2008 BCSC 578 Churchill v. Stockgroup Media Inc.

Before: The Honourable Mr. Justice Slade

Reasons for Judgment

Counsel for the Plaintiff:	E. Bowes
Counsel for the Defendant:	A. Baker
Date and Place of Trial:	December 3-7, 2007
	Vancouver, B.C.

I. OVERVIEW

[1] The plaintiff entered a contract of employment with the defendant in December 2002. She was 25 years of age, and held a university degree in marketing and finance.

[2] The defendant is engaged in the business of selling internet advertising space. The plaintiff’s position was that of an advertising sales representative.

[3] The plaintiff’s sales targets were generally not achieved in her first year of employment. She accepted a transfer to an administrative assistant position in which her primary function was to assist the sales representatives. This position did allow her to continue with sales, part-time. She continued in this role until mid-2004, when she resumed her full-time work in sales. Shortly after, her supervisor went on maternity leave, and the plaintiff assumed the handling of her supervisor’s sales accounts. Her sales, and in turn her commissions, increased as a result.

[4] From the date of the plaintiff’s resumption of responsibilities for sales, up to May 2005, the plaintiff’s sales territory included the province of Ontario. This is a more lucrative territory than the other provinces in which the defendant operated.

[5] In May 2005, the defendant employed a new director of sales. A revised compensation plan was proposed to the plaintiff in May 2005. Some aspects of this plan were changed in response to the plaintiff’s concerns, but the plaintiff remained dissatisfied with the commission structure. She nevertheless signed on to the plan in June 2005.

[6] After the June 2005 plan was implemented, the plaintiff continued to prevail on the defendant for changes to the commission structure.

[7] The terms of employment established when the plaintiff was first hired provided for the following:

… Management reserves the right to change compensation and incentive plans at any time in response to business requirements.

[8] The June 2005 plan included the following provision:

Territory and Targets

Stockgroup Media reserves the right to set targets to be achieved by you and has full authority to determine the territory to be covered by you and the territory to which business shall be credited.

[9] In February 2006, the defendant implemented a realignment of sales territories. The new territory assigned to the plaintiff did not include parts of Ontario, in particular Toronto, that historically generate higher sales revenues than the new territories assigned to her.

[10] The defendant became concerned with some aspects of the plaintiff’s attitude and performance and, on April 24, 2006, delivered a performance improvement plan (PIP) to the plaintiff. This plan set out, generally, the defendant’s concerns, and specified goals to be met by the plaintiff and a probationary time frame for meeting those goals. The substance of the PIP was conveyed to the plaintiff in a telephone conversation with the defendant’s director of sales on April 24, 2006. On April 26, 2006, the plaintiff presented a doctor’s note to the defendant, which stated that she required a medical leave as of April 24, 2006 for one month. The defendant withdrew the PIP, and placed the plaintiff on disability leave. She did not, however, return to work at the expiry of the leave period.

[11] The plaintiff says that the defendant’s unilateral change in the commission structure, as proposed in May 2005 and implemented in June 2005, constituted constructive dismissal. She says that the defendant’s wrongful actions were compounded in February 2006 when the defendant changed her sales territory.

[12] The plaintiff claims damages for wrongful dismissal, and says that aggravated damages are payable due to the manner in which the defendant acted up to, and including, the delivery of the PIP.

[13] The defendant says that the terms of employment agreed on in December 2002 permitted it to change the manner in which compensation would be determined, and that the terms of employment, as amended by the June 2005 plan, permitted it to implement changes to the plaintiff’s sales territory. The defendant says that the plaintiff terminated her employment when she failed to return to work at the expiry of her disability leave.

II. THE DECEMBER 2002 TERMS OF EMPLOYMENT

[14] In December 2002 the plaintiff applied to Stockgroup for a position as an advertising sales representative. She had no previous advertising sales experience.

[15] The plaintiff reviewed and signed two documents: a letter agreement and a compensation plan. The material terms of these documents included the following:

(a) Termination: … Your employment may be terminated without cause upon receipt of written notice or pay in lieu thereof pursuant to the Employment Standards Act as amended from time to time.

