Lalonde v Sena Solid Waste Holdings Inc, 2017 ABQB 374

Court of Queen’s Bench of Alberta Citation: Lalonde v Sena Solid Waste Holdings Inc, 2017 ABQB 374 Date: 20170613 Docket: 1303 01585 Registry: Edmonton Between: Kerry Lalonde Plaintiff - and - Sena Solid Waste Holdings Inc. Defendant Corrected judgment: A corrigendum was issued on June 19, 2017; the corrections have been made to the text and the corrigendum is appended to this judgment. _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice J.J. Gill _______________________________________________________ Introduction [ 1 ] This is an employment law matter.

The plaintiff was dismissed without cause. The issue to be decided is what amounts are owing to the plaintiff as a result of his wrongful dismissal.

Background [ 2 ] Mr. Lalonde (“the Plaintiff”) is a 62 year old Millwright. He received his Journeyman Millwright Certificate in 1991. His career includes working as a contractor with his own oilfield service company from 1980 to 2004. [ 3 ] In March 2007, he started working as a contract employee at the Swan Hills Waste Treatment Plant (“the facility”) which is operated by SENA Solid Waste Holdings Inc. (“the Defendant”).

On April 15 th , 2008, after being invited to join the company by a manager of the Defendant, he became a full time employee of the Defendant as a Journeyman Millwright, Technician 111 in the Maintenance Department. [ 4 ] The Plaintiff signed a letter of employment (“the April, 2008 employment letter”). When ownership of the facility changed he signed another letter of employment on February 24th, 2011 (“the February, 2011 employment letter”). [ 5 ] The Plaintiff worked continuously at the facility from April 15, 2008 until his dismissal on July 24th, 2012.

The Plaintiff expected to work at the facility until it closed in December 2015. He assumed that if he did a good job he would be allowed to stay until the facility closed. There is no evidence the Defendant advised him that he would be employed until the facility closed. [ 6 ] Prior to his dismissal in July 2012, the Plaintiff had not received any verbal or written warnings or been subject to any suspensions.

In April 2012 he received a letter advising him that he had earned a merit increase and his “ hard work and efforts contributed to our overall solid performance and we want to thank you ” [Emphasis added]. [ 7 ] The Plaintiff’s compensation included a short-term and long-term retention initiative payment. Under the terms of the retention initiative employees released without cause are entitled to compensation. [ 8 ] The events leading to his suspension and ultimate dismissal took place on June 13, 2012.

That work day started as usual with a tailgate meeting of about eight maintenance staff including the Plaintiff, his supervisor Derrick Nelson, and a contract worker called Adrian. The Plaintiff advised his supervisor he was going to do preventive maintenance that day. [ 9 ] After leaving the tailgate meeting, the Plaintiff went to the maintenance shop and obtained a work permit to cover the work he was about to do. Obtaining a work permit was standard practice. Midmorning he went to the control room.

Adrian came in and asked him a question about the RBR unit and the Plaintiff provided him with some information. [ 10 ] Later that morning the Plaintiff spoke with the Safety Supervisor, Mark Rosenberger who inquired about Adrian. He wanted to know if Adrian had a permit. The Plaintiff did not know and nothing else was said. The Plaintiff then finished some paperwork and went for lunch. [ 11 ] After lunch the Plaintiff picked up another permit to do work in another area of the facility. Later in the afternoon he was called by radio to a meeting at the office of the Maintenance Manager, Victor Goegan. [ 12 ] Mr.

Goegan told him to sit down and then proceeded to accuse him of a number of workplace infractions. The Plaintiff described the conversation as Victor “chewing him out a new one.” He was accused of putting a life in danger and of insubordination. The allegation of putting a life in danger related to Adrian who apparently was working without a permit. The allegation of insubordination related to the Plaintiff’s alleged failure to follow his supervisor’s direction concerning the disposal of scrap metal.

The Plaintiff was also accused of lying to his supervisor in relation to the scrap metal. [ 13 ] The Plaintiff was surprised by the criticism. He tried to respond to the allegations but was given little, if any, opportunity to do so. He tried to convey the fact that it was his supervisor’s responsibility (not his) to assign work to Adrian. The Plaintiff was suspended and summarily escorted off the facility by two other employees. [ 14 ] Subsequent to his suspension the Plaintiff made several unsuccessful efforts to communicate his side of the story including writing to and phoning Mr.

Goegan. [ 15 ] After his suspension the Plaintiff heard nothing from the Defendant for several weeks. The Plaintiff testified that the period of time while suspended and waiting for a response or update from the Defendant was difficult. He found it very stressful. After meeting with his doctor he went on stress leave. Two letters from his doctor were entered at trial. They indicate that he was unable to work from July 3, 2012 to July 20, 2012. [ 16 ] The Defendant never responded to the Plaintiff’s request for more information. The record shows that the Defendant was aware that the Plaintiff was under stress.

