Linton v. The Ethical Bean Coffee Company Ltd. Date:, 2012 BCPC 212

Citation: Linton v. The Ethical Bean Coffee Company Ltd. Date: 20120403 2012 BCPC 0212 File No: 10-21917 Registry: North Vancouver IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: JEFFREY SCOTT LINTON CLAIMANT AND: THE ETHICAL BEAN COFFEE COMPANY LTD. DEFENDANT EXCERPTS FROM PROCEEDINGS REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE C. BAIRD ELLAN Counsel for the Claimant: J. Linton Appearing for The Ethical Bean Coffee Co. Ltd : V. Malik, an officer of the Company

Place of Hearing: North Vancouver , B.C. Date of Judgment: April 3, 2012 [ 1 ] THE COURT: The claimant, Jeffrey Linton, seeks damages for wrongful dismissal from his position with the defendant company, The Ethical Bean Coffee Company Ltd. [ 2 ] The defendant takes the position that Mr. Linton was fired for cause, has failed to mitigate, and is bound by a contractual clause limiting his notice period to that provided under the Employment Standards Act . Nature of Position [ 3 ] I will turn firstly to the nature of the position, because that really assists in characterizing a lot of the issues here.

Having regard to the relevant factors for assessment of the notice period, which are set out in case law, notably Bardal v. Globe & Mail , Mr. Linton's position may be summarized as follows: He was hired as a food services sales manager of Ethical Bean in September 2007. He made a presentation of a business development plan, based on his prior five years' experience, or so, at JJ Bean, to take over the task of moving the company, that is Ethical Bean, into food sales.

Basically, as I understand it, that would be servicing restaurants, cafés, and providers of coffee and related products. [ 4 ] This, as I understand the evidence, was a different focus for the company than its previous concentration on retail sales. So essentially a new position for Mr. Linton and a new direction, to some extent, for the company, as presented by Mr. Linton in his pitch, I guess I could call it. [ 5 ] Mr. Linton was employed with the defendant for just under three years, a month under three years.

He was 38 when terminated in the summer of 2010. [ 6 ] As to the availability of other similar employment, in my view, that factor is wrapped up in the issue of mitigation to some extent, and I will deal with it under that heading when I get to it. Mr. Linton asserts that there were many people unemployed in the industry at his level at the time when he was terminated, and that there were other factors hindering his ability to find an equivalent position when he left.

Cause [ 7 ] Turning to the issue of dismissal for cause, the factors that a court will look at in considering whether there has been dismissal for cause are well documented and conveniently set out by Justice Goepel in the case of Hennessy v. Excell Railing Systems Ltd. , 2005 BCSC 734 , at page 5. Mr. Justice Goepel quotes from Boulet v.

Federated Co - operatives , a Manitoba decision. [ 8 ] Those factors, rather than setting out the extensive reference in the case, may be distilled into a requirement that the employer must establish that there has been serious misconduct or incompetence, adequate communication with the employee of his failure to meet standards that have been adequately communicated to him and which he has been told were crucial to his continued employment.

That is my paraphrasing of what the Hennessy case and the Boulet case set out. [ 9 ] The employer also notably may not rely on previously condoned transgressions. [ 10 ] In this case, the employer in its Reply relied on a past transgression that had been condoned long prior to the dismissal. It is not permitted to do that, and Mr. Malik has quite properly declined to rely on that as cause in these proceedings. [ 11 ] The more substantial allegation in terms of dismissal is that Mr. Linton failed to meet his key performance indicators [KPIs] for three consecutive quarters. [ 12 ] Mr.

Malik relies upon a discussion on June 6th, wherein the two agreed on a month-to-month assessment of Mr. Linton's KPI performance. Then on July 22nd, he says there was a meeting in which they discussed the need for the company to restructure the food services portion of the business, and essentially Mr.

Linton was, at that point, given notice that his position was no longer required. [ 13 ] None of the discussions prior to that, or even those discussions on June 6th and July 22nd, were really documented, except by past references in subsequent correspondence, nor was there any reference in those subsequent correspondence references to the fact that Mr.

Linton's employment was contingent upon the KPIs being met. [ 14 ] The evidence led by the defendant in these proceedings, both documentary and from its witnesses, also, in my view, fails to establish that these key performance indicators were either incorporated into the employment contract or established with the employees as standards that had to be met for continued employment. [ 15 ] There was an understanding on the part of two of the witnesses who testified; they said that after three consecutive quarters of not meeting some level, it might be that there would be dismissal.

But that does not establish that it was conveyed to Mr. Linton as a condition of his employment, that that was the case. [ 16 ] The document on which the defendant relies to introduce the KPIs is the Bonus Plan. That document establishes that additional salary may be payable if employees meet certain criteria. There are also bonuses for team and overall company performance, but there is no mention in that document of anything called KPIs or key performance indicators. That, Mr. Malik testified yesterday, came by word of mouth essentially or by passing out the employee handbook at some meeting.

But again, there is nothing effective in all of those communications to incorporate the meeting of the KPIs, or 75 percent or whatever percentage it was, into the employment contract, such that failure to meet that term might be cause for dismissal.

[ 17 ] There are also emails between Mr. Malik and Mr. Linton about Mr. Linton's individual KPIs, and again these two employees of the company testified that they had been told that failure to meet the KPIs for three consecutive quarters may be cause for dismissal. Those understandings on their part and these emails, although they refer to KPIs, do not document the condition of employment that, if you do not meet these things, you may be subject to dismissal. [ 18 ] It is open to

interpretation, based on the documentation which is before the Court, that failure to meet the KPIs just affected an employee's ability to earn bonuses, which in Mr.

Linton's case it clearly did, and bonuses being on top of regular salary and something that one would normally not view as cause for dismissal if they were not earned. [ 19 ] There was some confusion as to whether there might be a threshold of, for instance, 75 percent of the key performance indicators, and again, neither of the employees who testified seemed to be aware of any suggestion that 75 percent was a threshold that had to be met. [ 20 ] So while I do find on the facts that Mr.

