[2] On October 20, 1999, the defendants
terminated the plaintiff's employment effective December 31, 1999.
They concede the notice period was not reasonable.
[3] There are two issues in the action. First,
what was a reasonable notice period? The plaintiff submits it is
24 months, the defendants say about 9 months. Second, did the
defendants agree to compensate the plaintiff for his new duties as
medical director of the clinic?
THE PLAINTIFF AND HIS PROFESSIONAL EXPERIENCE
[4] Presently 61 years of age, the plaintiff
obtained his medical degree in 1962 from the University of
Manitoba. He took post-graduate studies in radiology at McGill,
graduating in 1967. He was employed for 13 years as a radiologist
at the University of Alberta Hospital where he also held the
position of associate professor of radiology. In 1988, he came to
British Columbia, took six-months' post-graduate studies in
ultrasound and mammography and entered into a contract of
employment with U.B.C. Hospital. In 1990, he joined Dr. Fraser,
the owner of Fraser Radiology Clinic, was put in charge of
diagnosing x-rays, and performed general diagnostic work. The
Fraser Radiology Clinic did not perform MRI work and the plaintiff
is not trained to do that work.
[5] Dr. Fraser owned and operated the clinic.
From 1990 to 1993, the plaintiff worked 50% of his professional
time for Dr. Fraser and the balance of his time he worked for
other x-ray clinics. In 1993, Dr. Fraser began taking more time
away and the plaintiff worked the hours that Dr. Fraser did not.
At trial, he estimated he then worked 60-65% of his time at the
Fraser Radiology Clinic; at Discovery he said it was less. In
1996, Dr. Fraser suffered a stroke and thereafter the plaintiff
worked 95% full-time at the Fraser Clinic. From 1998 until
termination he was fully engaged at Fraser Radiology Clinic.
[6] The defendant, DC DiagnostiCare Inc., is a
large, publicly traded corporation listed on the Toronto Stock
Exchange. Beginning in the 1990's, the defendants proceeded to
acquire diagnostic clinics across Canada. In the fiscal year
ending September, 2000, the defendants earned one hundred million
dollars.
[7] In late 1997, the plaintiff met with Dr.
Stringer, chief medical officer and now vice-chairman of the
defendants, and with Don Little, CEO of the defendant companies,
and they offered him continued employment at the Fraser Radiology
Clinic. He says they offered him:
1. He was to carry on the practice of
radiology in the same fashion and at the same premises. It was
to be a full-time position and his hours would be 8:30 a.m. to
4:30 p.m.
2. He would be medical director of the clinic,
a new appointment for him, and for that work he would be paid
either $10,000 yearly or given yearly stock options in the
defendant companies in that amount.
3. His share of the gross billings at the
clinic would be reduced from 27%, which he had drawn when Dr.
Fraser operated the clinic, to 25%.
4. He would continue to be the radiologist on
staff at the clinic and would supervise the clerical staff and
radiology technicians. There was one clerical position and two
technician positions.
[8] He agreed to those terms and continued his
work there. The defendants confirm that arrangement but say they
did not offer to compensate him for his work as medical director.
I shall address that issue later.
[9] His appointment as medical director was
approved by the College of Physicians and Surgeons of British
Columbia. In its letter of approval sent to Dr. Stringer, the
Deputy Registrar of the College wrote, inter alia:
The members of the (College Executive)
Committee noted that Dr. John Bachynski is the Medical
Director of the clinic and that he will have control of
and be fully responsible for the practice of medicine in
the facility.
His duties as medical director included
management and hiring and firing of staff and supervising the
technicians.
[10] When they made their offer the defendants
knew that the plaintiff did not have MRI experience, nor had Dr.
Fraser. There was no MRI instrument in the clinic.
[11] The plaintiff earned $154,739.71 at the
clinic from June 1, 1998 to February 16, 2000. He did not receive
any payment, either in money or shares, for his responsibilities
as medical director. In October, 1998, he spoke to Mr. Mulcahy,
the business manager of the defendants' B.C. operations, who
professed to know nothing of the arrangement to pay him for his
duties as medical director. He spoke to Dr. Stringer who replied
he was too busy at the time to discuss the matter of that
remuneration.
[12] Dr. Stringer's letter of October 20, 1999
terminating the plaintiff's employment reads:
I would like to take the opportunity to
thank you for the services you have provided us in the
past.
Reorganization and consolidation have
brought about circumstances whereby your professional
services will not be required beyond December 31, 1999. In
addition, I have advised the Diagnostic Accreditation
Program that you will not be held responsible as the
Medical Director beyond that date.
Again, that you for your past support
and I hope there is some time in the future when we can
work together.