An internal email written by Mr. Goegan commented that the Plaintiff had called and “he’s a bit stressed.” [ 17 ] On July 24, 2012 the Plaintiff received a letter from the Defendant which advised him that his employment had been terminated. The first paragraph states as follows: “This letter confirms your employment with SENA Waste Services will end effective July 24, 2012. After which you will no longer be considered an active employee.

You’re being terminated with cause due to your of failure to follow safety procedures and your failure to follow your supervisor’s instructions.” [ 18 ] On July 26, 2012 the Plaintiff wrote in what he described “as a last resort” to Philip Allouche, a Division Manager with the Defendant. In that letter he provides a detailed response to the allegations and asks a number of questions. [ 19 ] On August 17, 2012 he received an email from the Defendant’s Human Resources Manager, Yvonne Bur. In that email, which was copied to a number of other senior employees, Ms.

Bur states: During our investigations, we identified the following:

(

a) Failure to meet your Employee Responsibilities as per

Section 3.1 of the SHTC Safety Manual which reads: “Take reasonable care to protect the health and safety of himself/herself and other workers in Corporation with the employer.” (

b) Failure to follow Safe Work Procedures as per

Section 17.1 of the SHTC Safety Manual and obtain a Work Permit. (

c) Failure to follow Incident Reporting Procedures as per

Section 13.3 of the SHTC Safety Manual and report any incidents immediately to your immediate Supervisor or his/her delegate. (

d) Failure to follow your Supervisor instructions that scrap steel/metal was only to be discarded in the large “Maple Leaf Bins.” [ 20 ] The Plaintiff issued a Statement of Claim seeking compensation for his wrongful dismissal and the Defendant filed a lengthy Statement of Defence outlining in detail the alleged cause for the dismissal. [ 21 ] In May 2017, on the opening day of trial, the Defendant withdrew the allegations of cause. [ 22 ] At trial the Plaintiff was asked to respond to the original allegations made by the Defendant.

Firstly, in relation to the allegation that he failed to protect the safety of an employee, he was not advised at the tailgate meeting that he was responsible for supervising Adrian. He did not know that Adrian did not have a permit. He was told after the fact but had no knowledge of this in advance. [ 23 ] The Plaintiff’s evidence is confirmed by a letter entered at trial from another employee (Larry Dakin) dated July 10, 2012 who was present at the tailgate meeting. In that letter, which was addressed to the Defendant, Mr.

Dakin indicates there was no mention at the tailgate meeting of the Plaintiff being responsible for or in charge of Adrian. In fact, Mr. Dakin recalled that when the Plaintiff was asked what he was doing that day, he indicated he was going to be doing preventive maintenance. [ 24 ] Secondly, the Plaintiff was essentially accused of insubordination for not following or ignoring the specific direction from his supervisor concerning storage of scrap metal. [ 25 ] The Plaintiff described a number of the employees discussing moving specialty metal into scrap bins and recycling it.

Any monies earned would be for the social club. [ 26 ] The Plaintiff had asked Don Freckleton, the Plant Manager, if they could do this and he said he would think about it. Scrap metal was collected and put in bins. Subsequently, his supervisor decided to clean up the warehouse and dumped those bins into a large scrap bin. The Plaintiff testified that he did not object and did not ignore or disobey any directions from his supervisor. [ 27 ] After being dismissed the Plaintiff applied for EI benefits. However, as a result of being terminated for cause his EI was delayed for 6 to 8 weeks.

The Plaintiff was able to find another job after a few months. He was not able to find another job as a millwright. [ 28 ] A letter from the Plaintiff’s wife Rena Lalonde was entered as an exhibit. It describes the negative impacts that the dismissal had on the Plaintiff. The impacts included a change in his personality and a loss of interest in family and other matters. Ms.

Lalonde believes that the worst part for the Plaintiff was the humiliation he suffered while being escorted off the facility followed by the treatment he received from SENA Management and the HR department in the weeks that followed his dismissal. She described the Plaintiff as being depressed, miserable, isolated and angry. She believes he has mental health problems and has not recovered from the firing. In the letter Ms.

Lalonde mentions an incident when the Plaintiff was told that the general consensus around the plant was “Lalonde got fired because he was stealing.” [ 29 ] The Plaintiff testified that the dismissal caused him a lot of stress and has had a negative impact on his life. Issues 1) Do the employment letters signed by the Plaintiff limit the amount of notice the Plaintiff is entitled to? What is the appropriate reasonable notice period? 2) Is the Plaintiff entitled to aggravated damages? 3) Is the Plaintiff entitled to punitive damages?

