GEOFF MILSOM Plaintiff - v. -, 2003 ABQB 296

Milsom v. Corporate Computers Inc., 2003 ABQB 296 Date: 2003 0331 Action No. 0103 13802 IN THE COURT OF QUEEN'S BENCH OF ALBERTA JUDICIAL DISTRICT OF EDMONTON BETWEEN: GEOFF MILSOM Plaintiff - and - CORPORATE COMPUTERS INC. AND CORPORATE COMPUTERS

(2000) INC. Defendants _______________________________________________________ MEMORANDUM OF DECISION of the HONOURABLE MADAM JUSTICE J.B. VEIT _______________________________________________________ APPEARANCES: C.J. Taylor Weiss Taylor Epp LLP for the Plaintiff W. Neil McKay

for the Defendants

Summary [ 1 ] Geoff Milsom began employment with the defendant as a 100% commission sales representative in February 1995; he had no written contract of employment, and there was no term in the employment arrangement concerning the amount of notice to which he would become entitled upon termination. In February 2001, Mr. Milsom was terminated purportedly because of a change of corporate structure of which he was a “victim”; the employer alleges that the reference to a corporate re-structuring was a ruse to get rid of an employee who was underperforming. Mr.

Milsom was provided with the nearly 6 weeks’ notice required under Alberta labour legislation for an employee having between 6 and 8 years’ service. After the termination, Mr. Milsom entered into negotiations to improve the terms of severance. When those negotiations were unsuccessful, the employer examined Mr. Milsom’s e-mail communications and concluded that it had cause to terminate Mr. Milsom based on the high volume of non work-related communications. [ 2 ] Mr.

Milsom was terminated without sufficient cause: his work performance was poor, but that should have resulted in his receiving notice of a need to improve his performance, rather than termination. The volume of e-mails sent and received by Mr. Milsom constitutes part of the evidence proving that Mr. Milsom’s work performance was poor. It is obviously in the interests of both the employer and the employee to publish a policy concerning e-mails and internet access in the workplace.

However, even where an employer does not have a written policy concerning an employee’s use of e-mail, the employer is entitled to use the employee’s e-mail as evidence relating to the employee’s job performance. [ 3 ] Courts cannot apply rules of thumb to set the length of notice required in an individual case: each contest between an employer and an employee deserves individual assessment in the circumstances of the specific case and in light of then current social policy demands. [ 4 ] Since the Supreme Court of Canada decision in Dowling , it is not clear whether a rights-based model should be applied in wrongful dismissal cases: if a rights analysis were to be applied, one would expect that the employer’s right to fair effort would be taken into account as well as the employee’s right to security of employment.

It may be that the underlying policy which is now to be applied to resolve contests between employers and employees is a dependency analysis, some aspects of which are familiar to courts from family law models. Under this analysis, within reason, where an employer makes an employee financially dependent upon the employer - that is restricts the employee’s ability to find employment elsewhere - or allows the employee to become financially dependent in that way, the employer must provide appropriate support for the employee if employment is withdrawn. [ 5 ] In the circumstances here, including the fact that Mr.

Milsom had been employed for six years, that he was 34 years old at the time of termination, that he was a salesman with limited corporate authority, that he had not mitigated his damages by applying for employment at one of the three Edmonton businesses that specialized in the Macintosh platform, Mr. Milsom was entitled to a total of 5 months’ notice. He received only one and a half months’ notice. He is therefore entitled to 3 and one half months’ notice at an average income of $3,100 per month, or a total of $10,850. [ 6 ] Mr.

Milsom is not entitled to aggravated or punitive damages. [ 7 ] Corporate Computers counter-claims against Mr. Milsom for damages arising from loss of business as a result of Mr. Milsom’s poor work performance. [ 8 ] Corporate Computers’ counter-claim is dismissed: it has failed to prove to the standard necessary that the corporation suffered identifiable damage as a result of Mr. Milsom’s activities and attitude. Cases and authority cited:

[ 9 ] By the plaintiff: Kuny v. Owens-Corning Canada Inc., 1999 ABQB 540 (CanLII) , [1999] A.J. No. 722 ; Walsh v. Alberta and Southern Gas Co. , [1991] A.J. No. 1071 ; Pauloski v. Nascor Inc. , 2002 ABQB 171 (CanLII) , [2002] A.J. No. 256; Holmes v. PCL Construction Management Inc. , 1994 ABCA 358 (CanLII) , [1994] A.J. No. 850; Lowery v. Calgary (City) , [2000] A.J. No. 1418 ; Agarand v. Farm Business Consultants Inc., [2000] A.J. No. 421 ; Canadian Crude Separators Ltd. v. W.A. (Wes) Jacobson , 1998 ABQB 590 (CanLII) , [1998] A.J. No. 787; Kempling v.

