Rice v Shell Global Solutions Canada Inc, 2019 ABQB 977

Court of Queen’s Bench of Alberta Citation: Rice v Shell Global Solutions Canada Inc, 2019 ABQB 977 Date: 20191218 Docket: 1701 11042 Registry: Calgary Between: Terri Rice Plaintiff - and - Shell Global Solutions Canada Inc . Defendant _______________________________________________________ Decision of the Honourable Mr. Justice J.T. Eamon _______________________________________________________ I Overview [ 1 ] Ms Rice is a chartered professional accountant who worked for Shell. On February 8, 2017, Shell terminated her without cause.

She received a combination of working notice and pay in lieu of notice through May 15, 2017. Ms Rice obtained other employment in September 2017 with another company. She sued Shell for damages for wrongful dismissal. [ 2 ] The main issue between the parties is whether Shell promised Ms Rice fixed term employment. This issue dramatically

affects her damages claim for two possible reasons. First, the remaining period of her employment term for which she did not receive her salary was 34.5 months. It exceeds the number of months of reasonable notice of termination to which she was entitled if she were an employee with an indefinite term of employment. Second, she submits that a fixed term employee does not have to deduct earnings from other employment obtained to mitigate the loss during the term. [ 3 ] These issues arise from the language in Shell’s employment offer to Ms Rice dated March 16, 2016.

Among other things, it says: The desired First Day on Payroll will be: 1/APR/2016 Your Assignment Length will be: 4 years . [ 4 ] Ms Rice further claims 15 months as the period of reasonable notice if I find that she was not promised a fixed term of employment. [ 5 ] Shell responds that Ms Rice’s term of employment was indefinite and terminable on reasonable notice. The period of reasonable notice is in the range of 8 ½ months. Ms Rice must (and did) mitigate her loss by seeking other work.

The amounts she earned in mitigation must be deducted from her damages award. [ 6 ] The parties also raised other damages calculation issues: whether to include Shell’s Construction, Commissioning and Start- Up Allowance (CCSA) as part of her lost earnings, and whether to include a living out allowance in income that Ms Rice received from another employer in mitigation of her loss. [ 7 ] For the reasons set out herein, I agree with Shell that the contract was not a traditional fixed term contract. However, the words of the contract which I have quoted above are not redundant and should be given meaning.

The proper meaning is that Shell could not terminate her without cause during the first four years or payment of her salary during that term. I further find that the CCSA is not included in calculating her salary; that her earnings from her other employment must be deducted from her compensation; and that the living out allowance is not in the nature of earnings and therefore shall not be deducted. II Fixed or indefinite employment term? (

a) Facts [ 8 ] At all times pertinent to this matter, Ms Rice was a professional accountant. She initially was a Certified General Accountant. She became a Chartered Professional Accountant in 2015 when the three regulated accounting professions in Alberta merged ( Chartered Professional Accountants Act, SA 2014, c C-10.2 ). [ 9 ] The Shell Group consists of various companies. Ms Rice worked for two of them. Initially she worked for Shell Canada Ltd. In 2014 she was transferred to the Defendant Shell Global Solutions Canada Inc (formerly Shell Chemicals Americas Inc).

Both sides agree her period of service with the Defendant should be counted from her start with Shell Canada. [ 10 ] Ms Rice started as an employee with Shell Canada on September 7, 2008. She was a Senior Financial Analyst on a fixed term of two years under written agreements dated September 8 and September 16, 2008. Her contract specified that her employment would automatically terminate on the end date without further notice. [ 11 ] After the end of her term on September 22, 2010, she continued working in her position. The parties agreed to extend her employment term to December 31, 2010.

By letter dated December 1, 2010, the parties agreed to further extend her employment term from December 31, 2010 to August 3, 2011. The letter explicitly said that her employment would cease on that date without further notice. [ 12 ] By letter dated May 27, 2011, the parties agreed that her “term employment” would be converted to “regular, full time employment” effective June 1, 2011. [ 13 ] In 2014, the position of Indirects Manager became vacant. The Plaintiff was asked if she was interested in the job. She succeeded in her application and Shell offered her the position of Indirects Manager.

She accepted that offer in November 2014. The written record of that offer, if any, is not available. The Plaintiff testified that the position contained an “assignment length” of four years. I will describe the meaning of “Assignment Length” later in these reasons. [ 14 ] In March 2016, due to a business reorganization that saw the elimination or change of numerous employment positions, Shell under took a “managed open resourcing process”. Shell required various employees (whom it described as potentially impacted by the business changes) to apply for available positions. One of them was Ms Rice.

She therefore reapplied for her job. [ 15 ] Shell offered her the job by email dated March 21, 2016. This short email advised Ms Rice that the Defendant was offering her the position of Indirects Manager, and included the following: Dear Terri, Further to our conversation, I write to confirm that the hiring employment company CA SHELL CHEMICALS AMERICAS INC is making you an offer of employment as its Indirects Manager (393436). This offer is valid for five working days from and including today’s date 21/Mar/2016.

If you have not responded to accept the job offer during this period, the offer will be automatically withdrawn.

This letter does not contain a description of the full terms and conditions of employment for this position. Where applicable, the hiring employment company CA SHELL CHEMICALS AMERICAS INC will send you a contract of employment or a Letter of Intent for this position to sign after you accept the role and before you start. In such cases, the hiring employment company CA SHELL CHEMICALS AMERICAS INC reserves the right to add to or change the information contained in this letter when setting out such terms and conditions of employment in the contract.

