Gibson v Alberta, 2013 ABQB 695

Court of Queen ’ s Bench of Alberta Citation: Gibson v Alberta, 2013 ABQB 695 Date: 20131129 Docket: 1103 02950 Registry: Edmonton Between: Lorne Gibson Plaintiff/Respondent - and - Her Majesty the Queen in Right of Alberta and the Legislative Assembly Office Defendants/Applicants _ ________________________________________ ______________ Reasons for Judgment of the Honourable Madam Justice J.M. Ross _________________________________________ ______________ Introduction [ 1 ] The Applicants, Her Majesty the Queen in Right of Alberta (Alberta) and the Legislative Assembly Office (Legislative Assembly), established pursuant to Legislative Assembly Act , RSA 2000, c L-9, seek

summary judgment dismissing the Statement of Claim filed by Mr. Lorne Gibson, the Respondent. The application is based on the ground that there is no merit to the Respondent’s claim for severance pay arising on the expiration of his statutory term in office as the Chief Electoral Office (CEO) for Elections Alberta, a position established under the Election Act , RSA 2000, c E-1.

Facts [ 2 ] In March 2006, Mr. Gibson applied for the position of Chief Electoral Officer for Elections Alberta. At that point, he was the Deputy Chief Electoral Officer with Elections Manitoba and had held the position for approximately 8 years. Mr. Gibson was interviewed for the CEO position by both the Alberta Government’s Corporate Human Resources’ Executive Search Branch and the Standing Committee on Legislative Offices of the Legislative Assembly (Standing Committee). As part of the recruitment process, a series of negotiations on Mr.

Gibson’s compensation took place between him, the Human Resources’ specialist and the Clerk of the Legislative Assembly. [ 3 ] On June 5, 2006, Mr. Gibson accepted an appointment as CEO for Elections Alberta, signing a Contract of Personal Employment (the Contract) with the Legislative Assembly, as represented by the Speaker. His official start in the CEO position followed the issuance of Order in Council 258/2006, effective June 12, 2006. Consequently, Mr.

Gibson purchased a new home in Edmonton; sold his home in Winnipeg and moved his family to Edmonton. [ 4 ] The Contract provided for a base salary and benefits. The benefits were substantially provided through arrangement with the Government of Alberta, and they include participation in the governmental Group Extended Medical/Dental Benefits Plan, Group Life Insurance Plan and Group Long Term Disability Plan for Management Employees of the Public Service of Alberta. [ 5 ] The Contract provided, in clauses 1, 2, 10 and 11: 1.

The Officer shall be employed in the position of Chief Electoral Officer and shall perform the duties of such position as prescribed in the Election Act (RSA 2000, c. E-1, as amended) (hereinafter “the Act”), the Election Finances and Contribution Disclosure Act ( RSA 2000, c. E-2 , as amended) and the Senatorial Selection Act (RSA 2000, c. S-5, as amended). 2. This Agreement applies for the term of the Officer’s appointment commencing June 12, 2006.

Pursuant to section 3(3) of the Act, such employment shall terminate 12 months after polling day for the next general election unless sooner terminated as set out in paragraph 11, or unless the Officer is reappointed. 10. In accordance with section 3(6) of the Act, the Officer may resign his Office at any time. 11. (

a) If the Officer is removed from Office pursuant to section 3(4) of the Act, this Agreement shall terminate as of the effective date of such removal and the Officer shall only be entitled to receive such amounts and benefits under this Agreement as have accrued to the effective date of the removal from Office. (

b) If the Officer resigns, this Agreement shall terminate on the effective date of the resignation and the Officer shall only be entitled to receive such amounts and benefits under the Agreement as have accrued to the effective date of the resignation. (

c) Except as provided in clauses (

a) and (b), this Agreement will terminate as provided in paragraph 2. [ 6 ] On March 3, 2008, a general election was held in Alberta. Subsequently, Mr. Gibson as the CEO worked with the Applicants to review the 2008 general election and plan for the next general election. However, on February 19, 2009, Mr. Gibson learned that he would not be re-appointed and his employment as the CEO would terminate on March 3, 2009. [ 7 ] Mr.

