Bellini v. Ausenco Engineering Alberta Inc., 2016 NSSC 237

SUPREME COURT OF Nova Scotia Citation: Bellini v. Ausenco Engineering Alberta Inc. , 2016 NSSC 237 Date: 2016-09-10 Docket: Halifax , No. 443113 Registry: Halifax Between: Robert Bellini Applicant v. Ausenco Engineering Alberta Incorporated Respondent Judge: The Honourable Justice Arthur J. LeBlanc Heard: May 24, 2016, in Halifax, Nova Scotia Counsel: James B. Green, and Kelcie White, Law Student, for the Applicant Mark Tector and Michelle Black, for the Respondent By the Court: Introduction [ 1 ] The applicant, Mr.

Bellini, claims that he was wrongfully dismissed from his position as a Senior Mechanical Engineer with the respondent. In addition to a declaration that he was wrongfully dismissed, he seeks damages for breach of his employment contract, pre-judgment interest, and costs. [ 2 ] Mr. Bellini was hired as a Senior Mechanical Engineer by PROJEX Technologies on March 30, 2012. He began work on April 12, 2012. In July 2013, Ausenco bought the company. Mr. Bellini was provided with a new contract by Ausenco, and an opportunity to obtain independent legal advice.

The Ausenco contract included a provision governing termination without just cause. It states: 15.1 Conditions Although the Company anticipates a long term employment relationship, our business is subject to economic factors which sometimes necessitates a reduction in workforce. We have therefore adopted a policy of specifying termination conditions in our employment letters.

If it becomes necessary for us to terminate your employment for any reason other than cause, your entitlement to advance working notice or pay in lieu of such notice, will be in accordance with the provincial employment standards legislation . [Emphasis added.] [ 3 ] Mr. Bellini signed the Ausenco contract on July 10, 2013. It recognized his seniority date from his former contract. He began work with Ausenco on July 22, 2013, and remained there until June 17, 2015, when his employment was terminated. Ausenco attributed the termination to a lack of work. Mr.

Bellini was paid all outstanding wages and benefits, as well as an additional two weeks’ salary and extended health and dental coverage to the end of the month in lieu of notice. [ 4 ] While Ausenco is an international company, there is no dispute that the relevant legislation is the Nova Scotia Labour Standards Code , R.S.N.S. 1989, c.

Section 6 of the Code provides: Effect of Act 6 This Act applies notwithstanding any other law or any custom, contract or arrangement, whether made before, on or after the first day of February, 1973, but nothing in this Act affects the rights or benefits of an employee under any law, custom, contract or arrangement that are more favourable to him than his rights or benefits under this Act. [ 5 ]

Section 72 of the Code provides for minimum notice periods for employees terminated without cause. It states, in part: Termination of employment by employer

72(1) Subject to subsection (3) and

Section 71, an employer shall not discharge, suspend or lay off an employee, unless the employee hasbeen guilty of wilful misconduct or disobedience or neglect of duty that has not been condoned by the employer, without having given atleast … (

b) two weeks’ notice in writing to the person if his period of employment is two years or more but less than five years; …

(4) Notwithstanding subsections (1), (2) and (3), but subject to

Section 71, the employment of a person may be terminated forthwithwhere the employer gives to the person notice in writing to that effect and pays him an amount equal to all pay to which he would havebeen entitled for work that would have been performed by him at the regular rate in a normal, non-overtime work week for the period ofnotice prescribed under subsection (1) or (2), as the case may be. [6] This case is concerned with the interaction between the contractual termination provision and the Labour Standards Code. Termination at common law and by contract [7] Mr. Bellini does not challenge the enforceability of the contractual termination provision. The issue is its

interpretation. Mr.Bellini maintains that the language of the employment contract does not oust his common law notice rights, and therefore does not limithis reasonable notice period to the statutory minimum. [8] It is well-established that “employment contracts for an indefinite period require the employer, absent express contractuallanguage to the contrary, to give reasonable notice of an intention to terminate the contract if the dismissal is without cause”: Machtingerv. HOJ Industries Ltd., (SCC), [1992] 1 S.C.R. 986, [1992] S.C.J. No. 41, at para. 19.

The intention to contract out ofthe obligation to give reasonable notice requires “clear, express language”: Howard A. Levitt, The Law of Dismissal in Canada, 3d edn.(Toronto: Thomson Reuters, looseleaf) at §11:40:30. As the court said in Cybulski v. Adecco Employment Services Ltd., 2011 NBQB181, 2011 CarswellNB 401: 12 In order to displace the presumption of reasonable notice, the language of a limiting clause must be clear and unequivocal. Theremust be a high level of clarity... It should be noted in this case that the Contract was prepared by [the employer].

There is a presumptionthat unless there is an agreement with express language to the contrary, an employee is entitled to reasonable notice of termination. [9] The Ontario Court of Appeal commented on the practice of limiting notice by agreement in Bowes v Goss Power ProductsLtd, 2012 ONCA 425, [2012] OJ No 2811: 23 It is well-settled law that employment agreements are subject to the ordinary principles of contract law.

Peculiar to employmentlaw, however, is the principle that, unless otherwise stated, every employment agreement contains an implied term that an employer mustprovide reasonable notice to an employee prior to the termination of employment. If the employer fails to provide reasonable notice oftermination, the employee is entitled to damages that flow from this breach. … 25 However, the parties to employment agreements can, and often do, substitute a fixed period of notice in the agreement, therebydisplacing the common law period of "reasonable notice".

Parties are entitled to do so provided that they do not violate the minimumstatutory requirement relating to notice: see Machtinger v. HOJ Industries Ltd., (SCC), [1992] 1 S.C.R. 986, at pp. 998-1002. 26 Establishing a pre-determined period of notice in the contract of employment has certain distinct advantages. Most notably, itprovides certainty. From the employer's perspective, it has the advantage of "capping" the period of reasonable notice that a court mightotherwise award in a suit for wrongful dismissal.