Your Country of Employment and Work Location will be: CA Canada & Fort McMurray, Shell Albian Site The desired First Day on Payroll: 1/APR/2016 Your Assignment Length will be: 4 years The Salary Group for this position will be: [the group number deleted by Eamon J] Salary Group (if not Group Standard): Confirm if Promotion agreed: No Terms of calculating your package will be: Local Work Option: Full Time Multiple Successive Locations Assignment: No Please ensure that you have read and understood the terms & conditions of this position and that your personal details (and those of family members) are correct and up-to-date on HR Online e.g. marital status and that the names of family members should correctly reflect the name printed on their passport.

Your Regional HR Service Centre can assist you if you are unable to update your record. Please revert within the next five working days to confirm that you accept this position: Please log on to Open Resourcing , choose “My Applications” and press the “Job Offer” button. Then “Accept” or “Decline” the job offer. Your acceptance will kick off the transfer process to your new role/location. Applications and processing of potential International Mobility exceptions, if applicable, can only commence after formal job acceptance.

Please note: -The first day on payroll is dependent on any immigration requirements that may be applicable, details of lead times can be found here . -Any local policies requested can be found on HR Online. -For further details regarding this transfer please contact your Regional HR Service Centre in the first instance. ... Please do not reply to this message as it is generated automatically. (Italics, bold face, and underlining in original) [ 16 ] Ms Rice accepted the offer. She did not receive any further contract or letter of intent in furtherance of the offer.

She asked her direct supervisor, on the same day she accepted the offer, whether there were any other terms and conditions of her employment. No one at Shell ever informed Ms Rice that there were any other additional terms and conditions. Ms Rice therefore understood there were no other terms and conditions and proceeded on that basis. (In comparison, Shell had recorded Ms Rice as an indefinite employee in its internal records, and did not change that characterization following Ms Rice’s acceptance of the offer). [ 17 ] The phrase “Assignment Length” appears in the offer and underlies the entire dispute.

That phrase means to Shell’s human resources department the length of time that Shell expects an employee to remain in a specified position before being able to apply for other positions at Shell. It is a flexible policy and an employee may apply for a new position before the end of their assignment length if their line manager gives permission. [ 18 ] Shell provides an online glossary of business terms that is available to Shell employees. The glossary includes: Assignment Length Length of time spent on a particular assignment. Also known as Assignment Duration. Guidelines on Assignment Length are as follows: 1.

New graduate recruits will have structured assignments in the first five years or so. 2. For positions aimed at individuals in early career (from 5 to 10 years) 3-4 year assignments are the norm. Assignment Duration Length of time spent on a particular assignment. Also known as Assignment Length.

[ 19 ] Shell also published resource materials in respect of the managed open resourcing process: the Shell Open Resourcing Group People Principles and the Shell Open Resourcing Internal Resourcing Guidelines. [ 20 ] The People Principles document revised March 2016 describes the “process and guidelines to manage the people consequences of large-scale organisational changes consistently and fairly”.

The policy stated, with respect to Anticipated Assignment Length, that assignments in principle will be for four years or longer unless the role is of a project nature, in a hardship location or individual development needs merit a different approach. Further, “[d]eparture from the guidelines will be permitted for business reasons, either known or anticipated, e.g. where tenure may be shorter due to the nature of the work being undertaken, or valid personal concerns from the individual in question” [underlining added]. [ 21 ] That policy also provides: (

a) Where managed open resourcing applies, “[i]ndividuals on permanent Shell contract should be considered over individuals on fixed term contracts.” (

b) Local legislation, policy and practice will guide the management of various situations, including where an employee applies to, but is not selected for, a position, or chooses not to apply for any positions. [ 22 ] Shell required Ms Rice, like other employees at her level, to complete an annual Individual Development Plan. Employees complete this plan online. The template includes a field entitled “Availability”, where a date appears. A user can click on the term “Availability”.

If they do so, a definition appears: “The earliest date that an employee is available for a reassignment ....” [ 23 ] Shell sought to prove that its definition of Assignment Length was known to Ms Rice at the time she made her various employment contracts with Shell or Shell Canada. [ 24 ] Ms Rice testified that she understood the term “Assignment Length” to mean the length of time in her position.

That would prevent her from applying for another job within Shell before the expiry of that period, and would limit the duration of her employment, in the sense that at the end of her term, she would need to apply for another job, and if none were awarded, she was unemployed. She had not seen the human resources policies or clicked on the term “Availability” in the online template.

None of the glossary, the People Principles, or the internal resourcing guidelines were brought to her attention before she accepted the March 2016 offer. [ 25 ] Ms Rice knew all her colleagues had an assignment length associated with their employment.

She had never seen a colleague terminated at the end of their assignment length without notice or pay in lieu of notice. [ 26 ] Shell presented evidence from its human resources department, and from a single employee, in an effort to demonstrate that Shell’s special meaning of “Assignment Length” was widely understood in the organization. [ 27 ] I cannot place much weight on Shell’s evidence, because it is not backed by the sorts of procedures one might expect in a large organization, with multiple business locations, to ensure or verify that such concepts are known to its employees.