Hearthstone Manor Corp., 1996 ABCA 254 (CanLII) , [1996] A.J. No. 654; Baptiste v. Baptiste , [2001] A.J. No. 1383 ; Vorvis v. Insurance Corp. of British Columbia, 1989 CanLII 93 (SCC) , [1989] 1 S.C.R. 1085; Wallace v. United Grain Growers Ltd. (c.o.b. Public Press), 1997 CanLII 332 (SCC) , [1997] 3 S.C.R. 701; David Harris, Wrongful Dismissal , Volume 1, Revised and Consolidated (Toronto: Carswell) at pp 4-240.1 - 4-240.10; Amalgamated Transit Union v. Independent Canadian Transit Union , [1997] A.J. No. 191 ; Olson v. Runciman , [2001] A.J.

No. 754 ; David Harris, Wongful Dismissal, Volume 1, Revised and Consolidated (Toronto:Carswell) at pp 3-147 - 3-148. [ 10 ] By the defendants: Alberta Employment Standards Code Division 8 - Termination of Employment ; Carr v. Ireco Canada II Inc. 1991 CanLII 5849 (AB KB) , 80 Alta. L.R. (2d) 154 (Q.B. - Alberta) ; Denhamer v. RBC Dominion Securities Inc. (2000) 2000 ABQB 651 (CanLII) , 273 A.R. 159 (Q.B. - Alberta) ; McKinley v. BC Tel 2001 SCC 38 (CanLII) , [2001] 8 WWR 199 (S.C.C.) ; Letendre v. Deines Micro-Film Services Ltd. 2001 ABQB 26 (CanLII) , [2001] 6 W.W.R. 369 (Q.B. Alta.) ; Agarand v.

Farm Business Consultants Inc. (2000) 2000 ABQB 244 (CanLII) , 264 A.R. 1 (Q.B. - Alberta) . [ 11 ] By the court : Milsom v. Corporate Computers Inc. [2002] A.J. No. 1187 (Q.B.) ; Milsom v. Corporate Computers Inc. [2002] A.J. No. 1572 (Q.B.) ; Garrity v. John Hancock Mutual Life Insurance Co. 2002 WL 974676 (D.Mass.), 146 Lab. Cas. P. 59, 541, 181 IER Cases 981; McLaren v. Microsoft Corporation 1999 W.L. 339015 (Court of Appeals of Texas); Smyth v The Pillsbury Company 914 F.Supp 97 (U.S. District Court, E.D. Penn.) 1.

Background [ 12 ] Geoff Milsom became employed as a 100% commission salesperson by the defendant Corporate Computers in mid-February 1995. A portion of the business of the firm was sold in 2000, but any responsibility in relation to this action was retained in Corporate Computers

(2000) Inc.; so, reference throughout will be only to Corporate Computers. There was no written contract of employment. There was no term in the employment arrangement relating to the amount of notice to which Mr. Milsom would be entitled upon termination. Mr. Milsom was not provided with any employee handbook. [ 13 ] Mr. Milsom had graduated from the University of Alberta in 1990 with a Bachelor of Arts with a major in economics and a minor in history and political science.

From 1993 to 1995, he had worked in retail sales at WestWorld Computers, a Macintosh sales outlet in Edmonton, where he developed his knowledge of Apple hardware and related accessories and software. In addition to retail accounts, he also had some government and education accounts. [ 14 ] Mr.

Milsom’s move to Corporate Computers was a little bit of a step-up as he moved away from walk-in type sales and sales to retail clients, including a lot of teachers, to a more challenging role including servicing small business accounts and broadened his general work- load to making Macs work in a pc environment. [ 15 ] In Edmonton, there were not many businesses specializing in the Apple platform: Compusmart and WestWorld were Corporate Computers’ only competitors with real knowledge of the services available. [ 16 ] Mr. Milsom’s territory at Corporate Computers was essentially northern Alberta.

He obtained clients from word of mouth referrals and from tenders; there was essentially no advertising. There were no minimum sales requirements. Mr. Milsom worked a 5 day week, from 8:30 a.m. to 5 p.m., although he was quite often out of the office either with clients or on some other business. There was no formal performance review during his employment with the defendants although Mr. Milsom acknowledged that, once in a while, he would hear from Graham Fletcher, the principal of the defendants, if the “numbers were good or bad”. Mr.

Milsom testified that he thought that he was “most of the time in the middle” of sales performance; he acquired this impression from talking to the defendants’ other sales people although nobody discussed how much they were making. Mr. Milsom’s perspective is that he got along pretty well with is co-workers, although during the last year of his employment, there were tensions with the service staff who has been authorized to sell both software and hardware. Mr. Milsom felt that the service staff were “poaching sales right out of my pocket”. Mr. Milsom raised his concern about this change of policy with Mr.

Fletcher on several occasions.

[ 17 ] Mr. Milsom acknowledged that Mr. Fletcher had, on May 30, 2000, attempted to change the basis of Mr. Milsom’s remuneration, by putting him on a base salary rather than retaining the 100% commission structure. In a communication of that date, Mr. Fletcher stated: “The situation is that we have been breaking even or losing money (depending on the writedown value of equipment that is aging in our office) for the last 3 years. Our interest is to increase to profitability - we NEED what we used to pay in commissions to survive.

