Cunningham v. Hillview Homes Ltd., (2015) 615 A.R. 375 (QB)

• Judge: Gates, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: May 05, 2015
• Citations: (2015), 615 A.R. 375 (QB);2015 ABQB 304

Cunningham v. Hillview Homes Ltd. (2015), 615 A.R. 375 (QB)

MLB headnote and full text

Temp. Cite: [2015] A.R. TBEd. MY.094

Terrance Cunningham (plaintiff) v. Hillview Homes Ltd. (defendant)

(0903 02622; 2015 ABQB 304)

Indexed As: Cunningham v. Hillview Homes Ltd.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Gates, J.

May 5, 2015.

Summary:

The plaintiff, in his 50s, had been employed by the defendant, a "new home" construction company, for over 11 years. As service manager, the plaintiff addressed customer concerns during the warranty period. He sued the defendant for the termination of his employment without proper notice or payment in lieu of notice. He claimed $53,098, representing income and benefits entitlement due in lieu of notice. The defendant argued that the termination notice and pay provisions in the Employment Standards Code did not apply as the plaintiff's duties fell within the exception found in s. 5(1)(a) of the Employment Standards Regulations, i.e., "employed at the site of and in the construction, erection, repair ... of any building or structure". Alternatively, the defendant argued that the plaintiff failed to mitigate his loss.

The Alberta Court of Queen's Bench allowed the claim, and awarded $53,098 as payment for income and benefits due in lieu of notice, based on a notice period set at 11.58 months (one month for each year of employment). The plaintiff did not fail to mitigate by declining to pursue an employment offer.

Damages - Topic 1002

Mitigation - Duty to mitigate - [See Master and Servant - Topic 8064 ].

Damages - Topic 1415.1

Special damages - Wrongful dismissal - [See Master and Servant - Topic 8404 ].

Master and Servant - Topic 7703

Dismissal of employees - Damages for wrongful dismissal - Failure to follow statutory procedure - [See Master and Servant - Topic 8404 ].

Master and Servant - Topic 7998

Dismissal without cause - Notice of dismissal - When required - [See first Master and Servant - Topic 8303 ].

Master and Servant - Topic 8001

Dismissal without cause - Notice of dismissal - Reasonable notice - Effect of statutory requirements - [See Master and Servant - Topic 8323 ].

Master and Servant - Topic 8064

Dismissal without cause - Damages - Mitigation - The plaintiff/employee (57 at the date of trial) was wrongfully dismissed after 11 years and 7 months of employment with the defendant, a "new home" construction company - The defendant took the position that the plaintiff failed to take reasonable steps to mitigate his loss - There was a significant downturn in the new home construction market at the time of the plaintiff's termination - The plaintiff declined a position with another new home builder ("Westview") - Westview gave warnings to the plaintiff regarding its economic viability - The Alberta Court of Queen's Bench concluded that the plaintiff did not fail to mitigate, and he was entitled to payment in lieu of notice for the full period - The Westview position carried substantial elements of uncertain prospects and risks - The plaintiff's age and family circumstances called for a relative degree of stability or certainty - "At that station in life, a careful evaluation of employment opportunities is justifiable when making decisions as to which type of employment a person should accept or decline" - See paragraphs 89 to 96.

Master and Servant - Topic 8303

Employment and labour standards - Application of statute (incl. exempt employees) - The defendant/employer argued that no termination notice/pay was required pursuant to s. 5(1)(a)(i) of the Regulations, as the plaintiff was "employed at the site of and in the construction, erection, repair ... of any building or structure" - The Alberta Court of Queen's Bench held that the fundamental nature of the plaintiff's employment was not covered by s. 5(1)(a)(i) of the Regulations - The plaintiff was hired to perform a customer service role and to act as a go-between for the defendant and its various new home purchasers - Although the plaintiff did personally attend to some of the repairs identified during the course of home inspections, that was not his primary function - The plaintiff's role involved decision-making and the exercise of judgment as to whether or not a deficiency identified by a customer was the responsibility of the homeowner or caused by the construction company - Further, the plaintiff was required to decide whether he could or would do the work himself, whether the work could be done in-house, or whether it had to go back to one of the trades - Moreover, the plaintiff had supervisory responsibilities in relation to the other employees - All of those functions were properly characterized as management functions and did not fall within the scope of s. 5(1)(a) of the Regulations - See paragraphs 53 to 57.

