Winfield v Pattison Sign Group, 2013 ABQB 595

Court of Queen ’ s Bench of Alberta Citation: Winfield v Pattison Sign Group, 2013 ABQB 595 Date: 20131010 Docket: 0803 05467 Registry: Edmonton Between: James Robert Winfield Plaintiff - and - Pattison Sign Group, a Division of Jim Pattison Industries Ltd. Defendant _ ________________________________________ ______________ Reasons for Judgment of the Honourable Mr. Justice K.G. Nielsen _________________________________________ ______________ I.

Introduction [ 1 ] James Robert Winfield alleges that Pattison Sign Group, a Division of Jim Pattison Industries Ltd. (PSG), wrongfully terminated his employment as a commissioned sales representative. Mr. Winfield seeks damages in lieu of proper notice along with aggravated damages. PSG argues that it terminated Mr. Winfield’s employment for just cause, namely, that he converted a cheque payable to PSG to his own bank account and, therefore, he is not entitled to any damages.

II. Background A. Evidence of the Circumstances Surrounding the Termination [ 2 ] Mr. Winfield was employed by PSG from the spring of 1984 until his termination on April 9, 2008. He was 55 years old at the time of his termination. [ 3 ] Mr. Winfield’s income from PSG was earned from commissions and bonuses on sales. In 2007, his T4 from PSG showed an employment income of $191,393. In early 2008, he was paid a bonus for having achieved sales exceeding $34,000,000 during his 24 years of employment with PSG. [ 4 ] Mr.

Winfield also received holiday pay from PSG and was covered pursuant to a benefits plan through PSG with Sun Life Assurance Company of Canada. [ 5 ] Mr. Winfield’s commissions were directly deposited to his bank account. Bonuses and holiday pay were sometimes directly deposited but could also be paid by cheque. Benefits paid by Sun Life Assurance Company of Canada were always by means of cheques. [ 6 ] Mr. Winfield was entitled to be reimbursed for certain expenses incurred in the course of his employment with PSG.

He would accumulate expenses, prepare an expense report and submit it for reimbursement when he determined it was appropriate. The expense report would be reviewed and adjusted if necessary having regard to the reimbursement policies of PSG. During Mr. Winfield’s employment, he was permitted to submit several expense reports per month if necessary. PSG would provide a cheque to reimburse for expenses. [ 7 ] Mr. Winfield has been in a common-law relationship with Deborah Felicioni since late 2000. Mr. Winfield and Ms. Felicioni have a joint bank account (the Winfield Account). Ms.

Felicioni did the majority of the banking for the couple. [ 8 ] When Mr. Winfield received cheques in the course of his employment, he would take the cheques home and place them on a desk in the residence he shared with Ms. Felicioni. Ms. Felicioni would then prepare a personal bank ledger which would record the date on which she made an entry in the ledger, a brief description of the cheque and the amount of the cheque. She would then place the cheques in a bank envelope and would deposit the funds in the Winfield Account.

Such deposits were usually made at an automated teller machine. [ 9 ] In 2007 and early 2008, the Edmonton sales office of PSG maintained an account called the “Imprest Account”. The Imprest Account was for the purposes of making small purchases for the Edmonton office. It was essentially a petty cash account, except that any purchase would be paid for by cheque as opposed to cash. Patricia Sperling was an administrative assistant in the Edmonton offices of PSG in 2007 and 2008. She administered the Imprest Account. The balance to be maintained in the Imprest Account was $3,000. When purchases were made, Ms.

Sperling would complete a report to seek replenishment of the Imprest Account to bring it back to the $3,000 balance. She stated that when the replenishment cheques were received, she would immediately take the cheques to the PSG bank in Edmonton and deposit them into the Imprest Account. [ 10 ] After August 2007, all accounts payable for PSG were handled by the Toronto office of PSG. In 2008, Grazia Migliore was the Assistant Controller for the Western Region of PSG, which covered the sales offices in, and west of, Manitoba. She reported to Richard Macina. Mr.

Macina is now the Senior Vice President and Chief Financial Officer of PSG. In March and April 2008, he was the Director of Finance of PSG. Ms. Migliore oversaw all accounts payable for the Western Region. The accounts payable department in Toronto processed all expense cheques for sales representatives in the Western Region, as well as cheques to replenish the Imprest Accounts maintained by offices in the Western Region. [ 11 ] The accounts payable department in Toronto would receive requests for cheques. It would review each request and if it was in order, the printing of a cheque would be approved.

The accounts payable department would then complete a cheque run which would print all of the cheques required on a given day. Ms. Migliore would review the printed cheques to ensure that they were in order and had been properly approved. The cheques would then be returned to the accounts payable department for folding and placement in envelopes. [ 12 ] The cheques were printed on an 8 ½ x 11 sheet. The bottom third was the detachable cheque, and the top two-thirds was the cheque stub. The accounts payable personnel would fold the cheques and place the cheques in windowed envelopes.

The payee of the cheque would be visible through the window, but the amount of the cheque would not. If the cheque was payable to someone outside of PSG, the cheque would be processed through a mail machine which would seal the envelope. If the cheque was payable to someone within PSG, the envelope would not usually be sealed. An envelope containing a cheque would be placed in an interoffice envelope and sent to the appropriate PSG office by means of Purolator courier. [ 13 ] In the PSG Edmonton office, either Ms.

Sperling or Joyce Niziol would receive the courier package with the interoffice envelope containing any cheques for the Edmonton office, and would distribute the cheques as necessary. Ms. Sperling testified that when doing so, cheques payable to Mr. Winfield would be placed in his mail slot if he was not in the office, or on his desk if he was in the office. Ms. Niziol testified that when she distributed cheques, she would hand the envelope to the individual in question or would place the envelope on either the individual’s desk or computer keyboard. [ 14 ] In December 2007, Ms.

Sperling requested a replenishment of the Imprest Account in the amount of $741.13. On January 4, 2008 the accounts payable department printed a cheque payable to “Pattison Sign Group – Imprest” at the Edmonton office of PSG in the sum of $741.13 (the Imprest Cheque). [ 15 ] Ms. Sperling testified that she submitted a further request to replenish the Imprest Account in early January 2008.

[ 16 ] In early February 2008, she received the cheque in relation to the January request, but had not yet received the cheque in relation to the December request. Ms. Niziol confirmed to Ms. Sperling that she had not received the required cheque. Ms. Sperling then made inquiries of the Vancouver, Calgary and Saskatchewan PSG offices. [ 17 ] At the time, Ms. Sperling reported to Robert Greenawalt in Calgary and she discussed the matter with him. Mr. Greenawalt had not received the cheque. He told Ms. Sperling that she should contact Ms. Migliore to advise that the cheque had not been received. Ms.

Sperling contacted Ms. Migliore who indicated that it was necessary to wait until the cheque had cleared the PSG bank. [ 18 ] Ms. Migliore eventually obtained the Imprest Cheque and sent a copy to Ms. Sperling. The Imprest Cheque indicated that it had been cashed in Calgary. Ms. Sperling believed that the Imprest Cheque had been cashed by the PSG Calgary office and therefore asked Mr. Greenawalt to follow up on this. Mr. Greenawalt did so and determined that the Imprest Cheque had not been cashed by the PSG Calgary office. Both Ms. Sperling and Mr. Greenawalt testified that Mr.