James has provided nothing, you have been thin, and Stephen has been carrying most of the cash flow of the business.” Mr. Milsom did not agree to a change in the salary structure, assessing any change as an attempt to severely compromise his earning potential. [ 18 ] From the start of his employment with Corporate Computer until his termination, Mr. Milsom’s remuneration consisted entirely of commission: he earned 40% on gross profits from sales. [ 19 ] On February 20, 2001, Corporate Computers Inc. prepared a letter of termination and notice to Mr.

Milsom containing the following: As we discussed today, I regret to inform you that, effective April 1, 2002, corporate Computers Inc. will cease to operate with full time commission salespeople. Although Corporate Computer Inc. will continue to be a vendor of technology equipment, it has proven over the last couple of years to be uneconomic to carry out those sales through the employment of commission sales people, ending a 16 year tradition of paying salesmen through the best commission structure in Alberta.

This letter then is the confirmation of our meeting today regarding almost 6 weeks of notice of termination of employment. Effective at 5:00 p.m., Friday, March 30 th , 2001, you will no longer be employed by Corporate Computers Inc. . . . Please feel free to use us as an enthusiastic and appreciative reference for those who may wish to contact us for such. [ 20 ] Mr. Milsom testified that he received the letter on March 16, 2001, but that the date of the letter was indeed the date on which he had a conversation with Mr. Fletcher concerning his termination. [ 21 ] Mr.

Milsom actually left his employment on March 16, 2001, as it had been mutually agreed between himself and Corporate Computers that he could leave earlier than the end of March if he wished. [ 22 ] Corporate Computers provided Mr. Milsom with a letter of reference dated March 8, 2001, which referred to Mr. Milsom’s “technical expertise, and described him as a “very capable and diligent sales person” and as “careful, co-operative, and an enthusiastic representative of our products and our company”.

The letter of reference also included the following: We wish to be very clear that the reasons for his departure from our company have to do with the owners’ restructuring and repositioning of the company going forward. This restructuring cause us to close our direct sales commission program, and Geoff is a victim of this process. We wish Geoff well in whatever his next career move might be, and recommend him highly to any who needs a responsive technical Sales Representative.

[ 23 ] Mr. Fletcher, the principal of Corporate Computers, testified that his general approach to Mr. Milsom’s termination was to try to get him out the door as soon and as congenially as possible so that he could not “destroy further relationships with clients” and so that Corporate Computers could smoothly transfer Mr. Milsom’s accounts to another salesperson. To similar effect, he testified that he might well have given instructions to the office staff to describe the Milsom termination as due to shortage of work rather than dismissal so as to allow Mr.

Milsom to obtain EI again as part of a strategy of trying to keep Mr. Milsom happy. [ 24 ] Beginning on March 12, 2001, Mr. Milsom began negotiations with Corporate Computers concerning a severance package. As part of these negotiations, there was a discussion about Mr. Milsom receiving a lap top computer in lieu of $1,450 in commission earnings for March 2001. Corporate Computers had prepared a document for Mr. Milsom’s signature in which it had included both a waiver of certain employment standard rights, and a reference to the value of the lap-top computer.

The document was entitled “General Release” which included the following: Know all men by these presents that I , Geoffrey Milsom, . . . in consideration of the delivery to me of one Macintosh Powerbook . . . laptop computer, and a cheque for $824.28 . . . do hereby . . . release . . . Corporate Computers . . . from all manner of actions, causes of action, suits . . . against the said Corporate Computers I ever had, . . . by reason of any cause . . . existing up to the present time, including without limiting the generality of the foregoing, my employment by the said Corporate Computers . . . . . . . . .

Corporate Computers Inc. confirms to Geoffrey Milsom that the it believes the resale value of the PowerBook G3 250 is approximately $1,500 US, or about $2,250 Canadian. [ 25 ] An employee of Corporate Computers sent Mr. Milsom an e-mail message in which she referred to the lap top computer and stated “have you signed the release form on this? It cannot be included until this is signed. (this is the property of Corporate computers until you sign the form.)” Mr. Milsom refused to sign the General Release, but took the computer. [ 26 ] On March 15, 2001, Mr.

Milsom provided a handful of recent decisions to Corporate Computers concerning awards which had been made in certain legal decisions. Graham Fletcher replied to his message in the following way: A quick scan of these doesn’t compute. No wrongful termination is provided by us.

Sufficient notice was given (almost 6 weeks), we have no standard severance package save that which is governed by Employment Standards, you are not too old to find another job, you did turn down our offer to stay the full almost 6 weeks, you did do this kind of job before you joined us, a good market (I would say a GREAT market) for sales jobs in Edmonton exists, we are allowed to terminate anybody if sufficient notice is given, this place was a good training ground for you for future employment, you are able and willing to work, you agreed with me on February 20 th that there wasn’t much money in computer sales in our business for you, you were told why we were dismissing you (we are losing money and have been for some time through our commission sales program) and I fail to see what would constitute a requirement for severance. . . .

This from Employment Standards once again: Dear Mr. Fletcher: Thank you for your email inquiry of March 14, 2001 regarding termination of employment.