(b) … Management reserves the right to change compensation and incentive plans at any time in response to business requirements.

III. EMPLOYMENT RELATIONSHIP FROM JANUARY 2003 TO JANUARY 2006

[16] On commencing work, the plaintiff was given sales targets. In her first year, she failed to meet the sales target set for her in all but one month. Nevertheless, Stockgroup recognized her potential, and it was agreed that she would transfer to the role of traffic coordinator. In this capacity, she provided support for the sales representatives, and performed other valuable services. This new position did permit her to continue with sales. Her base salary was increased when she became traffic coordinator, apparently in recognition of her reduced opportunities for commission income. For the 2003 calendar year, she received a total income of $34,027.54, of which $6,840.12 was commission.

[17] In June 2004, Stockgroup introduced a stock option program to its employees. Each employee received an option to purchase up to 15,000 shares of Stockgroup’s common stock at USD$0.305 per share. The option would become exercisable as to 12.5% of the option shares on the third month anniversary of the grant date, and an additional 12.5% of the options would vest on each three month anniversary thereafter until all the options vested. It is provided in the option agreement that the option will be void if the employee is terminated for cause. If the employee is terminated for a reason not contemplated in the agreement, the option is “exercisable, as to the vested portion only on the date of termination, for a period of ten days after termination…” [paragraph 7(a)].

[18] From the date of the commencement of her employment, the plaintiff’s compensation plan included a commission of 12% on monthly revenues up to $40,000, and 18% on monthly revenues over $40,000. Her base annual salary was $27,500 when she started, and was increased to $34,500 in February 2004, when she was reassigned to the traffic coordinator role. As of February 2004, the plaintiff’s sales territory included the province of Ontario.

[19] The plaintiff continued as traffic coordinator until mid-2004. Her supervisor, the director of advertising sales, went on maternity leave, and the plaintiff assumed the handling of her accounts. She was credited for revenue from these accounts for the last four months of 2004. This, in turn, increased the commission component of her income. In 2004, she received a total compensation of $55,398.15, of which $21,835.65 represented commissions.

[20] On May 26, 2005 the plaintiff was presented with a revised compensation plan. This provided for an increase in base salary of up to $42,000. The provision for commission was revised as follows:

5% on the first $585,000 net revenue
12% from $585,001 to $950,000 net revenue
18% on any net revenues from $950,001 on

[21] The changes to the compensation plan were set out in a document entitled “Sales Commission Contract 2005”. This document included the following:

Territory and Sales Targets

Stockgroup Media reserves the right to set targets to be achieved by you and has full authority to determine the territory to be covered by you and the territory to which business shall be credited. Stockgroup shall have the right to re-assign any account handled by you to others. All sales (and resulting commissions) on such re-assigned accounts following such re-assignments will be deemed to be the sales of the sales representative to whom the accounts are re-assigned.

[22] The plaintiff took exception to the changes in the compensation plan. A revised document, dated June 2, 2005, followed. This revised “contract” specified that the revised commission structure is in addition to matters covered in the Employment Agreement. Base salary was increased over the May 26, 2005 compensation plan, to $50,000. The thresholds for the calculation of commission were changed as follows:

5% on the first $540,000 net revenue
12% from $540,001 to $900,000 net revenue
18% on any net revenues from $900,001 on

[23] The paragraph dealing with territory and sales targets was unchanged from the May 26, 2005 version. This revised “contract” was signed by the plaintiff on June 2, 2005.

[24] Although the plaintiff signed the June 2005 “contract”, she was not satisfied with the changes to the commission structure. She engaged with her supervisor, the director of sales, over her concerns. She persisted in raising concerns throughout the remainder of 2005, and into January 2006.

[25] The plaintiff’s income in 2005 was $103,924.31, of which $59,317.69 was commission income. By her calculation, she would have earned approximately $160,000 if commissions were calculated on the basis of the compensation plan in place before June 2005.