Linton received the emails attaching his KPIs for each quarter and inviting discussion, et cetera, -- perhaps he was a little coy about that in his evidence. He tended to stand on the letter of the law and say, "Well, if you cannot prove I got them, then I am not saying I did," which I suppose is reserving his position, but I found it a little coy; he clearly did get them.

So I also find there were some back-and-forth discussions about whether he was meeting the KPIs and that they might be revised to something more realistic, and there was discussion between the parties. [ 21 ] As well, I agree the evidence establishes some of his duties may have been passed on to other employees, so that he could concentrate on developing the food sales. But the problem with the defendant's evidence is that the company has not established that it was adequately conveyed to Mr.

Linton that achievement of the KPIs was a condition of his employment. [ 22 ] None of what the company later relied upon as cause, specifically non-satisfaction of KPIs for three consecutive quarters, is squarely spelled out in any documentation between them. Neither of the employee witnesses provided evidence that they knew, again, that Mr. Linton was aware of that. [ 23 ] In addition, the company has not established that the standards it seeks to rely upon, these KPIs, were reasonable.

The law says they need to do that. [ 24 ] This was a new area, and the company has not shown either that another employee in the company was able to achieve the same KPIs, or that the company itself has done so since Mr. Linton left. That is not a major portion of the reasoning here, but again there is no comparison against which to measure Mr. Linton's performance, nor was he given that comparison against which to measure his own performance. [ 25 ] I will say, moreover, the company did not allege cause in the reasons it provided Mr. Linton for dismissal.

It does appear, and here I refer to Tab 37, I think it was

Schedule A, which is the company's reasons that they gave, I think Mr. Malik wrote it, to Mr. Linton in writing about the dismissal. There were a couple of communications back and forth, I am not going to refer to them specifically here, but it does appear that the company did, in fact, first of all, say, "It is a restructuring, we are not going to be doing this anymore, and therefore your position is essentially redundant," or whatever. But they also did, in fact, restructure the food services aspect. That is, they did not replace Mr. Linton with anybody in an equivalent position.

They kind of divided it up, and maybe continued in the food services exploration, but did apparently do some restructuring. So not only did they rely upon that as the reason for dismissal, but they actually appear to have genuinely intended not to replace him. [ 26 ] It was not until an email from Mr. Bernhardt, the chief operating officer, to Mr. Linton on September 1st that there was any documented reference to the issue of KPIs not being met for three consecutive quarters. It is also in this letter that the first veiled reference to Internet usage and assertion of cause occurred.

This was five weeks or so after the first discussion of termination, and over three weeks after the termination date. I am not sure my figures are right there, but not much turns on it. [ 27 ] There had been amicable discussions between Mr. Linton and Mr. Malik up till that point, and between those dates, talking about the appropriate notice period, and then well after the fact, even after the final payment had been made, Mr.

Bernhardt raises the issue of cause. [ 28 ] In all, looking at the facts here and having heard the evidence of the parties, I do not find that the defendant has established that there was cause for dismissal. I gave that indication to Mr. Malik fairly early in the proceedings, perhaps by some of the comments I made, but in my view it just was not established on the facts here, so no cause. Notice Period [ 29 ] So we turn to the issue of the notice period. The actual notice period essentially was July 22nd, the date on which Mr. Linton was told restructuring, et cetera.

He took his vacation after that, and there is certainly case authority that I have just seen over the break that establishes that vacation does not enter into the notice period. I agree with that assessment. [ 30 ] He came back on August 3rd, did a working notice week, and then two further weeks after that, with a final notice date being August 25th. I do not know the final date that he had finished, it was three weeks after August 3rd.

So essentially it was a three-week notice period, and that was paid on September 25th or thereabouts. [ 31 ] There were email discussions between them, as I have said, in the meantime about what the terms of severance would be. The company relies upon the employment contract, which specifies reasonable notice in accordance with the Employment Standards Act . However, the defendant appears to be, I noted in Mr. Malik's submissions, unfamiliar with what the Employment Standards Act reasonable notice provisions might be. In fact, it does say a week per year.

It is such a minimal amount and it comes up so rarely in these courts that it is not something the Court is familiar with either. We do not award damages for wrongful dismissal based on the Employment Standards Act . It is viewed as a minimum statutory measure of what an employee is, by right, entitled to. It is not a measure of what is the reasonable common-law level of damages for wrongful dismissal.

[ 32 ] Nonetheless, it would be open to an employer to have an employee at a particular level, perhaps not this level, but a level, sign a contract saying that they would be limited to Employment Standards Act provisions. That is not what this contract says, and I will get into that in a second, but the first thing is that Mr. Linton did not sign a copy of that agreement that is relied upon by the defendant. [ 33 ] He points out, or did yesterday, that the first reference he ever heard of it or to it was in a letter from Mr.

Malik, the letter after termination. [ 34 ] The company is not able to point to any documentation indicating that Mr. Linton received a blank copy of that contract. What was retrieved from his employment file was a blank copy, as in not signed by any of the parties, and it was again referred to in correspondence, but Mr. Linton says that is the first he heard of it. That is not the first time we have heard him say that; however, this is a place where the onus lies on the defendant to establish that it is a binding contract between the parties. [ 35 ] Mr. Linton certainly did not sign it.

He did sign a confidentiality agreement that is dated around the same time, as it was supposed to have been conveyed to him or put in his file. While Mr. Malik to some extent points to that as indicative of the fact that they always come together, so Mr. Linton must have gotten a copy of the blank one before he took the employment on, the evidence does not establish that it was conveyed or given to Mr.

Linton; at least, it does not establish that in any positive fashion. [ 36 ] My view is that since he signed the one document and not the other, somehow there was an oversight with respect to the documentation that was done when he entered into his employment. I note that the other is witnessed by Mr. Bernhardt. He did not testify about whether he provided the first document to Mr. Linton or not, or whoever may have given it to him.