The Employment Standards Code addresses termination of employment only with regard to notice or pay in lieu of notice of termination. Your message indicates that you provided 5 weeks’ written notice to meet the requirements for notice to an employee with more than 6 years but less than 8 years of service. You have no further obligation under the Employment Standards Code regarding notice to employees with less than 8 years of service and your employees would not be able to file claims with Employment Standards. Laura Forster Employment Standards Officer [ 27 ] Although Mr.

Fletcher’s e-mail did not so indicate, he had, in fact, excised a portion of the letter from Laura Forster, in particular, a reference to the fact that additional compensation might be required by common law to be paid to a terminated employee. The portion of the Forster communication that was not forwarded to Mr. Milsom stated: Employers and employees always have the right to sue one another in a civil claim process and meeting the requirements of the Code will not protect you from a civil suit if one of your employees decides to sue for severance pay.

You may wish to consult a lawyer for legal advice on typical severance awards granted by the courts. [ 28 ] From the time of the discussions concerning severance, relations between Mr. Milsom and Corporate Computers have been acrimonious. [ 29 ] Corporate Computers did an analysis of Mr. Milsom’s e-mails. Before Mr. Milsom’s departure, Corporate Computers had given him instructions not to erase any e-mails from his work station. Despite this instruction, when Corporate Computers went into Mr.

Milsom’s computer, it found that there was a gap in the out messages from April 18 th 2000 forward, that there was a gap in the In messages from April 18 2000 to August 7 2000, and that there were no messages from January 22, 2001 forward. The evidence of Corporate Computers, which evidence I accept, is that there were 1,899 proven e-mail messages on Mr. Milsom’s computer in the year 2000, and that this volume of e-mails constitutes about 40% of the messages at Mr. Milsom’s work station. Corporate Computers calculates that during the year 2000, Mr. Milsom may have dealt with 18 personal e-mails per day.

The defendant estimates that very few of those messages were “spam”, or unsolicited junk mail, that many of them were e-mail jokes, that some were intimate in nature, and some related to certain internet sites that “appalled” Mr. Fletcher. In one e-mail, Mr. Milsom made reference to Mr. Fletcher as a “fat bastard”. [ 30 ] After his departure from Corporate Computers, Mr. Milsom made a complaint to Alberta Human Resources and Employment to the effect that his previous employer had failed to pay him vacation and holiday pay. Initially, Mr.

Milsom was successful; Corporate Computers appealed the initial decision and was itself then eventually successful. Indeed, Corporate Computers complained about the way in which Mr. Milsom’s application for vacation and holiday pay was dealt with, and how Corporate Computers’ appeal was dealt with, and sent a copy of its complaint to Mr. Fletcher’s MLA. [ 31 ] Mr. Milsom’s objective in leaving Corporate Computers on March 16 was to take up an opportunity with a Calgary company called “mymacdealer”, operated by another former employee of Corporate Computers. This initiative was not a success. Mr.

Milsom testified that “they screwed up every order” and that everything that could go wrong did go wrong. [ 32 ] Mr. Milsom testified that “there were not as many jobs out there as I thought there might be”. His experience was essentially as that of a Macintosh specialist, which experience could not necessarily be translated to a pc specialist; indeed, Mr. Milsom described the difference between the two as the difference between English and Greek. Mr. Milsom applied for many jobs and regularly checked websites with employment opportunities. [ 33 ] Mr.

Milsom then revisited the idea of starting his own business and took a crash course provided by Human Resources Development Canada in setting up a small business. The company he started was called “softwarepeople”. For this purpose, he used a registered company which he had originally incorporated in 1992, and which he had kept alive by making annual returns, but which was not active.

[ 34 ] Mr. Milsom also took a part time job as a concierge at the building where he lived. [ 35 ] In 1998, Mr. Milsom’s earnings from Corporate Computers were $31,870; in 1999, his earnings were $27,849; in 2000, his earnings were $37,553. Mr. Milsom’s evidence is that his earnings for the last 6 or 7 months of his employment with the defendant produced average earnings of approximately $3,700 or $3,800 per month. [ 36 ] On October 3, 2002, Mr. Milsom obtained employment with Telus. [ 37 ] In this lawsuit, Mr.

Milsom is claiming $42,000 as damages in lieu of notice, aggravated, exemplary or punitive damages in the amount of $7,500 and costs on a solicitor-client basis. Corporate Computers is claiming $60,000 for loss of business, damages for the laptop computer of $6,000 and costs on a solicitor-client basis. 2. Termination for cause [ 38 ] Even including as part of the relevant evidence the e-mails which have been introduced, Corporate Computers has not proved that it had cause to summarily terminate Mr. Milsom’s employment. [ 39 ] There are two bases on which Corporate Computers relies as evidence of cause.

Graham Fletcher, the principal of Corporate Computers, described the e-mails as evidence of distractions which prevented Mr. Milsom from taking care of Corporate’s clients. Mr. Fletcher also described a conversation with one Randy Lee in which Mr. Lee said that Corporate Computers would not get another dime of sales from Webbco if Mr. Lee had anything to do with it, due to Mr. Milsom’s prior dealings with that client.

a) Introduction and use of e-mails [ 40 ] Even where an e-mail policy is published within a workplace, and even where the published policy outlines some privacy rights for an employee, an employee may not have a reasonable expectation of privacy when the contents of the employee’s e-mail is of an unprofessional nature, offensive, or where access by the employer is in furtherance of investigating illegal activity, in which case the employer’s interests would outweigh any claimed privacy right: McLaren . [ 41 ] Where there is no e-mail policy in place, an employee has no reasonable expectation of privacy in relation to e-mails received and sent in the workplace on the employer’s time and equipment. [ 42 ] In this case, the first objection to the introduction of e-mails was made on the basis that Mr.