IV. FEBRUARY 2006 TO APRIL 2006

[26] The plaintiff raised her unresolved concerns over the June 2005 compensation plan with Stockgroup’s recently employed director of sales, Theresa McVean, in January 2006. Her concerns remained unresolved when, on February 15, 2006, Stockgroup, over the signature of Ms. McVean, presented her with a revised compensation plan, to be retroactive to January 1, 2006. The plaintiff’s base salary would continue at $50,000. The thresholds for the calculation of her commission income were lowered, as follows:

5% on the first $400,000
12% from $400,001 to $700,000 net revenue
18% on any net revenues from $700,001 on

The reduced threshold for the calculation of commission recognized that the compensation plan called for a significant change to the plaintiff’s sales territory. It would now cover Alberta, British Columbia, the west coast “Provinces [sic] of the United States”, Quebec, and the Maritimes. She would no longer have the entire province of Ontario, and in particular Toronto, the most lucrative market for advertising sales in the country.

[27] The plaintiff took strong exception to the unilateral change in her sales territory. Based on her analysis of the history of sales in her new territory, she anticipated a very significant reduction in commission income.

[28] The plaintiff and Ms. McVean were in communication over the plaintiff’s concerns, and in relation to a planned trip to Montreal to afford the plaintiff an opportunity to meet with clients, potential clients, and others in the industry. In an email dated April 6, 2006, Ms. McVean confirmed that the territory realignment was now in effect. She urged the plaintiff to keep her sales activity up, and assured her that the communication would remain open. The plaintiff responded the same day with a six page email in which she reviewed her history with Stockgroup, her concerns over the June 2005 changes to her compensation plan, and the territorial realignment. Her concerns went beyond the changes to her compensation plan and sales territory to include:

1. perceived inequality of treatment in relation to other sales personnel;

2. a change in the fall of 2005 in her seating location. She was relocated from an area close to a window to “a cubicle with no window”;

3. a loss of commission on a “contra-type deal” made between Stockgroup and one of her accounts. This, on her understanding, involved the account providing 150 mp3 players to Stockgroup in lieu of payment for advertising;

4. the transfer of an account on which she had received commission to “house account” status, which meant no commission to her.

[29] In a separate email on the same day, the plaintiff asked that the Montreal trip, scheduled for meetings between April 19-21, be postponed. Ms. McVean expressed the concern that the business was close to the end of its first quarter for the year, and declined the request to postpone the meeting.

[30] The plaintiff travelled to Montreal, where she and Ms. McVean attended several meetings with clients and other people in the industry.

[31] Ms. McVean had, in collaboration with other senior personnel at Stockgroup, decided, prior to the Montreal trip, to put the plaintiff on probation. The plaintiff was not advised of this prior to the Montreal trip. Ms. McVean decided not to raise it with the plaintiff while in Montreal, as she did not want the plaintiff to receive such upsetting news just before a long flight back to Vancouver. Ms. McVean had, however, discussed with the plaintiff her apparent unhappiness, resistance to change, and her poor performance in the first quarter compared to the last quarter of the previous year.

[32] The plaintiff returned to her office for work on Monday, April 24, 2006. She received a call from Ms. McVean. She took the call in a boardroom for privacy. There was no computer in the boardroom, and hence no access to email.

[33] Ms. McVean testified that she had, in the course of the April 24, 2006 conversation, read to the plaintiff at least a part of a letter dated April 24, 2006 in which the terms of probation were set out (this letter is erroneously dated April 24, 2005). In this letter, Ms. McVean refers to the discussion at a one-on-one meeting at which she raised concerns about the plaintiff’s attitude regarding her territory, sales numbers, activity levels, and office hours. This letter was sent, by email, under cover of another email dated April 24, 2006 in which Ms. McVean made reference to their telephone conversation earlier that day.

[34] The plaintiff testified that the discussion centred on her dissatisfaction with her new territory, and her feelings of stress. She told Ms. McVean that she intended to see her doctor. She left work, but was unable to see her doctor until April 26, 2006. Her doctor gave her a note, which states that the plaintiff required a medical leave from week as of April 24, 2006, for a period of one month.