Greenawalt advised her that the Imprest Cheque was cashed at the Inglewood branch of TD Canada Trust in St. Albert, Alberta. Ms. Sperling then advised Ms. Migliore of this information. Ms. Migliore then informed Ms. Sperling that the Imprest Cheque had been deposited in an account in the name of Deborah Felicioni. Ms. Migliore inquired as to whether Ms. Sperling knew Ms. Felicioni, and Ms. Sperling advised that Ms. Felicioni was Mr. Winfield’s girlfriend. Ms. Migliore then asked Ms. Sperling to review the matter with Mr. Winfield. Ms. Sperling said she was not comfortable doing this. Ms.

Migliore said she would review the matter with Mr. Winfield. [ 19 ] Ms. Migliore’s evidence with respect to the Imprest Cheque was as follows. When the issue with the Imprest Cheque was determined, she had a conversation with the PSG contact at PSG’s bank in Toronto which also happened to be TD Canada Trust. As a result of that conversation, it was determined that the Imprest Cheque had been deposited into an account in the name of Ms. Felicioni. Ms. Migliore then contacted the PSG Calgary office to determine if individuals in that office knew Ms. Felicioni. She then contacted Ms. Sperling and was advised Ms.

Felicioni was Mr. Winfield’s partner. [ 20 ] As Ms. Sperling was uncomfortable in dealing with Mr. Winfield on this issue, Ms. Migliore contacted Mr. Winfield. Ms. Migliore testified that she had not spoken with Mr. Winfield previously and, therefore, at the outset of the conversation she introduced herself and explained why she was calling. She advised Mr. Winfield that Ms. Sperling had indicated that the Imprest Cheque was missing. She gave Mr. Winfield the account number and the name on the account of Deborah Felicioni. Mr.

Winfield confirmed that he recognized the account and that he shared the account with Ms. Felicioni. Ms. Migliore advised of the amount of the Imprest Cheque which had been deposited into the account. She testified that Mr. Winfield replied that he had noted that there was money in that account that was unaccounted for. Ms. Migliore found this to be a strange response. She advised Mr. Winfield to repay the amount of the Imprest Cheque and that he should give the money to Ms. Sperling for deposit. Mr. Winfield agreed.

At the end of the conversation, she indicated she would send a copy of the front and back of the Imprest Cheque to Mr. Winfield, which she did immediately after the telephone conversation. Both Ms. Sperling and Ms. Niziol testified to a telephone conversation which had taken place between Ms. Migliore and Mr. Winfield. [ 21 ] Ms. Migliore’s recollection was that the conversations with the bank representative, the PSG Calgary office, Ms. Sperling and Mr. Winfield all took place on March 5, 2008. [ 22 ] Mr.

Winfield testified that his recollection was that the first time the Imprest Cheque was raised with him was on March 6, 2008 when Ms. Sperling came into his office and said that Ms. Felicioni had the Imprest Cheque. He recalled Ms. Sperling producing a copy of the back of the cheque which had Ms. Felicioni’s name typed on it and an indication that it had been deposited at an automated teller machine through TD Canada Trust. He testified that he advised Ms. Sperling that if he had this money he would return it. He then contacted Ms. Felicioni at home and asked her to check the records. She did so.

The bank ledger maintained by Ms. Felicioni indicated that on January 12, 2008 she had made an entry for a deposit in the sum of $741.13. The description was “PSG – EXP” which she testified meant “Pattison Sign Group expenses”. Ms. Felicioni testified that she had no recollection of the cheque with respect to this particular deposit or making the deposit.

The bank ledger also had notes for January 12, 2008 which were for a deposit from her in the sum of $2,000 as well as a deposit in the sum of $117.76, again with respect to Pattison Sign Group expenses. [ 23 ] When it was determined that the Imprest Cheque had been deposited into the Winfield Account, Mr. Winfield indicated that it was necessary to return the money. Ms. Felicioni then prepared a cheque on their personal account. The cheque is dated March 7, 2008, payable to “Pattison Sign Group – Imprest” in the sum of $741.13 (the Replacement Cheque) with a memo which reads “original cheque cashed in error”. Mr.

Winfield took the Replacement Cheque to work on March 7, 2008 and provided it to Ms. Sperling. Mr. Winfield recalled stating to Ms. Sperling when he gave the Replacement Cheque to her that he was owed some expense reimbursements in the sum of approximately $720 and therefore, perhaps he should just make the Replacement Cheque payable for the difference. He did not do that, and the amount of the Imprest Cheque was reimbursed in full. [ 24 ] Mr. Winfield recalled that the conversation with Ms. Sperling took place on March 6, 2008. He determined this date from the date of the Replacement Cheque.

He did not recall a conversation with Ms. Migliore, nor did he recall receiving emails from her on March 5, 2008 enclosing copies of the front and back of the Imprest Cheque. He stated that if he did receive the emails, he did not read them. [ 25 ] Ms. Sperling testified that after Mr. Winfield had spoken with Ms. Migliore on March 5, 2008, he spoke to Ms. Sperling and at that time said “he did not heed the cheque, that he was owed some expense cheques and that he would just reimburse the difference between the amount of the Imprest Cheque and the amount he was owed”. She understood Mr.

Winfield to be saying that he had not paid attention to the Imprest Cheque. She testified that she reviewed with Mr. Greenawalt Mr. Winfield’s suggestion that he simply pay the difference in the amounts owed. Mr. Greenawalt was advised that these were two different issues and that Mr. Winfield would have to replace the amount of the Imprest Cheque in full. Mr. Greenawalt confirmed that he had given this advice to Ms. Sperling. [ 26 ] Ms. Sperling described her conversation with Mr. Winfield as being nonchalant. That is, that Mr. Winfield was not angry or agitated in any way.

She further testified that she was not comfortable in discussing the matter with Mr. Winfield because she felt that it

was management’s responsibility to do so. [ 27 ] Ms. Migliore testified that she found the conversation with Mr. Winfield to be strange because he did not ask her to clarify anything, nor did he ask for copies of the front and back of the Imprest Cheque or how she had received the information. [ 28 ] As a result of the information Ms. Migliore received on March 5, 2008, she was very anxious to discuss the matter with her supervisor, Mr. Macina. He was out of the office on March 5, 2008. Ms. Migliore met with Mr. Macina as soon as he arrived in the office on March 6, 2008.

She provided him with a copy of the front and back of the Imprest Cheque as well as the notes of her conversations on March 5, 2008. She advised Mr. Macina of her investigations in this matter and reported to him that Mr. Winfield had stated in his conversation with Ms. Migliore that he had noticed that there was money in the Winfield Account which was unaccounted for. In cross- examination she acknowledged that she believed that she and Mr. Macina had discussed that the Imprest Cheque could either have been stolen or deposited by mistake. [ 29 ] Mr. Macina recalled the meeting with Ms. Migliore on March 6, 2008.

Ms. Migliore relayed to him the steps she had taken in this matter. She advised that when she discussed the matter with Mr. Winfield there was no surprise expressed by Mr. Winfield, and he did not question Ms. Migliore. She reported that Mr. Winfield had said “he knew they had money in their bank account that was unaccounted for”. [ 30 ] Mr. Macina stated that during the meeting with Ms. Migliore, she became colourful and upset and stated: “What the f***, this guy stole from the company”. [ 31 ] Mr. Macina was the administrator of PSG’s Whistleblower Policy.

In that role, he had an obligation to report matters such as this one to Don Belanger, the President of PSG. He asked Ms. Migliore to provide copies of the front and back of the Imprest Cheque and her notes. He then sent the documents to Mr. Belanger and discussed the matter with him. [ 32 ] During this conversation, Mr. Belanger asked Mr. Macina to have Tony Kwan, Mr. Winfield’s supervisor, review Mr. Winfield’s expense reports for the previous 12 months to see if there were any unusual items. Mr. Kwan did this and did not find anything unusual in Mr. Winfield’s expense reports. Mr.