Master and Servant - Topic 8303

Employment and labour standards - Application of statute (incl. exempt employees) - The defendant/employer argued that no termination notice/pay was required pursuant to s. 5(1)(a)(i) of the Regulations, as the plaintiff was "employed at the site of and in the construction, erection, repair ... of any building or structure" - The defendant sought to distinguish authorities emanating from Ontario and British Columbia on the basis that the language in the Alberta legislation was different from that found in either the Ontario or British Columbia equivalents - The exemptions created in those provinces were expressed in terms of "construction workers" - The Alberta Court of Queen's Bench stated that "[w]hile the legislation in Alberta, Ontario and British Columbia may employ different language, I am of the view that they have consistent legislative purposes. They deny benefits otherwise available to all employees on the basis of the temporary nature of the employment typically found in the construction industry broadly defined. ... Cases from Ontario and BC should not automatically be excluded from consideration here. The precise structure of the exclusion may be different, but the fundamental purpose and reach of the exception, however expressed, is fundamentally the same." - See paragraphs 58 to 61.

Master and Servant - Topic 8303

Employment and labour standards - Application of statute (incl. exempt employees) - The defendant/employer argued that the exemption from termination notice found in s. 5(1)(a) of Alberta's Employment Standards Regulations ("the construction, erection, repair, remodelling, alteration, painting, interior decoration or demolition of any building or structure") should be interpreted to include the supervision of work captured by the exemption - The Alberta Court of Queen's Bench disagreed - The essence of supervisory or management responsibilities were fundamentally different than those involved in s. 5(1)(a) - In the result, the plaintiff/employee was entitled to the benefits set forth in Part 2 of the Employment Standards Code; i.e., to notice of the termination of his employment or pay in lieu thereof - See paragraph 69.

Master and Servant - Topic 8307

Employment and labour standards - General - Interpretation of legislation - The Alberta Court of Queen's Bench considered the language employed in the relevant provisions of the Employment Standards Code and Regulations in the context of the purpose and function of the legislation - The Court disagreed with the defendant/employer's interpretation of the preamble, as well as his contention that decisions from other provinces whose employment standards legislation lacked such a preamble were therefore not relevant to a proper interpretation of the Alberta Code - On the authorities referenced by the Court, the fundamental purpose of employment standards legislation was to protect the interests of employees - The Court accepted the plaintiff/employee's argument that the legislation was to be interpreted in a broad and generous manner - Further, any ambiguities in the language used in the Code should be resolved in favour of the claimant/employee - The plaintiff correctly asserted that the exceptions set out in the Code and Regulations were to be narrowly construed - See paragraphs 45 to 52.

Master and Servant - Topic 8307

Employment and labour standards - General - Interpretation of legislation - [See Master and Servant - Topic 8323 ].

Master and Servant - Topic 8323

Employment and labour standards - Enforcement - Civil actions - The defendant/employer argued that the combined effect of s. 138 of Alberta's Employment Standards Code and s. 5(1)(a) of the Regulations extinguished the plaintiff/employee's right to pursue a civil remedy under s. 3 of the Code - The Alberta Court of Queen's Bench rejected the argument - While the effect of s. 5(1)(a) of the Regulations was to eliminate the statutory right to a minimum period of notice of termination for an employee covered by that section, s. 5(1)(a) did not extinguish an employee's right to pursue a civil remedy pursuant to s. 3 of the Code - Given the legislative history of the Code, particularly the exemption set out in s. 5(1)(a) of the Regulations, the Court rejected the argument that s. 138 of the Regulations was introduced in response to the Court of Appeal's decision in Smith v. Hostess Frito-Lay Co. (1994) - The Court also rejected the argument that Smith, which confirmed the common law right of employees to pursue civil action for determination of the appropriate period of reasonable notice, beyond the minimum standards in the Code, was no longer good law in Alberta - See paragraphs 74 to 85.

Master and Servant - Topic 8404

Employment and labour standards - Layoff or dismissal - Notice - The plaintiff's employment as a service manager was terminated by the defendant without notice or payment in lieu of notice - Neither party provided the Court with authorities on the appropriate period of notice the plaintiff was entitled to receive pursuant to the common-law remedy for wrongful dismissal - The Alberta Court of Queen's Bench fixed the notice period at one month for every year of service - The Court agreed with the defendant/employer that notice periods in excess of one month for every year of service were typically reserved for employees terminated from executive level type positions - The Court also accepted the defendant's position that the plaintiff was entitled to between two weeks and one month's notice for every year of employment - Given that the plaintiff was employed by the defendant for 11 years and 7 months, the Court set the notice period at 11.58 months, or pay in lieu of notice at $53,098 - See paragraphs 86 to 88.