[35] It appears that, subsequent to the plaintiff’s conversation with Ms. McVean, she received written notice of her probationary status, and a list of Stockgroup’s expectations for improvements in her performance by May 31, 2006. She was given 48 hours in which to advise whether she accepted the terms of probation. If she chose not to accept the terms, she was expected to resign immediately, in which case she would be paid to May 31, 2006.

[36] On April 26, 2006, Ms. McVean sent another email, in which she acknowledged that the plaintiff was off work due to stress, and provided information on sick leave, and long-term disability coverage for stress. She asked the plaintiff to reply with her decision regarding the terms of the April 24 letter.

[37] The defendant did not, subsequent to this letter, press further for a response to the April 24 notice of probation. On May 10, Ms. McVean wrote to the plaintiff to advise of payroll details for the May 15 payroll deposit. In this letter, she mentions that the plaintiff’s stress leave commenced on April 25. As she had six vacation days accrued, she would be paid up until May 2, then would be on unpaid leave for the remainder of her medical leave period.

[38] The plaintiff did not return to work. The defendant tendered payment based on its own assessment of the sum owed to the plaintiff, approximately $3,400. The cheque was returned.

[39] The plaintiff’s income between January 1 and April 30, 2006 totalled $40,159.49, of which $23,114.06 represented commissions.

V. ISSUES

[40] These are the issues:

1. Did the unilateral revisions to the compensation plan made in June 2005 constitute a constructive dismissal?

2. Did the territorial alignment, imposed unilaterally on February 15, 2006 constitute a constructive dismissal?

3. Did the imposition of probation on April 24, 2006 constitute a constructive dismissal?

4. Did the conduct of the defendant, surrounding the termination of the plaintiff’s employment, warrant an award of increased damages based on the principles in Wallace v. United Grain Growers Ltd., [1997] 3 S.C.R. 701.

VI. ANALYSIS

The June 2005 Compensation Plan

[41] In Farber v. Royal Trust Co., [1997] 1 S.C.R. 846, Gonthier J. for the Court said, at ¶24:

Where an employer decides unilaterally to make substantial changes to the essential terms of an employee's contract of employment and the employee does not agree to the changes and leaves his or her job, the employee has not resigned, but has been dismissed. Since the employer has not formally dismissed the employee, this is referred to as "constructive dismissal". By unilaterally seeking to make substantial changes to the essential terms of the employment contract, the employer is ceasing to meet its obligations and is therefore terminating the contract. The employee can then treat the contract as resiliated for breach and can leave. In such circumstances, the employee is entitled to compensation in lieu of notice and, where appropriate, damages.

[42] The provisions of an employment contract that address compensation are, of course, essential terms. However, it was said further in Farber, at ¶25, that:

On the other hand, an employer can make any changes to an employee's position that are allowed by the contract, inter alia as part of the employer's managerial authority. Such changes to the employee's position will not be changes to the employment contract, but rather applications thereof. The extent of the employer's discretion to make changes will depend on what the parties agreed when they entered into the contract. …

[43] Here, the employment contract specifically reserved the right of Stockgroup to “change compensation and incentive plans at any time …”. The defendant was entitled to change the commission structure. In doing so, it acted fairly. The June 2, 2005 plan reflects changes made to accommodate some of the plaintiff’s concerns over the terms of the plan dated May 26, 2005.

The February 15, 2006 Territory Realignment

[44] The question is whether the unilateral changes imposed by the employer substantially altered the essential terms of the employee’s contract of employment. The court must ask whether a reasonable person in the same situation as the employee would have felt that the essential terms of the contract were being substantially changed [Farber, supra at ¶26].

[45] In the present circumstances, I would find that the imposition of a change in the plaintiff’s sales territory would, if not provided for by the employment contract, be a substantial alteration to an essential term of the plaintiff’s contract of employment.