Analysis 1) Do the employment letters signed by the Plaintiff limit the amount of notice the Plaintiff is entitled to? What is the appropriate reasonable notice period? The employment letters [ 30 ] As noted above the Plaintiff signed the April, 2008 employment letter. When ownership of the facility changed in 2011 he also signed the February, 2011 employment letter. [ 31 ] The Defendant submits that the wording of the April, 2008 employment letter limits the Plaintiff’s reasonable notice period to the notice period prescribed by provincial legislation.

That is, the Plaintiff is entitled to only four weeks’ pay in lieu of notice under the

Employment Standards Code, RSA 2000, c E-9 (“the Code”). [32] In his submissions the Plaintiff suggests the February, 2011 employment letter is the relevant letter of employment. Hesubmits that the termination clause in that letter does not restrict the Plaintiff to the notice period provided for under ss 56 and 57 of theCode.

As a result, the Plaintiff is entitled to any civil remedy available by law pursuant to s 3(1) of the Code. [33] The first issue to be decided is which employment letter (the April 2008 letter or the February 2011 letter) applies? [34] I find that the April 2008 employment letter is the applicable letter of employment. The Defendant has accepted that thePlaintiff was employed since April 20, 2008 and is not asserting that the February 2011 employment letter effectively restarted thePlaintiff’s employment effective April 1, 2011.

If I am wrong on that issue, it does not affect the outcome as I agree with the Plaintiff’sinterpretation that the wording of the February, 2011 employment letter does not limit the Plaintiff’s notice to the amount prescribed byprovincial legislation. [35] Turning to the April 2008 employment letter, it includes the following “Termination” provision: Should your employment with Earth Tech Canada Inc. be terminated for any reason, other than willful or professional misconduct,conflict of interest, disobedience or willful neglect of duty, that has not been condoned by Earth Tech Canada Inc., your sole legalentitlement will be notice of termination (or termination pay) and/or severance pay equivalent to the legal requirements, as prescribed byprovincial legislation, and you will not be entitled to any payment in excess thereof. [36] The clause distinguishes between different types of reasons for termination.

Any reason (i.e. “other than willful orprofessional misconduct, conflict of interest, disobedience or willful neglect of duty, that has not been condoned by Earth Tech CanadaInc.”) will limit entitlement to the amounts prescribed by provincial legislation.

By implication, if the reason is “willful or professionalmisconduct, conflict of interest, disobedience or willful neglect of duty, that has not been condoned by Earth Tech Canada Inc.” anemployee’s entitlement is not limited to the amounts prescribed by provincial legislation. [37] The Plaintiff was dismissed for alleged disobedience and professional misconduct. Consequently, the April 2008 employmentletter signed by the Plaintiff does not limit the amount of notice the Plaintiff is entitled to be paid. What is the appropriate reasonable notice period?

Positions of the parties [38] The Plaintiff submits that he was induced to leave secure employment to work for the Defendant and expected hisemployment to be of a permanent, full-time character until the facility was shut down December 31st, 2015. At the time of histermination he was a 56 year old senior millwright, in a very responsible and technical position. Since his wrongful termination, he hasnot been able to find similar alternative employment.

In addition, based on the bad faith actions of the Defendant, the Plaintiff has failedto generate interviews to positions to which he is eminently qualified for and has been forced to take a punishing labour-intensiveposition. [39] In terms of damages and reasonable notice period, the Plaintiff in essence seeks approximately 18 months of lost incomeminus the amounts he has earned as mitigation during this period.

In addition, he seeks lost RRSP contributions and retention initiatives.He seeks short term retention initiatives amounts for the years 2012-2015 totalling $81,501.00 and a long term retention initiative of $57,841.00. [40] The Plaintiff refers to a number of cases including Bardal v Globe & Mail Ltd (1960), (ON SC), 24 DLR(2d) 140 [“Bardal”] and Wallace v United Grain Growers Ltd, (SCC), [1997] 3 SCR 701. [41] The Defendant submits that if the notice period is not determined through the employment letters the case law indicates thatreasonable notice is based on conventional factors such as age, length of service, degree of responsibility, etc.

Based on these factors thePlaintiff should receive approximately 4 months’ notice. [42] The Defendant also notes that the Plaintiff successfully mitigated his damages by obtaining employment in mid-October of2012 earning $40/hr instead of the $42/hr he was earning with the Defendant. The Defendant submits that the amount of reasonablenotice should be set at $43, 819.26 less any mitigation earned from July 24th, 2012 to November 24th, 2012. [43] In the alternative, the Defendant submits that if the court finds five months’ reasonable notice is owed, the Defendant acceptsthe calculation of the Plaintiff in his

Schedule A that the shortfall was $29, 474 to the end of 2012. Analysis [44] In Wallace v United Grains Ltd, (SCC), [1997] 3 SCR 701, the Supreme Court addressed the issue of howto determine the period of reasonable notice.

