other than during the period that he also worked 80%.

The calculation of Hansen’s last earnings and statutory termination pay was calculated by Altus upon his termination utilizing a salary of $160,000 per year or $13,333.33 per month, argued by the plaintiff as the proper figure. [ 19 ] The defendants argue that the plaintiff’s base salary was not to be returned to it’s former level of $13,333.33 per month after he returned to full time hours on October 1, 2009. It is argued that his salary was to and did remain at $10,666.66 per month after June 1, 2009 for a period of over 8 months, until his termination.

The wage reduction was to be for an indefinite period of time and, as far as Mr. Stowkowy, the current President and Chief Operating Officer of Altus, is aware, Hansen was not given any assurances that it would be increased at a later date. [ 20 ] It is stated by Mr. Stowkowy in his affidavit that he began employment with Altus as President and Chief Operating Officer of Altus on or about January 2010. On speaking with his colleagues, Mr.

Stowkowy discovered that from September 2009 onwards, Hansen had no longer been considered to be the General Engineering Manager (Facilities) and was no longer carrying out the duties of that role, nor did the plaintiff have any significant responsibilities. Hansen had moved to a role wherein he would assist the then Vice President of Operations who soon thereafter left the company. In January 2010 when Mr.

Stowkowy joined the company, it quickly became apparent to him that Hansen was not carrying out the General Engineering Manager (Facilities) role, he did not have any supervisory responsibilities and he was not assisting the Vice President of Operations. Mr. Stowkowy states in his affidavit that, as a result of Hansen’s change in role and the significant reduction in duties and responsibilities, his gross salary remained at $10,666.66 per month even when he returned to full time work on October 1, 2009. It is further stated by Mr.

Stowkowy in his affidavit that the February 2010 calculation of the plaintiff’s last earnings and statutory termination pay at his previous salary of $160,000 was a clerical error. [ 21 ] The defendants, through the evidence of the current President and Chief Operating Officer of Altus, provided no direct evidence as to what took place with Hansen’s position, title, job description or salary in the fall of 2009 but rather gave evidence based on his discussions with colleagues and what became apparent to him in January 2010 when he started with Altus.

Accordingly, where there is conflicting evidence in the affidavits of these two witnesses, I accept the evidence of the plaintiff. [ 22 ] I am satisfied from the evidence that the plaintiff’s salary and hours were reduced by 20% effective June 1, 2009 as a measure employed by Altus to address a period of slow activity at the company and as an alternative to terminating employees. This had been done by Altus previously. Hansen states in his evidence that on or about October 1, 2009 the staff at Altus returned to full time work on the direction of the Vice-President of Operations.

The plaintiff also returned to full time work on October 1, 2009. This is confirmed by the defendants. [ 23 ] In September 2009 Hansen was asked by his immediate boss, the Vice-President of Operations, to pass-off his regular managerial duties to others in order to assist the VP Operations in his new role of overseeing all operations at Altus. This new full time permanent position involved analysis of the financial performance and management of all of Altus’ business units with a view to identifying improvements for enhanced performance. I find this new role was a promotion and certainly not a demotion.

At no time was the plaintiff advised that his salary would decrease in this new role nor did his salary in fact decrease effective September 2009. [ 24 ] I find that Hansen’s base salary of $160,000 per year remained the same in his new role and that his salary should have been reinstated to its full time level of $13,333.33 per month effective October 1, 2009 when the plaintiff commenced working full time hours. The plaintiff shall have judgement against the defendants in the amount of $ 11,692.00 for unpaid base salary from October 1, 2009 to February 8, 2010.