Milsom had not received adequate notice of the employer’s intent to introduce evidence of these e-mails. In the circumstances here, the employer has provided notice to the employee of the intention to rely on e-mails as soon as practicable and, as ruled during the trial, the proposed evidence is relevant. [ 43 ] In May 2002, after discovery and answers to undertakings were complete, Corporate Computers provided to Mr. Milsom a box of transcriptions of e-mails that Mr. Milsom had sent and received while employed.

The defendant took the position that, pursuant to the provisions of R. 197(2), it had forwarded these documents as additions to its affidavit of records, as soon as those came into its awareness as part of this case. [ 44 ] The portion of R. 197(2) on which the defendants rely reads as follows:

(2) If, after a party has filed an affidavit of records, the party discovers, creates or comes into possession, custody or power of a relevant

and material record not previously disclosed, the party must immediately give notice of it to all other parties, and must, on request, supply the other parties with a copy of it, but in any case the Court may permit the record to be given in evidence upon such terms as to costs or otherwise as may be just. [ 45 ] On the basis of lack of relevance, Mr. Milsom objected to the introduction into evidence of these records.

That objection was over-ruled - see decision no. 1187 cited above, and the documents were tendered into evidence. [ 46 ] It is obvious that it is best for an employer who provides e-mail and internet access to its employees to develop for, and publish to, its employees a policy concerning the use of e-mails.

In the absence of any such policy, an employee has no reasonable expectation of privacy in relation to e-mails sent and received using corporate assets, particularly once the e-mail is accessible to, or passes through, the hands of third parties, or once the individual has communicated unprofessional comments to a second person over an e-mail system utilized by the entire company: McLaren , Smyth . [ 47 ] In this case, Mr.

Fletcher testified that Corporate Computers had established a corporate policy that employees should not use the corporate e-mail structure for their personal communications and that those instructions were handed out to employees; there was, however, the evidence provided no confirmation of the publication of this policy. Mr. Milsom did have a personal e-mail account, and some of the e-mails received at his workstation referred to that personal account; indeed, Mr. Milsom employed the usual technique of sending messages to himself. [ 48 ] When testifying about the e-mails on which the employer relies, Mr.

Milsom stated that there was “such a volume [of them]” that he could not “authenticate” them, that is confirm that they all came from his work station. Since Mr. Milsom had the e-mails for at least 5 months prior to trial, his evidence to the effect that he could not authenticate them tends to prove the employer’s point: there were an awful lot of e-mails. The fact is, however, that Mr. Milsom did introduce his own evidence relating to the proper characterization of the e-mails. I do not accept Mr.

Milsom’s evidence on the nature of the e-mails because he has failed to take into account the considerable inflow of messages and to take into account the total number of e-mails during the pertinent period. [ 49 ] I am not satisfied, however, even using the Corporate Computer evidence of 18 e-mails a day, that this amount of e-mail traffic constituted a serious distraction for Mr. Milsom. Without evidence concerning Mr. Milsom’s habits relating to coffee and lunch breaks, it is possible to account for this level of e-mail traffic as having taken place during Mr.

Milsom’s legitimate breaks from work. [ 50 ] At the most, however, this level of e-mail traffic might have caused some distraction from Mr. Milsom’s peak performance for Corporate Computers. Attending to this level of personal messaging might have decreased Mr. Milsom’s work performance, but it did not stop Mr. Milsom’s work performance. As will be discussed below, poor performance is rarely a basis for

summary dismissal.

b) Loss of corporate business [ 51 ] In the circumstances here, it has not been proved that Mr. Milsom was responsible for a material loss of Corporate Computers’ business. [ 52 ] Mr. Lee does not confirm Mr. Fletcher’s recollection of any conversation in which he told Mr. Fletcher that he would try to see that Corporate Computers no longer got any significant business from Mr. Lee’s employer. In any event, Mr. Lee would not be in a position to materially affect the amount of business done between the Bowes publishing group and Corporate Computers.