Nobody said, "We gave you this when you first applied," and the evidence does not establish he got it. [ 37 ] So I think his having signed the one document is inconsistent with an assertion that he had notice of the other, because if one was doing it properly at the time he signed on, the confidentiality agreement would have been signed after the employment contract, and the employer would go through the terms of the employment contract and say, "Sign here." It did not happen. [ 38 ] So I do not find that Mr.

Linton is being coy about this aspect, because the onus is on the defendant to establish that it was provided to him and incorporated into the terms of their employment contract. [ 39 ] I am not convinced it would have been binding in terms of what the damages would have been, in any event, because it does not purport to limit them to that. It says reasonable notice. [ 40 ] Mr. Malik first has argued, and refers to a case of Johnson v. CanWest Communications , that a term can be implied in a contract if it is accepted by both parties. He says Mr.

Linton executed these parts of the contract and should be taken to be bound by other parts. He also says that Mr. Linton relied upon parts of the contract by accepting some of the benefits and alluding to it. [ 41 ] The only allusions or references I have seen in Mr. Linton's correspondence to the employment contract take place after the first reference to it in the written materials by Mr. Malik. I do not see any written evidence that Mr. Linton purported to rely upon it before he says he was aware of it.

He certainly accepted the benefits under the contract, but that is because they were offered or proffered to him by the defendant in connection with his employment, and it does not indicate that he had personal knowledge of the fact that they were being paid pursuant to a written contract that he says he did not receive. [ 42 ] He may be taken to have accepted the benefits, but there is nothing in the documentation provided that fixes him with notice of the existence of a written contract. [ 43 ] Again, I am not sure that is definitive, because I do not think it would necessarily bind him. Mr.

Linton says the contract is ambiguous, should be construed against the draftsperson, which I agree with, that is a principle of law as well. The contract promises reasonable notice, and then refers to the statutory minimum or the statutory provision, but not as a minimum. Reasonable notice, Mr. Linton says, is a common-law term governed by the Bardal v. Globe & Mail factors, and he says the way in which the company reads the contract essentially negates the concept of reasonable notice, and it is therefore inconsistent with the contract itself.

That is sort of a paraphrase of his argument. [ 44 ] I agree with that. That is, that it is ambiguous and it does not definitively say, "The only notice you will get will be one week per year, aligned with the minimum provided by the Employment Standards Act ." [ 45 ] So again, onus on the defendant, not met in this particular case. [ 46 ] So there is no contract governing the notice period. We turn to what the cases say about what is a reasonable notice period for this type of employment. Mr. Linton has referred to a number of cases.

I am not going to go through them all, there are enough to kill at least a hundred trees, but I have referred and flipped through them and looked at them. [ 47 ] Mr. Malik distinguishes a number of the cases referred to by Mr. Linton. The first, in particular, Bavaro , which is a coffee or tea industry case. He says in that case there is a difference in level of seniority or level of the type of employment, number of employees, that sort of thing. Age, some of these cases differ in age, and certainly age is a factor.

Whether there is an inducement to join the company, `the level of responsibility, number of employees, et cetera. Some of these are fixed term contracts, so if you sign on for five years, you get a lot more notice than if you sign on for whatever, a regular contract. And some, of course, have medical issues which have to enter into it as well. [ 48 ] Mr. Malik himself passed up a number of cases, and I did page through them and they assist.

They all assist in deciding the range of notice period. [ 49 ] We used to have a handy rule of thumb where it was one month per year, but of course the Court of Appeal thought that was too simple so resiled from that, so there is never any certainty in this area of the law now, and it seems that they kind of go all over the map.

[ 50 ] Mr. Linton says in his submissions, and he has always taken the position, that six to eight months was the appropriate notice period for his level. He also submits that the character of employment is not to be given undue weight in relation to the other Bardal factors, and certainly he has cited authority for that which I have read through on the break. [ 51 ] As I say, I have skimmed through all the cases, and as I indicated to the parties, the issue is one of balancing the relevant factors, giving each the appropriate weight and not too much to character of employment.

What we have here is what might best be characterized as a middle sales management position. It could be sales/management, I guess. It is not upper management, clearly. There is not responsibility for subordinates. There is not inducement to leave prior employment, although I think I balance that to some extent with the fact that there was a submission for a business plan and it is at a certain level. It is not a lower-level kind of barista sort of thing. It is a fairly particular skill set and knowledge of the industry with prior involvement in the industry, sort of a niche, I would say.

A mid to high middle-level salary, I would say. [ 52 ] So having regard to the cases, the best the period can be assessed, in my view, this should have been a situation where four months' notice was provided. Mitigation [ 53 ] I turn to the issue of mitigation. The burden is on the defendant again, it seems to always be on the defendant and that is just the way these cases go, which is why, I might add, it is better to take legal advice before the dismissal is effected rather than after. The defendant has not produced any evidence of available positions in the industry at the time when Mr.

Linton was making his job search. [ 54 ] Mr. Malik points to the fact that Mr. Linton had employment with Speciality Coffee Services Company in November of 2010, and could have continued there. Mr. Linton says he was denied employment there because he was seeking a salary higher than the company was willing to accept. The offer had been 22.50, Mr. Linton counteroffered with $25 an hour, and the answer that he got back was, "No, essentially that is too much and we have decided not to pursue this employment with you." [ 55 ] I note Mr. Linton says essentially that letter was not a job offer, and I agree with that.

He also says that there is a scale of what is reasonable, in terms of what he was required to take, and that what was initially offered by Speciality Coffee Services was so far outside the range of what he was leaving that it amounted to constructive dismissal, this ingenious argument that his lawyer friend advanced in the materials, and he points to a case called Pavlis . [ 56 ] Mr. Malik points out that the offer from Speciality Coffee was pretty close to what Mr.

Linton was leaving, if you add up the hourly rate, 45,000 a year, 40 hours a week for only 50 weeks or so, and he says that is essentially within striking distance of what he had been getting at Ethical Bean. [ 57 ] Mr. Linton had built in the benefits he received at Ethical Bean, as well as the use of the phone, the nature of the position, travel requirements, and overtime.