Kwan further determined that as at January 14, 2008, being the date that the Imprest Cheque cleared the PSG Account, there were no funds outstanding to Mr. Winfield in respect of expense claims. [ 33 ] After the initial conversation with Mr. Belanger, Mr. Macina had a meeting with Mr. Belanger, Mr. Sheehan (the Senior Vice-President and Chief Financial Officer of PSG at the time), and external legal counsel for PSG. It was decided that Mr. Macina would meet with Mr. Winfield to continue the investigation, and to ask Mr.

Winfield for his explanation of the events surrounding the deposit of the Imprest Cheque into the Winfield Account. The external legal counsel for PSG had prepared a termination letter which Mr. Macina was to take with him to his meeting with Mr. Winfield. If Mr. Macina determined that Mr. Winfield’s explanation was not credible, then he would terminate Mr. Winfield’s employment, provide the termination letter to him, and read it to him word for word. If he found the explanation to be credible, he would not terminate Mr. Winfield’s employment. [ 34 ] Mr. Macina asked Mr. Kwan to arrange a meeting with Mr.

Winfield. The meeting was set for the morning of April 9, 2008. Mr. Winfield testified that he understood the purpose of the meeting to be to discuss sales and budgets. Mr. Macina did not advise Mr. Winfield of the purpose of the meeting and gave him no warning that he was investigating the circumstances surrounding the deposit of the Imprest Cheque to the Winfield Account, or that Mr. Winfield’s employment could be in jeopardy. Mr. Macina acknowledged in cross-examination that in the period from March 6, 2008 to April 9, 2008, he did not contact Mr. Winfield with respect to the matters in issue.

He did not discuss the matters with Mr. Winfield until the meeting of April 9, 2008. [ 35 ] The meeting on April 9, 2008 took place in the boardroom of the PSG Edmonton office. Mr. Kwan, Mr. Macina and Mr. Winfield were in attendance. Mr. Macina testified that he started the meeting by stating that he was investigating the missing cheque for $741.13 and wanted to know Mr. Winfield’s side of the story. He testified further that Mr. Winfield said that he thought the cheque in question was payment of an expense report, and that Mr.

Winfield said he was expecting an expense cheque not for that amount, but for an amount close to the amount of the Imprest Cheque. Mr. Winfield said that Ms. Sperling had left the Imprest Cheque on his desk in a windowed envelope, and that he did not usually look at the payee on his cheques and simply gave the cheque to his partner to deposit in their personal bank account. [ 36 ] Mr. Macina testified that he did not find Mr. Winfield’s explanation to be credible. He felt that Mr. Winfield had given contradictory explanations in that he had advised Ms.

Migliore that he knew there were funds in the Winfield Account which were unaccounted for, and had advised Mr. Macina that he thought the funds were in respect of expenses owed to him. Mr. Macina was under the impression that at the point in time the Imprest Cheque was deposited, there were no expense reimbursements outstanding to Mr. Winfield and, therefore, Mr. Winfield had lied to him. He found Mr. Winfield’s comment that he did not usually look at the payee on cheques to be troubling. Mr. Macina felt that as Mr.

Winfield had deposited a cheque payable to the order of PSG to his own account, he had stolen funds from PSG. Finally, Mr. Winfield expressed no apology or remorse in the meeting but, rather, attempted to justify why the Imprest Cheque had been deposited to the Winfield Account. [ 37 ] In the circumstances, Mr. Macina felt he could not trust Mr. Winfield and as a result he terminated Mr. Winfield’s employment. The termination letter was passed to Mr. Winfield and Mr. Macina read the letter to Mr. Winfield word for word. Mr. Kwan then escorted Mr.

Winfield from the PSG offices and invited him to return after 4:30 p.m. the next day to collect his personal effects. [ 38 ] Mr. Macina explained that honesty and integrity are core values of the Pattison Group of Companies. He described it as being “paramount” to the way the companies operate. The duty of honesty is very important with respect to the sales representatives. The sales representatives have access to confidential price lists and markup sheets, and they are the face of the company to customers of PSG. He stated that PSG must be able to trust their sales representatives completely. [ 39 ] Mr.

Macina testified that he advised Mr. Winfield during the meeting of April 9, 2008 that the decision to terminate Mr. Winfield’s employment was not a decision made by Mr. Kwan but, rather, was a decision made by the senior executives of PSG. Mr.

Macina did acknowledge in cross-examination, however, that Mr. Kwan wanted to terminate Mr. Winfield’s employment. During Mr. Macina’s investigation between March 6, 2008 and April 9, 2008, he had received an email from Mr. Kwan indicating that “opportunities like this do not come along very often”. This was an indication from Mr. Kwan that matters in relation to the Imprest Cheque could be used as a grounds for terminating Mr. Winfield’s employment. [ 40 ] Ms. Sperling testified that as Mr.

Winfield was leaving the PSG offices, he stated to her: “that cheque you placed on my desk I am getting fired over”. [ 41 ] After the meeting with Mr. Winfield, Ms. Sperling went into the boardroom and spoke to Mr. Macina, advising him that she had not left the Imprest Cheque on Mr. Winfield’s desk. [ 42 ] Mr. Macina confirmed that the investigation of Mr. Winfield’s expense reports for the previous 12 months disclosed nothing untoward. Further, he testified that his understanding was that as at the date the Imprest Cheque was deposited by Ms. Felicioni, there were no funds outstanding to Mr.

Winfield in respect of expenses. He confirmed, however, that after Mr. Winfield’s employment was terminated, he determined that Mr. Winfield had an outstanding expense claim for $117.76 and that a cheque in this amount payable to Mr. Winfield had been prepared by PSG in its cheque run on January 4, 2008. Ms. Felicioni’s records confirm that this cheque was recorded in her bank ledger as a PSG expense cheque on January 12, 2008. [ 43 ] Mr. Winfield’s last day of work with PSG was April 9, 2008. He commenced employment with ZIP Signs in June 2008. [ 44 ] Ms.

Sperling testified that at times it was difficult to work with Mr. Winfield. It was stressful and “an unhappy situation most times”. B. Evidence on Damages [ 45 ] Mr. Winfield claims the termination of his employment was wrongful and that he is entitled to pay in lieu of notice for a period of 24 months. [ 46 ] Both parties retained accounting experts to address the damages to which Mr. Winfield would be entitled if his termination was wrongful. The parties, by agreement, entered a

schedule of damages as Exhibit 35. This

schedule sets out the loss of income by Mr. Winfield for periods ranging from one to 24 months. The

schedule sets out the difference between the income that would have been earned by Mr. Winfield at PSG had he remained as an employee, and the actual income earned by Mr. Winfield in his new employment. The

schedule also calculates the pre-judgment interest to the commencement of trial on any such loss of income. [ 47 ] Having reviewed the schedule, I find that the parties’ methodology is sound. Therefore, if it is determined that PSG wrongfully terminated Mr. Winfield’s employment, it is simply necessary to determine the appropriate notice period in months which will then determine the cumulative total of loss of income and pre-judgment interest. Mr. Winfield does not seek loss of income for a period beyond 24 months from April 2008. [ 48 ] Mr.

Winfield also seeks damages in respect of commissions which he claims to have earned on a project known as the Eagle River Casino Project. This was a project on which Mr. Winfield had worked just prior to the termination of his employment. PSG was concerned about its security position in respect of this project, given that the casino was constructed on First Nation lands. As a result, a special arrangement had been given to Mr. Winfield by PSG in January 2008, pursuant to which Mr.