Likewise, from the employee's perspective, it ensures a guaranteed entitlement thatmay be greater than that which a court would award under common law. For both parties, pre-determining the period of notice avoids theneed for litigation to assess notice upon termination. [10] A termination provision that can support more than one meaning should be read contra proferentum. For instance, in Kaiser v.Dural, 2001 NSSC 131, [2001] N.S.J. No. 352, Coughlan J. said that an ambiguously worded contract drafted by the employer’s lawyer“must be read contra proferentem” (para. 28).

The Court of Appeal held that “the judge did not err in finding that the provision of theletter was ambiguous and interpreting it contra proferentem”: 2002 NSCA 69, [2002] N.S.J. No. 249, at para. 8. [11] Accordingly, clear and express language is required to deprive Mr. Bellini of the right to reasonable notice at common law. Hesays the employment contract does not accomplish this.

Ausenco, by contrast, says the termination provision reveals an agreement tooust the common law and to limit the notice period to the minimum under the Labour Standards Code. [12] The scope of the Labour Standards Code is a matter of statutory

interpretation. The basic method was described by Iacobucci J,for the court, in Re Rizzo & Rizzo Shoes Ltd., (SCC), [1998] 1 S.C.R. 27, [1998] S.C.J. No. 2: 21 Although much has been written about the

interpretation of legislation …, Elmer Driedger in Construction of Statutes (2nd ed.1983) best encapsulates the approach upon which I prefer to rely. He recognizes that statutory

interpretation cannot be founded on thewording of the legislation alone. At p. 87 he states: Today there is only one principle or approach, namely, the words of

an Act are to be read in their entire context and in their grammaticaland ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.

[13] It has been said that “the general tenor of the statute” is that the Labour Standards Code is “intended to be remedial. It isintended that it should add to the rights of employees and not diminish those rights”: Deagle v. Shean Co-operative Ltd. (1995), (NS SC), 143 N.S.R. (2d) 261, [1995] N.S.J. No. 332 (S.C.) at para. 14, affirmed at 156 N.S.R. (2d) 219 (C.A.). CromwellJ.A. (as he then was) described the interpretive approach for the Code in Morine v. L & J Parker Equipment Inc., 2001 NSCA 53, [2001]N.S.J.

No. 114: 11 … we must review the words of the Code "in their entire context in their grammatical and ordinary sense harmoniously with thescheme of the Act, the objective of the Act and the intention of [the Legislature]: see Elmer A. Driedger, The Construction of Statutes,3rd edition (Toronto: Butterworths, 1994) at p. 67.

Having done so, if there remains doubt concerning the true meaning of the Code, itshould, as stated by the Supreme Court of Canada in Machtinger and Rizzo Shoes, be interpreted so that its protections extend to as manyemployees as possible and so as to resolve difficulties of language in favour of the claimant. [Emphasis added.] [14] Mr.

Bellini argues that the effect of the Code is to supplement common law reasonable notice with a statutory “floor” beneathwhich the employer cannot go, namely the minimum notice periods under s. 72(1). [15] Ausenco says s. 6 of the Labour Standards Code – which provides, in part, that “nothing in this Act affects the rights or benefitsof an employee under any law, custom, contract or arrangement that are more favourable to him than his rights or benefits under this Act”– means only that the existence of the minimum notice provisions in the Code does not preclude the parties from agreeing to greaternotice entitlements.

However, Ausenco says, no such terms were negotiated in Mr. Bellini’s case. In the absence of such agreement, inAusenco’s view, there is no entitlement to common law notice that is greater than the statutory notice entitlement. The question inDeagle, Ausenco says, was whether the employee could recover both by statute and at common law. There was no evidence of anexisting contract. [16] The applicant says this is a mischaracterization of s 6; the employee is not required to negotiate for common law reasonablenotice, which is implied into the contract.

Rather, it is the employer’s task to show a clear intention to depart from this presumption. [17] In Kaiser v Dural the employer argued that the termination provision of the contract – which contemplated the “minimumnotice required by law” – limited the notice required. The court found the provision was ambiguous and read it against the employer onthe contra proferentum principle.

Ausenco says this language left it unclear whether the notice provision referred to “common law,statute or otherwise”, and therefore “it is not difficult to understand why the Court found the clause to be ambiguous.” I note that inaffirming the decision of Coughlan J., however, the Court of Appeal said: 8 The appellant says that Mr. Kaiser is restricted to the "... minimum notice required by law" under the terms of his hiring letter andthat this means a period of one (1) week as provided for under

section 72 of the Labour Standards Code... Having regard to

section 6 ofthe Code, we doubt that this argument is sound even if the hiring letter were to be interpreted as incorporating the Code by reference. Inany case, the judge did not err in finding that the provision of the letter was ambiguous and interpreting it contra proferentem. [Emphasisadded.] [18] Ausenco says the absence of specific reference to the Code “clearly distinguishes” Kaiser from this case. The respondent saysthe comment about

section 6 is obiter, that

section 6 was apparently not fully argued at either level of court, and that there is no fullanalysis of

section 6 provided. [19] For its own part, Ausenco relies on the Small Claims Court decision in Hoadley v. Manpower Services Ltd., 2005 NSSM 17,[2005] N.S.J. No. 605, where the contract provided for notice “as is required by applicable Statute or pay in lieu thereof, and withoutfurther liability to me for notice at common law for wages, salary or benefits except such as may have been actually earned by me forwork performed as at the date of such termination” (para. 20). The adjudicator concluded that, on the facts, the contract did not governthe relationship between the claimant and defendant.

Additionally, the language of the contract in Hoadley is quite different from thelanguage in the Ausenco agreement. I do not find this decision to be particularly persuasive here. [20] In Goebel v. Jardine Rolfe Ltd. (1992), (BC SC), 42 C.C.E.L. 290, 1992 CarswellBC 864 (S.C.), theemployment contract provided that a terminated employee was “entitled to receive the compensation provided for in the 'Termination ofEmployment' provisions of the Employment Standards Act of British Columbia, in its then operative form…” (para. 11).