Finally, the evidence establishes that the general level of computer business available from the Bowes publishing group had decreased because of corporate changes that had nothing to do with Randy Lee, or Geoff Milsom or Graham Fletcher or anyone else involved in this case.

c) Does poor performance constitute cause for dismissal? [ 53 ] Generally, and in the circumstances here, poor performance does not constitute cause for dismissal. Rather, it justifies action which can be characterized either as disciplinary or as rehabilitative. [ 54 ] The Supreme Court of Canada has recently reviewed the bases for

summary dismissal: McKinley . Although the court was

focussing in that case on the effect of dishonesty on the employment relationship, I agree that the general comments of the court can be applied generally to provide a test for

summary dismissal. Just cause for dismissal exists where the [the conduct complained of] violates an essential condition of the employment contract, breaches the faith inherent to the work relationship, or is fundamentally or directly inconsistent with the employee's obligations to his or her employer. [ 55 ] The case law in Canada is clear: poor performance does not generally constitute such a breach of the employment relationship as to entitle the employer to summarily dismiss an employee. Some relatively early cases, as quoted by the trial judge in Agarand , describe poor performance as a sufficient cause for

summary dismissal: If an employee has been guilty of serious misconduct, habitual neglect of duty, incompetence, or conduct incompatible with his duties, or prejudicial to the employer's business, or if he has been guilty of wilful disobedience to the employer's orders in a matter of substance, the law recognizes the employer's right summarily to dismiss the delinquent employee. However, given the unique nature of the employment contract, more recent case law establishes that warnings, and maybe help, must be given to an employee who is failing to perform adequately. [ 56 ] In this case, it is clear that Mr.

Milsom’s work performance did not constitute a breach of the core of his obligation to Corporate Computers. On the contrary, Mr. Fletcher’s own evidence indicates that, for a period of some weeks after he took over Mr. Jakemec’s accounts, Mr. Milsom performed adequately. The problem for Corporate Computers is that Mr. Milsom did not perform well enough most of the time. This constituted a legitimate problem for Corporate Computers, but it was a problem that should have remedied by setting standards for Mr. Milsom and subsequently assessing his performance against those standards.

Corporate Computers did not have a basis to summarily terminate Mr. Milsom. 3. Adequacy of notice if no termination for cause

a) Poor sales and work performance not cause for termination [ 57 ] Mr. Milsom performed his work poorly; however, the employer’s remedy for poor work performance is not dismissal, but the right to insist that the employee take reasonable steps to improve work performance. [ 58 ] That Mr. Milsom’s work performance was poor has been proved. Although Mr. Milsom was on 100% commission, in the workplace circumstances here, it is obvious that his poor performance had a negative impact not only on his own commissions, but also on his employer’s business. The less commission Mr.

Milsom earned, the less income Corporate Computers earned. If Mr. Milsom did not provide adequate service to a customer, that customer would very likely go elsewhere because the services and equipment provided by Corporate Computers were not exclusive; as Mr. Fletcher put it - If it costs 25 cents to sell old product to old customers, then it costs 50 cents to sell new product to old customers and it costs $1 to sell new product to new customers. It was part of Corporate Computers’ expectations that Mr. Milsom would nurture old customers, both for his benefit and for the employer’s benefit. If Mr.

Milsom did not cooperate with the service staff, customers of Corporate Computers could not get the level of service which the company had the right to expect it was providing. [ 59 ] In reaching the conclusion that Mr. Milsom’s performance was poor, I rely on the following evidence: - the evidence of Graham Fletcher to the effect that Mr. Milsom was not producing a level of sales which would have been reasonable given the indications in the marketplace.

- the evidence of Steven Yakimec concerning the attendance on customers that was part of a reasonable expectation of the work he did, and the evidence that Mr. Milsom did not provide that level of service and the evidence of Mr. Yakemec relating to Mr. Milsom’s relationships with the service manager; - the evidence of Mr. Lengstrom concerning Mr. Milsom’s poor relationship with the service technicians and the negative effect those bad relationships had on customers, the general depressed state of the accounts for which Mr. Milsom had responsibility, and the complaints he received about Mr.

Milsom not getting quotes out in a timely way and not dealing responsibly with complaints; - the evidence of Mr. Sutcliffe concerning Mr. Milsom’s poor performance relating to quote requests by fax, general poor level of service - that Mr. Milsom was essentially anonymous relative to Sutcliffe as a customer, and the failure not only to service, but even to return a printer Mr. Sutcliffe had sent to Mr. Milsom’s attention for servicing; - the evidence that although Mr. Milsom continued to maintain, or even slightly increase, his sales volume after the departure of Mr.

Yakemec only proved that his performance was not adequate: as a result of Mr. Yakemec’s departure and the fact that he was not replaced, and the fact that Mr. Yakemec’s had a history of much higher sales that Mr. Milsom, when Mr. Milsom acquired the Yakemec accounts in addition to his own, he should have doubled or tripled his volume of sales, rather than merely slightly increased his volume of sales; - the evidence of Mr.

Milsom himself concerning some of the problems which he acknowledged, including problems with the Spruceland account, with the Webbco account in Canmore, and with the service providers. [ 60 ] Mr. Milsom testified, and I accept, that at least after 1999, Graham Fletcher never directly communicated to him that he had to improve his sales performance. Indeed, Mr. Fletcher essentially gave similar evidence; I have no doubt that this is a reflection of Mr. Fletcher’s management style which was essentially laid back and described as “hands off”. Mr.

Fletcher’s style would be to tell an employee that “someone is out there eating your breakfast”, or “get your ass in gear”, but he would not give more concrete directions to an employee. The objective standards instituted by Mr. Fletcher consisted of general guidance: never make a good customer mad, don’t lose a good customer, don’t lie - be honest, work hard. Mr. Milsom required more concrete direction. [ 61 ] Poor performance which has not been given the opportunity of being remediated is not cause for dismissal.