He says that the offer was one that might have met the definition of constructive dismissal, in that it was outside, essentially, the 80 percent range of what he had been making as a package at Ethical Bean. [ 58 ] I note there is no specific case authority for the use of the constructive dismissal assessment in relating to whether or not an offer should be taken. The issue I have got with the Speciality Coffee Services offer is that it was not an offer at all. There was a negotiation, and I do not view it as unreasonable for Mr.

Linton to have engaged in negotiation to get himself a higher salary or a better package. He made the counteroffer. It is like how we would assess it in real estate sales. The offer that came back was, "I do not like your counteroffer and I am not going to make an offer." He did not get an offer of employment from those people.

They did not come back and say, "No, we stand on our 22.50." They basically said, "We are not going to pursue it with you." [ 59 ] So, in a sense, maybe he shot himself in the foot by going and seeking, you know, shooting too high, but the fact is it was not a bird in the hand and he did not fail to mitigate by simply renegotiating or trying to renegotiate. The assessment is what is reasonable in the circumstances. It is always, that is the whole assessment here, what is reasonable in the circumstances. [ 60 ] So I cannot find that a failure to take that particular offer was unreasonable in the circumstances. Mr.

Linton fairly points out that the first offer was made on November 15th. That would have been within the notice period, so if I found it was a failure to mitigate, it would have reduced the notice period to about three months, but I do not find that is the case, so I do not find it to reduce the notice period. [ 61 ] Mr. Linton has pointed out that he is out a few dollars as a result of deduction of CPP and EI, and I do not think there is any dispute about that. As well, the failure to include vacation pay.

I do not think those particular amounts are disputed. [ 62 ] I was going to say one further thing about mitigation, and it kind of enters into this area as well, and they do overlap a little bit. In Mr. Linton's case, he said specifically in his evidence that once the employer alleged cause, and in particular raised the spectre of this previously-condoned transgression, he became a little gun-shy in terms of using them as a reference. There is also the aspect of the promised reference that never came to pass.

In fact, ultimately a reference was provided that was no reference at all, and it really probably would have been more negative than anything for Mr. Linton to produce. [ 63 ] So his hands were, to some extent, tied.

If he went within the coffee industry, given what was said in the Reply about, "Look, he used the cellphone for this and we have a bill that we want to get back from him," he was leery of using Ethical Bean as a reference, so there is that gaping question, "Where have you been for the last three years and why are you not telling us?" Or, "I was at Ethical Bean," they call them up, and he does not know what they are going to say, because they had not given him a reference and they alleged that they were going to rely on the cause aspect, both aspects of the cause, but in particular that one that, at the time, was treated fairly lightly. [ 64 ] So that enters into Mr.

Linton's duty to mitigate. He had trouble finding employment in an equivalent industry at the time because of how he felt his hands were tied, until much later. Well, until the outcome of these proceedings, I suppose, and the time when finally Mr. Malik, as I say, reasonably abandoned any suggestion that there was cause based on the use of the computer way back when.

[65] So that is part of my reasoning in saying that there is no failure to mitigate here. It does also enter into the issue of aggravateddamages. Aggravated Damages [66] So turning to the issue of aggravated, punitive, exemplary damages, or what we call Wallace damages in relation to wrongfuldismissal. [67] Mr. Linton claims bad faith on the part of the employer in the manner in which the dismissal comes about, and the casereferred to is Wallace at page 26 of the submissions, Wallace v. United Grain Growers, (SCC), 152 D.L.R. (4th) 1.

Itis a fairly dated case from 1997, and I had indicated before we adjourned for the break that I thought maybe cases had fallen back a bitfrom the assessment of Wallace damages. [68] My reading of the cases referred to, and I cannot put passage right now, but there is an indication in one of the cases that it hassince been endorsed again by the Supreme Court of Canada, and I could not find the year of the reference to that, but sometime after2000, I think it was.

So it has not been detracted from; in fact, it has been relied upon again by high authority and reiterated. [69] So the basis for the damages under Wallace is set out in the brief that was provided. . . . bad faith can be said to occur when one party, without reasonable justification, acts in relation to the contracts in a manner where theresult would be to substantially nullify the bargained objective or benefit contracted for by the other, or . . . -- this is significant -- . . . to cause significant harm to the other, contrary to the original purpose and expectation of the parties. [70] That is kind of an oblique reference, but it goes on: Aggravated damages are the proper vehicle to take into account the additional harm caused to the plaintiff's feelings by reprehensible oroutrageous conduct on the part of the defendant. [71] So it is a fairly unique set of circumstances that would justify the award of what we call punitive damages, and the cases allsay that; that it is kind of not to be treated lightly or awarded without considerable thought. [72] The claimant has submitted that the defendant did not follow through on its obligation to act in good faith and fair dealing, andthat the claimant, Mr.

Linton, suffered in a number of ways and is entitled to receive aggravated damages. [73] He says in particular that [as read in]: The manner of dismissal was callous because it was before summer holidays, causing great stress and uncertainty during a time that wasmeant to be a time of relaxation and repose. The defendant could reasonably have waited until the claimant returned from vacation, andduring that time taken the necessary steps to be sensitive to the disruption that this dismissal has caused the claimant and his family. [74] He goes on: (

b) The defendant dismissed the claimant verbally in an off-handed manner, providing no written notice until compelled to do so,showing a lack of concern to what the gravity of the dismissal would have caused on the claimant's life. This left the claimant feelingbetrayed by the defendant to whom he had dedicated himself deeply and left other similar employment to work for the defendant. (

c) When the claimant declined to sign a release, the defendant changed their reason for dismissal from departmental restructuring todismissal for just cause. This made the claimant fearful and anxious when applying for jobs, that potential employers would contact thedefendant for a reference . . . -- I have already alluded to this -- . . . and the defendant would damage the claimant's credibility by claiming dismissal for just cause. This greatly affected the claimant'sjob search in a negative way as he went forward with the fear of how the defendant would reply to any inquiries about the claimant. (

d) The defendant retained the claimant's personal information stored on a laptop computer and iPhone, leaving the claimant with thefeeling of having been taken advantage of, especially since this was in contradiction to the defendant's offer in a letter dated August 6,2010. (

e) The defendant dangled a carrot by offering to act as a reference for the claimant in his job search, should he agree to the terms of thedismissal. When the claimant declined to sign the release, the defendant changed its reason for dismissal from departmentalrestructuring to dismissal for just cause. The claimant felt double-crossed by his employer. (

f) The claimant was powerless to reason with the defendant, even to obtain what was statutorily owed to him, including his ownpersonal expenses, salary and vacation pay, causing him great frustration and anxiety. And finally:

(

g) The claimant was placed in an awkward position when applying for work due to his conviction that he needed to disclose the pending lawsuit against his former employer, and uncertainty as to what comment they may provide when questioned by potential employers, not to mention the fact that the pleadings would be a matter of public record. So I will leave my quotation at that. [ 75 ] Mr. Malik says there was no malice. The decision to allege cause, he says, was done after Mr. Linton contacted the owners, which I note in the materials is the case, and I have already noted the response by Mr.

Bernhardt to that contact with the owners. [ 76 ] Mr. Malik says any delays in paying were due to the fact that the parties were still in discussion about what an appropriate notice period would be. Essentially, it appears that when Mr. Linton elected to try to negotiate a better severance package or perhaps a reasonable one, retracting a prior offer he had made following taking legal advice, that he was urged to do by the defendants, Mr. Bernhardt responded with his September 1st email alleging cause. [ 77 ] Well, Mr.

Malik says that they did what they thought was best, relying on a legal advisor, and I note not a lawyer at that time, and they took legal advice only after getting served with the Notice of Claim.

What the defendant does not seem to have done here is take steps to understand its statutory obligations, the meaning of the term "reasonable notice", and the need for consistency and good faith in its position regarding the issue of cause. [ 78 ] Reneging on the offer of a letter of reference, taking a position which is diametrically opposed to the initial position taken, restructuring, is above and beyond what was necessary in order to achieve what the defendant wished to achieve which was, I presume, an amicable parting of the ways.

It became less than amicable, and that is because of the manner in which the defendant or members of the defendant company behaved after Mr. Linton (

a) took legal advice, and (

b) tried to get what he was reasonably entitled to, in terms of notice for his level of employment, and the reasons given for dismissal. [ 79 ] So in relation to the analysis on the issue of aggravated or Wallace damages, with respect, I can do no better than to adopt in entirety the well-prepared brief provided by Mr. Linton's legal advisor, who I gather is a lawyer, and that would be pages 28 through 31 of the brief that has been filed.

I will spare the parties reading that, they both had the opportunity to go through it and it has been referred to at some length in the submissions. [ 80 ] But it is a convincing submission, and I suppose again, with all due respect to the defendant, Mr. Linton had able legal assistance in preparing his materials and his case, and he presented it himself in an able fashion.

That is not to say it is just because of the way he has presented it; the legal argument is also convincing. [ 81 ] So in relation to the issue of aggravated or Wallace damages, in my view, it is appropriate that there be an award, in addition to the notice period.

Having regard to the case law and noting that the outside range was 50,000, in my view in this case a further one month will suffice. [ 82 ] The total notice period then, in light of all of what I have considered, will be one of five months; that is four, reasonable notice, plus one, Wallace . [Discussion Re: Calculation of Damages] [ 83 ] I am going to leave it to Mr. Linton to do the math or the parties to work it out, rather than spend the court time doing it.

You agree on what the monthly salary amount is, I take it, do you? [ 84 ] JEFFREY LINTON: Based on an equation of yearly salary divided by 12 basically, Your Honour. [ 85 ] THE COURT: Yes, but that was at the lower -- not the expected 10 percent, or whatever it was, but the actual rate. [ 86 ] JEFFREY LINTON: Oh sorry, the bonus. [ 87 ] THE COURT: The actual. [ 88 ] JEFFREY LINTON: The actual bonus, yes, Your Honour. [ 89 ] THE COURT: Where was that in your materials again? [ 90 ] JEFFREY LINTON: In

Schedule A, Your Honour. [ 91 ] THE COURT: Yes. That is the binder, Mr. Registrar. No, I have it here, sorry. [ 92 ] JEFFREY LINTON:

Schedule A, pages 32, 33, 34, and I believe as well – [ 93 ] THE COURT: Yes. [ 94 ] JEFFREY LINTON: -- 35. [ 95 ] THE COURT: We had sort of given a ballpark -- where is that

summary of what your package was? That was page -- what was it? Do you remember it, Mr. Malik? [ 96 ] JEFFREY LINTON: Page 66, Your Honour. [ 97 ] VIREN MALIK: I do not, Your Honour.

[ 98 ] THE COURT: Okay, 66, okay. Well, let us do it this way. We can do it now, so it is certain. We agree on your yearly salary being 49? [ 99 ] VIREN MALIK: Yes, Your Honour. [ 100 ] THE COURT: Vacation pay, 1960, any issue with that? [ 101 ] VIREN MALIK: No, Your Honour. [ 102 ] THE COURT: Okay. Bonus, KPI bonus, that was a high potential, 10 percent, but the actual earnings were about 18. [ 103 ] VIREN MALIK: Correct. [ 104 ] THE COURT: Mr.

Linton, you are satisfied with 18 being your average KPI earnings? [ 105 ] JEFFREY LINTON: Yes, Your Honour. [ 106 ] THE COURT: Okay. [ 107 ] JEFFREY LINTON: I believe that was the number we came up with. [ 108 ] THE COURT: Medical Services Plan, that was the portion paid by the employer? [ 109 ] JEFFREY LINTON: Yes, Your Honour, it's $102 a month. [ 110 ] THE COURT: Okay. Is that included, as far as you are concerned? [ 111 ] VIREN MALIK: It seems a little high, Your Honour, for MSP, a hundred dollars per month. [ 112 ] THE COURT: Yes, it is high. The employer's portion, you have got that?