At paragraph 116: To determine the period of reasonable notice, the court examines the characteristics of the particular employment relationship relevant tothe employee’s prospects of finding a similar position including “the character of the employment, the length of service of the servant,the age of the servant and the availability of similar employment, having regard to the experience, training and qualifications of theservant”: Bardal v Globe & Mail Ltd. [45] At paragraph 82 the Supreme Court also noted that the Bardal case does not state, nor has it been interpreted to imply, that thefactors enumerated in that case were exhaustive.

[46] In Nelson v Champion Feed Services Inc., 2010 abqb 409 at paras 86-87, Justice Graesser summarized the law in relation towhat is reasonable notice: No two cases are identical. And there is no set formula that is to be applied. Bardal v Globe & Mail Ltd. (1960), (ONSC), 24 D.L.R. (2d) 140 (Ont. H.C.) at p. 145 (confirmed in Wallace v United Grain Growers Ltd., (SCC), [1997] 3S.C.R. 701 (S.C.C.)) gives instruction as to the calculation of the appropriate notice period.

It required an analysis of a number of factorsin the context of determining how long it is likely to take this employee to find suitable alternate employment. The analysis is performedprospectively, at the time of the dismissal, rather than retrospectively at the time of trial. The length of time it actually takes thedismissed employee to find suitable alternate employment may be a relevant consideration, but is not determinative. The [Bardal] factors are: 1. The nature of the employment – the more senior the position, the longer it is likely to take to find a replacement position.

There arefewer senior management jobs around. 2. The length of service – the longer an employee has worked for one employer, the more difficult it may be to find an alternate job.Either because the employee has narrowed his or her skills by working for one employer for a long time, or the employee has been paidmore than the job is worth because of long service. 3. The age of the employee – the older the employee is, the less likely he or she is to find a suitable position, or the longer it is likelyto take. Older employees are sometimes perceived as less worthwhile to invest in. 4.

The availability of suitable similar employment having regard to the employee’s experience, training and qualifications togetherwith surrounding economic circumstances – what is the realistic prospect of this employee getting a similar replacement job? What is thejob market like? In good economic times, jobs may be plentiful and the employee may have little difficulty finding a good replacementjob; in poorer times, there may be few jobs around. [47] The Plaintiff was employed continuously from April 2008 to his termination in July 2012 being a period of just over 4 years.

Iam not satisfied that the evidence supports a finding that he was enticed or induced to leave secure employment to work for theDefendant nor that there was any representation that this would be a permanent, full-time job until the facility was shut down onDecember 31, 2015. [48] At the time of his dismissal the Plaintiff was a 56 year old millwright. Clearly he occupied a responsible and technicalposition with the Defendant.

On occasion he was required to supervise other workers (including contract workers). [49] The evidence is that shortly after his dismissal he obtained employment earning close to the hourly wage he was earning withthe Defendant but the overall quality of the new employment was lower. He is now required to drive long distances to different job sitesand the work is more physically challenging. [50] He had difficulty finding similar employment as a millwright and despite applying for many jobs for which he appeared to beeminently qualified for he has been unsuccessful in obtaining similar employment.

It is impossible to know precisely why but it is areasonable inference from the evidence that the difficulty in obtaining similar quality employment is related to a number of factorsincluding his age, the surrounding economic circumstances, and the circumstances surrounding his dismissal. I will discuss this in moredetail under the heading of aggravated damages. [51] I have reviewed the case law on the subject of reasonable notice provided by the parties. None of the cases are that similar tothe facts of this case.

The most relevant cases are the following: Meyer v Danka Business Systems Ltd, 2001 BCSC 428 (55-year-oldsenior salesperson with 4 years of service received 10 months’ notice); Ghate v Acres Consulting Services Ltd, 1986 CarswellOnt 855(50-year-old engineer with 4 years for service received 10 months’ notice); Humble v Atlantic Rentals Ltd, 2004 NBQB 362 (53-year-old heavy equipment operator with close to 8 years of service received 8 months’ notice; Stancu v ECE Group Ltd, [2005] OJ No 4277(59-year-old CAD operator with two and half years of service received 4 months’ notice). [52] I find a reasonable notice period to be in the range of 4 to 8 months taking into account: the length of the Plaintiff’semployment (less than 5 years), his age at dismissal (56), the nature of his employment (tradesman doing fairly technical work, withoccasional, minor supervisory responsibilities) and the availability of similar work.

I set the notice period at 6 months. [53] In calculating the amounts owing for this notice period there is an additional component to his compensation being theretention initiative bonus. [54] In the case of Paquette v TeraGo Networks Inc., 2016 ONCA 618 the court considered whether the plaintiff was entitled tocertain bonuses as part of a wrongful dismissal.

The law surrounding entitlement to bonuses, in the absence of an agreement, wassummarized as follows (at paras 16-17): The basic principle in awarding damages for wrongful dismissal is that the terminated employee is entitled to compensation for all lossesarising from the employer's breach of contract in failing to give proper notice. The damages award should place the employee in thesame financial position he or she would have been in had such notice been given: Sylvester v. British Columbia, (SCC), [1997] 2 S.C.R. 315 (S.C.C.), at para. 1.