[46] The defendant relies on the provision for territory realignment that was introduced as part of the “contract” presented in June 2005. This was signed by the plaintiff, albeit in circumstances in which she felt she had no choice.

[47] Once an employee has commenced employment, a fundamental term of the employment contract cannot be changed unless the employer provides the employee with fresh consideration in the form of forbearance or some other incentive for the change: Watson v. Moore Corporation Ltd. (1996), 21 B.C.L.R. (3d) 157 (C.A.) at ¶25 and ¶28; Singh v. Empire Life Insurance Co., 2002 BCCA 452 at ¶12-13.

[48] There was, in my opinion, no fresh consideration for the introduction of a term in the employment contract that would permit the unilateral imposition of a significant change in territory. Although Stockgroup revised the base salary and commission thresholds after presenting changes in May 2005, the terms ultimately reflected in the June 2005 “contract” were unilaterally imposed. There was no consideration for the introduction of a new, and significant, term to the employment contract. The fact that she signed the June 2005 document does not imbue it with contractual effect.

[49] Although Stockgroup was not entitled to unilaterally impose a term that permitted it to realign the plaintiff’s sales territory, I do not consider its introduction of this provision, and its subsequent reliance on this provision, a breach of any obligation to act in good faith in its relationship with the plaintiff. Stockgroup presented the provision openly, and the plaintiff took no exception to it. Her concern at the time was over the changes to her compensation plan, not the introduction of a new provision that permitted changes in her sales territory. Nevertheless, I conclude that this new provision was not incorporated in the contract of employment, as there was no consideration for this change.

[50] I find that the plaintiff was entitled to treat the change to her sales territory imposed in February 2006 as a constructive dismissal.

[51] The plaintiff continued in the employment of Stockgroup after the territorial realignment. She continued to voice her concerns over the June 2005 changes to her compensation plan, and the realignment. She also raised concerns over several other changes made in 2005, in particular a change in her seating location, and the loss of commission income on two accounts. One loss of commission resulted from Stockgroup’s acceptance of MP3 players in lieu of payment for advertising, and the other had to do with the transfer of an account to “house account” status.

[52] In Schellenberg v. Marzen Artistic Aluminum Ltd., [1986] B.C.J. No. 1190 (C.A.), Taggart J.A. for the court said, at ¶26:

While he is entitled to a reasonable time to consider what he will do consequent on the action of his employer in reducing his commission income, where, as in this case, an employer says in effect: accept this reduction in your income or leave my employment, the employee must make it clear to the employer he will only continue in the employment on the basis of the former arrangement as to commission income. If the employee does not make that clear to the employer it is open to the court to conclude the employee has elected not to accept the employer's conduct as repudiation of the contract of employment.

[53] The concerns expressed by the plaintiff after February 15 were not limited to the territorial realignment. She persisted in her complaint over the June 2005 changes in the calculation of her commissions, and raised new complaints over the contra arrangement, and the transfer of one account to “house account” status. Stockgroup, however, was entitled by the employment agreement to change the commission structure, and it did not act capriciously or unfairly in implementing the June 2005 changes. The loss of commission on the contra arrangement was very modest, and did not seems to be of great concern until the events of February 2006. As for the transfer of an account to house account status, this account had gone back and forth between the plaintiff and successive directors of advertising, apparently without controversy. This account involved the sale of remnant inventory, unused internet space sole in bulk to service providers like Google. As such, it did not require the extent or type of work generally associated with advertising sales.

[54] The change in the plaintiff’s seating location resulted from changes in personnel and the physical plant requirements of Stockgroup’s business undertaking. Her seating position adjacent to a window did not reflect her standing in the corporate hierarchy. Rather, it reflected the fact that Stockgroup had under-utilized space, and the need arose to make better use of the available space.

[55] Ms. McVean, the new director of sales, was, like her predecessor, trying to respond to the plaintiff numerous concerns. This was no simple matter, as the plaintiff persisted in her complaints about the change to her commission structure, despite it having been made clear that the change was in effect, and no longer negotiable. Even if her other complaints, unrelated to the territorial realignment, had any validity, they too were dated.