The court heldthat, read in the context of the rest of the contract, this was not sufficiently clear and unambiguous to deprive the plaintiff of common lawnotice. [21] Goebel was distinguished in Strench v Canem Systems Ltd, 2005 BCSC 1736, [2005] B.C.J. No. 2698, on the basis that “[i]nGoebel … there were clear ambiguities found by the trial judge. There are no such ambiguities in the case at bar” (para. 39). Thecontract in Strench set out specific notice periods.

In the event of employment for more than three months but less than one year, noticewas to be “in accordance with the Employment Standards…” (para. 9). For clarity, the ambiguity found in Goebel was described asfollows: 26 In my view the termination clause in the employment agreement in this case is not clear and unambiguous. Clause 6(

f) provides inpart that: ... the Employee shall be entitled to receive the compensation provided for in the 'Termination of Employment' provisions of theEmployment Standards Act of British Columbia ... It does not say the employee is "limited" in the compensation he is entitled to receive by the provisions of the Employment StandardsAct, 1980. It does not say the contract "may be terminated at any time".

Clause 6 further provides that: ... provided such compensation is paid in such circumstances, the Employee ... shall not claim ... any further compensation of any kind ornature whatsoever arising in any manner from the termination ... I am left with the question, if the plaintiff is indeed limited to two weeks' notice or two weeks' pay in lieu thereof, even if wrongfully

dismissed, why would the last paragraph be included in cl. 6, which paragraph appears to be an attempt to limit damages for wrongfuldismissal? As well, on the reading of that part of cl. 6, payment pursuant to the applicable provisions of the Employment Standards Act,1980 operates as a condition precedent to the employee, releasing the employer from any claims arising from termination… [22] Mr. Bellini cites McLennan v.

Apollo Forest Products Ltd. (1993), (BC SC), 49 C.C.E.L. 172, [1993] B.C.J.No. 2078 (B.C.S.C.), where the termination provision stated that the terms and conditions of employment were “in accordance with theEmployment Standards Act and other legislation of the Province of British Columbia governing the Employer/Employee relationship inthe workplace” (para. 10). The court held that this language did not oust the common law notice entitlement, and that it incorporated thestatutory requirement of “at least” two weeks’ notice that would apply to the plaintiff under the Act.

Meiklem J said: 11 Notwithstanding my determination in the preceding paragraph the express terms of the employment agreement do not restrict thenotice to the minimum set out in the Act, since the Act uses the terminology of "at least". Thus a determination of reasonable notice inthe circumstances remains to be made in construing the term of reasonableness implied by common law as a matter of public policy. [23] The Alberta Employment Standards Code expressly preserves common law rights, and qualifies statutory notice requirementsby the phrase “at least.” In Kosowan v.

Concept Electric Ltd., 2007 ABCA 85, [2007] A.J. No. 266, the termination provision providedfor notice “in accordance with the Employment Standards Act…” (para. 1). Berger J.A. said, for the court: 4 The question to be decided is whether the termination clause in the letter agreement renders inapplicable s. 3(1) of the Code.

As weread it, the term of the agreement provides only that in the event of termination without cause, the Appellant is entitled to severance pay"in accordance with the Employment Standards Act of Alberta." (It is conceded here that the reference is to the Code.) The clause doesnot, on its face, confine the Appellant to compensation pursuant to ss. 56 and 57(1) of the Code. On the contrary, the choice of languageleaves open to the employee the ability to pursue an action. To do so, in our opinion, would be "in accordance with the EmploymentStandards Code." The provision is clear and unambiguous. [24] Mr.

Bellini also cites Joseph v. June Warren Publishing Ltd., 2007 ABPC 309, [2007] A.J. No. 1224, where the terminationprovision required the employer to comply with “its minimal obligations, if any, under the Alberta Employment Standards Code.” Inholding that this language was not sufficiently clear to oust common law notice, the court said, “any agreement that derogates from thecommon law rights of employees is to be read strictly and will not be extended beyond a strict literal

interpretation of the words used,notwithstanding that there is a strong inference that the probable intent would go further” (para. 16). To a similar effect, in Gillespie v.1200333 Alberta Ltd., 2012 ABQB 105, [2012] A.J. No. 171, where the employer argued that a reference to the legislation in a policyand procedure manual was sufficient to oust the common law, the court said: 40 I reject the Respondent's argument that the minimum notice provisions of the Employment Standards Code … are determinative inthis case.

A contractual provision that termination notice will accord with legislated provincial standards should be interpreted as anagreement regarding minimal notice, not an agreement to exclude the implied contractual term that dismissal without cause requiresreasonable notice. Although employers are free to make contracts that limit an employee's notice entitlement to the statutory minimums(see Machtinger … at paras. 33-35), any such agreement to exclude the employee's common law protection must be clear andunambiguous.

Requiring such clarity where an employer intends to rely on its strict rights under the Employment Standards Code accordswith the objectives of the Code as summarized by the Alberta Court of Appeal in Vrana v. Procor Ltd., 2004 ABCA 126 at para. 10: The Code contains a detailed

preamble setting forth its legislative objectives. In particular, those objectives stress the importance ofemployment legislation encouraging the "fair and equitable resolution of matters arising over terms and conditions of employment".Further and most important for purposes of this appeal, the

preamble expressly recognizes the salutary effect of open communicationbetween employer and employee and the vital need for each to understand their respective rights and obligations. 41 In Vrana, the Court of Appeal considered the temporary layoff provisions of the Code. It held that where an employer intends torely on its strict rights under the Code, it needs to ensure the employee is properly advised of this intention.

As such, it must inform theemployee of this and point to the relevant sections of the Code on which it intends to rely in its notice to the employee (Vrana at para13). [25] After referencing Kosowan and several trial court cases, the court concluded that “a clause that references the division orsections of the Code dealing with termination notice, combined with the wording ‘will be limited to’, is sufficiently clear andunambiguous to confine the employee to the statutory minimums and oust his or her ability to claim for higher damages for wrongfuldismissal at common law.