Gibson filed a Statement of Claim on February 22, 2011 against the Applicants alleging breach of contract, for terminating his employment without reasonable notice or severance pay in lieu of notice. The Statement of Claim also alleged that he had a reasonable and legitimate expectation of ongoing employment. [ 8 ] An Affidavit filed on behalf of the Legislative Assembly briefly set out Mr. Gibson’s appointment, the date of the general election and the fact that he was not reappointed. It also attaches the Contract. An Affidavit filed on behalf of Alberta stated that Mr. Gibson was not employed by Alberta.

Alberta merely provided payroll and benefit services to Mr. Gibson and other Legislative Officers, at the request of the Legislative Assembly. [ 9 ] In response, Mr. Gibson filed an affidavit in which he deposed: 1. During the interview process prior to his appointment Mr. Gibson asked the Chair of the Standing Committee about the process for renewing the term of the CEO. The Chair responded that the Standing Committee would evaluate the performance of the CEO at the end of the first term to determine if it was satisfactory and then decide to recommend to reappoint or not based on performance in the job. 2.

While negotiating the terms of his contract with the Clerk of the Legislative Assembly Mr. Gibson again asked about the renewal process. The Clerk responded that renewal was not automatic, but that it would be done following a review of performance and it was common for Officers to have their terms renewed. 3. Surveys following the 2008 election indicated that 97 or 98 percent of voters were satisfied or very satisfied with their voting experience. 4. Mr.

Gibson described events which occurred during his tenure which led him to believe that the Progressive Conservative Party found him to be “too independent” for their liking. 5. No performance review was conducted. Until February 13, 2009 Mr. Gibson was given “every indication” that he would be reappointed. 6. On February 18, 2009, the Standing Committee did not recommend reappointment. 7. Mr. Gibson was advised by the Chair of the Standing Committee on February 19, 2009 that he would not be reappointed. He received no other notice and no severance pay.

[ 10 ] There was no cross-examination on any of the Affidavits. Legislation [ 11 ] Following are excerpts of the relevant legislative provisions: Alberta Rules of Court , Alta Reg 124/2010 7.3(1) A party may apply to the Court for

summary judgment in respect of all or part of a claim on one or more of the following grounds: (

a) there is no defence to a claim or part of it; (

b) there is no merit to a claim or part of it; (

c) the only real issue is the amount to be awarded. Election Act , RSA 2000, c E-1 Appointment of Chief Electoral Officer 3(3) The appointment of the Chief Electoral Officer expires 12 months after polling day for a general election unless the Chief Electoral Officer is reappointed by the Lieutenant Governor in Council prior to that date on the recommendation of the Standing Committee.

(4) The Lieutenant Governor in Council, on an address of the Assembly, may suspend or remove the Chief Electoral Officer from office for disability, neglect of duty, misconduct or bankruptcy.

(6) The Chief Electoral Officer may resign that office by filing a written notice with the Speaker of the Assembly or, if there is no Speaker or the Speaker is absent from Alberta, with the Clerk of the Assembly. Employment Standards Code , RSA 2000, c E-9 Application of this Act 2

(1) This Act applies to all employers and employees, including the Crown in right of Alberta and its employees, except as otherwise provided in this section. ... Minimum standards cannot be avoided 4 An agreement that this Act or a provision of it does not apply, or that the remedies provided by it are not to be available for an employee, is against public policy and void. … Options for employer to terminate employment 55(1) Unless subsection (2) applies, an employer may terminate the employment of an employee only by giving the employee (

a) a termination notice under

section 56 , (

b) termination pay under section 57(1) , or (

c) a combination of termination notice and termination pay under section 57(2) .

(2) Termination notice is not required ... (

c) when the employee is employed for a definite term or task for a period not exceeding 12 months on completion of which the employment terminates ... Employer’s termination notice 56 To terminate employment an employer must give an employee written termination notice of at least (

a) one week, if the employee has been employed by the employer for more than 3 months but less than 2 years, (b) 2 weeks, if the employee has been employed by the employer for 2 years or more but less than 4 years,

(c) 4 weeks, if the employee has been employed by the employer for 4 years or more but less than 6 years, ... Termination pay 57(1) Instead of giving a termination notice, an employer may pay an employee termination pay of an amount at least equal to the wages the employee would have earned if the employee had worked the regular hours of work for the applicable termination notice period.