Master and Servant - Topic 8442.2

Employment and labour standards - Layoff or dismissal - Payments or compensation - Mitigation - [See Master and Servant - Topic 8064 ].

Statutes - Topic 501

Interpretation - General principles - Purpose of legislation - Duty to promote object of statute - [See first Master and Servant - Topic 8307 ].

Statutes - Topic 523.1

Interpretation - Benefits-conferring legislation - [See first Master and Servant - Topic 8307 ].

Cases Noticed:

Smith v. Hostess Frito-Lay Co. (1994), 155 A.R. 254; 73 W.A.C. 254; 116 D.L.R.(4th) 378; 1994 ABCA 238, refd to. [para. 46].

Lefebvre v. HOJ Industries Ltd.; Machtinger v. HOJ Industries Ltd., [1992] 1 S.C.R. 986; 136 N.R. 40; 50 O.A.C. 200; 91 D.L.R.(4th) 491, refd to. [para. 49].

Machtinger v. HOJ Industries Ltd. - see Lefebvre v. HOJ Industries Ltd.; Machtinger v. HOJ Industries Ltd.

Rizzo & Rizzo Shoes Ltd. (Bankrupt), Re, [1998] 1 S.C.R. 27; 221 N.R. 241; 106 O.A.C. 1; 154 D.L.R.(4th) 193, refd to. [para. 50].

Jalan v. Institute of Indigenous Government et al., [2005] B.C.T.C. 590; 2005 BCSC 590, refd to. [para. 63].

Thompson Brothers (Construction) Ltd. v. Saar, 2012 CarswellAlta 2359 (Prov. Ct.), refd to. [para. 65].

Boyd v. Culliton Brothers Ltd. (1995), 22 C.L.R.(2d) 1; 1995 CarswellOnt 290 (Ont. Gen. Div.), refd to. [para. 67].

Beaulne v. Kaverit Steel & Crane ULC (2002), 325 A.R. 237; 2002 ABQB 787, refd to. [para. 80].

Driscoll v. Coseka Resources Ltd. (1992), 130 A.R. 378; 4 Alta. L.R.(3d) 106 (Q.B.), refd to. [para. 81].

Rasanen v. Rosemount Instruments Ltd. (1994), 68 O.A.C. 284; 112 D.L.R.(4th) 683; 17 O.R.(3d) 267 (C.A.), leave to appeal refused (1994), 178 N.R. 80; 77 O.A.C. 320 (S.C.C.), refd to. [para. 81].

Michaels et al. v. Red Deer College, [1976] 2 S.C.R. 324; [1975] 5 W.W.R. 575; 5 N.R. 99, refd to. [para. 89].

Deputat v. Board of Trustees of Edmonton School District No. 7 (2008), 425 A.R. 25; 418 W.A.C. 25; 291 D.L.R.(4th) 140; 2008 ABCA 13, refd to. [para. 89].

Christianson v. North Hill News Inc. (1993), 145 A.R. 58; 55 W.A.C. 58; 106 D.L.R.(4th) 747 (C.A.), refd to. [para. 89].

Gordon v. Dumont (Gabriel) Institute of Native Studies and Applied Research Inc. (1996), 145 Sask.R. 111; 21 C.C.E.L.(2d) 145 (Q.B.), refd to. [para. 94].

Forshaw v. Aluminex Extrusions Ltd. (1989), 27 C.C.E.L. 208 (B.C.C.A.), refd to. [para. 94].

Ceci v. Comdisco Canada Ltd. (1994), 6 C.C.E.L.(2d) 86 (B.C.S.C.), refd to. [para. 94].

Stanley v. Advertising Directory Solutions Inc. et al., [2014] B.C.T.C. Uned. 376; 2014 BCSC 376, refd to. [para. 95].

Lyle v. Aluminex Extrusions Ltd., 1996 CarswellBC 213; 17 C.C.E.L.(2d) 320 (S.C.), refd to. [para. 95].

Statutes Noticed:

Employment Standards Code, R.S.A. 2000, c. E-9, sect. 2, sect. 3(1)(a), sect. 6, sect. 55(1), sect. 56, sect. 57 [para. 32]; sect. 138(3) [para. 76].

Employment Standards Regulation, Alta. Reg 14/1997, sect. 5(1), sect. 5(2) [para. 33].

Counsel:

Murray L. Engelking, for the plaintiff;

Gary B. Romanchuk, for the defendant.

This trial was heard on December 12 and 13, 2013, before Gates, J., of the Alberta Court of Queen's Bench, who delivered the following judgment and reasons, dated at Edmonton, Alberta, on May 5, 2015.