2021 Employment Law Alberta Year in Review.

• Author: Fairbrother, Joel

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:

1. 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.

2. 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:

1. a 24-month severance award is rare so should be noted, and

2. 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...