In other words, in determining damages for wrongful dismissal, the court will typicallyinclude all of the compensation and benefits that the employee would have earned during the notice period: Davidson v. Allelix Inc(1991), (ON CA), 7 O.R. (3d) 581 (Ont. C.A.), at para. 21. Damages for wrongful dismissal may include an amount for a bonus the employee would have received had he continued in hisemployment during the notice period, or damages for the lost opportunity to earn a bonus. This is generally the case where the bonus isan integral part of the employee's compensation package: see Brock v.

Matthews Group Ltd. (1988), 20 C.C.E.L. 110 (Ont. H.C.), at

para. 44 , aff'd (1991), 34 C.C.E.L. 50 (Ont. C.A.), at paras. 6-7 (appeal allowed in part on other grounds); Bernier , at para. 44 (Ont. S.C.), aff'd, at para. 5 (Ont. C.A.). This can be the case even where a bonus is described as "discretionary": see Brock v. Matthews Group Ltd , at para. 44 (Ont. H.C.J.), aff'd, at paras. 6-7 (Ont. C.A.). [ 55 ] In addition to his monthly salary, the Plaintiff is also entitled to a portion of the retention initiative that he would have earned during this notice period. The retention initiative expressly outlines how the bonus will be paid upon dismissal.

It states as follows: “employees who are released without cause will be compensated on a pro-rated basis under the Short Term Initiative and under the Long Term Initiative. Any pro-rated payments will be based on the number of months worked in the calendar year with one day worked in a month being considered working in that month.” [ 56 ] Damages for the loss of this retention bonus in the amount of 6 months should be added to the 6 months of salary. Any income earned during this period as mitigation should be deducted. 3. Is the Plaintiff entitled to aggravated damages?

Positions of the parties [ 57 ] The Plaintiff submits that he is entitled to aggravated damages as a result of how he was treated by his employer before and during the termination. [ 58 ] The Plaintiff contends he was essentially accused of theft of company property. The theft allegations were a main factor for his termination as is evident in the Defendant’s Statement of Defence. He was humiliated when escorted off company property in full view of his co-workers.

The Defendant did not rescind their position that he was terminated for just cause until the eve of trial. [ 59 ] The Plaintiff submits that in the five years since termination his employment prospects were hamstrung by the Defendant’s spurious allegations. The Plaintiff notes he resides in a small community and because of the allegations he was unable to secure similar alternative employment due to the rumors surrounding his termination.

He believes his previously good reputation was and continues to be harmed by the Defendant’s bad faith conduct. [ 60 ] In addition, the Plaintiff points to what he submits is a one sided investigation undertaken by the Defendant prior to his termination. At no point were the Plaintiff’s concerns addressed and he was not able to provide, what is now conceded by the Defendant, to be the true version of the events. [ 61 ] The Plaintiff points also to his wife’s letter which was entered as evidence. In that letter she indicates that the termination greatly affected their relationship.

She indicates the Plaintiff is now depressed, miserable and uninterested in activities and relationships with family members that he previously relished. She notes that the physical laborious work he has been forced into as a result of his termination has caused a great deal of economic, physical and mental stress. She believes but for the conduct of the Defendant, the Plaintiff’s reputation and positive familial relationships would have likely remained intact. [ 62 ] The Defendant submits there is no basis for an award of aggravated damages.

It is admitted that aggravated damages can only be awarded for actual damages provided the employee can prove that the manner of dismissal caused mental distress that was in contemplation of the parties. The Defendant suggests that the Plaintiff has not demonstrated any damages resulting from the matter of his dismissal. [ 63 ] The Defendant notes, in this case, they had conducted an investigation and suspended the Plaintiff with pay during that time. The Defendant interviewed many people and certainly had evidence to conclude the Plaintiff had breached a safety rule and had been insubordinate.

Therefore, the conduct of the Defendant does not meet the requirements for bad faith as set out in the case law. [ 64 ] The Defendant denies that there was any allegation of theft. The reasons for dismissal were breach of safety rules and insubordination. The Defendant suggests that no weight should be given to the letter written by Mrs. Lalonde. [ 65 ] In addition, the Defendant suggests that there is no evidence that it committed any malicious or outrageous acts, either through the investigation or the dismissal on the part of the Defendant.

The facts in this case are very different from the cases relied upon by the Plaintiff. In Boucher v Wal-Mart Canada Corp, 2014 ONCA 419 an individual was terrorized by her employer for years for failing to agree to do something fraudulent. Similarly in Karmel v Calgary Jewish Academy , 2015 ABQB 731 the employee was terrorized for a lengthy period of time.