For example, there is no evidence that: (

a) Employees were provided copies of human resources policies, or told that they could find them on Shell’s intranet site. (

b) Employees were required or even asked to read human resources policies. (

c) Shell required sign offs from employees that they reviewed such policies. (

d) Shell held meetings or offered other forms of instruction concerning the policies at the Plaintiff’s work location at Albion Sands. [ 28 ] To the contrary, Shell’s witness testified that Shell does not track whether anyone is told of the definition of “Assignment Length”, does not require employees to sign off that they have read the policies, and did not know if the Plaintiff saw the policies. She testified that she expected line managers to have conversations with their staff about the concept, but did not know if the Plaintiff’s line manager had that conversation with Ms Rice.

Shell provided an affidavit from Ms Rice’s manager during the period 2013 – 2015, but he did not depose that he informed her of the meaning of “Assignment Length”. [ 29 ] Shell invited me to find that Ms Rice’s testimony of her understanding of the term “Assignment Length” was not credible. I refuse to do so. The Plaintiff testified forthrightly, without advocating, arguing, or having any appearance of embellishing. She adequately explained a minor inconsistency with her previous cross-examination on affidavit.

She noted that Shell did not hold a meeting at her Albion Sands work location about the open resourcing process. Her subjective understanding was essentially that Assignment Length played a dual role in precluding her from applying for other positions and limiting the duration of her employment.

That understanding is not implausible and does not cause me to question her evidence that she was actually unaware that “Assignment Length” had a special meaning in Shell employment policies. [ 30 ] Accordingly, I find, on the present evidentiary record, that the Plaintiff was not aware of the limited and special meaning that Shell placed on the term “Assignment Length” to the exclusion of other potential meanings. Later I deal with the question whether the matter can fairly be adjudicated on this evidentiary record.

(

b) Contract

interpretation principles [31] The goal in contractual

interpretation is to ascertain the mutual and objective intent of the parties through the application oflegal principles of

interpretation (Sattva Capital Corp. v Creston Moly Corp., 2014 SCC 53, [2014] 2 SCR 633 at paras 49, 57). To thisend, “the exercise is not to determine what the parties subjectively intended but what a reasonable person would objectively haveunderstood from the words of the document read as a whole and from the factual matrix” (IFP Technologies (Canada) Inc v EnCanaMidstream and Marketing, 2017 ABCA 157, application for leave to appeal dism, (SCC) at para 79).

The Courtmust “read the contract as a whole, giving the words used their ordinary and grammatical meaning, consistent with the surroundingcircumstances known to the parties at the time of formation of the contract” (Sattva at para 47). Contract

interpretation is a “practical,common-sense approach not dominated by technical rules of construction” (ibid). [32] The meaning of words is often derived from a number of contextual factors, including the purpose of the agreement and thenature of the relationship created by the agreement (Sattva at para 48). The relevant contextual background and commercial contextknown to the parties at the time the contract was made must be considered regardless of whether the contract meaning is ambiguous(Sattva at para 47; IFP at paras 58, 80-83, 89).

The Alberta Court of Appeal elaborated on the meaning of the surrounding circumstancesin IFP as follows: [83] Determining what constitute properly surrounding circumstances is a question of fact. As to what is meant by surroundingcircumstances, this consists of “objective evidence of the background facts at the time of the execution of the contract ... that is,knowledge that was or reasonably ought to have been within the knowledge of both parties at or before the date of contracting”: Sattva,supra at para 58.

Examples of relevant background facts include: (1) the genesis, aim or purpose of the contract; (2) the nature of therelationship created by the contract; and (3) the nature or custom of the market or industry in which the contract was executed: Sattva,supra at paras 47-48; Geoffrey L. Moore Realty Inc. v The Manitoba Motor League, 2003 MBCA 71 at para 15, 173 Man R(2d) 300; King v Operating Engineers Training Institute of Manitoba Inc., 2011 MBCA 80 at para 72, 270 Man R (2d) 63;Ledcor, supra at paras 30, 106.

Ultimately, the surrounding circumstances can include “absolutely anything which would have affectedthe way in which the language of the document would have been understood by a reasonable man”: Sattva, supra at para 58, citing LordHoffman in Investors Compensation Scheme Ltd. v West Bromwich Building Society, [1998] 1 WLR 896 at 913 (UKHL). [33] Surrounding circumstances must never be allowed to overwhelm the words of the agreement (Sattva at para 57).

The Court“cannot use them to deviate from the text such that the court effectively creates a new agreement” (ibid). [34] Employment contracts are presumptively for an indefinite term, and terminable on reasonable notice or compensation in lieuof notice (Machtinger v HOJ Industries Ltd, , [1992] 1 SCR 986 at p 998; Pennock v United Farmers of Alberta Co-Operative Limited, 2008 ABCA 278 at para 15; Benfield Corporate Risk Canada Limited v Beaufort International Insurance Inc,2013 ABCA 200 at para 44).

The requirements for a fixed term contract were described by the Alberta Court of Appeal in Alguire vCash Canada Group Ltd, 2005 ABCA 387 at para 5: ... A true fixed term employment contract requires “unequivocal and explicit” language: Ceccol v. Ontario Gymnastic Federation(2001), (ON CA), 204 D.L.R. (4th) 688 at paras. 25-27 (Ont. C.A.). Any ambiguities will be interpreted strictlyagainst the employer’s interest. In interpreting the contract, the objective is to discover and give effect to the real intention of the parties:Alberta v.

