Wronko v. Western Inventory Service Ltd., (2008) 237 O.A.C. 1 (CA)

• Jurisdiction: Ontario
• Judge: Winkler, C.J.O., MacPherson and Rouleau, JJ.A.
• Neutral Citation: 2008 ONCA 327
• Citation: (2008), 237 O.A.C. 1 (CA),2008 ONCA 327,90 OR (3d) 547,292 DLR (4th) 58,46 BLR (4th) 159,[2008] CarswellOnt 2350,[2008] OJ No 1589 (QL),165 ACWS (3d) 855,237 OAC 1,65 CCEL (3d) 185,[2008] O.J. No 1589 (QL),292 D.L.R. (4th) 58,237 O.A.C. 1,90 O.R. (3d) 547,(2008), 237 OAC 1 (CA)
• Date: 10 March 2008
• Court: Court of Appeal (Ontario)

Wronko v. Western Inventory (2008), 237 O.A.C. 1 (CA)

MLB headnote and full text

Temp. Cite: [2008] O.A.C. TBEd. AP.120

Darrell Wronko (appellant/plaintiff) v. Western Inventory Service Ltd. (respondent/defendant)

(C46187; 2008 ONCA 327)

Indexed As: Wronko v. Western Inventory Service Ltd.

Ontario Court of Appeal

Winkler, C.J.O., MacPherson and Rouleau, JJ.A.

April 29, 2008.

Summary:

The plaintiff sued for damages for wrongful dismissal.

The Ontario Superior Court, in a decision reported at [2006] O.T.C. Uned. A65, dismissed most of the plaintiff's claims, except for his claim relating to unpaid vacation pay. Based on the plaintiff's partial success at trial, the court awarded him costs in the amount of $10,000. The plaintiff appealed the dismissal of his claims. The defendant applied for leave to cross-appeal the costs disposition.

The Ontario Court of Appeal allowed the plaintiff's appeal and assessed the plaintiff's damages. The court denied the defendant leave to cross-appeal and awarded the plaintiff his costs on a substantial indemnity basis both on appeal and at trial.

Master and Servant - Topic 1266

Contract of hiring (employment contract) - Variation - Unilateral change of terms or conditions - The Ontario Court of Appeal stated that "The basic premise underlying the individual contract of employment is that it continues as long as both parties agree. In common parlance, the employment of persons is 'at will'; that is, either party has a right to terminate the employment relationship without cause. However, the use of the expressions 'at will' and 'a right to terminate' must not obscure the reality that the employer's right to terminate an employee without cause is a breach of contract that carries with it consequences for the employer, both under statute and at common law. The use of these expressions also must not obscure the reality that an employer's unilateral change to a fundamental term of an employment contract constitutes a repudiation of the contract. An act of repudiation carries consequences, which depend on how the employee responds to the repudiation." - See paragraph 24.

Master and Servant - Topic 1266

Contract of hiring (employment contract) - Variation - Unilateral change of terms or conditions - The Ontario Court of Appeal summarized the three options identified in Hill v. Peter Gorman Ltd. (Ont. C.A.) that were available to an employee where an employer attempted a unilateral amendment to a fundamental term of an employment contract: (1) the employee could accept the change, either expressly or implicitly through apparent acquiescence, in which case the employment would continue under the altered terms; (2) the employee could reject the change and sue for damages if the employer persisted in treating the relationship as subject to the varied term (i.e., constructive dismissal); and (3) the employee could make it clear to the employer that he or she was rejecting the new term - The employer could respond to the rejection by terminating the employee with proper notice and offering re-employment on the new terms - If the employer did not do so, and permitted the employee to continue to fulfill his or her job requirements, then the employee was entitled to insist on adherence to the terms of the original contract - In other words, if the employer permitted the employee to discharge his obligations under the original employment contract then, unless proper notice of termination was given, the employer was regarded as having acquiesced to the employee's position - An employer did not have any unilateral right to change a contract and could not, by attempting to make such a change, force an employee to accept a change or quit - See paragraph 36.