Analysis [ 66 ] One can characterize what happened here as a case where the Defendant decided to “shoot first and ask questions later.” It is unclear why the Defendant maintained, what they now readily agree, were unsubstantiated allegations for so many years. [ 67 ] The Defendant suggests that its actions throughout were appropriate. It points to the investigation that was undertaken to determine whether the Plaintiff should be dismissed. However, clearly missing from that investigation was any serious consideration of the Plaintiff’s side of the story.

I find that the Plaintiff was never given a proper opportunity to present his side of the story both prior to being suspended and prior to being fired. [ 68 ] The evidence suggests that the Defendant had made up his mind to dismiss the Plaintiff within days of his suspension, therefore supporting the conclusion that the investigation was at best incompetent and unfair and at worst a sham. The Defendant clearly ignored or failed to give proper weight to information it received from another employee (Larry Dakin) who was present at the tailgate

meeting on June 13, 2012. Mr. Dakin supported the Plaintiff’s account of what happened at the tailgate meeting. [69] In Keays v Honda Canada Inc, 2008 SCC 39, the Supreme Court summarized the law surrounding damages that may resultfrom the manner of dismissal. Beginning at para 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).

The application of Fidler makes it unnecessary to pursue an extended analysis of the scope of any implied duty of good faith in anemployment contract. Fidler provides that "as long as the promise in relation to state of mind is a part of the bargain in the reasonablecontemplation of the contracting parties, mental distress damages arising from its breach are recoverable" (para. 48).

In Wallace, theCourt held employers "to an obligation of good faith and fair dealing in the manner of dismissal" (para. 95) and created the expectationthat, in the course of dismissal, employers would be "candid, reasonable, honest and forthright with their employees" (para. 98). At leastsince that time, then, there has been expectation by both parties to the contract that employers will act in good faith in the manner ofdismissal. Failure to do so can lead to foreseeable, compensable damages.

As aforementioned, this Court recognized as much in Fidleritself, where we noted that the principle in Hadley "explains why an extended period of notice may have been awarded upon wrongfuldismissal in employment law" (para. 54). 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 oftermination. 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. Theamount 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 theemployee can prove that the manner of dismissal caused mental distress that was in the contemplation of the parties, those damages willbe awarded not through an arbitrary extension of the notice period, but through an award that reflects the actual damages.

Examples ofconduct in dismissal resulting in compensable damages are attacking the employee's reputation by declarations made at the time ofdismissal, misrepresentation regarding the reason for the decision, or dismissal meant to deprive the employee of a pension benefit orother right, permanent status for instance (see also the examples in Wallace, at paras. 99-100) [Emphasis added]. [70] The Alberta Court of Appeal considered the issue of aggravated damages in Elgert v Home Hardware Stores Ltd, 2011ABCA 112, though the court held at para 73: Damages resulting from the manner of dismissal (as opposed to the fact of dismissal) are available, however, if damages arise out of theconduct 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.” [71] In Wallace v United Grain Growers Ltd, (SCC), [1997] 3 SCR 701 the Supreme Court provided someexamples of conduct that would support an award of aggravated damages. Beginning at para 98: The obligation of good faith and fair dealing is incapable of precise definition.

However, at a minimum, I believe that in the course ofdismissal employers ought to be candid, reasonable, honest and forthright with their employees and should refrain from engaging inconduct that is unfair or is in bad faith by being, for example, untruthful, misleading or unduly insensitive. In order to illustrate possiblebreaches of this obligation, I refer now to some examples of the conduct over which the courts expressed their disapproval in the casescited above.

In Trask, supra, an employer maintained a wrongful accusation of involvement in a theft and communicated this accusation to otherpotential employers of the dismissed employee. Jivrag, supra, involved similar unfounded accusations of theft combined with a refusal toprovide a letter of reference after the termination, In Dunning, supra, bad faith conduct was clearly present. Although the plaintiff’sposition had been eliminated, he was told by several senior executives that another position would probably be found for him and that thenew assignment would necessitate a transfer.

However, at the same time that the plaintiff was being reassured about his future, a seniorrepresentative of the company was contemplating his termination. When a position could not be found, the decision was made toterminate the plaintiff. This decision was not communicated to the plaintiff for over a month despite the fact that his employers knew hewas in a process of selling his home in anticipation of the transfer.

News of his termination was communicated to the plaintiff abruptlyfollowing the sale of his home [Emphasis added]. [72] In this case, I am satisfied that the actions of the Defendant amount to a breach of the obligation of good faith and fair dealingand support an award of aggravated damages.

Those actions include the following: 1) The Plaintiff was summarily terminated after being accused of serious safety violations and insubordination relating to allegedretention of salvageable equipment and scrap metal and failure to supervise an unassigned contract worker. 2) The Defendant maintained these allegations which are described in the Statement of Defence as “serious safety violations andinsubordination” from the date of suspension in June, 2012 until shortly before trial in May 2017 at which time they withdrew thoseallegations. 3) Two days after the Plaintiff’s suspension, without regard for his explanation and without giving him an opportunity to fully explain the alleged misconduct, a decision was made to terminate his employment on the 15th of June.

