Another Case Upholds CERB as a Reduction of Wrongful Dismissal Damages

In Oostlander v Cervus Equipment Corporation, 2022 ABQB 200, Justice Hollins said the following :


[41] Employment Insurance benefits are generally not deducted because of the employee’s obligation to repay them to the federal government; Crisall v Western Pontiac Buick (1999) Ltd, 2003 ABQB 255 at para.71. While no evidence was led before me any communications between this Plaintiff and the government concerning repayment, I am satisfied that there are sufficient cases having considered this issue to feel comfortable saying that Mr. Oostlander’s EI benefits should not be treated as mitigative income to be deducted from his damages.

[42] Mr. Oostlander also received some money by way of the Canadian Emergency Response Benefit, or CERB payments. These payments have been treated differently by different Canadian courts in the context of wrongful dismissal damages. While most courts have focussed on whether or not the CERB benefit will ultimately be repayable by the plaintiff to the government, in Irotakis v Peninsula Employment Services Ltd, 2021 ONSC 998 at para.21, the CERB benefit was not deducted, not because of any obligation to repay but because it represented only a subsistence-level, ad hoc benefit. I am not convinced that is the case here, nor do I find that reasoning particularly compelling.

[43] Further, I have no evidence whatsoever before me that Mr. Oostlander will be required to repay these CERB benefits. To the extent that other courts were prepared to speculate about repayment obligations based on the general financial circumstances of their respective plaintiffs, I can only say that Mr. Oostlander’s earnings during his notice period might distinguish his case from those involving well-compensated senior executives; Hogan v 1187938 BC Ltd, 2021 BCSC 1021 as cited in Snider v Reotech Construction Ltd, 2021 BCPC 238 at para.61.

[44] Frankly, I prefer not to speculate at all and so, in the absence of any such proven obligation, I am assuming that Mr. Oostlander will retain his CERB benefits and so they are properly deducted from his final damage award.

My Comments;
Cases from Western Canada seem to support the proposition that CERB payments are deductible while the older cases. from Eastern Canada tend to go the other way. I am not aware that this matter has found its way yet to an appeal court.

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Alleging Theft Irresponsibly Leads to $15,000 Aggravated Damages :

In Austin v. Kitsumkalum First Nation, 2020 BCSC 2298, Justice Groves had a situation of a 15 year School Principal in a First Nation school who gave notice of resignation 11 months in advance saying that she was leaving in November. The Employer turned around and terminated her in June, 5 months before her resignation date, and did not allege just cause at that time . The Plaintiff sued only for the 5 months. The Employer then alleged all sorts of criminal behaviour and alleged that it was after acquired cause.

The Judge found that the Defendant was fully aware of all of the necessary facts prior to termination and that those facts did not constitute just cause. In awarding aggravated damages , this is what the Judge said :

[33] In my view this defendant in raising in their statement of defence unfounded allegations which through a reasonable interpretation suggest potential criminal behaviour, suggest theft, suggest inappropriate reimbursement for expenditures, support a finding that this employer engaged in conduct that was unfair and in bad
faith. They are not saying she did not do her job. They are saying she was dishonest. They were saying she was fraudulent. They are saying she conducted herself in a semi criminal manner. All those things have not been proven, and in my view as they are unproven, they are both unfair and they were made in bad faith.

[35] And let us put this in context. She is a teacher in a small aboriginal community in Northern British Columbia near Terrace. She resides in that community. Upon her dismissal, everyone, she says, knew that she was dismissed. It was apparent. It is not like she is living in a big city and loses her job and no one knows.

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Ontario Court of Appeal Upholds 26 Month Notice Period :

In Currie v Nylene Canada (  2022 ONCA 209 ) the Court upheld  the trial judge’s decision  that the case contained exceptional circumstances which  justified a notice period in excess of 24 months.

The Court of Appeal referred to the following factors :

(i) Ms. Currie left high school to start work (at age 18) as a twisting operator at Nylene and worked there for her entire career, ultimately rising to become the Chief Operator reporting to the Shift Leader;

(ii) After working at Nylene for 40 years, her employment was terminated by Nylene near the end of her career, when she was 58 years old;

(iii) Ms. Currie had very specialized skills making it very difficult for her to find alternative suitable employment. Moreover, at the time of her termination, her computer skills were limited. She made diligent efforts to attempt to gain basic computer skills and mitigate her damages but the trial judge was not convinced she would succeed in securing alternative employment;

(iv) The work landscape had evolved significantly since Ms. Currie had entered the workforce in 1979 and, as her experience was limited to working for Nylene and its predecessors in one manufacturing environment, her skills were not easily transferable; and

(v) Given Ms. Currie’s age, limited education and skills set, the termination “was equivalent to a forced retirement.”

