Pauloski v. Nascor Inc., (2002) 311 A.R. 67 (QB)

• Judge: Clark, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: February 26, 2002
• Citations: (2002), 311 A.R. 67 (QB);2002 ABQB 171

Pauloski v. Nascor Inc. (2002), 311 A.R. 67 (QB)

MLB headnote and full text

Temp. Cite: [2002] A.R. TBEd. MR.055

Richard Pauloski (plaintiff) v. Nascor Incorporated (defendant)

(9801-09391; 2002 ABQB 171)

Indexed As: Pauloski v. Nascor Inc.

Alberta Court of Queen's Bench

Judicial District of Calgary

Clark, J.

February 26, 2002.

Summary:

The plaintiff left his secure 19 year employment to work for the defendant. The defendant offered fixed term employment, but the plaintiff insisted (and obtained) a commitment for indefinite employment. The plaintiff was to manage a construction project in Germany. He would be paid a base salary, a $30,000 bonus after one year, a $30,000 bonus if the project was on time and a $30,000 bonus if the project was under budget. In fact, the project deadline and budget were unrealistic. Work on the project stopped. The plaintiff alleged that the defendant advised that he was terminated, there being no work for him in Germany or in Calgary. The plaintiff sued for damages for wrongful dismissal, submitting that he was induced by negligent misrepresentations to leave secure employment. The plaintiff also alleged that bad faith in the manner of his dismissal warranted an increase in the notice period. The defendant submitted that the plaintiff resigned, that he was never terminated. The defendant also alleged a failure to mitigate, relying on its offer (after being served the statement of claim) of continued employment.

The Alberta Court of Queen's Bench held that the plaintiff was dismissed without cause. He did not resign. In addition to the two week's severance given by the defendant, the plaintiff was entitled to five months' notice. Further, the defendant's bad faith in the manner of dismissal warranted an additional two months' notice. The plaintiff was entitled to the first $30,000 bonus. The claim for the performance based bonuses, which was based on negligent misrepresentation, was dismissed because the plaintiff failed to prove reliance. Finally, the defendant failed to establish a failure to mitigate by accepting employment with the defendant or otherwise. It was not reasonable for the dismissed plaintiff to accept employment with the defendant.

Damages - Topic 6750

Contracts - Employment relationship or contract - For breach by employer - Loss of bonus or profit sharing - The plaintiff accepted employment with the defendant as a project manager in consideration of a base salary, plus a $30,000 bonus after 12 months, a $30,000 bonus if a project was completed on time and a further $30,000 bonus if the project was under budget - The plaintiff was terminated before 12 months - The project deadline and budget had been unachievable - The plaintiff claimed he was induced to leave secure employment on the basis that the defendant negligently misrepresented that the bonuses were achievable - The Alberta Court of Queen's Bench held that the plaintiff was entitled to the bonus for the 12 month period, since its entitlement fell within the notice period (seven months) - However, there was no entitlement to the performance based bonuses - The plaintiff was experienced in deadlines and budgets - He was advised that there were problems in these areas - The plaintiff did not accept employment until he was given the opportunity to go to the construction site to see matters for himself - The plaintiff had an opportunity to learn the deadline and budget were unachievable, but chose not to do so - Accordingly, the plaintiff failed to establish the requisite element of reliance on any representations made - See paragraphs 100 to 110.

Evidence - Topic 4022

Witnesses - General - Credibility - Considerations - The Alberta Court of Queen's Bench set out the considerations respecting the assessment of credibility of witnesses - See paragraph 28.

Fraud and Misrepresentation - Topic 2825

Misrepresentation - Defences - Lack of reliance - [See Damages - Topic 6750 ].

Master and Servant - Topic 1223

Contract of hiring (employment contract) -Termination - Resignation - The plaintiff alleged dismissal - The defendant employer alleged he quit - The Alberta Court of Queen's Bench stated that "while specific and unequivocal notice of dismissal is required, notice is specific and unequivocal if the employer's words or conduct would lead a reasonable person in the employee's position to understand that he or she has been dismissed" - The court further stated that "a resignation is effected if, in all the circumstances, the employee's words or conduct would lead a reasonable person in the employer's position to understand that the employee has resigned. ... Deciding between dismissal and resignation requires an objective assessment of 'the actions and statements of the parties within the context of the specific workplace involved, as well as the particular industry and all relevant surrounding circumstances'." - See paragraphs 68 to 72.