Western Irrigation District (2002), 2002 ABCA 200 , 312 A.R. 358 at para. 21.... [35] Fixed term contracts, or guaranteed tenure contracts, are rare (Benfield at para 46). The reason is that, generally speaking,they are contrary to the contracting parties’ interests and the reality of the need for flexibility both by employers and employees. [36] This is reflected in the lower Court judgments in the well-known case of Wallace v United Grain Growers Ltd, (MB QB), app allowed (CA), app allowed in part, , [1997] 3 SCR 701.

There, the trial judgeand Manitoba Court of Appeal addressed the employee’s claim that the parties entered into a guaranteed tenure contract, which arosefrom the parties’ discussions that the employee needed a guarantee of security if he were to change jobs at his age. [37] The trial judge rejected that contention, and observed (at p 13 of ): In my view, the making of a fixed-term contract, whilst not inconceivable, would happen rarely, if at all. A skilled employee may wish tobetter himself by moving to other employment. A company may wish to rid itself of an employee either for cause or without cause.

Inthe latter event, it would have to compensate the former employee. In the present case, with 20 years still to go before retirement at 65, itis unlikely that either side would have wanted to limit itself to a fixed-term contract. I agree with counsel for the defendant that such acontract would be so special in nature that it would have to be worded in very explicit terms.... [38] The Manitoba Court of Appeal agreed that a binding fixed term contract would need to be worded in explicit terms.

It pointedout that even the use of words “permanent employee” in an employment contract did not mean that the employment was for a fixed termuntil retirement, and that “the decision of the trial judge is entirely in line with these authorities, and consistent with the modern dayreality of an ongoing fluid relationship between employers and employees (at pp 34-35 of ). The Supreme Court ofCanada declined to interfere with the concurrent findings of fact in the lower courts and therefore declined to interfere with the lowercourts’ conclusions on this point (at para 72 of ). (

c) Whether fixed term contract [39] Surrounding circumstances are a question of fact. The parties proceeded by

summary trial, so I am also obliged to considerwhether a

summary trial is appropriate. The test is twofold: 1) can the court decide disputed questions of fact on affidavits or by any ofthe other proceedings authorized by the Rules for a

summary trial? 2) would it be unjust to decide the issues in such a way? There are avariety of factors the judge may consider (JN v GJK, 2004 ABCA 394 at paras 40-44; SHN GrundstuecksverwaltungsgesellschaftMBH & Co v Hanne, 2014 ABCA 168 at para 9). Many of the factors are outlined in Jagodnik v Oudshoorn, 2015 ABQB 456 at para

3 . Oral evidence may be heard at

summary trials ( ibid at para 4; Rules 6.11(1)(g), 7,7, and 7.11(b)). [ 40 ] I am satisfied that it is appropriate to resolve the contract

interpretation issue on the present record, and it can be done justly and fairly to both sides. In coming to this conclusion I considered the following. [ 41 ] First, I have the benefit of a thorough description of Ms Rice’s employment contracts with Shell or Shell Canada leading up to the March 21, 2016 offer. [ 42 ] Second, there are no material conflicts in the evidence provided by the parties, apart from obvious differences of subjective beliefs over what the parties thought they were agreeing to. [ 43 ] Contract

interpretation seeks the objective meaning of the parties’ contract language rather than the parties’ subjective beliefs. However, the evidence of Ms Rice’s belief was relevant in this case to ascertain the applicable surrounding circumstances: whether Ms Rice actually knew or ought to have known that the term “Assignment Length” had a specific and limited meaning at Shell. A fact finding that Ms Rice knew or ought to have known of this meaning may strongly support Shell’s

interpretation of the contract. [ 44 ] Shell contended that I should reject Ms Rice’s evidence that she was not aware of Shell’s meaning of “Assignment Length”. I raised with the parties that I could not make a credibility determination without oral evidence. The parties agreed to tender their respective client/client representative to provide oral evidence in the

summary trial. [ 45 ] There is no suggestion from the parties or the records that any further discovery or other processes in the action would provide any further information that could be used to impugn the credibility or reliability of Ms Rice as a witness or show that she knew of the special meaning which Shell gave to the term “Assignment Length”.

Shell accepted undertakings to use best efforts to ascertain whether the business terms glossary and open resourcing policies were ever brought to Ms Rice’s attention, and whether it had any information or knowledge (apart from the availability of its policies on its intranet) indicating that Ms Rice was specifically told what “Assignment Length” means.

Shell was unable to determine whether these records were brought to Ms Rice’s attention or that Ms Rice was told the meaning of “Assignment Length”. [ 46 ] Third, the parties did not suggest there were other material circumstances that should be heard in a trial. [ 47 ] Fourth, both parties sought a determination on the merits. [ 48 ] I am satisfied, for the reasons outlined earlier (at paras 23-30), that Ms Rice did not know that the term “Assignment Length” was used at Shell only in the limited sense asserted by Shell in this case. [ 49 ] Surrounding circumstances also include things that reasonably ought to have been within the knowledge of both parties at or before the date of contracting.

Should Ms Rice have known of Shell’s special and exclusive meaning of “Assignment Length”? [ 50 ] Some words and phrases in the March 21, 2016 offer obviously bore a special meaning. “Salary Group” is an example. But it was not so obvious in the case of others. The offer does not incorporate Shell’s glossary of business terms or other documentation. It strongly suggests to a reasonable reader that an employment contract or letter of intent will likely follow.