(2) An employer may give an employee a combination of termination pay and termination notice, in which case the termination pay must be at least equal to the wages the employee would have earned for the applicable termination notice period that is not covered by the notice. Public Service Act , RSA 2000, c P-42 Application of Act 2

(2) The Auditor General, the Chief Electoral Officer, the Ombudsman, the Ethics Commissioner, the Information and Privacy Commissioner, the Child and Youth Advocate, the Public Interest Commissioner and the chair of the Labour Relations Board shall be considered as employees for the purposes of this Act except in relation to their appointment, salary and tenure of office or any other conditions prescribed by the Act under which they are appointed. ...

(5) A person who is appointed or employed (

a) in accordance with, (

b) pursuant to, or (

c) subject to, this Act, is an employee of the Crown in right of Alberta. Test for

Summary Dismissal [ 12 ] The test for

summary dismissal varies depending on the nature of the issue as set out in Tottrup v Clearwater (Municipal District No 99) , 2006 ABCA 380 at paras 10-12 , 401 AR 88 [ Tottrup ]: [10] [W]here the defendant applies for

summary dismissal. . . it must be “plain and obvious”, or “clear” or “beyond real doubt” that the action should be summarily disposed of … The Supreme Court has stated that it must be shown that there is a “real chance of success” to avoid

summary dismissal of the action … [11] … In some cases the facts are clear and undisputed. The ultimate outcome of the case may depend on the

interpretation of some statute or document, or on some other issue of law that arises from undisputed facts. In such cases the test for

summary judgment is not whether the issue of law is “beyond doubt”, but whether the issue of law can fairly be decided on the record before the court. If the legal issue is unsettled or complex or intertwined with the facts, it is sometimes necessary to have a full trial to provide a proper foundation for the decision.

In other cases it is possible to decide the question of law summarily… [12] Trials are primarily to determine questions of fact … Trials are not generally held to find out the answers to questions of law [except] where the question of law is so fact specific and nuanced that a trial is necessary … [ 13 ] There is no dispute on the facts in this application.

The Applicants accept, for purposes of this application, the Respondent’s evidence regarding representations prior to his appointment and the process that ended with him not being reappointed. [ 14 ] The arguments as to whether the Respondent’s breach of contract action should be summarily dismissed centred around two issues. The first relates to

interpretation of the Contract, as to whether it was a fixed term contract or whether it included an express or implied provision requiring reasonable notice of termination or severance pay in lieu of notice. The second issue, which arises if the Contract is interpreted to require no notice of termination, is whether this provision is contrary to the Employment Standards Code , RSA 2000, c E-9, and therefore contrary to public policy and void, in which case the common law requirement for reasonable notice of termination would apply. [ 15 ] As both issues are issues of law, the test for

summary dismissal is whether the issues can fairly be decided on the record before the court, or whether the legal issue is unsettled or complex or intertwined with the facts, such that a full trial is necessary to provide a proper foundation for the decision.

Interpretation of the Contract [16] The Applicants’ position is that the Contract was a fixed term contract and the Respondent had no entitlement to reasonablenotice or severance pay in lieu at the conclusion of the term. [17] Howard A Levitt, The Law of Dismissal in Canada, loose-leaf (Toronto: Canada Law Book, 2013), at 11-8, 11-9 describesfixed term contracts: Most employees are hired on an indefinite basis. However, employees are occasionally hired only for particular terms or projects. If thisis done, it should be incorporated into an employment contract.

Employment will then automatically terminate at the end of the term andreasonable notice is not required ...The wording required to constitute a fixed term of employment must be “unequivocal and explicit.” A term contract ending on the occurrence of a particular event, without a specific date, is binding. [18] A decision not to renew a term employment contract does not amount to a “dismissal” from employment: Chambly (City) vGagnon, (SCC), [1999] 1 SCR 8 at para 1, [1999] SCJ No 3.

No action is required to terminate a fixed term contract:Lust v Foundations for the Future Charter Academy, 2007 ABCA 165 at paras 24-33, 409 AR 90 [Lust v Foundations]. [19] The Respondent submits that the Contract was not a fixed term contract as it did not terminate after a specified period or on aspecific date. It terminated “12 months after polling day for the next general election . . .unless the Officer is reappointed.” TheRespondent argues that this provision, together with the undisputed evidence that Mr. Gibson reasonably expected to be reappointed,means that Mr.