Of course, the parties are never at liberty to contract below the statutory minimums…” (para. 44). [26] In Cybulski, a New Brunswick decision, the termination provision stated that the contract was “subject to provincial legislationregarding termination of employment” (para. 3). The New Brunswick Employment Standards Act, like Nova Scotia’s, required “at least”the statutory minimum of notice (para. 18).

Glennie J. rejected the argument that notice was limited to the statutory minimum: 19 Thus the wording contained in the New Brunswick legislation is similar to the British Columbia legislation in that both contain thewords "at least". In my opinion Mr. Cybulski's employment Contract could not fix the notice period on termination to be the period setout in the Employment Standards Act because the statute itself, by providing that notice was required of "at least" the minimum statutoryperiod, does not fix the notice period.

The Contract only converts the provisions of the Employment Standards Act to a floor for benefitsrather than a ceiling. Accordingly, since the Contract failed to fix the notice period with sufficient clarity, the common law presumptionof reasonable notice continues to operate. The common law presumption in favour of reasonable notice has not been rebutted withexpress contractual language to the contrary. [27] As such, Mr. Bellini argues that the

interpretation of employment standards legislation with similar language to the Nova Scotialegislation, as applied to employment contracts with similar provisions to the termination

section here, support the conclusion that heretains a full common law notice entitlement. [28] Ausenco says the termination provision ousts the common law in favour of the minimum notice periods under the LabourStandards Code. It relies on University of British Columbia v. Wong, 2006 BCCA 491, [2006] B.C.J. No. 2846, where the court held

that the statutory provisions “providing for notice or pay in lieu of notice are incorporated into the contract in issue. The effect is that thelanguage of the ESA concerning notice or pay in lieu of notice is part of the contract. It is as if the draftsman included the words either inthe text of or as a

schedule to the contract” (para. 34). The chambers judge had noted the arbitrator’s conclusion that “even if the ESAgoverned, then it prescribed a minimum notice period only” (para. 22). According to the chambers judge, “Mr. Wong's counsel hasconceded that the arbitrator was incorrect on this point and I will make no further comment about it” (para. 22). The Court of Appealadded that “the incorporation by reference in this case does not involve an acceptance of any part of the substantive content of the ESA”(para. 35).

The Court of Appeal did not undertake any specific consideration of the language. [29] Wong was followed in Van't Slot v. OncoGenex Technologies Inc., 2010 BCPC 249, [2010] B.C.J.

No. 1942, where the courtsaid: 24 … I cannot see any substantive difference between "An employee ... shall receive notice or pay in lieu of notice in accordance withthe provisions of the Employment Standards Act" (Wong) and "... the Employee shall be entitled to ... notice or severance payments to theEmployee as required pursuant to the provisions of the Employment Standards Act ... as amended from time to time" (this case). [30] Given the lack of analysis of the language in question, I do not believe that Wong clearly supports the respondent’sinterpretation of the phrase “in accordance with…” It merely supports the conclusion that the Act was incorporated by reference into theemployment contract, which is not in dispute.

As the applicant argues, Wong was not concerned with the interpretive issue we aredealing with here. [31] Ausenco further argues that the absence of the word “minimum”, or of any reference to a “ceiling” to entitlements upontermination, does not mean that Mr. Bellini is entitled to common law notice. The respondent cites McKay v. LightRoom F/X Inc., 2009BCPC 321, [2009] B.C.J. No. 2059, where the relevant termination provision stated that “termination will be in accordance with theEmployment Standards Act…” (para. 11).

Noting that Wong was binding, the court held that this language “sets out the applicable noticeperiod with sufficient clarity and particularity to rebut the presumption of reasonable notice” (para. 45). [32] The applicant says Ausenco overstates the value of the British Columbia cases, particularly those that post-date the 1996legislative amendment replacing the “at least” phrasing with “equal to.” After that amendment, the British Columbia courts stoppedapplying McLennan, but they did not overrule it.

Thus, it is submitted, cases such as Van't Slot, McKay, and Strench do not displace theMcLennan reasoning when applied to the language of the Nova Scotia Code. As the applicant submits, a British Columbia terminationprovision that contemplates notice “in accordance with” the Employment Standards Act would clearly oust the common law, since thelegislation, as amended, sets out the requisite notice periods, rather than only setting a minimum. [33] In Stevens v. Sifton Properties Ltd., 2012 ONSC 5508, [2012] O.J.

No. 6244, the employment contract contemplated “notice orpayment in lieu of notice, and/or severance pay, in accordance with the Employment Standards Act of Ontario” (para. 4). On thedefendant’s

summary judgment motion, the plaintiff argued that, pursuant to Machtinger, a contract’s “mere indication of minimumnotice to be provided, (either expressly or by reference to legislation that speaks only to minimum required notice), is not necessarilyinconsistent with an intention to provide more generous notice in accordance with the common law, and therefore should not be regardedas sufficient to rebut the presumption” (para. 32). Leach J. acknowledged that McLennan and Cybulski supported this

interpretation: 36 The McLellan [sic] and Cybulski decisions therefore do suggest that, where an employment contract incorporates provisions ofemployment standards legislation by reference, that will not suffice to provide the clarity of intention required to displace thepresumption that reasonable notice in accordance with common law is required, if the legislation in question merely establishes minimumnotice requirements without going further to specify precisely what notice is required; e.g., by indicating that the legislative requirementsare not only a floor but a ceiling. [34] However, Leach J went on, this was not the end of the matter.

In Wood v. Industrial Accident Prevention Association, [2000]O.T.C. 605, [2000] O.J. No. 2711 (Sup. Ct. J.), Leitch J. had held “a provision requiring termination ‘in accordance with theEmployment Standards Act of Ontario’ sufficient to displace the presumption of notice in accordance with common law requirements”(Stevens, para. 39).