If the employer dismisses the poorly performing employee without giving the employee the opportunity of improving performance, the poor performance cannot - under the rubric “ near cause” - take the poor performance into account in determining the amount of notice to which the employee is entitled: Dowling . [ 62 ] Because the Supreme Court of Canada did not use the expression “moderated damages” in its decision in Dowling, some commentators that the S.C.C. has not put an end to the concept of moderated damages.

However, it may be that the concept of “moderated damages” as developed in the case law is indistinguishable from “near cause”. Adopting the latter view, I will not pursue the notion of Corporate Computers being entitled to pay Mr.

Milsom moderated damages. [ 63 ] Indeed, since the Supreme Court of Canada decision in Dowling , it is not clear whether a rights-based model is the one which should be applied in wrongful dismissal cases: if a rights analysis were to be applied, one would expect that the employer’s right to fair effort would be taken into account as well as the employee’s right to security of employment. It may be that the underlying policy which is now to be applied to resolve contests between employers and employees is a dependency analysis, which is familiar to the courts from family law models.

Under this analysis, within a reasonable range, where an employer makes an employee financially dependent upon the employer - that is restricts the employee’s ability to find employment elsewhere - or allows the employee to become financially dependent in that way, the employer must provide appropriate support for the employee if employment is withdrawn.

b) In the circumstances here, what length of notice was the employer required to give? [ 64 ] In the circumstances here, Corporate Computers was required to give Mr. Milsom a total of 5 months’ notice.

[ 65 ] The length of notice to which an employee is entitled varies according to the circumstances of the individual case, but is based on factors such as the following: age, length of service, responsibility, experience, status, training, qualifications, ease with which comparable work can be found, inducements, etc. The objective of the assessment in each case is to make an analysis of what is fair for the parties and what result will further the public good. [ 66 ] Mr. Milsom was 34 years old at the time of trial and had almost exactly 6 years of service with the defendant. Mr.

Milsom had not been provided any inducements to take up his employment at Corporate Computers; on the other hand, there was no anticipated impermanence in the employment contract with Corporate Computers. Mr. Milsom was a commission salesman, having his own standing accounts for which he was responsible with a minimum of supervision. On the other hand, Mr. Milsom had no particular qualifications or education relating to his employment with Corporate Computers; his earnings, even within the Corporate Computers context, were not noticeably high. At the time of his termination, Mr. Milsom was in good health.

Corporate Computers did not impose any restrictive covenant on Mr. Milsom upon termination. [ 67 ] After his termination, Mr. Milsom did do some work in his field, including for a Calgary firm, and on his own account. In addition, he received some income from his part- time job as a concierge. [ 68 ] Although Mr. Milsom did not find regular work in his field for a considerable time after his termination, he did not explore one of the most obvious potential opportunities for new employment which was a potential return to WestWorld.

Although it was one of the few Macintosh providers in Edmonton, and that was the area of Mr. Milsom’s expertise, it just “never occurred” to Mr. Milsom to look for employment with them. [ 69 ] It is clear from the case law that Courts cannot apply rules of thumb to set the length of notice required in an individual case: each contest between an employer and an employee deserves individual assessment in the circumstances of the specific case and in light of then current social policy demands.

So, for example, a court cannot use as a rule of thumb for an employee between the ages of 25 and 44 who is not in a senior management position a rule of thumb that the employee is entitled to one month of notice for every year of service. Of course, this restriction on the way in which courts must make a decision in a specific case does not prevent litigants from making an analysis of the existing case law and coming to their own conclusions about the length of notice which is likely to be imposed by a court. Mr.

Milsom himself argues that, in an “ordinary” case of the general type presented here, the length notice would be 6 to 10 months. He argues however, that this is not an ordinary case. Despite that argument, he has been unable to identify any circumstances that take his case out of the ordinary situation. On the contrary, his failure to look for work at one of the two remaining Macintosh specialists in Edmonton suggests that he did not do everything that was reasonable to mitigate his damages.

c) Average income with Corporate Computers [ 70 ] Mr. Milsom’s average earnings at Corporate Computers were $3,100 per month. [ 71 ] Although Mr. Milsom suggests that his average earings during the last period of employment was higher ($3,700 or $3,800) than the average during the last three full years of employment ($3,100), as his tax returns for the period 1998 to 2000 demonstrate, and as common sense suggests, commission earnings are likely to vary over time.

That is why longer range averages than the most recent earnings are used; in the absence of any evidence to suggest that the trend of the last few months of employment was likely to be maintained, a spike over a few months is not a fair indicator of employment income. [ 72 ] In the circumstances here, Mr. Fletcher himself indicated that, from time to time, Mr. Milsom’s performance improved. However, given all of the evidence concerning Mr. Milsom’s production, the average during the last three full years of employment is a fair measure of Mr. Milsom’s earnings with Corporate Computers. 4.

Aggravated damages [ 73 ] Mr. Milsom is not entitled to aggravated or punitive damages.