Winfield was to be paid one fifth of the commissions due to him on project completion, and the remaining four fifths one year after project completion. It was initially anticipated that the project would be completed in January 2008 and the one year would therefore expire in December 2008. Mr. Macina testified that the project was delayed until May 2008. Had Mr. Winfield still been employed by PSG, he would have received one fifth of the commissions on this project in May 2008 and the remaining four fifths in May 2009. [ 49 ] Mr.

Macina confirmed that the project was completed and that commissions were in fact paid to Ken Tanzy, Mr. Winfield’s assistant. No commissions were paid to Mr. Winfield. [ 50 ] PSG paid commissions to its sales representatives pursuant to a document entitled

Schedule of Commission Rates & Volume Splits. This document governed Mr. Winfield’s relationship with PSG. The document provided that if a salesperson was terminated from his employment with PSG for just cause, the salesperson would not be entitled to payment of any further commissions. PSG takes the position that Mr. Winfield’s employment was terminated for cause, and therefore any commissions that might otherwise have been owing with respect to the Eagle River Casino Project are not payable to Mr. Winfield. In any event, PSG argues that the agreed

schedule of damages takes into account commissions that would have been earned by Mr. Winfield in any notice period. Therefore, awarding Mr. Winfield damages in respect of the commission on the Eagle River Casino Project, in addition to damages in lieu of notice, would result in a double recovery. [ 51 ] Mr.

Winfield argues that the special arrangement by PSG in January 2008 was a unilateral arrangement on the part of PSG to which he never agreed, and that the whole of the commissions on the Eagle River Casino Project were due before his termination. [ 52 ] The total amount of the commission that would have been payable with respect to the Eagle River Casino Project, had Mr. Winfield’s employment with PSG not been terminated, was $40,501.50. [ 53 ] Mr.

Winfield also claims aggravated damages in respect of both the manner in which this matter was investigated by PSG, and the manner in which his employment was terminated. [ 54 ] Mr. Winfield makes no other claims arising from the termination of his employment with PSG. III. Issues

1. Did PSG have just cause to terminate Mr. Winfield’s employment? 2. If PSG did not have just cause to terminate Mr. Winfield’s employment, what is the reasonable notice period? 3. If Mr. Winfield is entitled to reasonable notice, what damages are payable in lieu thereof? 4. Is Mr. Winfield entitled to aggravated damages in relation to the manner in which the matter was investigated or his employmentwas terminated? IV. Analysis A. Just Cause 1. Law [55] A very useful

summary of the law in relation to termination of employment is given by Côté J.A. in Merrill Lynch CanadaInc v Soost, 2010 ABCA 251, 487 AR 389: 8 The contract of employment here was the most common kind: a hiring for an indefinite period. 9 Under such contracts, the common terminology is sloppy, even misleading. We speak of "wrongful dismissal", or damages for that.But there is no such thing as wrongful dismissal (apart from federal legislation). Under such a contract, either side may validly end thecontract at any time. The employee neither has tenure, nor is indentured.

The employee and the employer both have the right to end thecontract, and ending it is not a breach of contract, nor a tort . . . There is no right to be allowed to resign instead of being dismissed. 10 And we speak of "reasonable notice". But all that need be reasonable is the length of the notice.

The dismissal (or resignation)need not be reasonable; it may be whimsical, or inexplicable . . . 11 No cause whatever is needed for the employee to resign or for the employer to dismiss, and such resignation or dismissal cannot belegally upset (unless a collective agreement or certain federal legislation applies). 12 However, it is implied in the contract that the party terminating the contract without cause will give notice of reasonable length. Allthat need be reasonable is the amount of time which it affords.

So an employer wishing to dismiss an employee without cause must eithergive long enough advance notice, or pay salary corresponding to that period of time . . . 13 I emphasize the word "or". No employee has a right to work after dismissal. Every employee can be dismissed at once with nonotice and without any grounds. That will not be a breach of the employment contract, provided that the employer gives pay in lieu ofnotice. 14 Why do we ever discuss just cause for dismissal?

The only reason is that just cause obviates the need for notice or pay in lieu. . . .However, cause or lack of it is irrelevant to the effectiveness and the finality of resignation or dismissal. And cause is irrelevant towhether the employee gets working notice instead of pay in lieu of notice. (citations omitted) [56] The leading case in situations of termination of employment for alleged dishonest conduct is McKinley v BC Tel, 2001 SCC38, [2001] 2 SCR 161.

Iacobucci J. for the Supreme Court of Canada there stated as follows: 48 In light of the foregoing analysis, I am of the view that whether an employer is justified in dismissing an employee on thegrounds of dishonesty is a question that requires an assessment of the context of the alleged misconduct. More specifically, the test iswhether the employee's dishonesty gave rise to a breakdown in the employment relationship.

This test can be expressed in different ways.One could say, for example, that just cause for dismissal exists where the dishonesty violates an essential condition of the employmentcontract, breaches the faith inherent to the work relationship, or is fundamentally or directly inconsistent with the employee's obligationsto his or her employer. 49 In accordance with this test, a trial judge must instruct the jury to determine: (1) whether the evidence established the employee'sdeceitful conduct on a balance of probabilities; and (2) if so, whether the nature and degree of the dishonesty warranted dismissal.

In myview, the second branch of this test does not blend questions of fact and law. Rather, assessing the seriousness of the misconduct requiresthe facts established at trial to be carefully considered and balanced. As such, it is a factual inquiry for the jury to undertake. . . . 51 This being the case, I conclude that a contextual approach to assessing whether an employee's dishonesty provides just cause fordismissal emerges from the case law on point. In certain contexts, applying this approach might lead to a strict outcome.

Where theft,misappropriation or serious fraud is found, the decisions considered here establish that cause for termination exists. This is consistentwith this Court's reasoning in Lake Ontario Portland Cement Co. v Groner, (SCC), [1961] S.C.R. 553, where this Courtfound that cause for dismissal on the basis of dishonesty exists where an employee acts fraudulently with respect to his employer. Thisprinciple necessarily rests on an examination of the nature and circumstances of the misconduct.

Absent such an analysis, it would beimpossible for a court to conclude that the dishonesty was severely fraudulent in nature and thus, that it sufficed to justify dismissalwithout notice. 52 This is not to say that there cannot be lesser sanctions for less serious types of misconduct. For example, an employer may be

justified in docking an employee's pay for any loss incurred by a minor misuse of company property. This is one of several disciplinary measures an employer may take in these circumstances. 53 Underlying the approach I propose is the principle of proportionality.

An effective balance must be struck between the severity of an employee's misconduct and the sanction imposed. . . . . . . 57 Based on the foregoing considerations, I favour an analytical framework that examines each case on its own particular facts and circumstances, and considers the nature and seriousness of the dishonesty in order to assess whether it is reconcilable with sustaining the employment relationship.

Such an approach mitigates the possibility that an employee will be unduly punished by the strict application of an unequivocal rule that equates all forms of dishonest behaviour with just cause for dismissal. At the same time, it would properly emphasize that dishonesty going to the core of the employment relationship carries the potential to warrant dismissal for just cause. [ 57 ] Topolniski J. in Foerderer v Nova Chemicals Corp , 2007 ABQB 349 , 418 AR 64 summarized the basic legal principles involving cause, including the following: 63 ...(

e) Cause is a question of fact that varies with the nature of the employer's business and the employee's position of responsibility and trust. It is determined by an objective contextual and proportional analysis. A finding of misconduct does not, by itself give rise to just cause; the question is whether, in the circumstances, the behaviour is such that the employment relationship could no longer viably subsist. A balance must be struck between the severity of an employee's misconduct and the sanction imposed. The factors considered include the employees' tenure, employment record, and the seriousness of the misconduct. (

f) Cause is established where the employee misconduct amounts to a breakdown in the employment relationship - misconduct that so fractures the relationship to the point that the employer is not expected to give the employee a second chance. (footnotes omitted) [ 58 ] The cases mandate a three step analysis: 1. Determine the nature and extent of the alleged misconduct; 2. Consider the surrounding circumstances which include the employment history, the employee’s role and responsibilities, the type of business or activity, policies and practices, and the level of trust reposed in the employee; and 3.