An internal memo from the MaintenanceManager, Mr. Goegan, to the HR Manager, Ms. Burr, shows a decision had been made to terminate the Plaintiff; this despite not havingany response from the Plaintiff as to the alleged breaches of conduct. The Defendant ignored a letter from an employee (Larry Dakin)which supported the Plaintiff’s contention that he had done nothing wrong in relation to the alleged lack of supervision of a contractemployee.

The evidence supports the conclusion that the internal investigation was essentially a sham. 4) The nature of the allegation concerning the mishandling of salvageable equipment and scrap metal implied some form of illegal

conduct or dishonesty on the part of the Plaintiff.

This suggestion can be found in the Statement of Defence where the Defendant outlined in detail the alleged cause for termination using such wording as “the plaintiff’s serious safety violations and insubordination.” The Statement of Defence suggested that the dismissal for cause included “unsatisfactory performance, dishonesty, insubordination, serious misconduct.” In the Statement of Defence the Plaintiff’s misconduct is described as constituting “serious misconduct, insubordination and conduct constituting cause.” It is stated that “the Plaintiff’s misconduct was such that it interfered with and prejudiced the safe and proper conduct of the SHTC thereby, justifying cause for immediate dismissal.” [ 73 ] Other examples include paragraph 36 in the Statement of Defence which indicates that the Defendant “could not justify continued employment of the Plaintiff given his cavalier attitude toward safety and clear lack of respect for his Supervisor’s authority” [Emphasis added]. [ 74 ] Paragraph 37 states: The conduct of the Plaintiff constitutes:

a) Breach of express or implied terms of the Plaintiff’s Employment Agreement;

b) Breach of express or implied terms of the Plaintiff’s Agreement to abide and be bound by SHTC’s Safety Manual and its Safety Policies and Procedures;

c) Disregard for his safety, the safety of his coworkers and the community;

d) Insubordination; and;

e) Incompetence or negligence. [ 75 ] I note also that there was evidence of the impact that the actions of the Defendant, before and at the time of dismissal, has had on the Plaintiff. I note that while the evidence from the Plaintiff’s wife was in letter form it was not contradicted and was supported in substance by the sworn evidence of the Plaintiff. As already discussed, the letter describes how the termination has greatly affected their relationship and how the Plaintiff is now depressed, miserable and uninterested in activities and relationships with family members that he previously relished.

She explains the economic, physical and mental stress that he had gone through. In addition, his reputation has suffered.

I note also, that the Plaintiff lives in a small town, and the Defendant was one of the larger employers located close to the small community where the Plaintiff lived and it is reasonable to infer that the information concerning his termination and the ongoing allegations may have had an effect on both his reputation in the community and also his ability to obtain similar work due to the rumors surrounding his termination. [ 76 ] I note also that the Plaintiff’s EI benefits were delayed as a result of the allegations of cause made by the Defendant at the time of the dismissal. [ 77 ] In

summary, I am satisfied that the Defendant’s conduct during the course of dismissal was unfair, breached the requirement of good faith and the expectation that both parties to the contract had that the employer would act in good faith in the manner of dismissal. [ 78 ] The Plaintiff has proven that the manner of dismissal caused mental distress, particularly by the Defendant’s actions in attacking the Plaintiff’s reputation at the time of dismissal and representing that there was sufficient cause for dismissal for an extended period of time. [ 79 ] The Plaintiff seeks aggravated damages in the amount of $125,000.00.

Reviewing the case law relied upon by the Plaintiff, including Karmel v Calgary Jewish Academy , 2015 ABQB 731 [“Karmel”] and Boucher v Wal-Mart Canada Corp, 2014 ONCA 419 [“Boucher”], I find the amounts awarded in those cases to be inappropriate for the facts of this case.

In Karmel and Boucher the actions of the employers were much more prolonged, serious and arguably vindictive, thus in those cases the conduct supported a claim of $200,000 in aggravated damages. [ 80 ] In this case there was abusive conduct leading up to the dismissal, inappropriate and false reasons for dismissal and an inadequate and unfair investigation. The plaintiff did not receive procedural fairness. I would characterize the actions of the Defendant in this case to be less serious and egregious than in both Boucher and Karmel thereby warranting lower damages.

Although the Defendants actions appear not to have been vindictive, they were intentional, unnecessarily prolonged and caused the Plaintiff significant mental distress. The wrongful allegations were maintained for almost 5 years causing the Plaintiff considerable mental distress during and after his sudden termination. He was publicly humiliated at the time of dismissal and the humiliation continued as rumors concerning the reasons he was dismissed continued to circulate.