Wood had been given under an earlier version of the Ontario legislation which did not include the words “at least” inthe notice provision; it had since been amended to do so, bringing it into line with the British Columbia and New Brunswick legislationconsidered in McLennan and Cybulski (paras. 40-42). [35] The Ontario caselaw, however – particularly the Court of Appeal decision in MacDonald v. ADGA Systems International Ltd., (ON CA), [1999] O.J. No. 146 (C.A.) – led Leach J. to a different conclusion.

In MacDonald, the terminationprovision required “not less than one (1) month's prior written notice…” (para. 18). The court distinguished this language fromMachtinger’s, which stated, “[e]mployer may terminate employment on giving Employee 2 weeks' notice or salary ... in lieu of notice”(MacDonald, para. 19). Abella J.A. (as she then was) said, for the court: 20 In my view, the clause in Machtinger is easily distinguishable from the termination provision in MacDonald's contract.

TheMachtinger clause sets out a specific notice period which, on its face, violates the four week notice provisions required for theseemployees under the Employment Standards Act. 21 The MacDonald clause, on the other hand, does not, on a plain reading, conflict with any legislative entitlement. ADGA is requiredto give MacDonald not less than 1 month's notice.

This does not contravene the duty to comply with the Employment Standards Act'sminimal requirement of one week's notice per year of service, up to a maximum of eight weeks. … 23 It would no doubt have been linguistically preferable had the termination provision in MacDonald's contract contained words afterthe term of notice such as "in accordance with the relevant provisions of the Employment Standards Act." But while this layer ofspecificity might have enhanced the clarity of the parties' intentions, its absence does not detract from the provision's legality. 24 In this case, the common law presumption in favour of reasonable notice has been rebutted.

There is a clear - and clearly expressed

- term providing for not less than one month's notice. Neither on its face, nor inferentially, does this term provide for a notice period lessthan that required by the Employment Standards Act, nor reflect an attempt to contract out of that requirement. Accordingly, thecontractual term prevails over the common law presumption. [36] Leach J. said, in Stevens: 43 The problem with the plaintiff's argument is that Justice Leitch did not base her decision in Wood (and her rejection of [McLennan])solely on the difference then existing between the British Columbia and Ontario legislation.

At paragraphs 15-17, she also reliedexpressly on the Court of Appeal's decision in MacDonald […], in which the common law presumption was displaced not by legislationincorporated by reference, but by the contract's express reference only to a minimum notice requirement: […] In MacDonald the court interpreted a provision in an employment contract which provided that either party could terminate theagreement at any time by giving not less than month's prior written notice.

The Court of Appeal held that this clause did not, on its plainreading, conflict with any legislative entitlement and there was no attempt to contract out of the minimum requirements of the Act withthe result that the term of the contract prevailed over the common law presumption. ... I am satisfied that the contractual term in question is clear and sets out the applicable notice period with sufficient particularity to rebutthe presumption of reasonable notice.

I further find that the clause in question meets the policy considerations set out in Machtinger and Ifind that the reasoning of the Ontario Court of Appeal in MacDonald is applicable. The contract in question clearly provides anentitlement to a period of notice which is not less than that required by the Employment Standards Act.

It is not an attempt to contract outof the provisions of that Act and, as found in MacDonald, these contractual provisions prevail over the common law presumption.[Emphasis added in Stevens.] 44 In the result, Justice Leitch found in Wood, as do I, that our Court of Appeal has held that language in an employment contractmerely specifying a minimum notice period will suffice to displace the common law presumption, provided the specified minimum doesnot conflict with the legislative requirements. … 46 In that regard, I see no logical or meaningful distinction between the MacDonald case and the case before me.

Here as there, thetermination provision in question admittedly specifies only minimum notice requirements by incorporating, via reference, the "at least"provisions of the "new" Ontario employment standards legislation. However, incorporation of the legislative notice requirements alsomeans the specified minimum notice requirements of the contract self-evidently will not conflict with those of the legislation.

Pursuant toMacDonald, that is sufficient to displace the common law presumption. [37] Leach J. repeated that the termination provision in MacDonald “did not purport to incorporate the applicable employmentstandards legislation by reference. It merely specified a minimum notice period… For the Court of Appeal, that was sufficient to displacethe common law presumption” (para. 45).

As a result, there was “no logical or meaningful distinction” between MacDonald and theStevens case: “incorporation of the legislative notice requirements also means the specified minimum notice requirements of the contractself-evidently will not conflict with those of the legislation. Pursuant to MacDonald, that is sufficient to displace the common lawpresumption” (para. 46). [38] Leach J. also held that the post-MacDonald Ontario Court of Appeal decision in Ceccol v. Ontario Gymnastic Federation(2001), (ON CA), 204 D.L.R. (4th) 688, [2001] O.J.

No. 3488 – which indicated that a “high level of clarity” isrequired to rebut the presumption of common law reasonable notice – did not change the result (Stevens at paras. 31 and 47). The morerecent decision in Clarke v. Insight Components (Canada) Inc., 2008 ONCA 837, [2008] O.J. No. 5025, decided under the new “at least”language of the Employment Standards Act, had “found the contract provisions to be clear and unambiguous, not contrary to theemployment standards legislation, and therefore sufficient to displace the presumption of reasonable notice required at common law”(Stevens, para. 48).

The contract in Clarke provided: … Your employment may be terminated without cause for any reason upon the provision of reasonable notice equal to the requirementsof the applicable employment or labour standards legislation. By signing below, you agree that upon the receipt of your entitlements inaccordance with this legislation, no further amounts will be due and payable to you whether under statute or common law. [Clarke, para.1] [39] The Court of Appeal held: 4 … In our view the effect of this clause is clear. The words "reasonable notice" cannot be read in isolation.

They must be read in thecontext of the clause as a whole. When read in their proper context, the words "reasonable notice" cannot be taken to import the generalcommon law standard.