Show it to Mr. – [ 113 ] JEFFREY LINTON: They paid this, yes. It is -- has been submitted as one of the items already. [ 114 ] THE COURT: Okay, just show it to Mr. Malik then. [ 115 ] JEFFREY LINTON: This was paid entirely for the entire duration of my employment. [ 116 ] THE COURT: 102 per month, so 1960 a year, all right. Sorry, no, that was 1308, right? Is that right? [ 117 ] JEFFREY LINTON: Yes, Your Honour, 1308 per year, I believe.

I could be wrong on that. [ 118 ] THE COURT: 1224, one – [ 119 ] JEFFREY LINTON: Oh-two times 12. [ 120 ] THE COURT: -- oh-two times 12 is 1224. [ 121 ] JEFFREY LINTON: Okay, thank you. [ 122 ] THE COURT: Group benefits, 1113, where does that come from? [ 123 ] JEFFREY LINTON: Your Honour, that was a quote provided by an extended benefits provider that we -- my wife and I approached regarding extended medical insurance. [ 124 ] THE COURT: Okay.

Now, do you -- is there a paystub in here which shows what was deducted for those things or you're talking about the employer's portion? [ 125 ] JEFFREY LINTON: Yes, Your Honour. [ 126 ] THE COURT: But those were also taken off your pay, right? [ 127 ] JEFFREY LINTON: There was a deduction for long-term disability, but I believe that the employer covered the rest, that being -- and I hesitate to refer to the contract, it's been coming up again and again, but there was mention of medical, dental, group benefits that were provided and paid for 100 percent by the company. [ 128 ] THE COURT: Yes, so there is a paystub in here somewhere.

Yes, Mr. Malik? [ 129 ] VIREN MALIK: It's 80 percent paid for by the company. [ 130 ] THE COURT: Eighty percent of that is paid for by the company. Do you know what is the deduction? [ 131 ] VIREN MALIK: I would have to refer to one of the paystubs from Mr. Linton's files to – [ 132 ] THE COURT: Yes. I have got one at page 53. [ 133 ] VIREN MALIK: That sounds about right. I'd only be referring to one of his paystubs, so . . .

[ 134 ] THE COURT: And that does not have the -- LTD, 144.25 for the year, and you say it was paid 80 percent by the company? Yes. [ 135 ] VIREN MALIK: Eighty percent by the company. [ 136 ] THE COURT: Well, did your lawyer -- he set out this calculation that you have got at page 66. [ 137 ] JEFFREY LINTON: 66, no, Your Honour, that was me. [ 138 ] THE COURT: Oh, you did that, okay. That is a lot of coffee. All right, do you have any submissions on what the amount should be per month, Mr. Malik? [ 139 ] VIREN MALIK: For medical – [ 140 ] THE COURT: No, all together.

Do you differ with any of these figures provided by Mr. Linton? [ 141 ] VIREN MALIK: No, we've been through the bonus portion, Your Honour.

He did include cellphone and computer coverage of a dollar and I would argue that that wouldn't be part of the regular compensation. [ 142 ] THE COURT: Cellphone, that is provision of the phone? [ 143 ] VIREN MALIK: Provision of the phone and the computer, I mean, those are company property to be – [ 144 ] JEFFREY LINTON: Your Honour, I would submit that it was the -- the phone was provided to me, as I was expected to take phone calls after hours. [ 145 ] THE COURT: So the whole of the phone was paid for? [ 146 ] JEFFREY LINTON: The whole of the phone was paid for and this $600 number is quite a conservative estimate – [ 147 ] THE COURT: That is 50 bucks a month. [ 148 ] JEFFREY LINTON: -- that it's $50 a month. [ 149 ] THE COURT: For personal use? [ 150 ] JEFFREY LINTON: Yes, that is what I am currently paying for my phone right now. [ 151 ] THE COURT: I do not know anyone who is not. [ 152 ] JEFFREY LINTON: Yes. [ 153 ] VIREN MALIK: The phone was for company usage, whether he used personal -- 50 bucks, I'm not going to argue over. [ 154 ] THE COURT: Yes, per month, right, so yes, if it is provided by the company and you are permitted to use it for personal purposes, right, it is part of the benefit package. [ 155 ] JEFFREY LINTON: Your Honour, coffee was based on an equation that I was allowed a pound per week.

Retail price on a pound of coffee is -- I estimate it at $15, which is on the high side. [ 156 ] VIREN MALIK: With all due respect, we're a coffee producer. You know, if we're going nickel and dime, it costs us $3 to produce a pound of coffee. [ 157 ] THE COURT: It is the value of that though, is it not? [ 158 ] VIREN MALIK: I suppose. [ 159 ] THE COURT: Fifteen a week. [ 160 ] JEFFREY LINTON: I did continue drinking a pound a week, at least, Your Honour. For what it's worth, I'm not intending to nickel and dime either, I'm just saying. [ 161 ] THE COURT: Okay, and 520 is how many -- whatever.

How did you do that math, 520? [ 162 ] JEFFREY LINTON: Fifteen dollars a pound times four pounds in a month. [ 163 ] THE COURT: Okay. So if we take -- sorry, how many pounds a month? [ 164 ] JEFFREY LINTON: Four. [ 165 ] THE COURT: Right, okay, fine. [ 166 ] VIREN MALIK: For the record, they were 12 ounce bags at the time of his dismissal, which retail for $12. If we're going to go for it, let's go for it. [ 167 ] JEFFREY LINTON: Not quite.

[ 168 ] VIREN MALIK: All right. I'm the numbers guy. [ 169 ] THE COURT: Okay then, let us go with 52 weeks. [ 170 ] VIREN MALIK: Fifty-two weeks times $12, punch it up. [ 171 ] THE COURT: It is more. [ 172 ] VIREN MALIK: On sale at London Drugs right now for eight dollars. [ 173 ] THE COURT: It is more. Let us go with 520.