Bonuses [ 25 ] The plaintiff argues that at the time of termination he had the opportunity to earn bonus compensation of up to a maximum of 50% of his annual salary. In all but 2-4 years of his employment with Altus and its predecessors he received a bonus. [ 26 ] The plaintiff states that the bonus program was based on the profitability of the company and was described to him by way of memorandum from the then President of Altus in December 2008 as:

“...designed to reward employees who make a substantial impact to the achievement of our goals and objectives...consideration for a bonus had been developed as a direct link to the success of the departments and their performance.” The bonus was a quasi or non-formula bonus with simply a yearly maximum stipulated. [ 27 ] The plaintiff argues that his bonuses have become an integral part of his compensation structure and is therefore a benefit that has a value and should form part of the calculation of his damages.

It is further argued that at the time of his dismissal Hansen had a reasonable expectation of ongoing bonuses as Altus was projecting a return to profitability in 2010 and 2011 according to Altus 2010 Forecast and Long Term Plan dated March 2010 and projections by then Altus Chairman and Chief Operating Officer, Mr. Haslam, of a strong future for Altus. Hansen argues that he should receive a bonus for 2010 and a pro rated bonus for 2011. [ 28 ] Mr.

Stowkowy states in his affidavit that Altus has no intention of paying bonuses to any employees for the year 2010 given the company’s current financial position and that no decision will be made on bonuses until the final fiscal results are received for the calender year. It is furthermore anticipated that 2011 will be a year of slow recovery and the company will be very reluctant to start awarding bonuses again, particularly large bonuses similar to those received by Hansen previously.

It is therefore argued that the plaintiff should not be entitled to any damages for loss of bonuses because he would not have received any bonuses had he remained employed during a period of reasonable notice. It is further argued that it is a discretionary bonus plan and Hansen has no contractual entitlement to a bonus payment at any level. Finally, Mr.

Stowkowy deposes that he is not aware of any employees who received a pro rated bonus for part of a year worked and therefore it is argued that the plaintiff would not be entitled to a damage award for loss of bonus for part of a year. [ 29 ] I am satisfied that bonuses paid to Altus employees at the end of a year were designed to reward employees. Consideration for a bonus was directly linked to the success of the department and its performance, based upon the final fiscal results of the company for a calender year.

After June of 2006, Hansen was no longer receiving stock options and dividends on his shares, so his salary was adjusted to reflect current market value and bonuses were to be determined up to a maximum of 25% of annual salary. This was increased to a maximum of 50% of annual salary for Hansen in 2008. [ 30 ] As stated in Nelson v. Champion Feed Services Inc., [2010] A.J. No. 753 , 2010 ABQB and Lippa v. Can-Cell Industries Inc., 2009 ABQB 684 , the court must determine from the evidence the intention of the parties regarding the entitlement to any bonus.

A bonus scheme that has historically become an integral part of an employee’s wage or salary structure gives rise to a reasonable expectation of a bonus. Such a bonus is a benefit that has a value and should form part of the calculation of the employee’s damages. In the case of quasi or non-formula bonuses, if they are routinely awarded in a certain amount or in a certain range, they should be included in the assessment of damages, just like any other fringe benefit. Hansen had received bonuses in all but 2-4 of his 23 years of employment and therefore the bonuses could be considered as routinely awarded.

On the basis of this history, the plaintiff has a reasonable expectation of a yearly bonus. [ 31 ] Discretion is exercised by Altus in the awarding of such bonuses as “a direct link to the success of the departments and their performance” and to “employees who make a substantial impact to the achievement of [those] goals and objectives ”. Accordingly, discretion must be similarly exercised reasonably, on the basis of objective criteria, allowing for positive and negative contingencies. In Noble v. Principal Consultants Ltd. (Trustee of), [2000] A.J.

No. 508 , the majority confirmed that it is proper to use past performance in the calculation of bonuses and reasonable to award bonuses even where the fortunes of the employer company have diminished. However, in his dissent Justice Berger stated that where the formula for the calculation of a bonus would be based on the sales and performance of the company on a monthly basis and where the company ceased to have any sales during the period following bankruptcy, a bonus should not accrue for that period. It is furthermore stated in Stadler v. Terrace Corp (Construction) Ltd et. al. [1983] A.J.

