In Halifax Herald v Clarke ( 2019 NSCA 3) the Plaintiff’s commissioned sales position had been eliminated but the Defendant offered him another commission based job. The Plaintiff believed that if he accepted the new position his income would drop by 30% so he refused the job and claimed that he had been constructively dismissed. At trial the Defendant sought to lead evidence of the actual sales in the period after the departure to show that in fact his income would not have gone down.
The trial judge ruled that this after the fact evidence was not admissible, quoting the Supreme Court of Canada in Farber v Royal Trust and in Potter v New Brunswick Legal Aid Services Commission which stand for the proposition that evidence about what occurred after constructive dismissal is not relevant unless it reasonably could have been foreseen at the time of the dismissal .
However the Court of Appeal said that this evidence could be looked at to help determine what a reasonable person would have thought at the time. The Defendants’ view of the future earnings of this position were far more optimistic than that of the Plaintiff and they simply sought to introduce evidence to show that their forecast was more inline with reality that the Plaintiff’s. This is how the Court put it
72 Here, the respondent alleged in his statement of claim that he would suffer a 30% reduction in his income at the new BDS position. The appellant pled that this was incorrect. It expected growth in the sales of non-media product, and sales outpaced 2014.
73 The proposed evidence of the 2015 actual sales for Bounty Print and Headline promotions were by no means determinative whether the appellant’s conduct did or did not breach the substantial terms of the employment contract. But the 2015 results were relevant to assess whether Mr. Clarke’s subjective beliefs were reasonable and whether a reasonable person could reasonably have foreseen the growth. They were also relevant to demonstrate what his 2015 income would likely have been as an account executive.
74 The trial judge prevented the appellant from challenging the respondent’s pessimistic outlook on sales with what actually happened.
The Court then went on to actually reverse the trial judges’ decision because it was found that she incorrectly applied the two stage analysis in Potter for determining whether or not a constructive dismissal took place.
My Comments :
On the surface it looks like the employer was trying to do exactly what the SCC said you cannot do, which is rely on information derived after the fact to determine what a reasonable person would do before those facts came into existence.
However in this case the Plaintiff was the one who pleaded that his income would go down, so clearly the Defendant should be able to lead evidence about why they disagreed with that analysis based on the information they had at the time.
It seems somewhat absurd to ignore what actually happened in trying to determine whose forecast of the future was reasonable and whose was not. The Court of Appeal seems to skate close to the line by declaring that the actual results were not determinative of this issue but were still relevant.
Perhaps this comment by the Court of Appeal tells us what they were actually thinking:
61 Alex Liot ( the Defence witness) disagreed with Mr. Clarke’s pessimistic outlook for sales at Bounty Print and Headline Promotions. When he attempted to discuss the actual 2015 sales, the respondent again objected. Ironically, it was the respondent during the discovery process that had demanded production of these numbers, obviously in the hope they would bear out Mr. Clarke’s pessimistic outlook. Apparently, they did not.