Master and Servant - Topic 1230

Contract of hiring (employment contract) -Termination - Notice of termination - By employer - [See Master and Servant - Topic 1223 ].

Master and Servant - Topic 7502

Dismissal of employees - What constitutes dismissal or discharge - The plaintiff was hired indefinitely by the defendant - He was to be the project manager on a German construction project - The project was terminated - The plaintiff alleged that the defendant had no work for him in Germany or in Canada - The plaintiff sued for damages for wrongful dismissal - At that time, the defendant alleged that it had work for the plaintiff and that he had resigned - The Alberta Court of Queen's Bench held that the plaintiff had been dismissed - There was no work for the plaintiff - He was advised to seek alternate employment and a buyout was discussed - The defendant never objected to the plaintiff's correspondence indicating he had been dismissed until the plaintiff's statement of claim was filed - The evidence of the conduct and words of the parties, and the surrounding circumstances, were unequivocally indicative of dismissal - See paragraphs 68 to 74.

Master and Servant - Topic 7614

Dismissal of employees - Defences - Resignation of employee - [See Master and Servant - Topic 7502 ].

Master and Servant - Topic 7615

Dismissal of employees - Defences - Economic reasons - An employer submitted that a wrongfully dismissed employee was entitled to lesser notice because the dismissal resulted from financial difficulties beyond the employer's control - The Alberta Court of Queen's Bench stated that "at least in times of economic or industry-wide downturn, an employer's economic difficulties for which the employer cannot be faulted may warrant a reduced notice period" - The court stated that assuming employer-specific financial difficulties merited the same treatment, the court was not satisfied that the employer had proved the economic hardship warranting a reduction in the notice period - See paragraphs 77 to 79.

Master and Servant - Topic 8000

Dismissal without cause - Notice of dismissal - What constitutes reasonable notice - The 43 year old plaintiff was induced to leave secure 19 year employment to be the defendant's project manager on a German construction project - Employment commenced on September 12, 1997, and was terminated without cause effective June 30, 1998 - The plaintiff was to be paid a base salary, a $30,000 bonus after one year, a $30,000 bonus if the project was on time and a $30,000 bonus if the project was under budget - The Alberta Court of Queen's Bench, factoring in the brevity of employment and the partial inducement, fixed the period of notice at five months - See paragraphs 75 to 86.

Master and Servant - Topic 8003

Dismissal without cause - Notice of dismissal - Reasonable notice - Considerations affecting - [See Master and Servant - Topic 7615 ].

Master and Servant - Topic 8003

Dismissal without cause - Notice of dismissal - Reasonable notice - Considerations affecting (incl. bad faith) - The Alberta Court of Queen's Bench awarded a wrongfully dismissed employee entitled to five months' notice an additional two months for the employer's bad faith in the manner of dismissal - The employer, inter alia, avoided the employee after dismissal, strategized to limit its liability by maintaining for 16 months admittedly unfounded allegations of just cause and inflicted some minor emotional distress on the employee -See paragraphs 87 to 90.

Master and Servant - Topic 8003

Dismissal without cause - Notice of dismissal - Reasonable notice - Considerations affecting (incl. bad faith) - The Alberta Court of Queen's Bench stated that a wrongful dismissed employee may be awarded an increased period of notice by reason of the employer's bad faith conduct or unfair dealing in the course of the dismissal - An employee's remedy for bad faith conduct during the course of litigation, as opposed to the manner of dismissal, was in costs, not increased notice - See paragraph 89.

Master and Servant - Topic 8064

Dismissal without cause - Damages - Mitigation - An employee was dismissed without cause - The employer, upon being served with a statement of claim, made an unfounded claim of just cause and for the first time submitted that there was alternate employment available - The employer alleged that the employee's failure to return to work for the employer constituted a failure to mitigate - The Alberta Court of Queen's Bench held that the employee's failure to accept re-assignment with the employer did not constitute a failure to mitigate - The court stated that "accepting that there may be situations in which a wrongfully but not constructively dismissed employee must mitigate by continuing or returning to work for the dismissing employer, I cannot find that there existed, in respect of [the employer's] offering of a reassignment ... either a situation of mutual understanding and respect or a situation where [the employer] was unlikely to put [the employee's] interests in jeopardy" - See paragraphs 91 to 99.