No. 890 (Alta Q.B.) that if the plaintiff cannot prove that a profit was realized, there is no entitlement to a bonus . It is thus argued that It would be contrary to established principle to assume that a bonus or dividends would be paid in a year when they were not paid to continuing shareholders and employees of Altus. [ 32 ] The question here is whether the plaintiff must prove that Altus will be profitable in 2010 and 2011 and likely to in fact award bonuses to establish an entitlement to a bonus. The Noble , Nelson and Lippa decisions would appear to say not.

If they historically were an integral and routinely awarded part of an employees salary structure, they should be included in the assessment of damages with discretion only as to the amount, exercised reasonably on the basis of objective criteria. On the one hand we have that Altus’ own published projection in March 2010 of a return to profitability in 2010 and 2011.

On the other hand we have the statement of the President and Chief Operating Officer of Altus in his affidavit that Altus has no intention of paying bonuses for 2010 and that the company will be reluctant to give bonuses, particularly large bonuses, in 2011. No further financial insight or analysis is provided.

[ 33 ] Given this limited evidentiary basis for determining objective criteria I am left with little choice but to look at what occurred in the past and rely on Noble wherein the majority confirmed that it is proper to use past performance in the calculation of bonuses and reasonable to award bonuses even where the fortunes of the employer company have diminished.

In that the bonus structure changed throughout the years to mid 2006, I will look at what occurred in the past three years as an indicator of what is currently reasonable and fair. [ 34 ] The plaintiff’s most recent bonuses under the most recent bonus calculation approach were: 2007 $30,000 2008 $70,000 2009 $0 The average bonus received by the plaintiff under this current bonus scheme since 2007 has been 21.73% of his salary over the three years.

The plaintiff is entitled to receive a bonus calculated as 21.73% of his annual base salary of $160,000, or $34,768.00 for 2010. [ 35 ] With respect to 2011, the defendants argue that a bonus should not be awarded for a partial year as a pro rated bonus for part of a year worked has not historically been awarded by Altus. Indeed, it is consistent with the evidence of the plaintiff that bonuses are routinely given at the end of the year, based on profitability and employee contribution over the year.

There is no evidence before me that employees are routinely awarded a percentage of the anticipated bonus where they leave the employment of Altus prior to the end of the year. [ 36 ] In assessing damages for breach of contract, the employee must be placed in the same position he would have been in if the contract had been performed, assessed as of the date of breach. For wrongful dismissal, where reasonable notice is not provided on termination, the losses flowing from the lack of reasonable notice are compensated. ( Merrill Lynch v. Soost [2010] A. J. No. 955 (Alta C.A.) ).

The measure of damages is the loss of income and benefits that the employee would have received from the employer during the notice period. I am satisfied that the historical pattern was that bonuses were paid at the end of the year for that year. There is no evidence that bonuses were paid for a partial year. Accordingly, I agree with the defendants that a bonus would not be reasonably expected and therefore should not be awarded for a partial year.

Reasonable Notice [ 37 ] It is an implied term of contracts of employment that an employee is entitled to reasonable notice of termination to provide the employee with time to find alternate employment. The question for determination is how much notice is reasonable in the circumstances of this case. Certain factors are to be considered in determining that question, on a case by case basis, as outlined in Bardal v. Globe and Mail Ltd., 1960 CanLII 294 (ON SC) , [1960] O.J.

No. 149 , including age, length of service, character of employment and availability of similar employment considering experience, training and qualifications of the dismissed employee. [ 38 ] The plaintiff had worked for Altus and its predecessors for 23 years, with an additional 6 years working for Dominion in its Pumpjack Division. It is argued by the plaintiff that where there has been a change in ownership and no distinct break in service, it is open for the Court to consider the period of continuous employment with both the former employer and the new employer as a whole. The plaintiff relies on Sorel v.