Consider proportionality by deciding whether the misconduct is so incompatible with the fundamental terms of the employment relationship that it warrants dismissal. [ 59 ] The Supreme Court of Canada has stated that the standard of proof on a balance of probabilities applies in civil matters even where criminal or morally blameworthy conduct is alleged. There must always be clear, convincing and cogent evidence in order to satisfy the balance of probabilities test, and the trial judge must scrutinize the relevant evidence with care to determine whether it is more likely than not that an alleged event occurred: F(

H) v McDougall , 2008 SCC 53 , [2008] 3 SCR 41 at paras 44 , 46 and 49, McKinley at para 49. [ 60 ] For an employer to successfully defend a case such as this one, the Court must first be satisfied that the employee’s actions amounted to dishonesty or fraud.

The employer must be able either to indicate evidence on the record, or to adduce evidence, establishing this fact: J Sopinka et al, The Law of Evidence in Canada , 2nd ed (Markham, Ont: Butterworths, 1999) at § 3.22. [ 61 ] Where actions resulting in dismissal demonstrate mistakes of judgment, but fall short of establishing dishonesty or fraudulent intent, the dismissal may well be found to have been wrongful. See for example: Todd v 7-Eleven Canada Inc , 2004 ABQB 86 , [2004] AJ No 138 at para 26 . 2. Application to the Facts [ 62 ] PSG has asserted two bases for the termination of Mr. Winfield’s employment: 1.

Mr. Winfield stole from PSG when the Imprest Cheque was deposited into the Winfield Account; 2. Alternatively, Mr. Winfield was dishonest when confronted with the fact that the Imprest Cheque had been deposited to the Winfield Account. a. Theft of the Imprest Cheque [ 63 ] Mr. Macina concluded that Mr. Winfield had stolen the Imprest Cheque. Mr. Macina came to this conclusion on the basis that he understood that no expense reimbursements were outstanding to Mr. Winfield at the time of deposit. Further, Mr.

Winfield offered explanations that he knew that there were funds in the Winfield Account that were unaccounted for, and that he did not usually pay attention to the payee on cheques. Mr. Macina stated that honesty and integrity were paramount to the manner in which the Pattison Group of companies carried on business, and in the circumstances he felt that PSG would no longer be able to trust Mr. Winfield. [ 64 ] In my view, it is more likely than not that the Imprest Cheque was deposited to the Winfield Account due to mistake.

It is likely that several events combined to result in the deposit of the Imprest Cheque to the Winfield Account. [ 65 ] Mr. Winfield had received numerous cheques from PSG over his 24 years of employment. There was no evidence to suggest that he had ever received a cheque in error on a previous occasion. There was, therefore, no particular reason why Mr. Winfield would

have paid special attention to the payee of the Imprest Cheque. [ 66 ] There is no evidence to support, nor did PSG argue, that Mr. Winfield deliberately took the Imprest Cheque. Ms. Sperling was clear in her testimony that upon receiving a cheque to replenish the Imprest Account, she would immediately take it to the PSG bank in Edmonton for deposit to the Imprest Account. This did not happen and, clearly, the Imprest Cheque came into Mr. Winfield’s possession in error. There are two possibilities as to how this happened. [ 67 ] First, either Ms. Sperling or Ms. Niziol provided the Imprest Cheque to Mr.

Winfield by mistake by placing it on his desk or computer, by placing it in his mail slot or by handing it to him. Ms. Sperling and Ms. Niziol were the only PSG employees who would distribute cheques within the Edmonton office. Clearly, they did not notice that the Imprest Cheque had been distributed to Mr. Winfield. [ 68 ] Second, it is possible that two cheques were contained in one envelope which was distributed to Mr. Winfield. It is of note that the Imprest Cheque and Mr. Winfield’s expense reimbursement cheque in the sum of $117.76 both bear the date January 4, 2008. According to Ms.

Migliore’s evidence, this means that these two cheques would have been printed in the same cheque run. The cheques would have then been manually folded and placed in windowed envelopes and ultimately couriered to the PSG Edmonton office. If two cheques were contained in the same envelope, it is possible that Mr. Winfield’s name, as the payee on the expense reimbursement cheque, would have been visible through the window on the envelope. I accept Mr. Winfield’s evidence that the practice within the household was for Mr. Winfield to simply take the cheques payable to him home, and that Ms.

Felicioni would deposit them. It appears that Ms. Felicioni did not note the different payees on the two PSG cheques that she recorded in her ledger on January 12, 2008. This is not necessarily surprising. [ 69 ] Mistakes on the part of multiple parties resulted in the Imprest Cheque being deposited to the Winfield Account. Mr. Winfield and Ms. Felicioni failed to note the payee on the Imprest Cheque. Either Ms. Sperling or Ms. Niziol inadvertently distributed the Imprest Cheque to Mr.

Winfield or, alternatively, personnel in the accounts payable department of PSG inadvertently placed the Imprest Cheque in an envelope containing an expense reimbursement cheque for Mr. Winfield. Both Mr. Winfield’s bank and PSG’s bank failed to note that a cheque which was not payable to Mr. Winfield had been deposited into the Winfield Account. Had any one of these mistakes not been made, either the Imprest Cheque would not have been provided to Mr.

Winfield or, alternatively, it would have been noted at or about the time of deposit that the deposit of the Imprest Cheque to the Winfield Account had been made in error. As is often the case, a combination of errors likely resulted in the event occurring. Such a combination of errors does not lead to the conclusion that it is more likely than not that Mr. Winfield stole funds from PSG. [ 70 ] I find no clear, cogent and convincing evidence establishing deceitful conduct on the part of Mr. Winfield on a balance of probabilities. [ 71 ] I therefore conclude that PSG was not justified in terminating Mr.

Winfield’s employment based on theft of the Imprest Cheque. b. Dishonest Explanations [ 72 ] PSG argues that even if Mr. Winfield did not steal the Imprest Cheque, it had cause for terminating Mr. Winfield’s employment due to the dishonest explanations which he gave upon being confronted with the evidence that the Imprest Cheque had been deposited to the Winfield Account. PSG submits that Mr. Winfield’s statements upon being questioned establish that Mr.

Winfield either failed to explain why the Imprest Cheque was in his possession, or they support the conclusion that he knew he had funds from the Imprest Cheque in his possession and was not forthcoming that this was the case. [ 73 ] Mr. Macina testified that Mr. Winfield gave contradictory explanations with respect to the Imprest Cheque being in his possession. When first advised of the situation by Ms. Migliore, Mr. Winfield explained that he knew there were funds unaccounted for in the Winfield Account. Mr. Macina described the second explanation, being that Mr.

Winfield said he thought the cheque was an expense reimbursement cheque. This explanation was apparently given to Ms. Sperling in early March 2008 when the issue first arose and at the April 9, 2008 meeting. [ 74 ] The explanation given by Mr. Winfield to Ms. Migliore was given when the incorrect deposit was first brought to his attention, and was made without having particulars of the Imprest Cheque. In my view, such a statement supports neither the conclusion that Mr. Winfield knew he had in his possession money belonging to PSG and intentionally kept it, nor the conclusion that he was dishonest.