Gibson did not have reasonable notice of the termination of his employment. This is in contrast with fixed term contractswith a specified end date, in which the contract itself serves as a form of reasonable notice. [20] I reject this argument. Fixed term contracts can end on the occurrence of an event, in this case the expiry of one year followinga general election: Milne v Ocean Express Ltd (1989), (BC SC), 26 CCEL 187, [1989] BCJ No 1254 (BCCA); citedin Levitt at 11-9. Further, Mr.

Gibson knew, as soon as the polling date for the general election was set, that the Contract wouldterminate one year after that date. He had more than one year’s “notice” of termination. The question of reappointment is distinct fromthe termination of the Contract: Lust v Foundations at para 33. [21] The wording required to create a fixed term contract must be “unequivocal and explicit”: Dwyer v Mark II Innovations Ltd(2006), (ON CA), 208 OAC 305, [2006] OJ No 1189 (CA), cited in Levitt at 11-9.

The Respondent argues that thewording of the Contract was equivocal, and contains an implied entitlement to reasonable notice or pay in lieu. Clause 11 refers to threemethods by which the contract can be terminated: removal from office, resignation and termination as provided in clause 2, which theRespondent characterizes as “no reappointment”. The first and second methods of termination specify that salary and benefits accrueonly to the date of termination. There is no similar provision regarding the third method. [22] Again, I reject this argument. Clause 2 of the Contract provided that Mr.

Gibson’s employment “shall terminate 12 monthsafter polling day for the next general election unless sooner terminated as set out in paragraph 11, or unless the Officer is reappointed”.Neither of the qualifications apply; Mr. Gibson was neither sooner terminated nor reappointed. The Contract provision is explicit andunequivocal.

The possibility of renewal does not create ambiguity regarding the term: Pennock v United Farmers of Alberta Co-Operative Ltd, 2008 ABCA 278, 296 DLR (4th) 239 at para 8 (Alta CA) [Pennock v United Farmers]. [23] The Saskatchewan Court of Queen’s Bench considered a case with very similar facts in Baker v Saskatchewan, 2012 SKQB392, 406 Sask R 139. The Court found that the plaintiff was employed as Chief Electoral Officer for a fixed term as described inlegislation, namely “twelve months after the day fixed for the return to the writ for the second general election” for which the plaintiffwas responsible.

At the expiration of the term, the plaintiff was neither dismissed nor entitled to damages in lieu of reasonable notice. Asimilar claim was struck out in Matkowski v Saskatchewan, 2007 SKQB 46, 292 Sask R 20 The vice chair of a labour relations boardwas appointed for a four year term, and was not reappointed. His claim for breach of contract was struck out, the Court holding that itwas plain and obvious that a failure to reappoint could not constitute a breach of a fixed term contract. However, a claim for negligentmisrepresentation was allowed to continue. [24] I note that Mr.

Gibson has not pled a cause of action based on misrepresentation. His sole claim is that his termination withoutnotice or pay in lieu breached the Contract. Further, his allegations and evidence regarding representations do not relate to the term of theContract, but to the process for renewing it. He was aware that he was employed for a fixed term; however, he believed, based oninformation provided to him, that he had a reasonable expectation that the term would be renewed.

I agree with Baker and Matkowskithat a fixed term contract does not give a right to reasonable notice or pay in lieu and that a failure to reappoint cannot constitute a breachof a fixed term contract. Failure to renew or extend is not the same as termination of a contract: Lust v Foundations at para 33. Theprospect of renewal or extension, even an expectation that this may occur, is not a promise that term will be renewed or extended:Pennock v United Farmers at para 8. [25] I conclude that the Contract was a fixed term contract and did not require notice of termination or pay in lieu.

This conclusioncan fairly be made on the record on this application, and does not require a full trial. The legal issues involved are settled and notcomplex. They are also not intertwined with the facts. Accepting as true Mr. Gibson’s assertions that he had a reasonable expectation ofreappointment based on representations made to him; this nonetheless does not assist in his claim for wrongful termination. Effect of the Employment Standards Code [26] On the application, Mr.