The offer invites the recipient to contact a human resources service centre for further details re transfer, but a transfer occurs after the offer is accepted. It does not tell the reader to contact human resources or access Shell’s intranet and read human resources policies to obtain contract terms. [ 51 ] Shell line managers were involved in speaking to employees about employment matters (para 28 above). It is normal that employees seek and rely on guidance from their superiors in large organizations.

Reasonable options to those in Ms Rice’s situation, wishing to confirm terms and conditions, included speaking to their line manager. And that is exactly what Ms Rice did.

No one at Shell sent her any employment contract or letter of intent, or told her about special and exclusive meanings of common words. [ 52 ] Consequently, Shell’s special meaning ascribed to “Assignment Length”, to the exclusion of other meanings, was not something which Ms Rice ought to have known. [ 53 ] I turn to interpreting the contract. [ 54 ] In plain language, the phrase “Assignment Length” could reasonably include a term of employment with a defined end date or a promise of work for a defined term.

For example, we will give you a four year assignment, and at the end if we do not have more work for you then you are out of a job. [ 55 ] This

interpretation is supported by the surrounding circumstances. Ms Rice worked on a major capital project and Shell is a sophisticated organization that could reasonably be expected to predict and budget for its staffing needs on projects over a short time horizon. An employee in Ms Rice’s situation, having a history of both fixed term and indefinite term employment, and forced to reapply for their job in a corporate reorganization during a well-known downturn in Alberta’s oil and gas industry, could reasonably conclude that Shell was prepared to guarantee four years’ work but not more.

The form of the March 21, 2016 offer was substantially different than previous fixed term employment letters and one need not necessarily assume that Shell would use exactly the same language as in earlier letters to signal that the employment term was of fixed duration. [ 56 ] Given the factual circumstances, the phrase was also reasonably capable of the meaning asserted by Shell. (

a) Ms Rice was a long term Shell employee, who knew that the term “Assignment Length” was used in Shell to preclude employees from applying to other positions in the organization during that specified period, without permission of their manager. (

b) Ms Rice’s employment history with Shell included both fixed terms and indefinite term employment. She became a so-called

full time regular employee in 2011, and she had an Assignment Length associated with her employment by November 2014. Her previous fixed term contracts specified an end date and unambiguously stated her employment would end without further notice, although (as mentioned in para 55) the language difference may not persuasively suggest a different meaning given the differences between the form of the March 21, 2016 offer and previous employment letters. [ 57 ] Consequently, a reasonable person interpreting this contract, having carefully thought about the matter, could see more than one meaning.

In my opinion, there were three alternative meanings. One could reasonably ask: By “Assignment Length” do you mean that (1) she is a fixed term employee whose employment is over at the end of four years, (2) she is an indefinite term employee who cannot apply for other positions without her manager’s permission for four years, or (3) you are promising her work or an assignment for at least four years? [ 58 ] Ms Rice’s counsel relies on the well-known principle in employment law that contract ambiguities should be interpreted in the employee’s favour and against the employer’s interests.

He submits that the most favourable

interpretation in Ms Rice’s case is a fixed term of employment, which terminates automatically at the end of four years. That argument is results oriented. Courts interpret contracts in the circumstances in which they are made, not in the circumstances in which they were allegedly breached. The cases expressing a preference for the

interpretation most favourable to employees generally characterize indefinite contracts terminable on reasonable notice as the most favourable (examples include Ceccol at para 25 ; Wood v Fred Deeley Imports Ltd , 2017 ONCA 158 at para 28 ). Shell argues that the most favourable

interpretation is to imply common law reasonable notice. [ 59 ] The authorities binding on me require that a fixed term contract be formed by unambiguous language. I cannot construe Ms Rice’s employment contract as a traditional fixed term contract under the principle in Alguire . [ 60 ] Does the contract therefore mean Ms Rice’s employment was terminable without cause on reasonable notice? The law presumes an employment contract is terminable on that basis. But this contract also expressly included the fixed assignment length. I cannot simply ignore the express words of the parties’ contract.

I must attempt to ascribe meaning to the contract words “Assignment Length” if reasonably possible. [ 61 ] A mere difficulty of contract

interpretation does not create ambiguity. But where a provision is reasonably capable of more than one meaning, after applying other

interpretation techniques, a Court may conclude the provision is ambiguous ( Equitable Trust Company v Lougheed Block Inc , 2012 ABCA 261 at para 29 ). [ 62 ] The “role work plays in a person's life, the imbalance in many employer-employee relationships and the desirability of interpreting legislation and the common law to provide a measure of protection to vulnerable employees” influence the

interpretation of employment contracts ( Ceccol at paras 47-48 ). Faced with genuine ambiguity, Courts should prefer the

interpretation more favourable to the employee ( Ceccol at para 49 ; Wood at paras 26-28 ; Holm v AGAT Laboratories Ltd , 2018 ABCA 23 at para 34 ). [ 63 ] The objective

interpretation which gives reasonable meaning to the explicit phrase “Assignment Length”, does not impose the harsh consequences of a traditional fixed term contract, is the most plausible meaning in the limited surrounding circumstances which both parties knew or ought to have known, and is most favourable to Ms Rice, is that Ms Rice receive the promised assignment of four years (absent termination for cause) but not that the contract would automatically end at the conclusion of that time. Thus the contract is terminable effective any date thereafter in accordance with the common law. The use of the word “assignment” rather than “employment” in the contract supports this

