Law Times

Law Times • November 16, 2009 NEW An online resource tool 1.800.263.3269 Bestcase earlug.indd 1 3/26/08 11:52:01 AM Focus On LABOUR & EMPLOYMENT LAW 'Wallace damages are not dead' M BY JULIUS MELNITZER For Law Times any employment lawyers saw the Su- preme Court of Canada's 2008 decision in Honda Canada Inc. v. Keays as the death knell, or something close to it, for damages out- lined in the case of Wallace v. United Grain Growers Ltd. But if Keays poured water on the Wallace fire, the Ontario Court of Appeal's recent decision in Slepenkova v. Ivanov has at the very least turned the water pressure down. Justice Frank Iacobucci's 1997 decision in Wallace made employers liable for bad faith and unfair dealing over the way in which they dismissed employees. Where the employ- er engaged in such conduct, which could include untruth- ful, misleading or unduly in- sensitive behaviour, the courts could add to the length of the reasonable notice period. Since 1997, Wallace plead- ings have been a staple of wrongful dismissal cases. But in 2008, Justice Michel Bastarache's majority ruling in Keays stated that Wallace damages don't apply to nor- mal distress and hurt feelings resulting from dismissal. Rather, employees would receive redress only if they could show that the manner of dismissal caused mental distress that was in the con- templation of the parties. According to Bastarache, conduct capable of attracting such awards included "decla- rations made at the time of dismissal, misrepresentation regarding the reason for the decision or dismissal meant to deprive the employee of a pension benefit or other right, permanent status, for instance." Furthermore, such awards couldn't be arbitrary but had to reflect the actual dam- ages. In Slepenkova, however, Despite the Slepenkova ruling, Mark Josselyn expect the courts will be harder on plaintiffs. the Ontario Court of Appeal upheld the trial judge's award of two months' pay in Wallace damages. "The trial judge made a spe- cific finding that the appellant's pager message to other agents informing them 'that [Slepen- kova] failed to adequately perform her duties was un- founded and damaging to her Court upholds definition of strike in labour code BY JULIUS MELNITZER For Law Times doesn't offend the Charter of Rights and Freedoms. "It's a conservative decision and one that charts the path of the juris- T prudence on this issue," says Mort Mitchnick of Borden Ladner Ger- vais LLP. The issue arose in the consolidated cases of Grain Workers' Union, Local 333 v. B.C. Terminal Elevator Operations' Association and Inter- national Longshore and Warehouse Union-Canada v. British Columbia Maritime Employers Association. The Grain Workers' Union represented employees at the grain ter- minals in Vancouver and had a collective agreement with the B.C. Ter- minal Elevator Operations' Association. The International Longshore and Warehouse Union-Canada represented employees of stevedoring companies that load grain. The warehouse union was party to a collec- tive agreement with the B.C. Maritime Employers Association. The collective agreements both contained the following clause: "The union agrees that in the event of strikes or walkouts, the union will not take similar action on the ground of sympathy but will continue to work." Canadian Grain Commission personnel were responsible for the inspection of grain stored in Vancouver. Commission inspectors were members of the Public Service Alliance of Canada. In 2004, PSAC members striking against the commission set up picket lines at the grain terminals. Grain workers and warehouse union members had to cross the lines to get to work but refused. The employers sought a declaration from the Canada Industrial Re- lations Board that the refusal to cross the picket line constituted an illegal strike. The board agreed and issued back-to-work orders. It also See Pickets, page 13 Kuretzky_LT_Mar2_09.indd 1 www.lawtimesnews.com 2/24/09 12:26:18 PM he Federal Court of Appeal has ruled that a definition of "strike" in the Canada Labour Code that includes a refusal by work- ers to cross a lawful picket line established by another union reputation,'" the court stated. "In our view, this finding of fact was sufficient to sustain the Wallace award, even in light of the Supreme Court of Canada's decision in Honda Canada v. Keays . . . which was rendered after the trial judge's decision in this case." On its face, Slepenkova ap- pears to challenge Keays in two respects: firstly, there is no mention of any evidence advanced by the plaintiff to show the extent of the dam- age to her reputation; and secondly, the record discloses no specific reason as to how the trial judge arrived at the "two months' pay" figure that constituted the Wallace element of the award. Sue Sorensen of Bor- den Ladner Gervais LLP is surprised by the Slepenkova ruling. "It's shocking," she tells Law Times. "Since when does stare decisis not apply?" According to Mark Josse- lyn of Gowling Lafleur Hen- derson LLP, the fact that the trial judge decided the case before the high court re- leased Keays may account for the Court of Appeal's refusal to interfere with the exten- sion of the notice period. "It would have been easy enough for the Court of Ap- peal to say that the trial judge should have made a specific dollar award related to the ac- tual damages rather than just adding on two months' pay," he says. "But that's exactly what he did, because two months of Let us open right door for you the We specialize in Employment and Labour Law in Canada Kuretzky Vassos Henderson is a leading employment and labour law fi rm situated in the heart of Toronto. We are comprised of nine lawyers, all of whom specialize in the area of employment and labour law. We act for many prominent public and private sector employers as well as for individuals. Kuretzky Vassos Henderson LLP Our work includes extensive experience in the areas of: Wrongful dismissal • Human rights • Labour relations/Labour law/Collective barganing • Workplace health and safety • Sexual harassment • Employment standards • Employment contracts • Canada Labour Code • Class actions • Mediation/arbitration/ADR www.kuretzkyvassos.com • 416.865.0504 pay were worth about $10,000 to the plaintiff." The point is that regardless of how you express the award, the appeal court clearly be- lieved the employer's behaviour merited it. "The judge said the allega- tions about [Ilona] Slepenkova's performance were unfounded and that the termination was a tool by which the company hoped to persuade its agents to sign certain agreements," Jos- selyn says. Jeff Goodman of Heenan Blaikie LLP is of similar mind. "The court in Keays didn't say that employers shouldn't be punished for bad faith be- haviour," he says. "It merely changed the basis on which damages for such behaviour could be awarded by tying it to the plaintiff's actual damages." "The Slepenkova court prob- ably felt that it wasn't worth going through the mechanics of converting from months to dollars given that the trial deci- sion preceded [Keays] and that from a practical perspective the result would have been virtu- ally the same." The "actual damages," See Landmark, page 13 PAGE 9

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