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BCSC Says that CERB is Deductible from Wrongful Dismissal Damages ;

In Reotech Construction Ltd. v. Snider, BCSC 317, Justice Fleming , sitting on appeal from a decision of the Provincial Court, found that the trial judge erred when the Court failed to deduct the $9,000 CERB payment received by the Plaintiff from the damage award.

The Court referred to the following factors in making this decision:

1. CERB was not private insurance nor did the Plaintiff contribute ( unlike EI where the employee pays part of the premium).

2.There was no obligation under the CERB legislation whereby the Plaintiff would be required to repay CERB ( again unlike EI)

3. As such, the application of the collateral benefit rule did not apply.

4. CERB was designed to be a indemnification against wage loss and to not deduct it from the award would put the Plaintiff a better position than had the contract not been breached by failing to pay reasonable notice.

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24 Month Notice Case Takes into Account COVID and Disability as Factors in Determining Notice Period :

In Sandham v Diamond Estates Wines & Spirits ( no citation yet ) Justice MacNeil award 24 months notice to a 64 year old National Brands Manager with 22 years service.

In addition to the usual Bardal Factors the Judge also took Into consideration the following factors :

1) He had spent in whole working life selling only the products of this one company.

2) He was terminated in September 2020, right in the midst of the COVID pandemic.

3) Due to vision problems, the Plaintiff lost his drivers license a few years ago, which would now ” hinder or impair his ability to secure such a position with a different employer.”

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BC Case Deals with Enforceability of Handbook Termination Clause, When a Termination Took Place and Frustration under COVID

In Verigen v. Ensemble Travel Ltd., ( 2021 BCSC 1934) Justice Milman had a situation of a 55 year old Business Development Director ( really more of a sales person ) with 13 months service who was given a temporary layoff notice at the beginning of COVID. The plaintiff consented to the first time limited layoff and consented to a second one but did not consent to at. third  extension beyond August, 2020.

  1. The Judge found that because she had consented to the first two layoff periods, the date of her constructive  dismissal was not her original layoff date in March but only when she refused to consent to a third extension in August.
  2. At the time of hiring there was a clause in her contract agreeing that she was bound by the Employee Handbook which they said was enclosed, but in fact it was not enclosed.  The Defendant did not actually give her  a copy of the Employee Handbook until a few months after she started and, lo and behold, the Handbook contained an ESA termination clause. The Court found that because there was no termination clause in the original hire letter, that extra consideration would have had to be paid to the Plaintiff at the time she was asked to agree to the termination clause, and as no such extra consideration was paid, the termination clause was not enforceable .
  3. The Defendant then tried to argue that COVID had devastated the travel industry so that the doctrine of frustration applies and therefore the Plaintiff was not entitled to any common law notice . This is how the Court dealt with that issue:[59] The issue in Wilkie was whether the imposition of additional purchase tax on a prospective purchaser of real property frustrated the contract of purchase and sale. In answering that question in the negative, Warren J. canvassed various authorities holding that a purchaser’s inability to perform due to a lack of adequate funds will not generally justify a finding of frustration. She summarised the relevant principles as follows:

    [38] That a lack of money to perform does not, generally, give rise to frustration is not surprising because, as noted, frustration arises from a supervening event that results in performance becoming a thing radically different from that which was undertaken. While a lack of money affects a party’s ability to perform an obligation, it does not normally alter the nature or purpose of the obligation itself.

    [60] So too here, the collapse in the travel market goes to ETL’s “ability to perform”, rather than “the nature of the obligation itself.” This case is unlike the CRT decisions relied upon by ETL, where the very subject matter of the contract had been lost due to discrete, pandemic-related events. Although much of the consumer demand driving the business on which ETL and its members depend has abated, at least for the time being, not all of it has, and then not permanently. Moreover, although ETL chose to terminate a large part of its work force in the summer of 2020, at least some positions have been preserved and a recently-opened vacancy has been filled. ETL chose to relinquish Ms. Verigen’s branch of the business with a view to cutting operating costs so that it could better weather an ongoing storm. The fact that the pandemic had admittedly not brought about a frustration of the contract as of July 2020 makes it implausible for ETL to maintain that the contract had become frustrated only a few weeks later.

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