interpretation. The relatively short duration of the assignment distinguishes this case from the long, and therefore unlikely, claim to employment duration considered by the Manitoba Queen’s Bench and Court of Appeal in Wallace . [ 64 ] If there were any remaining doubt, I would adopt this

interpretation because it is against the interests of the party that drafted the contract. [ 65 ] Cases frequently observe that contra proferentem is a last resort, where other rules of construction failed to resolve the ambiguity (for example, Tien Lung Taekwon-Do Club v Lloyd's Underwriters , 2015 ABCA 46 at para 24 ; Equitable Trust at para 29). [ 66 ] A person in Ms Rice’s position, considering the language of the contract and the circumstances of which both parties knew or ought to have known, would reasonably and objectively expect to have work for four years. The ambiguity, on which Shell seeks to rely to defeat that expectation, was Shell’s responsibility. (

a) Shell sent Ms Rice an offer stating it did not contain all the terms and conditions of her employment and allowed line managers to discuss employment matters with employees, yet failed to respond to her inquiry of her line manager whether there were other terms. (

b) There was no defined process to incorporate Shell’s human resources policies or glossary into the automatically generated email offers of employment, or to ensure and verify that an employee was briefed by his or her manager about Shell’s special use of the term “Assignment Length”. (

c) Shell could have incorporated its administrative policies or

definitions into its employment offers, whereas Ms Rice had no practical power to negotiate an offer in the managed open resources environment imposed on her by Shell. [ 67 ] Ms Rice should not have her reasonable expectation of four years of work defeated by Shell’s ambiguity. The contract should be interpreted as far as reasonable in her favour.

III Damages (

a) Facts [68] Immediately prior to her termination, Ms Rice received an annual base salary, participation in a bonus plan, a fly in fly outincentive (to compensate for travelling to and from a site outside of Fort McMurray), five weeks of paid vacation annually, andparticipation in Shell’s extended health and dental benefits plan. [69] Ms Rice diligently sought alternative employment after she was terminated. She obtained employment at another company(Fisher) operating in the Fort McMurray area on September 26, 2017. Her contractual employment location was Fisher’s head office inFort McMurray.

She worked full time until March 11, 2019, then fluctuated between full time and part time as business needs requireduntil August 7, 2019. Her final day for which she was paid was July 6, 2019. From the time she started getting part time work fromFisher, she searched for full time work elsewhere, but she has been unemployed since August 2019. [70] Shell does not assert that Ms Rice failed to act reasonably to mitigate her loss. (

b) Damages principles [71] An employer who dismisses an employee before a fixed-term contract has expired must pay the dismissed employee the salaryshe would have received had she worked until the end date unless there is a provision which states otherwise (Lovely at para 136).

Thesame applies to the promise to Ms Rice of four years of work. [72] Ms Rice’s counsel argues that a claimant is not obliged to mitigate their loss arising from breach of a fixed term employmentcontract and that any earnings received from any mitigation efforts after the breach are not deductible from the amounts payable underthe contract. [73] Mitigation principles do not apply where an employment contract specifies the amount payable on termination, whether afixed sum or ascertained by reference to some formula including a fixed period of notice (Mills v Alberta, 1986 ABCA 162 at para 11;Pacquin v Gainers Inc, 1991 ABCA 132 at para 6; Brown v Pronghorn Controls Ltd, 2011 ABCA 328 at paras 47-48; Bowes v GossPower Products Ltd, 2012 ONCA 425 at para 37; Lovely at paras 123-125). [74] Ms Rice’s counsel relies on Howard v Benson Group Inc (The Benson Group Inc), 2016 ONCA 256, where the OntarioCourt of Appeal extended this principle to a fixed term contract without a contractual termination provision.

The Court reasoned that theparties bargained for certainty to avoid litigation risk, and the uncertainty of litigating over mitigation was inconsistent with their bargain(ibid at paras 34-39, 44). [75] Ms Rice also mentions Baim v North Country Catering Ltd, 2017 ABCA 206, where the Court stated: [18] In our view, in interpreting the commission provision, neither the notice period nor the issue of just cause, are relevant.Further, in the circumstances of this case, mitigation does not apply to liquidated damages or contractual amounts: Bowes v Goss PowerProducts Ltd, 2012 ONCA 425 , paras 41-43, 47-48. [76] The issue in Baim was whether partial

summary judgment was appropriate in respect of commissions derived from businesscontracts generated by the employee. This required the Court to interpret the contract to determine whether commissions received aftertermination were payable to the employee.

It does not address whether such principles should be extended as in Howard. [77] Shell submits that the law in Alberta requires that earnings from a replacement job must be deducted, absent some specificprovision such as the termination provision in Gainers (Stewart v DIGI Canada Incorporated, 2007 ABQB 662 at para 8, app dismwithout reference to the point, 2008 ABCA 350; West Care Pharmacy Ltd v SwiftRx Ltd, 2008 ABQB 473 at paras 48-49; Lavallee vSiksika Nation, 2011 ABQB 49 at para 131; Vaillancourt v Carter, 2016 ABQB 492 at para 74; Dalskog v Crowsnest Pass EcomuseumTrust Society, 2019 ABPC 36 at para 76).