Tomenson Saunders Whitehead Ltd. (1987), 1987 CanLII 154 (BC CA) , 39 D.L.R. (4 th ) 460 (B.C.C.A.) (QL) wherein it was held that where the purchaser acquires a business there is an implied term in the contract of employment between it and those employees continuing in the service of the business that the employees will be given credit for years of past service with the vendor for purposes of such incidents of employment as salaries, bonuses, vacation entitlement and notice of termination. This can only be negated, the court held, by an express term to the contrary.

Where a new employer does not advise the employee that it is unwilling to contract on the basis that the employee has credit for past years of service, the employer is deemed to have contracted with the employee on the basis that the employee will be given such credit. When the Pumpjack Division was bought by Altus’ predecessors, Hansen’s years with the Pumpjack Division were recognized by Altus’ predecessors as he was given 3 weeks vacation instead of 2 weeks as a new employee. This was not disputed in the evidence of the defendants.

Accordingly, I find that the entire period of 29 years must be considered by the court in considering Hansen’s length of service.

[ 39 ] Prior to September 2009, the plaintiff was the General Engineering Manager (Facilities) for Altus wherein he was responsible for managing the work of the technical group of about 35 at both the Nisku and Bonnyville facilities with an annual office budget of $2,350,000 and $50,000,000 worth of product annually.

After September 2009 the plaintiff was moved into another position where he was to work with the Vice-President of Operations on overseeing, managing and financial analysis of all operations at Altus, including the Nisku and Bonnyville fabrication facilities, the construction business unit, the coatings business unit and the crane rental business unit. This was clearly an important role within the company with considerable responsibility. [ 40 ] Shortly after being moved into the new position, the Vice-President of Operations, with whom the plaintiff was to work in his new position, was terminated.

Thereafter the plaintiff was given little or no direction on his new role and responsibility by the defendants, despite his continuous efforts to obtain clarification. I note that the defendants were undergoing considerable upheaval with a number of changes within management over that period, until just before the plaintiff was terminated.

Therefore, I will rely upon the description of Hansen’s role and responsibilities provided to the plaintiff in September 2009 as no change was made or clarification provided by the defendants prior to his termination. [ 41 ] The plaintiff argues that with his age, length of service, character of employment, level of responsibility, level of remuneration and the limited availability of similar employment he is reasonably entitled to 24 months notice. Some of the comparable case law argued before me was Johnston v. Canada Cement Lafarge Ltd., 1984 ABCA 190 (CanLII) , [1984] A.J.

No. 654 , 65 A.R. 283 (C.A.) wherein 24 months was determined as reasonable notice for an engineer with 26 years of service who was terminated while occupying the position of general manager of an associated company, on loan from his employer. Similarly, in Mitchell v. Westburne [2000] A.W.L.D. 329 , 24 months was deemed reasonable for a 57 year old purchasing manager with almost 29 years of service and earning $90,000 yearly (salary and bonus) and a 45 year old manager with 27 years of service earning almost $100,000 yearly in Chapell v. Canadian Pacific Railway Company, 2010 ABQB 441 (CanLII) .

Finally, in Veer v. Dover Corp (Canada) Ltd., [1997] O.J. No. 3821 (Ont. Ct. (Gen.Div)) 24 months was determined as reasonable notice for a 61 year old with 43 years of service and more than 20 of those years as a senior executive. [ 42 ] The plaintiffs also refer the court to the case of Miller v. IOC Canada Inc, 2005 ABQB 226 , wherein 22 months was deemed reasonable notice for a 51 year old Special Project Supervisor earning $68,000 yearly with 30 years of service. In Smith v. Pacific National Exhibition 1991 CanLII 2366 (BC SC) , [1991] B.C. J.

No. 255 , 34 C.C.E.L. 64 , 22 months was deemed reasonable for a 46 year old with high school education who, over 19 years had worked his way up to General Manager, and was earning $110,000 yearly when he was terminated. This was further reduced to 21 months to account for the possibility that he may become employed before the end of the reasonable notice period. [ 43 ] The defendants argue that 24 months, generally considered the maximum period of reasonable notice, is inappropriate.