[56] The plaintiff’s complaints over the territorial realignment, which she could have treated as a constructive dismissal, were never presented on terms that would have made it clear to Stockgroup that the plaintiff would continue her employment only if the territorial realignment was rescinded. Ms. McVean’s insistence that the Montreal trip go ahead as planned gave the plaintiff a clear opportunity to put Stockgroup on notice that the territorial realignment, if not rescinded, would be a repudiation of her contract of employment. Her attendance in Montreal for orientation and meeting customers was inconsistent with an intention to accept a repudiation of her contract.

April 24, 2006: Imposition of Probation

[57] An employer may, in appropriate circumstances, place an employee under performance review: Sinclair v. Intrawest Resort Ownership Corp., 2005 BCCA 10.

[58] The probationary letter notified the plaintiff of Stockgroup’s wish to see improvement in several areas. The results that Stockgroup expected to see were as follows:

1) Bookings of $40,000 one third of target plus $30,000 pro-rated amount of Q1 bookings shortfall, for a total of $70,000 U.S. in bookings;

2) Weekly activity will increase by 25% of the average activity recorded on your last 4 weekly activity reports;

3) On time in the Vancouver office 8:00 – 5:00 each day;

4) An attitude of engagement in your realigned territory.

[59] It is plain on the evidence that Stockgroup’s primary concern had to do with the plaintiff’s reaction to the territorial realignment. Although the plaintiff did not elect to treat the realignment as a repudiation of her contract of employment, she was, in all the circumstances, justified in continuing to advance her concerns. She was responding to a step taken by Stockgroup that did not accord with the terms of her employment. This being so, the imposition of probation was not warranted. She was entitled to treat this as a constructive dismissal. She accepted the defendant’s repudiation of her contract of employment when she failed to return to work at the expiry of her leave.

V. DAMAGES

Pay In Lieu of Notice

[60] The employment agreement, entered in December 2002, provided that, in the event of termination without just cause, the plaintiff would be entitled to notice or pay in lieu of notice in accordance with the Employment Standards Act.

[61] The pleadings raise no issue over the validity of the contract. The evidence would not support an inference that the plaintiff did not consider the terms of the contract at the time the relationship commenced, or was unaware of the effect of those terms. As the action proceeded through trial, there was no claim that the contract could be avoided on the ground of unfairness or unconscionability.

[62] The termination provision in the December 2002 contract provides as follows:

(a) Termination: … Your employment may be terminated without cause upon receipt of written notice or pay in lieu thereof pursuant to the Employment Standards Act as amended from time to time.

This termination clause is unambiguous.

[63] It has not been contended that there is a basis in fact or in law on which the termination clause should be found unenforceable.

[64] The Employment Standards Act, R.S.B.C. 1996, c. 113 provides at s. 63 as follows:

(1) After 3 consecutive months of employment, the employer becomes liable to pay an employee an amount equal to one week's wages as compensation for length of service.

(2) The employer's liability for compensation for length of service increases as follows:

(a) after 12 consecutive months of employment, to an amount equal to 2 weeks' wages;

(b) after 3 consecutive years of employment, to an amount equal to 3 weeks' wages plus one additional week's wages for each additional year of employment, to a maximum of 8 weeks' wages.

…

[65] The plaintiff was employed for a period of approximately three and one-half years. She is, I find, entitled to an amount equal to four weeks’ wages.

[66] The plaintiff received an income of $40,000 between January 1 and April 30, 2006. It is not clear on the evidence whether her income was, during this period, adversely affected by the territorial realignment imposed on February 15, 2006. By her calculations, a monthly income of approximately $12,000 is indicated. This, however, appears to take account of her position that the June 2005 changes to her compensation structure was invalid.

[67] I award the plaintiff the sum of $11,000 as pay in lieu of notice.

Stock Options

[68] It is a term of the stock option program that the option to acquire stock at the fixed price must be exercised within ten days of termination of employment. This requirement is set out on the second page of the document.