It seems unlikely to me that a person who has stolen or knowingly retained funds not belonging to him would make such an admission. [ 75 ] With regard to Mr. Winfield’s second explanation, it was given after he knew that the Imprest Cheque had been deposited to the Winfield Account, and he gave it as an explanation as to how it may have been that the deposit was made. At the time the Replacement Cheque was provided by Mr.

Winfield, it is clear that there was a discussion that he was owed expenses and that perhaps he would simply reimburse PSG for the difference of the amount of the Imprest Cheque and the amount of the expenses owed to him. As at the April 9, 2008 meeting Mr. Macina was under the belief that at the time of deposit of the Imprest Cheque to the Winfield Account, no other expenses were outstanding to Mr. Winfield. This, of course, is not correct as on that same date a deposit was made for expenses in the sum of $117.76. Further, between mid-January 2008 and early March 2008, Mr.

Winfield had submitted further expense reimbursement claims. Therefore, when he had the conversation with Ms. Sperling with respect to simply paying the differential, there were reimbursements owed to him. [ 76 ] Therefore, in my view, there are credible reasons why Mr. Winfield would have given the two explanations which do not support a finding of dishonesty. [ 77 ] Furthermore, I do not find that the two explanations are contradictory. [ 78 ] The explanation given to Ms. Migliore, at best, simply indicates that Mr. Winfield was apparently aware that there were funds

in the Winfield Account in respect of which he was unsure of the origin. His explanation to Ms. Sperling occurred after he had further information with respect to the Imprest Cheque from his conversations with Ms. Migliore and Ms. Felicioni. This explanation was given with the belief that at that point in time he had outstanding expense reimbursements. It is conceivable that he could have concluded that the Imprest Cheque was an expense reimbursement cheque. [ 79 ] Mr. Winfield, in hindsight, certainly should have taken steps to determine the source of the unaccounted for funds in the Winfield Account.

The fact that he did not do so does not inevitably lead to the conclusion that he was lying to Ms. Migliore, nor is it inconsistent with his subsequent explanation. [ 80 ] I do not find that the two explanations given by Mr. Winfield are irreconcilable statements as was urged by counsel for PSG. [ 81 ] PSG relied on a number of cases to demonstrate that dishonesty is just cause for

summary dismissal.

In the cases relied upon, the employee was not forthright when confronted with admitted or established misconduct or actions which were recorded on videotape: Cavic v Costco Wholesale Canada Ltd. , 2012 ONSC 5307 , [2012] OJ No 5039; Ptolemy Estate v Epcor Industrial Water Services Inc , 2010 ABPC 387 , [2010] AJ No 1515; Bell v Copter Science Corp , 2006 CarswellOnt 9143 (Sup Ct Just) ; Obeng v Canada Safeway Limited , 2009 BCSC 8 , 70 CCEL (3d) 212; Canada Safeway Ltd v UFCW, Local 401 (Armitage Grievance) , [2002] AGAA No 50. [ 82 ] In this case there is no admitted or established misconduct or actions recorded in some fashion.

There is no evidence that Mr. Winfield knew about the Imprest Cheque being deposited in the Winfield Account, or of deliberate concealment of the fact that he had the Imprest Cheque. As soon as the issue arose, Mr. Winfield refunded the amount of the Imprest Cheque to PSG. Further, Mr. Winfield never denied having deposited the Imprest Cheque.

He provided explanations as to how the Imprest Cheque may have come into his possession, and those explanations did not change over time and, in my view, are reasonable and support his credibility. [ 83 ] Turning to the first step of the analysis for the contextual approach as set out in McKinley , I conclude that it has not been proven on a balance of probabilities that Mr. Winfield either stole the Imprest Cheque or was dishonest when the issue was brought to his attention. It is true that Mr.

Winfield appears to have known that there were funds in the Winfield Account that were unaccounted for, and he took no steps to determine the rightful owner of same. However that, in and of itself, does not satisfy me that Mr. Winfield stole the Imprest Cheque in January 2008 or that he knew as a certainty that the Imprest Cheque had been deposited to the Winfield Account before March 5, 2008. When it was first drawn to Mr.

Winfield’s attention that the Imprest Cheque had been deposited to the Winfield Account, he agreed to return the funds and gave reasonable explanations as to why the funds may have been in his account. [ 84 ] Based on all of the foregoing, as stated previously, I find on a balance of probabilities that Mr. Winfield did not steal the Imprest Cheque, nor was he dishonest when he was confronted with the issue. Therefore, PSG did not have cause to terminate Mr. Winfield’s employment. c. Conduct Warranting Dismissal [ 85 ] If I am wrong in this conclusion and Mr.

Winfield was guilty of dishonesty, this would not end the matter. It would then be necessary to consider whether Mr. Winfield’s conduct, viewed within the employment context, was sufficiently serious that it gave rise to a breakdown in the employment relationship. The McKinley analysis mandates an assessment of the background circumstances of the employment relationship, and the proportionality of the sanction imposed having regard to the employee’s misconduct. [ 86 ] As to the background, Mr. Winfield was 55 years old at the time of his termination.

He had been employed as a commissioned salesman with PSG for 24 years. Shortly before his termination, Mr. Winfield had received a bonus for exceeding $34,000,000 in sales for PSG. Ms. Sperling testified that it was stressful working with Mr. Winfield and that it was an unhappy situation most of the time. Mr. Winfield’s supervisor, Mr. Kwan apparently wished to have Mr. Winfield’s employment terminated, given the email which he forwarded to Mr. Macina. However, Mr. Kwan was not called to give evidence with respect to this email or any problems with Mr. Winfield in his employment.

Based on the evidence before me, I can only conclude that Mr. Winfield was a good employee. [ 87 ] I accept that honesty and integrity were core values for PSG. I would presume that all employers would state that this is the case with respect to their operations. While Mr. Macina testified that sales representatives were the face of the company to PSG customers, Mr. Macina’s concerns with respect to honesty related to the fact that the sales representatives had access to internal confidential price lists and markup sheets. There was no evidence that there was anything untoward in Mr.

Winfield’s employment history with PSG, and an investigation with respect to expenses claimed by Mr. Winfield for the 12 month period prior to March of 2008 disclosed no other issues or discrepancies. He had no history of similar problems. [ 88 ] As to proportionality, the question is whether Mr. Winfield’s conduct was sufficiently serious that it warranted dismissal without notice. Did Mr. Winfield’s misconduct give rise to a breakdown in the employment relationship?

The Supreme Court in McKinley indicated there are three ways to express the test: 1. did the dishonesty violate an essential condition of the employment contract? 2. did the dishonesty breach the faith inherent in the relationship? or 3. was the dishonesty fundamentally or directly inconsistent with the employee’s obligations to the employer? [ 89 ] I am not satisfied that PSG was justified in dismissing Mr. Winfield, regardless of how the test is framed. In my view, Mr. Winfield’s conduct, when considered as a whole, was not so incompatible with the employment relationship that it could no longer be sustained.

The essential condition of Mr. Winfield’s contract was to perform his duties as a sales representative with honesty and integrity. Even if Mr. Winfield was guilty of dishonesty, the circumstances surrounding the Imprest Cheque constituted an isolated event which did not fundamentally undermine Mr. Winfield’s employment relationship or his duties toward PSG.