It is argued that notice in the range of 15 - 18 months is reasonable given that Hansen could successfully re-enter the employment market as he is an educated individual with many transferrable technical and managerial skills due to his work in a variety of engineering roles. He has a Bachelor of Science Degree in Civil Engineering and is a member of both the Alberta and BC professional association of engineers. It is also argued that Hansen was not a senior executive at the time of termination, was far from retirement, has no health issues or other disabilities. [ 44 ] In the case of Bullen v.

Proctor and Redfern Ltd., 1996 CanLII 8135 (ON SC) , 20 C.C.E.L. (2d) 36 , 19 months was determined to be reasonable notice for a 41 year old Site Representative Surveyor with 21 years of service. In Jamieson v. Finning International Inc. 2009 BCSC 861 the court felt 19 months was reasonable notice for a 53 year old employee, with 20 years of service, responsible for marketing heavy equipment and earning $84,000 base salary with bonuses and commission for a total of $142,184 yearly.

The court reduced the notice period to 18 months due to the possibility that he might find new employment prior to the end of the notice period. In the case of Larson v. Galvanic Applied Sciences Inc., 2005 ABQB 238 , the court awarded 18 months to a 53 year old professional engineer who was in the position of president and director of the company earning $100,000 per year at the time of his termination and who had been in managerial and executive positions throughout most of his employment of 24 years. Similarly, 18 months was awarded in Kalaman v. Singer Valve Co., [1996] B.C.J.

No.814 , to a 46 year old senior manager with 23 years of service, earning $114,000 yearly, who had sole responsibility for the day to day operations of the employer’s engineering department with primary responsibilities including the design and improvement of the defendant’s products and the maintenance of the parts list. In Deputat v. Edmonton School District No. 7, 2006 ABQB 549 , a 56 year old senior mechanical coordinator earning approximately $74,000 yearly with 24 years of service received 18 months as reasonable notice. Finally, 18 months was deemed reasonable in Carlson v. Ideal Cement Co., [1987] B.C.J.

No. 1827 (B.C.C.A.) for a 56 year old district manager, responsible for sales and marketing and for collection of accounts, with 26 years of service who the court found would continue to have trouble finding alternative employment because of his age, his skills and his knowledge in the BC economy. [ 45 ] In Hendren v.

Burntwood Regional Health Authority Inc., 2000 MBQB 82 the court found 16 months notice reasonable for a 56 year old with a grade 10 education in a senior managerial position as Director of Human Resources, with up to 44 individuals reporting to her directly or indirectly, with over 24 years of service. Similarly, 16 months was awarded in Murphy v. Optipress Inc.,

[2008] N.S.J. No. 185 (N.S.S.C.) to a 50 year old president with a Bachelor of Commerce degree in a senior management position earning $160,000 yearly with 24 years of service . In this case, the court held that his work in the specialized field of printing made obtaining similar positions very remote for the plaintiff. In Arrieta v. Westmin Resources Ltd. [1994] B.C.J. No. 30 (B.C.S.C.) a 54 year old mining engineer and mill shift supervisor, earning $6,300 per month, received 16 months reasonable notice after 21.5 years of service.

His work included technical duties in his capacity as an engineer and supervisory responsibilities over several line employees, which the court found made his work more specialized. [ 46 ] In Mothersele v. Gulf Canada Resources Limited 2003 ABQB 2 (CanLII) , [2003] A.J. no. 33 (Alta. Q.B.) the court awarded a 47 year old senior engineer of corporate resources with 19 years of service and earning $115, 000 yearly with 15 months notice. In that case the plaintiff was terminated when company was in good health and there was immediate demand for plaintiff’s knowledge and skill.

A 47 year old vice president with 22 years of service was awarded 15 months notice where similar employment not available to him in Carey v. F. Drexel Co., [1974] B. C. J. No. 604 (B.C.S.C.) and in Cooper v. MacMillan Bloedel Limited [1991] B.C.J. No. 3017 (B.C.S.C.) the court felt 15 months was reasonable for a 50 year old field engineer with 31 years of service earning just over $4,000.00 per month.

