Jack Wallace was hired in June of 1972
by a printing company, "Public Press", which had determined
to update its operations and expand its volume of commercial
printing. Wallace had many years experience in this
business, 25 to be exact, with a competitor that had used
the same type of web press being used by UGG.
At the time of his hiring, Wallace was 45 years of age. He
requested and received assurances of job security, and fair
treatment as to his employment and renumeration. These
commitments were given. He was told that if he did perform
as expected, he would have a job until retirement.
He was successful, and was top salesman in the company for
each year of his employment, until his termination in August
of 1986, approximately 14 years later at age 59. No reason
for termination was given.
When Wallace sued, the company met his claim with
allegations of just cause. This plea was made until the
trial commenced when it was withdrawn. The termination and
the allegations of cause made against him caused him real
emotional harm.
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Step 1: The Trial
The trial judge, Lockwood, J., awarded Jack Wallace 24
months notice, then considered the highest likely sum for a
severance award. Also the trial judge awarded $15,000 in
aggravated damages, usually given as emotional suffering
award, in both contract and tort. No punitive damages were
given.
Step 2: The Manitoba Court of Appeal
On appeal, the 24 month award was reduced to 15 months.
The aggravated award was set aside.
Step 3: Supreme Court of Canada
As the ending is well known, there no point in keeping
it to the finale. The Supreme Court restored the trial
judge's award of 24 months. No aggravated or punitive sums
were granted.
Ironically Wallace's main submission in the Supreme Court
failed. The submission had been made that a new tort of "bad
faith discharge" should be given judicial recognition,
either in contract or tort.
The court was quick to reject this
proposition. It did however, inject into the employment
relationship the requirement of good faith conduct at the
time of termination, the breach of which, it determined,
will cause the "normal" notice period to be increased.
In passing the court did speak of
the "special relationship" which governs the parties to an
employment relationship. This will likely of some
consequence to future extrapolations of this decision. ( par
90 )
Also the court spoke of the evident lack of bargaining power
inherent in the relationship. ( par 91 - 93 )
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At the time of termination, the court
determined, the employee is at his most vulnerable point,
and hence most in need of protection. ( par 95) The law must
encourage conduct which minimizes such damage and
dislocation, both economic and personal. Accordingly
employers must be held to an obligation of good faith and
fair dealing, the violation of which will heighten the
notice period.
Later appellate and trial courts have tended to award only (
as is now referenced ) "Wallace" increments rather than a
separate claim for emotional distress damages. Justice
Iacobucci added, however, these words to same issue:
"However, in my view
the intangible injuries are sufficient to merit compensation
in and of themselves. I recognize that bad faith conduct
which affects employment
prospects may be worthy of considerably more compensation
than that which does not, but in both cases damage has
resulted that should be compensable. ( par 104)"
Punitive damages were not really
discussed comprehensively in Wallace, notwithstanding the
plaintiff's request for this award. The Court stated the
well known test of a deterrent as a punishment to harsh,
vindictive and malicious conduct and also the presence of an
independently actionable wrong. The claim had been dismissed
by both courts below and was not given much serious chance
of success, given the findings of fact made below.
It is to be noted that there is no suggestion in Wallace
that bad faith conduct will allow for only the notice period
adjustment and will not also support a punitive award, as is
the present theme prevalent in subsequent decisions. |