Rather, the clause clearly provides that the reasonable notice period to which the employee is entitled is "equal tothe requirements of the applicable employment or labour standards legislation." To resolve any possible doubt, the concluding words ofthe clause exclude any further amounts "whether under statute or common law." [40] The applicant maintains that Leach J. made errors in analysis due to over-reliance on MacDonald and in rejecting McLennanand Cybulski without adequate explanation.

For instance, Leach J. found that MacDonald indicated that a termination provision need notinclude a floor and a ceiling to oust the common law. However, the applicant says this is not the case. The issue in MacDonald, hesubmits, was the enforceability of the termination clause, not its

interpretation. There was no general pronouncement about theinterpretation of termination provisions. Further, the contract in MacDonald did not incorporate statutory provisions. Moreover, to beclear, the governing statutory provision in MacDonald did not include the “at least” phrasing found in the Nova Scotia legislation, butimposed specified definite notice entitlements. [41] The applicant also says there were significant differences between the provisions in MacDonald and those in Stevens that LeachJ. did not consider.

He says it was implicit in the wording of the termination provision in MacDonald that the parties had agreed on onemonth’s notice. No such agreement existed in Stevens, nor did the applicant in this case agree to the minimum notice under the statute.

He agreed to notice in accordance with the Labour Standards Code – which includes common law notice.

The MacDonald analysis, heargues, will only govern where the employee has agreed to the statutory minimum. [42] The applicant emphasises that, unlike in Machtinger – where the lack of notice in the contract violated the fixed-noticeprovisions of the legislation – the issue here is not the enforceability of the contract, but whether it ousts common law notice by“clearly” providing an alternative. [43] On a consideration of all the relevant law, I conclude that I should follow the authorities requiring a higher level of clarity intermination provisions that are said to oust common law notice.

The Court of Appeal decision in Kaiser alludes to this reasoning,although admittedly the point was not directly dealt with. I find the reasoning in cases such as McLennan, Cybulski and Kosowanpersuasive. I take note of Clarke, but the provision in that case specifically referred to “reasonable notice” and stated clearly that “nofurther amounts will be due and payable … whether under statute or common law.” I believe that is significantly clearer and morespecific than the language I am dealing with here.

The provision in this case is at best ambiguous as to whether the parties intended thestatutory minimum to apply, or simply whether the applicable notice would be consistent with the legislation. It would not be difficultfor an employer to draft a termination clause that leaves no doubt as to the parties’ intention to oust common law notice. This languagedoes not do that. I am not convinced that the court should apply a strained

interpretation to attribute such meaning to contract languagethat does not specifically say so. As such, I am not convinced that the termination provision ousted Mr. Bellini’s right to common lawnotice. The reasonable notice period [44] The factors in Bardal v Globe & Mail Ltd. (1960), (ON SC), 24 D.L.R. (2d) 140 (Ont. S.C. (H.C.J.) governthe quantification of reasonable notice.

These factors are (1) the character of the employment; (2) the length of service of the employee;(3) the employee’s age; and (4) the availability of similar employment, having regard to the experience, training, and qualifications ofthe employee. This analysis has been endorsed by the Nova Scotia Court of Appeal: Silvester v. Lloyd's Register of North America Inc.,2004 NSCA 17, [2004] N.S.J. No. 37, at para. 20. [45] Mr. Bellini says a nine-month reasonable notice period is appropriate. In particular, he submits that the availability of similaremployment is a major factor in the present calculation.

In his view, the state of the Canadian oil and gas industry weighs heavily underthe fourth Bardal factor. [46] Ausenco says the reasonable notice period should be between three and five months. The respondent says Mr. Bellini’s skill setis highly transferable, as demonstrated by his employment history: he has held different positions with relatively short periods ofretention, including with Ausenco. Further, he was hired in his late-fifties, suggesting that his current age of sixty-one years should notautomatically be considered an obstacle in his search for further employment.

Finally, Ausenco says reasonableness applies to theemployer as well as the employee: see Bent v. Atlantic Shopping Centres Ltd., 2007 NSSC 231, [2007] N.S.J. No. 420, at para. 94. Inthis case, the impugned termination was not a surprise and was tied to factors beyond the employer’s control. [47] There are several approaches in the caselaw to the assessment of the Bardal factors. One line of cases in Ontario, such asRyshpan v. Burns Fry Ltd. (1995), (ON SC), 10 C.C.E.L. (2d) 235, [1995] O.J. No. 1132 (Ont. Ct. J. (Gen.

Div.),adopted a “rule of thumb” using the formula of one month of notice per year of service as a starting point. This approach was rejected bythe Ontario Court of Appeal in Minott v. O'Shanter Development Co. (1999), (ON CA), 168 D.L.R. (4th) 270, [1999]O.J.

No. 5, where Laskin J.A. said, for the court: 71 Those who support the rule of thumb approach to calculating the period of reasonable notice argue that it accords with popularperception, that it is reflected in corporate severance policies, and, most important, that it provides "some predictability and certainty tothe calculation ... while at the same time allowing for flexibility by adjusting for various factors." 72 Predictability, consistency and reasonable certainty are obviously desirable goals in employment law - both for employers and forthose advising employees who have been or are about to be dismissed - a point emphasized by Lacourciere J.A. in his majority reasons inCronk.

These goals, however, are best achieved by a careful weighing and blending of the Bardal and other factors relevant to thecalculation of reasonable notice, by establishing reasonable ranges for similar cases, recognizing that no two cases are the same, and evenby establishing upper limits for particular classes of cases where appropriate. 73 The rule of thumb approach suffers from two deficiencies: it risks overemphasizing one of the Bardal factors, "length of service",at the expense of the others; and it risks undermining the flexibility that is the virtue of the Bardal test.

The rule of thumb approachseeks to achieve this flexibility by using the other factors to increase or decrease the period of reasonable notice from the starting pointmeasured by length of service. But to be meaningful at all, this approach must still give unnecessary prominence to length of service.Thus, in my opinion, the rule of thumb approach is not warranted in principle, nor is it supported by authority. [48] Similarly, in Capital Pontiac Buick Cadillac GMC Ltd. v. Coppola, 2013 SKCA 80, [2013] S.J.

