The courts released several important employment law decisions in Alberta in 2021, including about bonuses, just cause, defamation and constructive dismissal.
This article summarizes several important employment law decisions in Alberta in 2021. This article does not focus on cases from other jurisdictions, although many of those can have persuasive weight here. It also does not address developments in human rights and labour (union) law, because to do so would make the article much longer than it already is!
Bonuses, Duty of Good Faith
Matthews v Ocean Nutrition, 2020 SCC 26 is a Supreme Court of Canada decision that came out at the end of 2020. I have included it here because it is probably one of the most important employment law decisions in a decade. It also majorly influenced cases in 2021. There are many important parts to this decision. Some highlights are:
- If an employer does not want to pay a bonus that the employee would have been entitled to during their reasonable notice period, the employment contract must unambiguously (very clearly) take away that right. Simply requiring “active employment” at the time of payment is not enough to remove that right.
- The duty of good faith and honest performance applies to employment contracts. It applies at the time of termination of employment and can apply prior to termination of employment in some other situations, such as where an earlier period is part of a claim for constructive dismissal.
In Hy Pham v Petro-Tech Heat Technology Inc, 2021 ABPC 78, the court required an employer to pay out the full bonus it had announced prior to termination of employment. It did not matter that the employer’s financial position had declined since then. The court also rejected the employer’s argument that it should be able to pay out less than the full bonus as discipline for the employee’s misconduct.
In Schafer v Calgary Co-Operative Association Limited, 2021 ABQB 579, the court awarded a stunning 24-month reasonable notice period (severance). It also awarded bonuses that would have been paid in the notice period if the employees had remained employed. The case is important for several reasons:
- a 24-month severance award is rare so should be noted, and
- this is one of the first Alberta decisions to consider the significance of Matthews v Ocean Nutrition on things like bonus awards and payments during the reasonable notice period. The court found the incentive plans did not unambiguously (clearly) remove entitlement to the bonuses, so the employer had to pay them.
Just Cause for Dismissal
Haack v Secure Energy (Drilling Services) Inc, 2021 ABQB 82 dealt with just cause for summary dismissal. The case provides an excellent summary of the law of just cause in Alberta, affirming the high bar an employer must meet to establish it. The case also found:
- An employer is not required to investigate misconduct prior to terminating employment for just cause related to poor performance. However, failing to investigate will make it harder for the employer to prove that it correctly believed the employee’s performance was deficient.
- Emailing confidential employer documents to oneself can be cause for discipline. But the employer must consider the context for doing so to decide if the conduct is blameworthy enough to warrant dismissal for cause.
In Jegou v Canadian Natural Resources Limited, 2021 ABQB 401, the court weighed in favor of employers for establishing just cause for dismissal.
In this case, the court found that CNRL had just cause to dismiss an on-site paramedic who had worked there for 8 years. The facts were that an on-site employee had displayed symptoms of a stroke. The paramedic’s guidelines clearly instructed paramedics to stabilize the patient and then take for “rapid transport to stroke centre”. The paramedic instead took the patient to the patient’s clinic, and it took 32 minutes. The patient did not suffer any harm as a result of the paramedic’s failure to follow protocol.
The court found this was not an error of judgment but breach of a clear, black-and-white protocol. That the patient was not harmed did not help the paramedic in these circumstances because what matters is the possibility of harm.
In GiVogue v International Union of Elevator Constructors Local 130, 2021 ABPC 188, the court found the employer did not have just cause for terminating employment. The case involved an office manager/bookkeeper who had entered time for herself for a day she did not work. The court found it had not been intentional so was not just cause for termination. The court went on to find that even if it had been intentional, in all the circumstances of this case it would not have been just cause. This case affirms the principle that context must always be considered when assessing cause for termination, even where the employer is alleging dishonesty.
Constructive Dismissal, Fixed-Term Contracts & Defamation
Kosteckyj v Paramount Resources Ltd, 2021 ABQB 225 dealt with an unusual constructive dismissal case in Alberta.
The employer reduced the employee’s income between “16.6% and 20%”. The court found this was a significant breach of the employee’s contract. The employer fired the employee 25 days later. The employee argued the wage cut was a constructive dismissal, and the pre-cut wages should be used to calculate severance. The employer argued that it could not be constructive dismissal because the employee did not actually end the relationship but was fired later on.
Usually constructive dismissal does require an employee to end the relationship. In this case, the court agreed with the employee that the timing of the constructive dismissal was at the time of the wage cut, even though the employee did not end the relationship and was terminated 25 days later.
Koutsikaloudis v Maple Leaf Academy Ltd, 2021 ABPC 136 dealt with the law of fixed-term contracts in Alberta. The plaintiff was employed for 18 consecutive years, ending in May 2018. The employer provided the plaintiff with a new contract each year, which she signed. Each contract provided for one year of paid instruction. The 2017 contract and the employee handbook had clauses which tried to place limits on severance. The plaintiff refused to sign the 2019 contract which had more of such clauses.
The court found the plaintiff was an indefinite-term, not a fixed term, employee, considering the circumstances. She had been constructively dismissed. The court strictly interpreted the clauses which the employer said limited severance. The court found these clauses did not limit severance in the circumstances.
Alberta Computers.com Inc. v Thibert, 2021 ABCA 213 is an Alberta Court of Appeal decision upholding the trial judge’s decision. The case involved an employee whom the employer had poached away from another job. After six and half months of working in a toxic work environment, the employee finally quit. The employer then sent a letter “warning” third parties about the employee’s dishonesty. The court found that it was constructive dismissal and awarded the employee nine months’ reasonable notice, $10,000 for aggravated damages, and $60,000 for defamation. One of the most important parts of the case is the defamation award, which is very uncommon in employment law dismissal cases.
Gender as a Factor In Reasonable Notice (Severance)
Cordeau-Chatelain v Total E&P Canada Ltd, 2021 ABQB 794 dealt with the termination a female employee in the oil and gas sector. She was 53 years old and had worked for 8 years and 7 months in a middle-management position. The court awarded her a stunning severance of 18 months. Part of the court’s reasoning in this very high severance was that it would be more difficult for this employee to get a new job, due to the “compounding negative effects” of gender and age.
Looking for more information?
The information in this article was correct at time of publishing. The law may have changed since then. The views expressed in this article are those of the author and do not necessarily reflect the views of LawNow or the Centre for Public Legal Education Alberta.
Looking for articles like this one to be delivered right to your inbox?