Gibson argued that if the Contract is interpreted as a fixed term contract not requiring notice oftermination, this would violate the Employment Standards Code, ss 4, 55-57. Further, according to Machtinger v HOJ Industries Ltd, (SCC), [1992] 1SCR 986, [1992] SCJ No 41, the provision is against public policy and void, and the common lawrequirement for reasonable notice applies.

[ 27 ] The Statement of Claim contains no reference to the Employment Standards Code and no allegation that the fixed term provision of the Contract is void due to non-compliance with the Code. However, these are matters of law, which are not required to be pled by Rule 13.6(3) unless they would cause surprise. The issues were detailed in Mr. Gibson’s response to the application, and there is no claim that the Applicants would be prejudiced by their consideration on the application.

If the application is not successful, the Respondent undertakes to apply to amend the Statement of Claim to plead the statute and the point of law. The relevant facts have been pled, including: the relevant provision of the Contract; the fact that Mr. Gibson was employed from June 5, 2006 to March 3, 2009; the fact that Mr. Gibson was not notified until February 19, 2009 that his employment would terminate 12 days later; and the fact that Mr. Gibson was not paid any termination pay.

In these circumstances, I choose to exercise my discretion to address this argument, notwithstanding any deficiency in the pleading. [ 28 ] The first stage in this argument is to determine whether the Employment Standards Code was violated. The Respondent submits that as a result of ss 55(1) and (2)(

c) of the Code , Mr. Gibson was entitled to receive two weeks written termination notice (s 56), or termination pay in lieu, or a combination of notice and pay (ss 57(1) and (2)). Mr. Gibson was employed for a definite term or task for a period exceeding 12 months, so did not come within the exception provided in s 55(2)(

c) to the termination notice or pay provision. Mr. Gibson was employed for two years or more but less than four years, so was entitled to two weeks’ notice or pay (s 56 (b)). [ 29 ] The Applicants submit that the notice provisions of the Code do not apply to the Contract. They argue that the exception in s 55(2)(

c) applies differently to two types of fixed term contracts, contracts for a definite term and contracts for a task; in that only the latter, contracts for a task, are limited to a period not exceeding 12 months. [ 30 ] I reject this argument, which in my view does not reflect the ordinary meaning of s 55(2)(c), and further is not an

interpretation which would promote the objectives of the Code . [ 31 ] Section 55(2)(

c) provides that termination notice is not required “when the employee is employed for a definite term or task for a period not exceeding 12 months.” The words “term or task” follow a single preposition,

article and adjective. This suggests that these words describe a single category of employment. If the two forms of employment were to be distinguished from each other, there would be some indication that they are separate items in a list, such as “for a definite term or for a task” or, at least, “for a definite term or a task.” As a single category of employment, both forms are modified by the following phrase.

In other words, both must be “for a period not exceeding 12 months.” [ 32 ] The Applicants argue that notice of termination is not necessary when an employee is employed for a definite term, regardless of the length of the term, because the employee will always be aware of the termination date. On the other hand, there may be more ambiguity regarding the termination of a task, such that notice would serve a useful function. [ 33 ] I do not accept this argument. It is speculative to suggest a task is more ambiguous than a term.

Secondly, if the Code was concerned with ambiguity regarding employment for a task, one would expect that the notice requirement would also apply to employment for tasks for periods between three months and one year. [ 34 ] The purpose of the Code is “to protect the interests of employees by requiring employers to comply with certain minimum standards, including minimum periods of notice”: Machtinger v HOJ Industries Ltd at para 31 . A construction which favours the application of the minimum periods promotes this purpose. On this ground, as well, I reject the Applicants’

interpretation of s 55(2)(c). [ 35 ] I conclude that s 55(2)(

c) does not apply. This conclusion is consistent with Lovely v Prestige Travel Ltd , 2013 ABQB 467 at para 102 , [2013] AJ No 901, where Wakeling J concluded that the termination notice provisions of the Code applied to a fixed term contract of more than one year’s duration. [ 36 ] Mr. Gibson was entitled to receive two weeks termination notice and/or pay. He received only 12 days written notice, and no pay. The Applicants argue that the Contract itself provided notice of termination. I do not accept this argument which would render the Code ’s application to fixed term contracts illusory.