He has only given you four-week months here, right. [ 174 ] VIREN MALIK: Sale price or regular price? [ 175 ] THE COURT: He gave you a 48-week year on this one. [ 176 ] VIREN MALIK: Right, yeah. [ 177 ] THE COURT: I think, four a month. [ 178 ] VIREN MALIK: We do have a policy that if you are not there, you're vacationing, you don't get your pound. [ 179 ] THE COURT: Really? [ 180 ] VIREN MALIK: We – [ 181 ] THE COURT: In Starbucks, you can go to Hawaii and get your pound there with your card. [ 182 ] VIREN MALIK: People would say, "I didn't collect my pound for eight weeks," then come and take two cases.

It didn't seem fair to me. [ 183 ] THE COURT: All right. In any event, I think 520 is in favour of the employer, so I am going to leave that in there. [ 184 ] So what I am doing is taking from the total here of 59,401, I am subtracting the difference between the 4900 KPI bonus and the 1800 that we have decided on. That figure, the difference there is 3100. If I take that off 59,401, I get a total annual package of 56,301. Are you with me there? [ 185 ] We divide that by 12 and multiply it by five, 23,458. [ 186 ] VIREN MALIK: Minus what we've already paid in terms of severance? [ 187 ] THE COURT: Yes.

Do you have a figure for that? [ 188 ] VIREN MALIK: It's in here somewhere. I believe Mr. Linton probably has it. [ 189 ] JEFFREY LINTON: I do, Your Honour. [ 190 ] THE COURT: Both minus what is already paid and what Mr. Linton earned during the period for EI. [ 191 ] VIREN MALIK: Correct. [ 192 ] JEFFREY LINTON: Yes, Your Honour. Severance pay is on page 52 of my documents, Your Honour. [ 193 ] THE COURT: Thank you.

Okay, so what was paid was 1884, but we are going to add those bits and pieces that were taken off that, right. [ 194 ] JEFFREY LINTON: Yes, Your Honour. [ 195 ] THE COURT: Okay, so we are starting, just for the record, with a figure of 23,458. I am going to forget about the pennies on that. We are going to subtract, less 1884.60. We are going to add the CPP, vacation, and EI that was subtracted.

Where is that amount? [ 196 ] JEFFREY LINTON: On page 33 of your chambers brief, Your Honour, it's $201.27. [ 197 ] THE COURT: 201? [ 198 ] JEFFREY LINTON: 27. [ 199 ] THE COURT: 27? [ 200 ] JEFFREY LINTON: Yes, Your Honour. [ 201 ] THE COURT: Okay. And then what did you receive for EI during the period? Do you have that handy? [ 202 ] JEFFREY LINTON: Yes, Your Honour, although it's the claimant's intention that EI, upon being informed of reasonable notice, will make their own adjustments, according to the Jack Cewe documents, that is the responsibility of EI and is not to be taken into account.

[ 203 ] THE COURT: They will take it from you? [ 204 ] JEFFREY LINTON: Yes, Your Honour. It's in the chambers brief. [ 205 ] THE COURT: Where is that? [ 206 ] JEFFREY LINTON: Page 23 of your chambers brief, number 80 [as read in]: While the claimant received EI during the notice period, the benefits are not deductible from damages. Instead, there is a process whereby EI being advised of a reasonable notice award will make its own adjustments. And that is based on Jack Cewe v. Jorgenson .

That, too, was provided to me by my lawyer. [ 207 ] THE COURT: Okay. [ 208 ] JEFFREY LINTON: However, Your Honour, there on page 33, there is a list of the earnings that I did make as a – [ 209 ] THE COURT: Right. [ 210 ] JEFFREY LINTON: -- as an employee of Speciality Coffee Solutions for the months of August, October, November, December, and January. [ 211 ] THE COURT: There is no convenient total there. [ 212 ] JEFFREY LINTON: No, sorry, Your Honour.

But if we take the – [ 213 ] THE COURT: So we are looking at the five month – [ 214 ] JEFFREY LINTON: Five months. [ 215 ] THE COURT: Okay, less – [ 216 ] JEFFREY LINTON: And when would the five months begin, Your Honour? [ 217 ] THE COURT: The five months, in my view, would begin from August 3rd. [ 218 ] JEFFREY LINTON: But we've already subtracted from the five months, three weeks for the – [ 219 ] THE COURT: Right. [ 220 ] JEFFREY LINTON: -- pay in lieu? [ 221 ] THE COURT: Yes. [ 222 ] JEFFREY LINTON: So are we not subtracting it a second time by doing so? [ 223 ] THE COURT: No. [ 224 ] JEFFREY LINTON: Okay. [ 225 ] THE COURT: No, you got paid a portion of your five months, that is how it works.

Okay, so you should have gotten – [ 226 ] JEFFREY LINTON: Okay. [ 227 ] THE COURT: -- five months, you got paid – [ 228 ] JEFFREY LINTON: Yes, Your Honour. [ 229 ] THE COURT: -- a portion of that. [ 230 ] JEFFREY LINTON: Yes, Your Honour. [ 231 ] THE COURT: So it starts from the date of your notice given, although the parties agree that the date of termination was July 22nd, I have already talked about the vacation, so it starts on August 3rd.

Okay, August 3rd, so September, October, November, December, January 3rd, so – [ 232 ] VIREN MALIK: What was the total of the earnings with Speciality Coffee? [ 233 ] JEFFREY LINTON: They're listed on page 33 of the chambers brief. [ 234 ] VIREN MALIK: Which I was not provided, so – [ 235 ] JEFFREY LINTON: Yes, you were. I gave it to you before we started.

[ 236 ] THE COURT: Okay. Well, what is there is – [ 237 ] VIREN MALIK: Can you just read it out? [ 238 ] THE COURT: Yes, 140 plus 366 plus 720 plus -- sorry. [ 239 ] JEFFREY LINTON: Your Honour, it's also – [ 240 ] THE COURT: 366. [ 241 ] JEFFREY LINTON: I'm sorry to interrupt your math, I'll wait. [ 242 ] THE COURT: No, that's fine, go ahead. [ 243 ] JEFFREY LINTON: That there is existing case law where mitigation does not apply to Wallace damages. [ 244 ] THE COURT: Right.