[69] The copy of the document produced by the plaintiff does not contain the second page. Her evidence raises a question whether it was ever received by her.

[70] The paragraphs on the first page of the stock option document are numbered one to four. The third page paragraphs bear the numbers nine to seventeen. The plaintiff’s signature appears on the third page, which is clearly marked “page 3 of 3”. The cover letter to all employees announcing the stock option program, dated June 3, 2004, contains the following sentence: “Our employee options expire after five years or are forfeited earlier if the employee leaves the company and does not exercise their option within the set period of time (usually 10 days after leaving).”

[71] I consider it unlikely that the plaintiff did not receive the second page of the stock option document. She would surely have noticed its absence if she looked at the document, and she must have, as she signed it. Moreover, the announcement letter referred to this important term of the stock option “agreement”. If, on review of the document, no reference could be found to a set period of time after termination in which the option must be exercised, it would alert her to the possibility that something was missing.

[72] If the plaintiff suffered a loss as a result of her failure to exercise the stock option, it was not the fault of Stockgroup.

Wallace Damages

[73] In Wallace v. United Grain Growers Ltd., [1997] 3 S.C.R. 701, it was held that employers are to be held to an obligation of good faith and fair dealing in the manner of dismissal. A breach of this obligation will be compensated for by adding to the length of the notice period.

[74] In Albert v. Le Conseil Scolaire Francophone De La Colombie-Britannique, 2006 BCSC 1539, Dillon J. discusses the application of Wallace, supra in circumstances in which the contract of employment limits the scope of recovery in the event of termination without cause [at ¶65-69]. She also discusses the threshold requirement for employer behaviour to attract Wallace damages, and the application of the principles on the facts of the case before her [at ¶70-71]. At ¶70, she says:

It is not necessary in the circumstances to assess the defendant's behaviour as to whether it constitutes bad faith or unfair dealing in the manner of dismissal. However, Iacobucci J. at para. 98 in Wallace said that employers should be candid, reasonable, honest and forthright with their employees and should not be untruthful, misleading or unduly insensitive. In his text, The Law of Dismissal in Canada, 3rd ed. Looseleaf (Aurora: Canada Law Book, 2006) at 8-56, Howard Levitt describes the general threshold requirement for employer behaviour to attract Wallace damages: "... for conduct to justify and increased period of notice, there must be intent, malice or blatant disregard for the employee. Well-intentioned but sloppy conduct on the part of the employer does not justify an increase in the notice period ...".

[75] Stockgroup, when it imposed the probation, demanded that the plaintiff either accept the terms of an improvement plan, or resign, within 48 hours. This, in all the circumstances, was somewhat insensitive. It was, however, understandable, as the plaintiff had a history of keeping issues alive long after it should have been apparent to her that, from Stockgroup’s perspective, the matter was closed.

[76] The imposition of the probationary term was due in large measure to the plaintiff’s rejection of the territorial realignment. Stockgroup was not entitled by the contract of employment to unilaterally impose this realignment. However, the imposition of probation, even with the demand for a response within 48 hours, was not intended to demean the plaintiff, and did not reflect a blatant disregard for her feelings. Stockgroup believed at the time that it was within its rights to realign the plaintiff’s sales territory. This was not an unreasonable belief as the plaintiff had endorsed the June 2005 document that purported to amend the contract to provide for territorial realignment at the instance of the employer. I do not find that the employer’s actions in this case support an award of Wallace damages.

[77] I note that in Albert, supra, and in Lane v. School District 68 (Nanaimo-Ladysmith), 2006 BCSC 129, the court found, in obiter dicta, that damages in the form of an extended notice period are in any event not awarded where the employment contract limits the notice period in the event of termination without cause. I make no finding in that regard.

VI. COSTS

[78] Subject to further submissions on costs, I would award the plaintiff costs based on Schedule B.

“H.A. Slade J.”
The Honourable Mr. Justice H.A. Slade

Citation:	*Churchill v. Stockgroup Media Inc.,*
	2008 BCSC 578