No. 454, the SaskatchewanCourt of Appeal held that a “rule of thumb” approach “is not supported by the jurisprudence and is inconsistent with Bardal” (para. 22).The Nova Scotia courts have not addressed this point in detail. In MacKinnon v. Acadia University, 2009 NSSC 269, [2009] N.S.J. No.411, Warner J. stated that the “rule of thumb” had no place in the assessment, being inconsistent with Bardal (para. 113).

I am satisfiedthat the weight of the caselaw militates against employing the “rule of thumb.” As MacKinnon suggests, what is required is anindividualized approach to assessing the Bardal factors. [49] The character of the employment. Mr. Bellini was a senior mechanical engineer who offered guidance to junior engineers, butdid not actually hold traditional executive or managerial responsibilities, such as hiring and firing personnel. [50] Length of service. Mr. Bellini began his employment with a different company on March 30, 2012, and signed a new contractwith Ausenco on July 22, 2013.

The Ausenco contract recognized the former seniority date. The fact that the new contract incorporatedthe former contract’s seniority date, with no express provision rebutting the presumption of continuance, suggests that the length ofservice should be calculated from March 30, 2012: see Peter Barnacle and Michael Lynk, Employment Law in Canada (Toronto:

LexisNexis, looseleaf), vol. I, at §3.13. As such, notice should be calculated from the earlier date. [51] Age of the employee. Geoffrey England writes in Individual Employment Law (Toronto: Irwin Law, 2008) that courts “treat ageas an important factor in increasing the notice period” (p. 317). Mr. Bellini contends that, at sixty-one years old at the time oftermination, he is approaching retirement, thereby limiting the reasonable radius of his job search. Ausenco says Mr.

Bellini’s history ofrelatively short-term work – and the fact that he was hired for the job in question at fifty-seven years of age – suggests that his age shouldnot automatically be considered a hindrance to finding new employment. I am inclined to agree that in view of his age at the time of hislast hire, and his relatively brief period in that position, his age should not be considered the major factor, though it will be a significantconsideration. [52] Availability of similar employment. This is a primary factor for determining the period of reasonable notice.

England notesthat “courts have always placed paramount weight on whether or not the employee can reasonably be expected to find replacement work,recognizing that employees need a financial cushion to support them while they conduct a job search” (Individual Employment Law, p.311). As the New Brunswick Court of Appeal put it in Bramble v. Medis Health and Pharmaceutical Services Inc. (1999), (NB CA), 175 D.L.R. (4th) 385, [1999] N.B.J.

No. 307, “[t]he primary objective of notice is to provide the terminated employeewith a reasonable opportunity to seek alternate suitable employment” (para. 57). [53] The parties disagree as to whether the general decline of the oil and gas industry is relevant to the availability of similaremployment. Ausenco says Mr. Bellini has a highly transferable skillset. He argues, however, that the same economic factors thatimpelled his layoff (such as the decrease in the price of oil) also make it more difficult for him to find similar employment. [54] In Stuart v.

Navigata Communications Ltd., 2007 BCSC 463, 2007 CarswellBC 670, the court commented that “[w]here theindustry at issue … is undergoing a restructuring which will lead to minimal availability of similar employment, the notice period maybe increased. This is so because a poor general work environment extends or increases the loss actually suffered by an employee fromthe breach of his employment contract” (para. 13). In Kelly v. Monenco Consultants Ltd., [1987] O.J. No. 563, 1987 CarswellOnt 1770(Ont.

S.C. (H.C.J.)), for instance, the plaintiff was a 44-year-old mechanical engineer who was dismissed after four years’employment. The court acknowledged the impact of an oil industry slowdown on the plaintiff’s ability to find new employment (para.23). Reasonable notice was assessed at ten months. [55] In Bohemier v Storwal International Inc. (1983), (ON CA), 4 D.L.R. (4th) 383, [1983] O.J. No. 3312, theCourt of Appeal affirmed the reasoning of the Trial Judge, suggesting that the usual “cushion” policy would unfairly jeopardize acompany’s ability to dismiss employees in difficult economic times.

A potential flaw in this position is described in Employment Law inCanada: “It rests on the flawed assumption that adverse economic conditions have an equivalent impact on employers and employees.This is palpably not so” (§14:114). [56] A further difficulty is Mr. Bellini’s assertion that, given his the location of his home and his wife’s job in Halifax, he should notbe expected to relocate at his age. In effect, this asserts that similar employment must be both in kind and in geographical proximity. [57] Discussion. Both parties advance several cases in support of their respective positions. Mr.

Bellini relies on Chen v. TorontoHydro Electric Commission, 2000 CarswellOnt 1108 (Ont. Sup. Ct. J.), where a 52-year-old junior electrical engineer with about sixyears’ employment was assessed a reasonable notice period of fifteen months. (However, the plaintiff held a PhD in his field and enteredthe workforce with relatively few years for remunerative work.) In Ghate v. Acres Consulting Services Ltd. (1986), 15 C.C.E.L. 20, 1986CarswellOnt 855 (Ont. S.C. (H.C.J.)), the plaintiff was a 50-year-old hydraulic engineer with four years’ employment. The court foundan appropriate notice period of ten months.

In Butler v. Potash Corp. of Saskatchewan Mining Ltd. (1986), (SK KB),47 Sask. R. 187, 1986 CarswellSask 543 (Sask. Q.B.), a 62-year-old senior mechanical engineer with under three years’ employmentreceived notice of nine months. In Dailey v. Falconbridge Ltd., [1986] O.J. No. 2038 (Ont. Dist. Ct.), a 55-year-old engineer working asa geomechanics supervisor with four years’ employment was assessed a reasonable notice period of twelve months.