Cases Noticed:

Faryna v. Chorny, [1952] 2 D.L.R. 354 (B.C.C.A.), refd to. [para. 28].

Osachoff v. Interpac Packaging Systems Inc. (1992), 44 C.C.E.L. 156 (B.C.S.C.), refd to. [para. 68].

Kalaman v. Singer Valve Co. et al. (1997), 93 B.C.A.C. 93; 151 W.A.C. 93; 38 B.C.L.R.(3d) 331 (C.A.), refd to. [para. 69].

Gibb v. Novascorp International Consulting Inc. (1990), 48 B.C.L.R.(2d) 28 (C.A.), refd to. [para. 70].

Assouline v. Ogivar Inc. (1991), 39 C.C.E.L. 100 (B.C.S.C.), refd to. [para. 71].

Pratt v. Arakis Energy Corp. (1999), 249 A.R. 136 (Q.B.), refd to. [para. 72].

Hopaluk v. Transx Ltd. (1998), 131 Man.R.(2d) 1; 187 W.A.C. 1; 164 D.L.R.(4th) 82 (C.A.), refd to. [para. 73].

Bardal v. Globe & Mail Ltd., [1960] O.W.N. 253 (H.C.), refd to. [para. 75].

Wallace v. United Grain Growers Ltd., [1997] 3 S.C.R. 701; 219 N.R. 1; 123 Man.R.(2d) 1; 159 W.A.C. 1, refd to. [para. 75].

Sarton v. Fluor Canada Ltd. (1986), 73 A.R. 241 (C.A.), refd to. [para. 78].

Shuya v. Azon Canada Inc., [1995] 8 W.W.R. 156 (Alta. Q.B.), refd to. [para. 78].

Russell v. Stewart (Winnifred) Association for the Mentally Handicapped (1993), 144 A.R. 74 (Q.B.), refd to. [para. 79].

Michaels et al. v. Red Deer College, [1976] 2 S.C.R. 324; 5 N.R. 99, refd to. [para. 92].

Farquhar v. Butler Brothers Supplies Ltd., [1988] 3 W.W.R. 347 (B.C.C.A.), refd to. [para. 95].

Christianson v. North Hill News Inc. (1993), 145 A.R. 58; 55 W.A.C. 58 (C.A.), refd to. [para. 96].

Kuz v. CIBC Trust Corp., [1998] A.J. No. 1532 (Q.B.), refd to. [para. 98].

Monti v. Hamilton-Wentworth (Regional Municipality) (1999), 102 O.T.C. 279; 45 C.C.E.L.(2d) 230 (Gen. Div.), refd to. [para. 98].

Jorgenson v. Crewe (Jack) Ltd., [1980] 1 S.C.R. 812; 32 N.R. 1, refd to. [para. 99].

Walsh v. Alberta and Southern Gas Co. (1991), 121 A.R. 341 (Q.B.), refd to. [para. 101].

Burns v. Oxford Development Group Ltd. (1992), 128 A.R. 345 (Q.B.), refd to. [para. 101].

Queen (D.J.) v. Cognos Inc., [1993] 1 S.C.R. 87; 147 N.R. 169; 60 O.A.C. 1, refd to. [para. 102].

Hedley Byrne & Co. v. Heller & Partners Ltd., [1964] A.C. 465 (H.L.), refd to. [para. 102].

Grant v. Oracle Corp. Canada Inc., [1995] 3 W.W.R. 202; 100 Man.R.(2d) 28; 91 W.A.C. 28 (C.A.), refd to. [para. 107].

Authors and Works Noticed:

Ball, S.R., Canadian Employment Law (2001 looseleaf), para. 12.35 [para. 96].

England, G., et al., Employment Law in Canada (3rd Ed. 1998 looseleaf), § 16.72 [para. 93].

Mole, E., Wrongful Dismissal Practice Manual (1984 looseleaf), §§ 10.9, 10.13.1 [para. 93].

Counsel:

R.A. Rakochey and J.F. Maxwell, for the plaintiff;

R.F. Steele, for the defendant.

This action was heard on June 25-29, 2001, before Clark, J., of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the following judgment on February 26, 2002.