Consequently substantial aggravated damages are justified for the Defendants failure to comply with their duty to act in good faith. [ 81 ] It is difficult to quantify an award of aggravated damages. No case is identical or directly applicable. The following cases displayed similar unfair and insensitive conduct to what occurred in this case.

Doyle v Zochem, 2016 ONSC 3188 , aff’d 2017 ONCA 130 - $60,000; Strudwick v Applied Consumer & Clinical Evaluations Inc, 2016 ONCA 520 - $70,000; Zesta Engineering Ltd v Cloutier (2010), 2010 ONSC 5810 , additional reasons 2013 ONSC 385 , reversed in part on other grounds 2014 ONCA 762 - $75,000; Tim Ludwig Professional Corp v BDO Canada LLP, 2017 ONCA 292 - $100,000 aggravated damages in a Partnership Context; Price v 481530 BC Ltd, 2016 BCSC 1940 - $50,000 aggravated damages; Pate Estate v Galway-Cavendish and Harvey (Township), 2013 ONCA 669 –$100,000.

Taking into account the evidence in this case and the jurisprudence, I award aggravated damages in the sum of $75,000. 4. Is the Plaintiff entitled to punitive damages?

[ 82 ] In addition, the Plaintiff submits that this is an appropriate case to award punitive damages in order to deter future conduct by the Defendant. [ 83 ] In support the Plaintiff refers to the conduct of the Defendant’s manager, Mr. Goegan. In an email to another employee, Mr. Goegan, shortly after the dismissal, made it clear that a decision to terminate had been made without hearing from the Plaintiff. The Plaintiff submits that the Defendant’s misconduct was a marked departure from the ordinary stance of reasonable behaviour. It was malicious, oppressive and high handed.

The Plaintiff notes that in the month between the Plaintiff’s suspension and his termination, he was kept in the dark regarding the Defendant’s plans. Even though he had attempted to defend these spurious allegations against him, the Defendant completed a one sided, high handed investigation. [ 84 ] The Defendant submits that there is no basis for an award for punitive damages. There is no evidence that there was any malicious or outrageous acts committed either through the investigation or the dismissal on the part of the Defendant.

The cases that are relied upon by the Plaintiff involve situations that clearly exhibit malicious behaviour that deserve punishment. [ 85 ] In Ram v Michael Lacombe Group Inc , 2017 BCSC 212 the court explains the differences between aggravated and punitive damages at para 112: While there may be some overlap in the facts relevant to establishing each of these heads of damage, each rests upon a different foundation and the purpose of awarding each is different.

In a wrongful dismissal case, aggravated damages are awarded to compensate a plaintiff for actual damage that is caused by unfair or bad faith conduct of the employer in the manner, as distinct from the fact, of the dismissal. In contrast, the objects of punitive damages are retribution, deterrence and denunciation as opposed to compensation, and punitive damages are restricted to cases where an employer's conduct is so malicious and outrageous that it is deserving of punishment: Vernon v. British Columbia (Housing & Social Development, Liquor Distribution Branch) , 2012 BCSC 133 (B.C. S.C.) ; Rodrigues v.

Shendon Enterprises Ltd . , 2010 BCSC 941 (B.C. S.C.) . [ 86 ] I agree with the Defendant that the actions of the Defendant do not support an award of punitive damages. While the Defendant’s actions were clearly insensitive, inappropriate and caused mental distress for the Plaintiff, I do not find they were malicious. [ 87 ] The claim for punitive damages is dismissed. Conclusion [ 88 ] In

summary therefore, I find that the Plaintiff is entitled to the following: 1) An award of reasonable notice equivalent to 6 months’ salary and an allowance for missed Short Term and Long Term retention bonuses. From this is deducted any monies earned in mitigation during the 6 month period. 2) An award of aggravated damages of $75,000; 3) Prejudgment interest pursuant to the Judgment Interest Act, RSA 2000, c J-1 and amendments thereto. 4) Costs. [ 89 ] If the parties cannot agree on costs, they may contact me to make further representations.

Heard on the 15 th day of May, 2017 Written submissions provided on May 19 th and May 26 th , 2017 Dated at the City of Edmonton, Alberta this 13 th day of June, 2017. J.J. Gill J.C.Q.B.A. Appearances: J Royal Nickerson, QC Nickerson Roberts Holinski & Mercer

for the Plaintiff Gulu Punia Fasken Martineau duMoulin LLP for the Defendant _______________________________________________________ Corrigendum of the Reasons for Judgment of the Honourable Mr. Justice J.J. Gill _______________________________________________________ The date in para [3] was changed to March 2007. Para [60] was changed to the following: [60] In addition, the Plaintiff points to what he submits is a one sided investigation undertaken by the Defendant prior to his termination.

At no point were the Plaintiff’s concerns addressed and he was not able to provide, what is now conceded by the Defendant, to be the true version of the events. Various formatting corrections were made which resulted in the page numbers changing.