Master and Servant - Topic 1266

Contract of hiring (employment contract) - Variation - Unilateral change of terms or conditions - In 2002, Wronko's employer sent to Wronko a new employment contract which reduced his entitlement on termination from two years' salary to 30 weeks' salary- Wronko refused to sign - The employer took the position that the new contract would come into effect in two years time - Wronko continued to object - In 2004, the employer e-mailed Wronko advising him that the new contract was in effect and concluded by saying that if he did not accept it there was no job for him - Wronko did not report to work and sued for wrongful dismissal - The trial judge concluded that the employer had the unilateral right to vary the contract upon reasonable notice and the employer had met that requirement and, accordingly, it was Wronko who had ended the employment relationship - The Ontario Court of Appeal allowed an appeal - The employer terminated Wronko's employment with the 2004 e-mail - The trial judge erred in treating this as a constructive dismissal action - The employer repudiated the contract in 2002, but Wronko refused to accept - The employer permitted him to continue his employment without advising that his refusal would result in his termination and that employment would be offered on the new terms - The employer had to be taken to have acquiesced and to have accepted that the existing contract remained in effect - Accordingly, the 2004 decision to terminate carried with it the consequence that Wronko was entitled to two years' termination pay - See paragraphs 26 to 43.

Master and Servant - Topic 2204

Breach of contract - General - Fundamental breach - [See first and third Master and Servant - Topic 1266 ].

Master and Servant - Topic 2264

Breach of contract - Repudiation by employer or employee - What constitutes repudiation - [See third Master and Servant - Topic 1266 ].

Master and Servant - Topic 7502

Dismissal or discipline of employees - General principles - What constitutes dismissal or discharge (incl. constructive dismissal) - [See third Master and Servant - Topic 1266 ].

Master and Servant - Topic 7901

Dismissal without cause - General - [See first Master and Servant - Topic 1266 ].

Practice - Topic 7454

Costs - Solicitor and client costs - Entitlement to - Improper, irresponsible or unconscionable conduct - Wronko sued for damages for wrongful dismissal - The trial judge dismissed the claims for damages other than that for unpaid vacation pay - Based on Wronko's partial success, the trial judge awarded him $10,000 in costs - The trial judge also expressed serious concerns about the employer's conduct, stating that the employer virtually finessed Wronko's departure from its ranks after making unfounded and unfair allegations about the manner in which he obtained his employment contract - The trial judge also referred to the employer's hardball tactics at trial - The trial judge stated that such conduct had no role in the relationship between employer and employee, particularly as it pertained to the emotionally charged area of severance - The Ontario Court of Appeal allowed Wronko's appeal on the merits - Having regard to Wronko's success on the appeal and to the employer's tactics as commented on by the trial judge, the court awarded Wronko costs on a substantial indemnity basis both on appeal and at trial - See paragraphs 50 to 52.

Practice - Topic 8327.2

Costs - Appeals - Costs of appeal - Solicitor and client costs - [See Practice - Topic 7454 ].

Cases Noticed:

Farber v. Compagnie Trust Royal, [1997] 1 S.C.R. 846; 210 N.R. 161, dist. [para. 21].

Hill v. Peter Gorman Ltd. (1957), 9 D.L.R.(2d) 124 (Ont. C.A.), refd to. [para. 31].

Fellowes-Strike v. Co-operators Group Ltd. (1998), 60 O.T.C. 223 (Gen. Div.), refd to. [para. 42, footnote 5].

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, refd to. [para. 51].

Authors and Works Noticed:

Echlin, Randall Scott, and Fantini, Jennifer M., Quitting for Good Reason: The Law of Constructive Dismissal in Canada (2001), p. 42 [paras. 37, 39, footnotes 2, 4].

England, Geoffrey, Wood, Roderick, and Christie, Innis, Employment Law in Canada (4th Ed. 2005) (Looseleaf), vol. 2, p. 13-16 [para. 42]; 13-22, 13-23 [para. 42, footnote 5].

Mole, Ellen E., Wrongful Dismissal Practice Manual (2nd. Ed.) (2006 Looseleaf), vol. 1, p. 3-1 [para. 41].

Swan, John, Canadian Contract Law (1st. Ed. 2006), p. 481 [para. 39, footnote 3].

Counsel:

Michael W. Kerr and M. Christine O'Donohue, for the appellant Darrell Wronko;

P. Christopher Lloyd, for the respondent Western Inventory Service Ltd.

This appeal was heard on March 10, 2008, by Winkler, C.J.O., MacPherson and Rouleau, JJ.A., of the Ontario Court of Appeal. Winkler, C.J.O., released the following judgment for the court on April 29, 2008.