Meaning? [ 245 ] JEFFREY LINTON: So that we would really only be calculating wages earned in the four months, not the fifth, because mitigation is not to be entered into against Wallace damages. [ 246 ] THE COURT: Yes. I do not know that this is mitigation, as much as what earnings during the period. It is $366. I am going to let the defendant have it. [ 247 ] JEFFREY LINTON: Yes, Your Honour, thank you. [ 248 ] THE COURT: Okay.

So 140. [ 249 ] VIREN MALIK: There was just the three totals? [ 250 ] THE COURT: One -- no, all of them, 140 plus -- I am sorry, just – [ 251 ] VIREN MALIK: 366 plus – [ 252 ] THE COURT: 140 plus 366 plus 720 plus 366. [ 253 ] VIREN MALIK: Okay. [ 254 ] THE COURT: Nothing in September? [ 255 ] JEFFREY LINTON: No, Your Honour. [ 256 ] THE COURT: A total of 1592 earned during the period, and so let us do that math: 23,458, since we are dealing with pennies, I will use the full figure, 23,458.75 was the five-month figure on the salary.

It is less what was paid, which is 1,884.60, plus 201.27 for benefits that were taken off that, minus 1,592 for amounts earned during the period, a total of 20,183.42. [ 257 ] Next comes the inevitable question, Mr. Malik. When would you like to pay that? [ 258 ] VIREN MALIK: Your Honour, I'll have to discuss with ownership and our CFO as to how we're going to pay that, whether it's over time and how long. I do believe we have that option. [ 259 ] THE COURT: You have the option of requesting a payment schedule, if you establish you do not have the current ability to pay.

So we can set it down for a payment hearing, but it will not be too long from now. [ 260 ] VIREN MALIK: That's fine. We just operate in a commodity business and there's cash flow fluctuations, so – [ 261 ] THE COURT: Sure, okay.

Well, I suppose the best suggestion at this point is to pay it as if it were salary. [ 262 ] VIREN MALIK: That would be my – [ 263 ] THE COURT: For now, until you get to your payment hearing, because the onus again is on you to establish you cannot pay it in one lump sum. [ 264 ] VIREN MALIK: Okay. [ 265 ] THE COURT: So better now to take what they offer in terms of a monthly amount, and set it down for a payment hearing. [ 266 ] JEFFREY LINTON: Yes, Your Honour.

My -- my counsel has offered to advise on this as well, and perhaps make contributions towards RRSP as well as expenses. [ 267 ] THE COURT: Okay. [ 268 ] JEFFREY LINTON: In consideration of taxes and that sort of condition. [ 269 ] THE COURT: Right, okay, so you parties should talk about that before you come back to the payment hearing. I will just tell you the total amount or the principal amount is 2,183.42.

[ 270 ] JEFFREY LINTON: Sorry, 20 -- 20,000, Your Honour? [ 271 ] THE COURT: Sorry, 20,183.42, of which -- I have not broken it down for punitive and notice, I have just added the one month, so – [ 272 ] JEFFREY LINTON: Your Honour, may I request that you do make a distinction in your ruling, just for the sake of tax and EI? [ 273 ] THE COURT: Well, yes. I have said one month, so if we go back into the analysis and you can sort of figure out how much of that is the one month and how much of it is the four months, then in terms of which the deductions come off, I am going to leave that with your lawyer for now.

I have done mine. The record will reflect that the principal amount of the award is 20,183.42. [ 274 ] You are entitled to your costs, which in this court amount to a total of your filing fees and service fee of $176 costs awarded. [ 275 ] The good news is if you were in Supreme Court, the lawyers' costs would also be added to that, and nobody wants to see that happen. [ 276 ] Do we have the payment

schedule here, Mr. Registrar? Payment hearing schedule? [ 277 ] THE CLERK: I don't, Your Honour, however any Thursday. [ 278 ] THE COURT: Thursdays, yes. So we are going to pick a Thursday afternoon, and I will set it now, so that you know when you are coming back, okay? [ 279 ] JEFFREY LINTON: Yes, Your Honour. [ 280 ] THE COURT: And so in terms of payments between now and then, I will leave it between the parties. My suggestion was just start it as salary, but Mr.

Linton may have some requests about how and where it gets paid, right. [ 281 ] JEFFREY LINTON: Yes, yes, Your Honour. [ 282 ] THE COURT: Okay. [ 283 ] VIREN MALIK: I think Mr. Linton knows how to reach me via email, so he can write those out to me. [ 284 ] THE COURT: I am sure he does. [ 285 ] JEFFREY LINTON: I will, Your Honour. [ 286 ] THE COURT: Any Thursday afternoon. I would say -- how long are you going to need? About a month?

To think about how you – [ 287 ] VIREN MALIK: Sure. [ 288 ] THE COURT: Right, okay, so let us say May 3rd, Thursday afternoon at 1:30. [ 289 ] VIREN MALIK: Unfortunately I'm out of town that week. [ 290 ] THE COURT: 10th? [ 291 ] VIREN MALIK: The 10th should be fine. [ 292 ] THE COURT: May 10th at 1:30, Court 2 is where we do the payment hearings generally. So what the defendant needs to do is, if you are asking for a payment schedule, bring some documentation of your available cash flow and state of the company, perhaps financial statements will suffice.

Okay. [ 293 ] VIREN MALIK: Yes, Your Honour, thank you. [ 294 ] THE COURT: Okay, and in the meantime, if you pay it in full, you do not have to come. [ 295 ] THE CLERK: Sorry, Your Honour, is the payment hearing to be before you? [ 296 ] THE COURT: It does not have to be, but if I am sitting that day, I can, yes. [ 297 ] THE CLERK: And with respect to the counterclaim, Your Honour? [ 298 ] THE COURT: Yes, the counterclaim is dismissed. Thank you. (REASONS CONCLUDED)