His duties included planning and laying out logging roads and logging areas, a crew in his area and planning and responsibility for Cutting Permits and 5 Year Plans. [ 47 ] Hansen is a professional engineer, who was terminated at age 50, after 29 years of service, from a senior managerial position, with considerable responsibility, at a base salary of $160,000 yearly, with an additional average yearly bonus of $34,768, regularly received for his substantial contributions.

With his senior executive position, relatively large income and high level of responsibility, after very long service in one area of industry with specific products, his opportunity for finding like employment is more limited, despite his degree in Civil Engineering and his membership in professional bodies in both Alberta and BC. [ 48 ] The economy will also influence the number of positions and job opportunities that become available and is another a component for consideration ( Mothersele ). Hansen was terminated after a year of financial hardship and cost cutting by his former employer in 2009.

Since being terminated the plaintiff has engaged the services of two headhunter/recruitment agencies to assist him in finding new employment. The evidence before me is that, to date, Hansen has had very few job opportunities to respond to. [ 49 ] Considering these facts and circumstances, and in light of all of the cases cited to me, I find Hansen is entitled to 24 months notice. I so conclude, acknowledging that it is the maximum period of reasonable notice generally provided. Any shorter period would be unreasonable.

Mitigation [ 50 ] The defendants argue that Hansen took very few steps to mitigate his losses following termination. All he did for the first 3 months was prepare his resume with the help of a consultant. The resume was sent to one company in May 2010 and Hansen responded to 4 job advertisements in May and June 2010. Hansen has not spoken to his headhunter/recruitment agency for 5 months but instead looks at their website for advertisements of jobs.

It is argued that a deduction should be applied to any notice period awarded as Hansen has not taken all the steps he could have taken and more could have been done. [ 51 ] An employee has a duty to mitigate his damages by taking all reasonable steps to obtain alternate employment (Red Deer College v. Michaels 1975 CanLII 15 (SCC) , [1975] 5 W.W.R. 575 ) .

While a wrongfully dismissed employee has a duty to take all reasonable steps to mitigate his damages, courts will afford the employee a brief “breathing space” of one or two months following the date of dismissal before requiring him or her to fulfill the duty to mitigate ( Pauloski v. Nascor Inc., [2002] A. J. No. 256 , 2002 ABQB 171 ). I am satisfied that Hansen has been reasonable in his attempts to find alternate employment by utilizing the services of two headhunting firms and by regularly utilizing the internet and specifically the website of the headhunting firm, to search for job opportunities.

I do not find 3 months an inappropriately long period of time to put together a resume, given the fact that Hansen had been employed by the same employer or their predecessors for 29 years and he may not have had even the basics of a resume developed. Failure to mitigate has not been made out. Contingencies [ 52 ] It is further argued by the defendants that any income earned by Hansen during that portion of the notice period post trial,

should be deducted from the amount otherwise recoverable from Altus during the notice period or that any monies received by the plaintiff as a result of employment during the notice period should be impressed with a trust in favor of the defendant, as the duty to mitigate continues throughout the notice period. [ 53 ] Indeed, where judgment is granted prior to the expiry of the notice period, the employee’s duty to mitigate continues post judgement throughout the notice period ( Thomson v. Bechtel Canada Ltd 3 C.C.E.L. 16 ).

The court has the discretion, depending on the circumstances, to apply a deduction for contingencies or anticipated mitigation. This exercise of discretion is based upon the possibility or contingency that the plaintiff will find a new position prior to the expiry of the notice period. Like the assessment of any contingency, it is possible this may happen, but it is also possible that the dismissed employee might not find any work until long after the notice period. Both negative and positive contingencies must be taken into account. ( Smith v.