In Lederhouse v.Vermilion Energy Inc., 2015 ABQB 387, the plaintiff was a 56-year-old geologist with 3.5 years’ employment, who was assessed areasonable notice period of nine months. The court accepted that the plaintiff’s proximity to retirement put her at a disadvantage inobtaining new employment (para. 30). [58] The respondent references a line of cases supporting a three-to-five month notice period, but only Slater v. Sandwell Inc. (1994), (ON SC), 5 C.C.E.L. (2d) 308, [1994] O.J. No. 1317, involves employment reasonably similar to Mr. Bellini’s.

In thatcase a professional mechanical engineer had been terminated at the age of 59, after being employed for two months and two years. Thecourt considered, inter alia, the “the cyclical nature of the engineering consulting industry” (para. 54), and found the reasonable noticeperiod to be four months. [59] Ultimately, the cases relied on by the parties provide a general sense of the range of notice in cases similar to this one, but theultimate determination is an individual one.

In this case, upon weighing the factors discussed above against the authorities, I am satisfiedthat the reasonable notice period is six months. Canada Pension Plan [60] Mr. Bellini seeks recovery for lost Canada Pension Plan contributions, citing Bell v. Izaak Walton Killam Hospital for Children(1986), (NS SC), 74 N.S.R.(2d) 309 (S.C.T.D.), where Nunn J. included in the award “the amount of the employer'spremium towards Canada Pension Plan during the period of the notice” (para. 81). Ausenco says Bell should be ignored, because it isthirty years old and provides no analysis on the point.

This is not a basis to ignore the case, however. More relevantly, Ausenco points tocaselaw to the effect that such an amount should not be awarded absent evidence of loss. For instance, in Monk v. Coca-Cola BottlingLtd. (1996), (NS SC), 150 N.S.R. (2d) 192, Saunders J. (as he then was) said: [67] The plaintiff has failed to prove a loss with respect to the defendant's contributions to the Canada Pension Plan. The Canada PensionPlan makes allowance for the contingency that a contributor may be out of work for some time during his working career.

Therefore it isquite possible that the plaintiff lost nothing by the failure of the defendant to make contributions to CPP during the notice period. If therehas been a loss, it is incalculable. No evidence was presented at trial as to what that loss, if any, might be.

[61] See also Horechuk v. I.M.P. Group International Inc., 2012 NSSC 96, [2012] N.S.J. No. 174, at para. 33, where Bourgeois J.(as she then was) followed Monk. [62] Mr. Bellini accepts the Monk reasoning, but argues that the loss is obvious from the earnings calculations that are used todetermine CPP entitlement. He cites Shinn v. TBC Teletheatre B.C., 2001 BCCA 83, [2001] B.C.J.

No. 223, where McEachern C.J.B.C.,speaking for the court on this point (see para. 26) said: 20 In my judgment, it should not be necessary in a wrongful dismissal action like this one to require a plaintiff to bear the cost of sucha study.

The legislation demonstrates that pension entitlement depends upon the amount of contributions, and such amounts should berecovered unless the defendant establishes that the loss is something less than the actual premium dollar shortfall during the period ofreasonable notice. [63] As the applicant argues, the loss of CPP contributions during the notice period makes it more likely that more of Mr. Bellini’slower-earning years will be counted among his pensionable earnings. The Monk reasoning does not directly address the form such proofwould take.

Mitigation [64] An employee cannot recover damages for reasonable notice if they could have been avoided with reasonable effort. The burdento establish a lack of mitigation is on the employer: Red Deer College v. Michaels, (SCC), [1976] 2 SCR 324, at 331. Afailure to mitigate will support a reduced notice period: see Chambers v. Axia Netmedia Corp., 2004 NSSC 24, [2004] N.S.J. No. 26, atparas. 99-101. [65] Ausenco says there are gaps in Mr. Bellini’s job search log, and contends that, in many cases, his efforts comprised only ofregistering with various job posting entities (such as Career Beacon).

Essentially, Ausenco says the applicant’s job search should havebeen more vigorous; for instance, the respondent points out that he took two vacations (and postponed an interview due to vacation) sincehis dismissal. [66] Mr. Bellini says his efforts were reasonable, and included diligently monitoring available job postings and applying for severalsimilar positions. He owns a house in Dartmouth and his wife works in Halifax. As they approach retirement age, he argues that it isreasonable not to relocate in search of work.

Moreover, submits that a “cooling off” period, and occasional vacations while searching foremployment, are not unreasonable: see, for instance, Zimmer v. Cascade Construction Ltd. (1985), (AB KB), 39 Alta.L.R. (2d) 66, [1985] A.J. No. 689 (Alta. Q.B.), at para. 10. [67] In all the circumstances, I am not convinced that Ausenco has established a lack of reasonable efforts by Mr. Bellini. Mitigationis not a matter of picking apart every detail of the applicant’s job search; on the evidence, I cannot conclude that there was a lack ofreasonable mitigation efforts by Mr. Bellini.

Conclusion [68] Accordingly, I find that the termination provision did not oust the right to common law notice; the applicant was entitled toreasonable notice of six months; the applicant is entitled to recover the CPP contributions; and the respondent has not established afailure to mitigate. [69] If the parties are unable to agree on costs, they may provide costs submissions within thirty days of the release of this decision. LeBlanc, J. SUPREME COURT OF Nova Scotia Citation: Bellini v.

Ausenco Engineering Alberta Inc., 2016 NSSC 237 Date: 2016-09-10 Docket: Halifax, No. 443113 Registry: Halifax Between: Robert Bellini

Applicant v. Ausenco Engineering Alberta Incorporated Respondent Erratum Judge: The Honourable Justice Arthur J. LeBlanc Heard: May 24, 2016, in Halifax, Nova Scotia Erratum Date: July 10, 2017 Counsel: James B. Green, and Kelsey Black, Law Student, for the Applicant Mark Tector and Michelle Black, for the Respondent Erratum: The first page of the electronic version of this decision has been modified to correct the name “Kelsey Black” to “Kelcie White”