In contrast, in Lovely at para 140, the Court observed that “a very sound argument can bemade that mitigation principles do not apply to fixed-term contracts with no early termination provisions unless the contrary position isstated”. [78] In Stewart, Justice Germain stated: [8] The law in this area is unclear and not completely reconcilable.

I believe a reasonable statement of the law is: While a few earlier cases held there is no duty to mitigate where a fixed term contract is breached, the majority of modern cases haveheld that an employee whose definite-term contract is breached must still mitigate his or her damages or that, in any event, any sumsearned within the balance of the contractual term must be deducted from the employer’s liability. The Supreme Court of Canada hasconfirmed that employees whose fixed-term contracts are breached have a duty to mitigate their damages.

This is, of course, subject tothe contract’s terms, and where they indicate that earnings should not be deducted, no deduction will be required. (Ellen E. Mole,Wrongful Dismissal Practice Manual, 2nd ed., looseleaf (Markham: Butterworths, 2006) at volume 2, para. 10.9). See also: Wells v. Newfoundland, (SCC), [1999] 3 S.C.R. 199, 177 D.L.R. (4th) 73. [79] The weight of authority at the trial level in Alberta applies mitigation principles as recently as 2016 in published decisions.Baim did not address these cases and dealt with a specific contractual covenant to pay commissions in addition to whatever damages for

reasonable notice might be due. I therefore apply the principles in Stewart and Vaillancourt. (

c) Damages assessment [80] The components of Ms Rice’s damages assessment include her base salary and the bonuses she probably would have receivedhad she not been terminated. The parties disputed how I should treat the following items: Shell’s CCSA and Fisher’s living outallowance. (Ms Rice’s counsel withdrew the claim for Shell’s fly in fly out allowance during the hearing). [81] Ms Rice’s counsel handed out a series of damages scenarios, calculating quantum based on various assumptions, during thehearing.

Shell did not appear to dispute his calculations of the base salary or bonus predictions, which appear reasonably founded. [82] The parties agreed to several facts concerning the CCSA. Ms Rice received the CCSA from Shell prior to 2017. It is intendedto compensate overtime exempt staff who are working approved construction schedules with increased hours above standard staffscheduled hours during construction, commissioning or start-up of major capital projects.

Ms Rice’s shift was changed in January 2017(at Shell’s request), so she was no longer eligible for CCSA. [83] Ms Rice’s counsel argued that I should include the CCSA in Ms Rice’s salary at Shell at the time of termination. In hiswritten brief he submitted this income reduction would have resulted in constructive dismissal.

During the oral hearing, he observed itwould be unfair for Shell to reduce his client’s income shortly before termination. [84] There is no evidence that working overtime, or on a shift to which CCSA applied, was an essential term of Ms Rice’semployment, or that Shell rescheduled her in January as an underhanded (or any) means to reduce its potential liability. [85] I considered whether I should decline to decide the point in a

summary trial, pending further evidence. It would beunreasonable to do that. The Plaintiff’s side had a fair opportunity to show at least some evidence on the point, but there is none. Neitherside suggested I should not determine this matter as part of the

summary trial. Given the amount in issue on account of the deduction,refusing to assess the damages because of a lack of evidence on this point would be a disproportionate response. In view of theagreement in the Agreed Statement of Facts, the CCSA is not a component of the damages assessment. [86] Ms Rice’s counsel submitted that if I decide to deduct amounts earned in mitigation, I should not deduct the living outallowance that Ms Rice received from Fisher.

Counsel stated such allowances are a taxable benefit, but suggested I take judicial noticethat they are generally understood to compensate for travel expenses such as meals and accommodation and therefore are not a net gainto the employee. He also suggested I take judicial notice that living in Fort McMurray is expensive (in comparison to where, he did notsay). Shell submitted that the living out allowance should be deducted. [87] Ms Rice’s residential address was in Calgary when she made her employment agreement with Fisher. The place of heremployment was Fort McMurray.

The agreement described the payment as a non-taxable monthly living out allowance, subject torevision or discontinuance at any time. The agreement provided Ms Rice with flights from Calgary to Fort McMurray, subject to revisionor discontinuance at any time. Ms Rice deposed by affidavit that the allowance was to cover living expenses while travelling for work.Shell did not challenge that evidence. [88] Expense reimbursements may be based on a fixed estimate rather than on specific expense receipts. The allowance was not avariable as a percentage of base income, which would tend to show it was part of salary.

Tax treatment of the living out allowance is notdeterminative. I do not need to take judicial notice as counsel suggested, because the purpose of the allowance is clear in theuncontradicted evidence: the contract contemplated that Ms Rice lived in Calgary and there would be turnaround travel between Calgaryand Fort McMurray, and Ms Rice’s evidence concerning the purpose of the allowance was not challenged. I conclude the allowance wasa genuine indemnity or reimbursement for the increased expenses of living out as opposed to salary or benefits.

Such allowances need notbe deducted (Bhavsar v Canadian Natural Resources, 2016 ABQB 471 at paras 34-35 and authorities cited therein). Therefore, I do notdeduct the living out allowance. [89] Accordingly, I award the Plaintiff damages as calculated in Scenario 2 provided by her counsel at the

summary trial, less theamounts for the fly in fly out allowance ($22,841.88) and CCSA ($68,525.62). The adjusted amount is $257,742.91, subject to anycalculation errors in the underlying scenario and subject to any additional mitigating income which Ms Rice might receive before March31, 2020. [90] If I had found that Ms Rice was not promised four years employment, I would have been required to assess the period ofreasonable notice.