The Respondent was entitled to written notice of termination, which he in fact received, but not for the period required by the Code . [ 37 ] This, however, demonstrates only that the Respondent’s right to notice under the Code was not complied with, which would have entitled him to seek a remedy under the Code by making a complaint under s 82. It does not demonstrate that the fixed term provision of the Contract was against public policy and void. [ 38 ]

Section 4 of the Code provides: “An agreement that this Act or a provision of it does not apply, or that the remedies provided by it are not to be available for an employee, is against public policy and void.” [ 39 ] In Machtinger v HOJ Industries Ltd , it was conceded that the employment agreements in issue attempted to contract out of the provisions of the Act, and were “null and void”: para 27. There were two contracts of employment at issue. Both were for employment for an indefinite period.

The relevant portion of one contract was reproduced in para 4: Termination – Employer may terminate employment at any time without notice for cause. Otherwise, Employer may terminate employment on giving Employee 0 week’s notice or salary (which does not include bonus) in lieu of notice. Bonus, if any, will be calculated and payable only to the date of the giving of notice of termination. [ 40 ] The second contract contained an identical termination clause, except that the word “two” was written into the space left blank for the notice period.

The applicable notice period under the Act was four weeks. [ 41 ] The Contract in this case does not specifically address termination notice or pay in lieu except by providing that, in the event of removal from office or resignation, salary and benefits would accrue only to the date of termination. There is no express provision relating to entitlement to notice or pay in the event of termination at the end of the term of the Contract. The fixed term itself excludes the application of the common law reasonable notice requirement, for the reasons set out in the previous portion of this decision. But is

the provision of a fixed term an attempt to contract out of the termination provisions of the Code , or to exclude employee’s remedies available under the Code , such that the fixed term is “against public policy and void”? [ 42 ] In my view there is no reason to interpret a fixed term provision as an attempt to contract out of the Code . The Code in s 55(2) (

c) provides that the requirement for notice of termination applies to contracts “for a definite term or task” of more than a year’s duration. That provision surely indicates that the mere existence of such a contract cannot be an attempt to contract out of the Code or contrary to public policy. [ 43 ] Further, no reason has been suggested to find that a fixed term contract is contrary to public policy.

Contract provisions which simply limit or remove the employers’ obligation to give termination notice under the Code operate to the disadvantage of employees, who may lack the bargaining power to negotiate better terms: Machtinger v HOJ Industries Ltd at para 31 . Fixed term contracts, on the other hand, benefit employees as well as employers. Employers who seek to terminate a fixed term contract prior to the expiry of the term will not be able to rely on reasonable notice of termination.

If the contract does not contain an express provision for early termination, the employer will be required to pay out the employee for the term of the contract: see, for example, Lovely v Prestige Travel Ltd . [ 44 ] I conclude that the fixed term provision of the Contract was not an attempt to contract out of the termination notice provisions of the Code or the remedies provided by it, and is therefore not rendered void by s 4.

This conclusion is also consistent with Lovely v Prestige Travel Ltd where Wakeling J commented that a proposed contract provision for termination without notice would have been null and void (at paras 103-108), but he found the contract’s fixed term valid and enforceable. [ 45 ] The Respondent’s argument that the Contract’s fixed term is void and the common law requirement for reasonable notice applies is rejected. Again, this conclusion can fairly be made on the record on this application. The legal issues involved, while somewhat novel, are not unsettled or complex. They are based on uncontroverted facts.

There is no need for a trial to determine this issue. Conclusion [ 46 ] The Applicants’ applications to summarily dismiss the Respondent’s action against them are granted. The parties may speak to me regarding costs if they are unable to agree. Heard on the 12 th day of September, 2013. Dated at the City of Edmonton, Alberta this 29 th day of November, 2013. J.M. Ross J.C.Q.B.A. Appearances: Simon Renouf, QC Simon Renouf Prof. Corp. for the Plaintiff Doreen Mueller

Alberta Justice - Civil Litigation for the Defendant, HMQ in Right of Alberta Craig Neuman, QC Neuman Thompson for the Defendant, Legislative Assembly Office