[90] Many of the cases where termination was justified for breach of trust or honesty relate to employees in a retail setting. Theposition occupied by Mr. Winfield was of a different nature. The evidence established that PSG had entrusted its sales representativeswith, and was primarily concerned about, confidential business information. [91] In my view, the dishonesty alleged by PSG does not constitute a breach of trust serious enough to destroy the employmentrelationship. Mr. Winfield’s conduct after March 5, 2008 suggests the contrary.

Whether his conduct after that point is characterised asjustification, explanation or apology, the fact remains that Mr. Winfield provided an explanation and returned the funds to PSGimmediately. If his conduct before March 5, 2008 is properly characterized as dishonest, it was not so egregious as to justify terminationwithout notice. I conclude that the sanction in this case was not proportional to the severity of Mr. Winfield’s misconduct. Lesser formsof sanction could have been considered in this case. [92] Further, as noted above, PSG exercised control over the distribution of cheques.

There is no suggestion in the evidence thatMr. Winfield submitted an improper expense report. PSG could have addressed any gaps in its own processes so as to foreclose thepossibility of wrongful deposit of Imprest cheques. [93] I find that Mr. Winfield was not dishonest in the circumstances before the Court. Even if Mr. Winfield was dishonest, I findthat his conduct did not warrant dismissal for just cause. Mr. Winfield was, therefore, entitled to reasonable notice of his termination.This leads to a consideration of the length of reasonable notice to which he is entitled. B.

Reasonable Notice Period [94] The often quoted statement in Bardal v The Globe & Mail Ltd (1960), (ON SC), 24 DLR (2d) 140, [1960]OJ No 149 (HCJ) sets out the test to be applied in determining a reasonable notice period: 21 There can be no catalogue laid down as to what is reasonable notice in particular classes of cases.

The reasonableness of thenotice must be decided with reference to each particular case, having regard to the character of the employment, the length of service ofthe servant, the age of the servant and the availability of similar employment, having regard to the experience, training and qualificationsof the servant. [95] In this case, Mr. Winfield submits that the reasonable notice period with regard to these factors is 24 months. PSG submitsthat the reasonable notice period is 12 to 15 months. [96] The courts in Alberta have adopted a rough upper limit of 24 months as reasonable notice.

Those cases which have awardedthe upper limit of 24 months are reserved for senior employees in management positions with significant responsibilities: Hanson v AltusEnergy Services Partnership, 2010 ABQB 820, 86 CCEL (3d) 297; Sumner v PCL Constructors Inc, 2010 ABQB 536, 32 Alta LR(5th) 239, var’d 2011 ABCA 326, 515 AR 231, leave denied [2012] SCCA No 32. [97] While Mr. Winfield was a long term employee, he was not in a senior management position within PSG and hisresponsibilities were limited to selling signs for PSG. [98] Counsel argued that Mr. Winfield had suffered a loss of income for at least 24 months.

As Côté JA indicated in MerrillLynch, loss of income may continue for quite some time after dismissal, but this does not determine the notice period. In a contract foran indefinite period, such as this one, the wrongful act is not the dismissal but the lack of reasonable notice. There can be nocompensation for loss of income beyond the reasonable notice period. [99] Counsel for PSG urged me to employ a “rule of thumb” of approximately 2.5 weeks per year of service for employees holdingsales representative positions.

This approach was adopted in British Columbia in Husband v Labatt Brewing, [1998] BCJ No 3193, 87ACWS (3d) 940 (SC) and Graham v Galaxie Signs Ltd., 2010 BCSC 609, [2010] BCJ No 788. The reasoning for this rule of thumbappears to be that sales representatives have skills that are more readily transferable to a new employer than employees in other positionsmay have. That is, the skills and qualities necessary for a sales career in a particular industry are readily transferable to a similar positionin a different industry.

I am not aware of any cases in Alberta utilizing this rule of thumb, nor am I inclined to do so. These cases, in myview, simply consider the factors set out in Bardal for determining the appropriate notice period. In particular, the cases which haveadopted the rule of thumb seem to focus on the experience, training and qualifications of the employee and the availability of similaremployment. It would be inappropriate to adopt a formulaic approach to a determination of a reasonable notice period. [100] Having regard to the test set out in Bardal, I find the following factors to be relevant in this case: 1. Mr.

Winfield was employed with PSG for 24 years, making him a long term employee; 2. Mr. Winfield was 55 years of age at the time of his termination; 3. Mr. Winfield worked as a commissioned sales representative which was a non-managerial position and he had no managerialresponsibilities; 4. Mr. Winfield was experienced and had been a successful sales representative for PSG having achieved total sales in excess of$34,000,000 over the course of his employment with PSG; 5. Mr.

Winfield’s job skills are relatively transferable, as evidenced by his ability to gain employment with Zip Signs within twomonths of his termination. [101] While Mr. Winfield is entitled to significant notice, I do not find that he is entitled to notice at the upper end of the range as hewas primarily responsible for his own performance, and did not occupy a senior management position with PSG. In all of thecircumstances, I conclude that a reasonable notice period for Mr. Winfield is 18 months.

C. Damages and Pre-judgment Interest [ 102 ] Again, Côté J.A.’s decision in Merrill Lynch is very useful. He summarizes the legal principles regarding damages for termination of employment without reasonable notice as follows: 15 Therefore, in ordinary circumstances, damages because of dismissal with neither reasonable notice nor pay in lieu cannot exceed what pay in lieu would have been. ... Indeed the damages will be less, if the dismissed ex-employee mitigated his or her loss (or should have) by getting a new job.

There is but one exception to that rule, which the Supreme Court of Canada has now clarified in Keays v Honda Canada Inc. , 2008 SCC 39 , [2008] 2 S.C.R. 362, 376 N.R. 196. . . . 28 If one assumes that the proper legal question is damages for loss of a job, under-compensation sounds plausible. But that is not the proper legal question. As noted, an employee with the usual contract of indefinite hiring has no right to keep the job, only a right to reasonable notice or pay in lieu (absent cause to dismiss).

It is arguable that some significant part of the respondent's loss of customers came from his dismissal (a point discussed in more detail below in Part G). But the dismissal itself was not a wrong (even without cause), and there can be no compensation for it. ... Economic loss from being dismissed does not fall within Honda damages: ... 29 The wrong was lack of reasonable notice. Damages must be for lack of reasonable notice (which was compensated here and not appealed): ...

Or for unduly unfair or insensitive manner of dismissal. (citations omitted) [ 103 ] As set out previously in these Reasons for Judgment the parties, by agreement, entered Exhibit 35 being a

schedule of damages. Exhibit 35 sets out the loss of income by Mr. Winfield for periods ranging from 1 to 24 months from the date of his termination. Exhibit 35 indicates that for a notice period of 18 months, Mr. Winfield’s cumulative loss of income is $169,689. Mr. Winfield is entitled to this amount in lieu of reasonable notice. [ 104 ] Cumulative pre-judgment interest to June 17, 2013 on the cumulative loss of income of $169,689 was $12,801. Mr. Winfield is entitled to this amount and to pre-judgment interest from June 17, 2013 to the date of these Reasons for Judgment. [ 105 ] Mr.

Winfield also seeks the sum of $40,501.50 being the commission which was payable with respect to the Eagle River Casino Project. Mr. Winfield argues that these commissions were payable to him prior to the date of the termination of his employment. PSG argues that the commissions were payable in May 2008 and May 2009 pursuant to an agreement set out in a letter in January 2008. Therefore, the commissions for this project would have been earned within the notice period. [ 106 ] No evidence was called with respect to how the loss of income was calculated in Exhibit 35.

