Cain v. Clarica Life Insurance Co., (2004) 364 A.R. 218 (QB)

• Judge: Sanderman, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: July 09, 2004
• Citations: (2004), 364 A.R. 218 (QB);2004 ABQB 531

Cain v. Clarica Life Ins. (2004), 364 A.R. 218 (QB)

MLB headnote and full text

Temp. Cite: [2004] A.R. TBEd. JL.148

Edward Cain (Also Known As Ted Cain) (plaintiff) v. Clarica Life Insurance Company formerly Known As the Mutual Life Assurance Company of Canada (defendant)

(0103 24611; 2004 ABQB 531)

Indexed As: Cain v. Clarica Life Insurance Co.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Sanderman, J.

July 9, 2004.

Summary:

The plaintiff, a long term manager with the defendant, commenced an action for wrongful dismissal. The plaintiff had negotiated and received a lump sum severance settlement but sued for additional compensation.

The Alberta Court of Queen's Bench allowed the plaintiff's claim.

Master and Servant - Topic 1230

Contract of hiring (employment contract) -Termination - Notice of termination - By employer - [See first Master and Servant - Topic 8009 ].

Master and Servant - Topic 1263

Contract of hiring (employment contract) -Variation - Notice period - [See first Master and Servant - Topic 8009 ].

Master and Servant - Topic 1266

Contract of hiring (employment contract) -Variation - Unilateral change of terms or conditions - The Alberta Court of Queen's Bench stated that "a purchaser of an operating business has certain obligations to those who are employed by the ongoing concern. It is implied that the terms of the employment will remain the same unless it is specifically brought to the attention of the employee that there has been a fundamental change. There is an obligation placed upon the purchaser to bring to the attention of the employee that certain terms of the existing arrangement will be changed. The employee has to have a real opportunity to assess the impact that these changes will have upon him and to decide whether he cares to remain in that position. If the employee does not wish to accept the new terms imposed upon him by the purchaser, he has rights that attribute to him against the vendor. It is essential that the purchaser resolve the fundamental difference in the terms of employment with the employee at the time of the takeover." - See paragraph 11.

Master and Servant - Topic 1266

Contract of hiring (employment contract) -Variation - Unilateral change of terms or conditions - [See first Master and Servant - Topic 8009 ].

Master and Servant - Topic 7502

Dismissal of employees - General principles - What constitutes dismissal or discharge (incl. constructive dismissal) - The plaintiff, who had been a manager for 26 years, was asked to take a demotion back to being an agent or being second in command of a branch office - The plaintiff refused to accept the demotion and negotiated a severance payment - The Alberta Court of Queen's Bench held that the plaintiff was constructively dismissed - See paragraphs 14 to 16 and 22 to 24.

Master and Servant - Topic 7607

Dismissal of employees - Defences - Release - Accord and satisfaction - The plaintiff accepted a severance package which was equal to approximately nine months' salary - The plaintiff then sued the defendant employer for additional money -The Alberta Court of Queen's Bench issued judgment for the plaintiff and ordered that the defendant pay him an additional ten months' salary - The court held that the defendant owed the plaintiff a fair settlement and had not negotiated with the plaintiff fairly and in good faith - Therefore the termination settlement could not stand and the defendant could not rely on the defence of accord and satisfaction - See paragraphs 16 to 32.

Master and Servant - Topic 7611

Dismissal of employees - Defences - Contract notice given - [See first Master and Servant - Topic 8009 ].

Master and Servant - Topic 8000

Dismissal without cause - Notice of dismissal - What constitutes reasonable notice - The plaintiff had worked for the defendant's predecessor company for 28 years when the defendant purchased the company in 1998 and he continued to work for the defendant another two years - The plaintiff had worked as a manager for the last 28 years of his employment prior to the defendant demoting him (constructive dismissal) - The Alberta Court of Queen's Bench held that the plaintiff was entitled to reasonable notice of 22 months, less the nine months of severance pay he had received and the three months he continued to work for the defendant, resulting in his being entitled to 10 additional months' severance pay - See paragraphs 26 to 34.

Master and Servant - Topic 8003.1

Dismissal without cause - Notice of dismissal - Reasonable notice - Calculation of length of service - [See Master and Servant - Topic 8000 ].

Master and Servant - Topic 8007

Dismissal without cause - Notice of dismissal - Reasonable notice - Long service employees dismissed - [See Master and Servant - Topic 8000 ].

Master and Servant - Topic 8009

Dismissal without cause - Notice of dismissal - Notice period - Where employer or bankruptcy trustee sells business to employer who dismisses employees - The plaintiff had worked for the defendant's predecessor company for 28 years when the defendant purchased the company in 1998 - The defendant argued that it had only employed the plaintiff since May 1998 and that the plaintiff had entered into a new employment contract with it in May 1998 which reduced the severance pay payable to the employee and increased the rights of the employer to terminate employment - The Alberta Court of Queen's Bench held that the termination clause was not enforceable - The court held there was no meeting of the minds between the defendant and the plaintiff in relation to the termination powers of the employer under the new employment contract, the terms had not been expressly considered and accepted by the plaintiff, there was not sufficient consideration flowing from the employer to the plaintiff to significantly reduce the length of the notice period and there was inequality of bargaining power between the parties - See paragraphs 7 to 13 and 17 to 20.

Master and Servant - Topic 8009

Dismissal without cause - Notice of dismissal - Notice period - Where employer or bankruptcy trustee sells business to employer who dismisses employees - [See Master and Servant - Topic 8000 ].

Cases Noticed:

Rosscup v. Westfair Foods Ltd. (1999), 248 A.R. 275 (Q.B.), appld. [para. 13].

Sorel v. Tomenson Saunders Whitehead Ltd. et al. (1987), 39 D.L.R.(4th) 460 (B.C.C.A.), folld. [para. 17].

Taylor v. Dallas Investments Inc. (1993), 138 A.R. 269 (Q.B.), refd to. [para. 18].

Bell v. Stanley Industrial Consultants Ltd. et al. (1996), 188 A.R. 53 (Q.B.), refd to. [para. 19].

Wallace v. United Grain Growers Ltd., [1997] 3 S.C.R. 701; 219 N.R. 161; 123 Man.R.(2d) 1; 159 W.A.C. 1, appld. [para. 28].

Bardal v. The Globe and Mail (1960), 24 D.L.R.(2d) 140 (Ont. H.C.), refd to. [para. 31].

Counsel:

Coralie J. Schultz (Carr & Smith), for the plaintiff;

Alex Kotkas and Katie Clayton (Fasken Martineau duMoulin LLP), for the defendant.

This action was heard on June 8-10, 2004, before Sanderman, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who delivered the following memorandum of decision on July 9, 2004.