[ 74 ] The “Wallace bump” has been described by the Supreme Court itself as being an award based on an employer’s bad conduct: While the obligation of good faith and fair dealing is incapable of precise definition, at a minimum in the course of dismissal employers ought to be candid, reasonable, honest and forthright with their employees and should refrain from engaging in conduct that is unfair or is in bad faith by being, for example, untruthful, misleading or unduly insensitive. [ 75 ] In this case, while the employer’s conduct was not truthful at the time of termination, the events around the termination itself were untruthful in a way which did not harm Mr.

Milsom. [ 76 ] As to the events leading up to the termination, it would not be fair to characterize Corporate Computers’ conduct relative to Mr. Milsom as being in bad faith or misleading. On the contrary, even Mr. Milsom acknowledges that Mr. Fletcher did mention to him, from time to time, the need to increase sales. Mr. Fletcher thought that his general remarks would be easy for anyone to understand; Mr. Milsom heard the messages but did not discern the depth of Mr. Fletcher’s concern.

This was not a situation of bad faith; rather it was a situation of two styles of doing business which merely did not connect in any meaningful way. [ 77 ] It is true, of course, that after a disagreement arose between the parties concerning the terms of severance, Mr. Fletcher was not completely open with Mr. Milsom. But neither of course was Mr. Milsom completely open with Mr. Fletcher. It stands to reason that once the parties become adversarial, each will act in what they perceive to be their own best interests. [ 78 ] In the circumstances here, the copying by Mr.

Fletcher of his letter of complaint about the way in which Corporate Computers had been dealt with by Employment Standards to his MLA was not an action which gives rise to damages. Although one would expect that the appeal system concerning labour standards operated independently, there can be no doubt that there is necessary political oversight of all government agencies. Mr. Fletcher was entitled to let his MLA know about his concerns about the way a government agency had treated his appeal. [ 79 ] The outline of the appeal itself, including the argument advanced by Mr.

Fletcher in the attachment to his letter of January 24, 2002, should be viewed as a type of pleading in relation to the Human Resources appeal. A litigant must be able to advance allegations during the course of such a process under a concept of privilege analogous to the privilege granted to pleadings in lawsuits. It is up to each tribunal to decide how it will deal with complaints that are not proved; in civil lawsuits, the usual discipline is exercised through costs.

Such a mechanism is a sufficient check and balance against unproven allegations; the establishment of causes of action in relation to unproven allegations is an unnecessary protection. [ 80 ] Mr. Milsom argues that he has been left with a black hole in his resume as a result of his termination by Corporate Computers. However, Mr. Milsom’s resume already had a professional hole of sorts from the time of his graduation from University to the beginning of his employment with WestWorld. Mr.

Milsom does not have the kind of resume in which a failure to e employed in computer sales for a period of time would be particularly noticeable. [ 81 ] Here, Mr. Milsom has not proved that he suffered injuries “such as humiliation, embarrassment and damage to one's sense of self-worth and self-esteem” as a result of the method of termination. He has not proved an entitlement to a Wallace bump. 5. Counter-claim [ 82 ] Corporate Computers’ counter-claim is dismissed. [ 83 ] Corporate Computers has failed to prove that any loss of business was due to Mr. Milsom. Graham Fletcher based his

[ 83 ] Corporate Computers has failed to prove that any loss of business was due to Mr. Milsom. Graham Fletcher based his position essentially on what he recalls of the attitude of Randy Lee. However, there are two problems with that. First, is that Randy Lee does not remember having any such conversation; if it had been that dramatic - “not one more dime” - he surely would have remembered. The second is that, at its best, if was a threat not to do another dime of business if he had any say about it; the evidence establishes that, although he could make recommendations, Mr.

Lee did not have the decisive say about where members of the Bowes group spent their computer dollars. As Mr. Fletcher’s own evidence demonstrates, with reference to sales to the Hinton Parklander, Airdrie Echo, Meadow Lake Progress, Cold Lake Sun, Crag & Canyon, Grizzly Gazette, Canmore Leader, Vermillion Standard, Fort Saskatchewan Record, and to the Westaskiwin Times Advertiser, Corporate Computers still did business with Webbco after the conversation with Randy Lee. Finally, the evidence, including the evidence of Mr. Keebaugh, establishes that the assumption by Mr.

Milsom of responsibility for the Bowes Publishing account more or less co-incided with the acquisition of that company by Quebecor and the imposition of a spending freeze; as Mr. Keebaugh put it, “unfortunately we are not making a lot of purchases these days”. Mr. Keebaugh also agreed that a lot of current purchases were being made from WestWorld, but that was partly because WestWorld was only 3 blocks down the road from Mr. Keebaugh’s operation. Mr. Keebaugh also confirmed that the Bowes group had never stopped purchasing from Corporate Computers.

The evidence does not support Corporate Computers’ counter-claim. 6. Costs [ 84 ] If the parties are not agreed on costs, I may be spoken to within 30 days of the release of this decision. HEARD on the 3 rd and 4 th days of October and the 25 th day of November, 2002. DATED at Edmonton, Alberta this 31st day of March, 2003. __________________________ J.C.Q.B.A.