What is clear from Exhibit 35 is that the potential income from PSG for each of the months identified in the

schedule has been calculated. In addition, the actual income earned by Mr. Winfield has been calculated. Therefore the potential loss of income is determined based on the differential of these two amounts. [ 107 ] Given the manner in which Exhibit 35 was prepared, I can only conclude that the total commission payable with respect to the Eagle River Casino Project, all of which would have been payable at the latest by May 2009, was included in the potential PSG income as identified in Exhibit 35.

That is, there is no evidence before me to suggest that these commissions have not been included in a determination of Mr. Winfield’s loss of income for the 18 month period. Therefore, in my view, to award the sum of $40,501.50 in addition to the sum of $169,689 as identified in Exhibit 35 would result in double compensation to Mr. Winfield. Mr. Winfield is, therefore, entitled to no further commissions with respect to the Eagle River Casino Project. D. Aggravated Damages [ 108 ] As set out previously in these Reasons for Judgment, Mr.

Winfield seeks damages in relation to the manner in which PSG conducted the investigation and in which Mr.

Winfield’s employment was terminated. [ 109 ] The Supreme Court of Canada addressed this issue in Keays v Honda Canada Inc , 2008 SCC 39 , [2008] 2 SCR 362: 57 Damages resulting from the manner of dismissal must then be available only if they result from the circumstances described in Wallace , namely where the employer engages in conduct during the course of dismissal that is "unfair or is in bad faith by being, for example, untruthful, misleading or unduly insensitive" (para. 98). . . . 59 To be perfectly clear, I will conclude this analysis of our jurisprudence by saying that there is no reason to retain the distinction between "true aggravated damages" resulting from a separate cause of action and moral damages resulting from conduct in the manner of termination.

Damages attributable to conduct in the manner of dismissal are always to be awarded under the Hadley principle. Moreover, in cases where damages are awarded, no extension of the notice period is to be used to determine the proper amount to be paid. The amount is to be fixed according to the same principles and in the same way as in all other cases dealing with moral damages.

Thus, if the employee can prove that the manner of dismissal caused mental distress that was in the contemplation of the parties, those damages will be awarded not through an arbitrary extension of the notice period, but through an award that reflects the actual damages.

Examples of conduct in dismissal resulting in compensable damages are attacking the employee's reputation by declarations made at the time of dismissal, misrepresentation regarding the reason for the decision, or dismissal meant to deprive the employee of a pension benefit or other right, permanent status for instance (see also the examples in Wallace, at paras. 99-100). [ 110 ] Our Court of Appeal considered the matter of aggravated damages and the application of Honda in Merrill Lynch :

16 The Honda case says that when dismissing an employee, an employer has a duty not to use methods which are unduly unfair or insensitive (paras. 57-60). I stress that the unfairness or insensitivity must be in the methods used, not in the mere fact of dismissal. One thinks of examples; one is a boss who tells all the fellow employees, or the employee's spouse and children, that the dismissed employee is stupid or incompetent. It is hard to think of circumstances where there would be any need to do that.

Another example might be dismissing the employee within a day or two of a daughter's wedding, or of the death of a parent.

Another example would be insincerely alleging to others embarrassing or demeaning (but unfounded) reasons for the dismissal (whether or not they would be just cause if true), when the employer does not honestly believe those grounds exist. 17 Mere sloppy conduct by the employer does not suffice for such extra damages; it takes something akin to intent, malice, or blatant disregard for the employee . . . 18 So these Honda damages are not an automatic enhancement of all "wrongful dismissal" damages. They are not like sales tax or overhead charges.

If Honda damages were triggered by the mere fact of dismissal, or it were very difficult to dismiss anyone without triggering them, then they would be an automatic surcharge. The Supreme Court of Canada shows in Honda that that is not the law . . . . . . 23 Honest belief, especially with arguable grounds, bars Honda damages for alleging cause . . . (citations omitted) [ 111 ] Our Court of Appeal had the opportunity to consider this issue further in its decision in Elgert v Home Hardware Stores Ltd , 2011 ABCA 112 , 510 AR 1.

There, the Court held: 73 Damages resulting from the manner of dismissal (as opposed to the fact of dismissal) are available, however, if damages arise out of the conduct of the employer in the course of termination.

To be compensable, such conduct must be unfair or in bad faith, in that it is untruthful, misleading or unduly insensitive” Further, an inadequate investigation is not, by itself, a basis for an award of aggravated damages: para. 88. [ 112 ] For aggravated damages to be awarded, a plaintiff employee must establish that the employer acted unfairly or in bad faith in the manner of dismissal, the employee suffered harm beyond the ordinary distress caused by the fact of dismissal, and the harm was caused by the manner of dismissal. [ 113 ] In hindsight, the investigation of Mr.

Winfield’s conduct with respect to the cheque could have been handled differently. However, I cannot find that PSG acted unfairly or in bad faith in the manner of the dismissal. I find that Mr. Macina honestly believed that Mr. Winfield had stolen funds from PSG and that Mr. Winfield had not been truthful in providing his explanations to PSG. Even though I have disagreed with the reasons for the decision by PSG to terminate Mr.

Winfield’s employment, that does not in and of itself attract aggravated damages. [ 114 ] The meeting conducted on April 9, 2008 was in accordance with what would be expected given the circumstances as PSG understood them. Once Mr. Macina had made the decision to terminate Mr. Winfield’s employment, it was not inappropriate to ask him to immediately leave the premises. [ 115 ] In my view, the conduct of PSG in both the investigation of this matter and the termination of Mr. Winfield’s employment was not unduly unfair or insensitive.

That is, the conduct in this case was not so egregious as to attract aggravated damages. [ 116 ] Further, I am not satisfied that Mr. Winfield suffered any harm beyond the ordinary distress caused by the fact of the dismissal. Mr. Winfield gave evidence that he was essentially embarrassed by the situation. He had to advise two voluntary associations in which he was involved of the circumstances. There is no evidence, however, that he suffered any harm from the manner in which his termination was conducted. As stated previously, Mr. Winfield found alternate employment within two months of the date of termination.

There is no evidence that his involvement with the two voluntary organizations, or any other organization, was in any way adversely impacted by the termination of his employment. [ 117 ] I therefore find that Mr. Winfield is not entitled to aggravated damages in this case. E. Statutory Deductions [ 118 ] PSG submits that it is obliged to make statutory deductions and remittances on any damages awarded in lieu of notice. This issue was not argued in front of me in any detail.

However, to the extent PSG is statutorily obliged to make any deductions from the amount awarded herein for damages in lieu of notice, it must do so. PSG shall, therefore, make deductions and remittances as required by law. V. Conclusion [ 119 ] In

summary, I find that PSG did not have just cause to terminate Mr. Winfield’s employment. A reasonable notice period in the circumstances is 18 months. Mr. Winfield is entitled to damages for this reasonable notice period in the sum of $169,689. Pre-judgment interest on this amount from the date of termination to the commencement of trial is $12,801. Mr. Winfield is entitled to additional pre- judgment interest from June 17, 2013 to the date of these Reasons for Judgment. Mr. Winfield is not entitled to aggravated damages. PSG is entitled to make deductions and remittances from the amounts owed to Mr. Winfield as required by law. VI. Costs

[ 120 ] The parties may speak to me within 60 days of the release of these Reasons for Judgment if they are not able to agree on costs. Heard on the 17 th to 21 st , 24 th , 25 th and 26 th days of June, 2013. Dated at the City of Edmonton, Alberta th is 10 th day of October, 2013. K.G. Nielsen J.C.Q.B.A. Appearances: J. Cameron Prowse, Q.C. and Philip Prowse (Student-at-Law) Prowse Chowne LLP for the Plaintiff L. Frank Molnar Field LLP for the Defendant