In Wallace, the Court observed: 81 In determining what constitutes reasonable notice of termination, the courts have generally applied the principles articulated byMcRuer C.J.H.C. in Bardal v. Globe & Mail Ltd. (1960), (ON SC), 24 D.L.R. (2d) 140 (Ont. H.C.), at p. 145: There can be no catalogue laid down as to what is reasonable notice in particular classes of cases.

The reasonableness of the notice mustbe decided with reference to each particular case, having regard to 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. 82 This Court adopted the foregoing list of factors in Machtinger v. HOJ Industries Ltd., (SCC), [1992] 1 S.C.R.986, at p. 998….

I note, however, that Bardal, supra, does not state, nor has it been interpreted to imply, that the factors it enumeratedwere exhaustive.… Canadian courts have added several additional factors to the Bardal list. The application of these factors to theassessment of a dismissed employee’s notice period will depend upon the particular circumstances of the case. [91] Ms Rice worked for Shell for about 8 years 7 months. Ms Rice’s counsel submitted her total length of employment with Shellshould include her time, prior to joining Shell, when she worked under a contract with a staffing agency and exclusively provided

services to Shell. I do not see the basis for this contention and I have not counted it. [ 92 ] She held the position of Indirects Manager since November 2014. She performed financial and managerial functions, including portfolio budget preparation and management, project indirects budget preparation and management, completing a cost-cutting plan, equipment and fuel management, and completing site-materials management plans. She supervised a six person team for materials management and site services.

She was a professionally qualified accountant throughout her employment, and also held a project management accreditation. [ 93 ] Shell and Ms Rice differ in their characterizations of Ms Rice’s employment. Shell said she had a mid-level role (Shell’s brief at para 70) but also acknowledged at the hearing that while she was not an executive, a vice-president or a president, she was relatively senior in the company with finance designations. Ms Rice’s counsel characterized her as having a senior management position (Ms Rice’s brief at para 77).

Regardless of the label, it is apparent that Ms Rice bore substantial responsibility in her position and it was one which required experience, diligence and trust. [ 94 ] When she was terminated, she was 53 years old and was caught in the economic downturn in the Alberta oil and gas economy. These would negatively affect her employability and the availability of similar employment. [ 95 ] Shell sometimes suggested that its responsibility for damages ended when Ms Rice found employment with Fisher in September 2017 (Shell’s brief at para 76).

Ms Rice was given working notice in February 2017, so it may be that Shell was simply pointing out that its estimate of reasonable notice, 8 ½ months, was consistent with the timing of Ms Rice’s actual date of finding work. [ 96 ] The availability of similar, alternative employment should be assessed prospectively, at the time of dismissal ( Bahrami v AGS Flexitallic Inc , 2015 ABQB 536 at para 36 ). It took months for Ms Rice to find a job, and the jobs are not directly comparable.

The Fisher job offered a higher base salary, but no opportunity for bonus participation, and the benefits plan was not covered by Fisher for the first 90 days. It appears to me that Ms Rice took a pay cut. [ 97 ] Ms Rice’s counsel cites a number of cases where individuals of similar age, years of service and roles as Ms Rice were awarded notice in the range of 9 to 15 months. In one of them, the appellate court observed that 15 months was on the high side but did not warrant appellate intervention.

Shell cited a number of cases suggesting a lower range of 6 ½ to 11 months. [ 98 ] Every case turns on its own facts. The ones selected by the Plaintiff’s counsel are a few of many, and one can also find cases where persons with greater responsibility than the Plaintiff and of similar age received an award at the lower end of the range proposed by her counsel (see, for example, the cases in Lovely at para 151). [ 99 ] I find it appropriate to apply the cases at the higher end of the range.

The most important factors are Ms Rice’s relatively senior position, the length of her employment with Shell companies, her age, and the downturn in the Alberta oil and gas economy, an industry sector where she had worked since October 2007. Further, the factors in Bardal are not an exhaustive list.

I find it appropriate to consider that she reasonably expected to have four years employment with Shell, and Shell was responsible for inducing this belief through its ambiguous documents and failure to advise her of additional employment terms. [ 100 ] If the damages were based on reasonable notice, I would have calculated Ms Rice’s loss on the basis of Scenario 3 provided by her counsel, again adjusted to remove the claims for the fly in fly out allowance and the CCSA and without deducting the Fisher live in allowance.

The result would have been $82,625.99, subject to any underlying calculation errors in the scenario. IV Conclusion [ 101 ] I assess damages at $257,742.91. If I had found reasonable notice applied, I would have assessed damages at $82,625.99 based on 15 months notice. If there are calculation errors in the scenarios provided to me during the

summary trial or in this judgment, counsel may address them. Shell requested that the judgment provide that Shell may remit withholdings required by law. If the parties require direction on this request or a dispute arises over implementation, they may arrange to speak to these. Counsel may speak to a mechanism or hold back to address potential mitigating income which may yet be received before March 31, 2020 if they wish. Counsel may arrange to speak to judgment interest and costs. Heard on the 17 th day of October, 2019. Dated at the City of Calgary, Alberta this 18 th day of December, 2019. J.T. Eamon J.C.Q.B.A. Appearances:

Joel C Fairbrother of Taylor Janis LLP for the Plaintiff Sara D Babich of Shell Canada Limited For the Defendant