Pacific National Exhibition , 1991 CanLII 2366 (BC SC) , [1991] B.C.J. No. 255 , 34 C.C.E.L. 64 ) and this has been done in a variety of ways in the past. In Cousins v. Woodward Stores Ltd., 32 C.C.E.L. 210 the court deducted 2 months from the reasonable notice period of 18 months as a contingency, in Boyd v. Whistler Mountain Ski Corporation, [1990] B.C. J. No 821 (B.C.S.C.) the court applied a 5% contingency deduction for post-trial mitigation after awarding a notice period of 15 months and in Carlson v.

Ideal Cement Co. 1987 CanLII 2422 (BC CA) , 18 B.C.L.R. (2d) 24 the court deducted $3,000 from an award of 18 months. [ 54 ] In this case I am applying a contingency of 2 months, as there is certainly a realistic possibility that Hansen will find alternate employment within the notice period provided for. His positive and long track record with the defendants may assist him if and when comparable opportunities do arise. Company Vehicle [ 55 ] At the time of his termination Altus was providing Hansen with a 2009 Honda Pilot for which Altus paid all operating costs of $13,215.92 per year.

Hansen kept a mileage log which indicates that approximately 45% of the overall mileage was for his personal use. This is a value or benefit of $495.60 per month to him for the vehicle. [ 56 ] Mr. Stowkowy states that Hansen was provided a company vehicle for business purposes to enable him to travel to and between the Nisku and Bonnyville facilities. It is Mr. Stowkowy’s understanding that some incidental personal use was allowed by Altus and no taxable benefit was declared to Canada Revenue Agency so there were no adverse tax consequences to Hansen for his personal use.

Accordingly, it is argued by the defendants that no compensation should be provided to Hansen in relation to this claim. [ 57 ] If the primary purpose of providing an employee with an automobile is to assist in the performance of his job functions, no damages should be provided for its loss ( Kokonis v. Shaw Pipe Industries Ltd., [1983] A.J. No. 212 (Alta. Q.B.) ). In this case, Hansen was provided a company vehicle for business purposes with some incidental personal use allowed.

No taxable benefit was declared by the plaintiff to Canada Revenue Agency however the plaintiff kept a mileage log of his personal use which he stated in his affidavit to be 45%. This is not challenged by the defendants. The plaintiff is entitled to a value or benefit for his allowed personal use of the company vehicle calculated to be $495.60 per month. Employee Benefit Plan [ 58 ] The plaintiff participated in Altus’ group Employee Benefit Plan, under which Altus paid 100% of the premiums including: extended health care, vision care, dental care, and the employment assistance program.

The plaintiff paid 100% of the premiums for basic life insurance, dependant life insurance, short and long term disability insurance and accident death and dismemberment insurance. [ 59 ] Hansen has obtained partial replacement health, vision and dental care coverage for he and his family, since termination at his own expense of $248.19 per month. Under this plan 75% of the cost of prescription drugs and dental care is covered, with a $50 annual deductible per family, in comparison to 90% and no deductible under the Altus Employee Benefit plan.

Overall, Hansen estimates that he will spend an additional $550 per year on a massage therapist, glasses or contact lenses and routine dental examinations and cleaning due to the reduced coverage under his current plan. [ 60 ] The defendants argue that the additional expenses not covered by the new benefit plan and which are actually incurred should be recovered.

[ 61 ] Fringe benefits which have become part of the wage package of an employee must be taken into account in computing damages for wrongful dismissal ( Baby v. Gustavson International Drilling 1980 ABCA ) . The court must consider the actual costs incurred following termination as demonstrated by the evidence. The evidence establishes that Hansen obtained partial replacement health, vision and dental care coverage for he and his family since termination at his own expense of $248.19 per month with an annual deductible of $50 per family.

The plaintiff shall be reimbursed for these costs, together with the additional expenses not covered by the new plan that would have been covered under the Altus group plan that have actually been incurred to date. The plaintiff shall also have judgement for the average monthly expenses incurred to date, for the balance of the period of reasonable notice. Should counsel have any difficulty in calculating this amount they may bring this matter back before me for clarification. Vacation Pay [ 62 ] The plaintiff was entitled to 8 weeks of paid vacation per year at the time of his termination.

His vacation entitlement is therefore 14.8% which at the end of the 7th week of the year, prior to his termination, would have entitled Hansen to 5.4 vacation days. I find the plaintiff entitled to 5.5 vacation days from January 1, 2010 to February 23, 2010. Stock Options [ 63 ] In 2007 the plaintiff was granted 50,000 stock options at an exercise price of $1.75, one-third of which were to vest on each of July 1 2008, July 1, 2009 and July 1, 2010, with an expiry date of July 1, 2012 on all options. The plaintiff did not exercise any of the options prior to his termination.

It is argued that the employer’s stock option plan did not clearly extinguish Hansen’s right to receive and exercise stock options during his reasonable notice period. At the time of his termination, the plaintiff also expected he would receive a further grant of stock options as had been done in the past.

The plaintiff claims $10,000 for this benefit over his reasonable notice period. [ 64 ] The defendant argues that the Stock Option Agreement which governs the plaintiff’s stock options clearly extinguishes Hansen’s right to exercise his options and for further options to vest after a written notice of dismissal or the employee ceasing to be and employee in active employment carrying out regular and normal duties. [ 65 ] There is no doubt that the parties can agree to a contract that would deprive a dismissed employee of options during a period of notice even if the dismissal was wrongful, that is a matter of construction of the contract (Saalfeld v.

Absolute Software Corp 2009 BCCA) . The Stock Option Agreement between the parties states in paragraph 4 that : “In addition to any other provision in this Agreement dealing with expiry or termination of the Option hereby granted, the Option hereby granted shall terminate at the earlier of: (

i) the close of business ninety (90) days after the Optionee ceasing (other than by reason of death) to be at least one of an officer, director, employee (in active employment carrying out regular and normal duties), or consultant of the Company or a subsidiary of the Company, as the case may be, (ii) the close of business ninety (90) days after the Optionee has been provided with written notice of dismissal related to (

i) above; and (iii) the Expiry Date. Notwithstanding paragraph 2 hereof, no part of the Option hereby granted shall vest during the ninety (90) day period referred to in this paragraph.” [ 66 ] The wording of the Stock Option Agreement is clear and unambiguous in intent to terminate an Option granted thereunder in circumstances where and employee is provided with a written notice of dismissal or an employee ceases to be in active employment carrying out regular and normal duties, both of which apply to Hansen.

In this case, the plaintiff’s window of opportunity to exercise his vested Options expressly expired on May 24, 2010 and his Options that had not yet vested on the date of his termination by way of written notice of dismissal could no longer vest. DECISION [ 67 ] The plaintiff shall have judgement against the defendants as follows: (a) $ 11,692.00 for unpaid base salary from October 1, 2009 to February 8, 2010

(b) $293,333.26 (13,333.33 per month x 22 months) reflecting his salary over the notice period (c) $34,768.00 reflecting a bonus for 2010 (d) $10,903.20 reflecting the value of the use of a company vehicle ($495.60 per month x 22 months) (

e) Employee Benefit Plan: (i) $5,460.18 in premiums ($248.19 per month x 22 months) (ii) $100.00 ($50 annual deductible per family) (iii) expenses not covered by the new plan that would have been covered under the Altus group plan that have actually been incurred to date (iv) average monthly expenses incurred to date, for the balance of the notice period (f) $615.36 for an additional vacation day entitlement prior to termination COSTS [ 68 ] The Plaintiff shall have his costs and reasonable disbursements. Counsel is free to contact me should further submissions be required in this area.

Heard on the 17 th day of November, 2010. Dated at the City of Edmonton, Alberta this 21 th day of December, 2010. J.H. Goss J.C.Q.B.A. Appearances: Dan R. Bokenfohr

for the Plaintiff Brian D. Portas for the Defendant