[13] The defendants do not allege any misconduct
on the plaintiff's part. They terminated his services solely for
economic reasons which I now relate.
[14] Prior to 1995, the defendants had acquired
two MRI instruments - they kept one in Richmond and one in North
Vancouver. Over time, MRI work increased and radiologists trained
in MRI work were hard to come by. The defendants approached Dr.
Janzen who told them MRI work alone would not justify his being
hired; he needed to do general radiology work as well. The
defendants concluded there was not enough work to justify
employing Dr. Janzen and the plaintiff. They hired Dr. Janzen and
terminated the plaintiff's employment, transferring the
plaintiff's general radiology work to Dr. Janzen. Before hiring
Dr. Janzen they had not contemplated terminating the plaintiff's
employment.
[15] When he received the termination letter,
the plaintiff attempted to reach Dr. Stringer; he was not
available. He tried again at the end of November, without success.
Eventually, Dr. Stringer communicated with the plaintiff, told him
that Dr. Janzen had been hired and would take over the plaintiff's
work. The plaintiff continued to work for the defendants until the
end of the notice period. He applied for work at all the firms in
the Lower Mainland doing the kind of work that he was qualified to
do, approaching 8 or 9 radiology clinics. He was given only
occasional days in various places, none of it permanent
employment. Although failure to mitigate is pled, at trial the
defendants abandoned that allegation. The plaintiff moved to
Kelowna in April, 2000 because he could not find any permanent
work in the Lower Mainland and because he owned a house there. He
has sought work in Kelowna, without success. Radiology is a
limited field.
[16] The plaintiff has earned approximately
$11,000 since leaving the defendants' employ, doing occasional
work in the Lower Mainland before moving to Kelowna.
DID THE DEFENDANTS AGREE TO RECOMPENSE THE
PLAINTIFF FOR HIS WORK AS MEDICAL DIRECTOR?
[17] The defendants' evidence on the issue is
given by Dr. Stringer. At trial, Dr. Stringer testified that he
has no recollection of promising remuneration, either by payment
of money or giving stock options. He said that the defendants do
not pay for the services of a medical director and he does not
know of any clinics that do. He conceded the position entailed
some responsibilities and some tasks. However, at Discovery, Dr.
Stringer testified:
237 Q Referring specifically to that initial
discussion, do you deny that Dr. Bachynski was offered either
$10,000 in stock options of $10,000 in cash?
A I do not have a recollection of that. I do
remember talking about stock options and I believe 10,000 was
the number suggested, I don't remember the cash portion of it.
And again this was a general discussion and it wasn't a definite
one, it was depending on getting an agreement between us, a
contract, a written contract.
238 Q So you say it's possible but you can't
recall about the $10,000 in cash?
A Yes.
At trial, Dr. Stringer admitted that answer
adding (my notes):
Anything is possible but I never offered it
to anyone before.
However, Dr. Stringer later testified that on
three occasions he has offered stock options to
"prestigious" radiologists as a "carrot" to
obtain their services.
[18] Dr. Stringer testified that when the
defendants were contemplating the plaintiff's termination, Mr.
Mulcahy mentioned the remuneration the plaintiff was seeking for
his services as medical director. Mr. Mulcahy attended court
during the trial but did not testify, nor did Mr. Little, whom the
plaintiff says was present at the meeting when his remuneration
and duties were discussed and agreed to.
THE LAW - CONCLUSIONS
[19] In Bardal v. Globe and Mail Ltd.
(1960), 24 D.L.R. (2d) 140 (Ont. H.C.) McRuer, C.J.H.C. said at p.
145:
There can be no catalogue laid down as
to what is reasonable notice in particular classes of
cases. The reasonableness of the notice must be decided
with reference to each particular case, having regard to
the character of the employment, the length of service of
the servant, the age of the servant and the availability
of similar employment, having regard to the experience,
training and qualifications of the servant.
[20] In Ansari v. B.C. Hydro
(1986), 2 B.C.L.R. (2d) 33 (S.C.) McEachern, C.J. (now C.J.B.C.)
said at p. 42:
In other words, the law seems to place a
cap of reasonableness upon the notice period and does not
compensate a discharged employee to retirement age,
whatever that may be, even if there is no likelihood of
alternate equivalent employment. . . .
Subject, therefore, to exceptional cases
such as Suttie and Sorel, where the degree of
responsibility, age, and years of service were very
extensive, it seems to me that 18 to 24 months is the
rough upper limit for reasonable notice, and other cases
should be scaled downward from there unless there are
extenuating circumstances which cannot all be enumerated
in this crude attempt to provide guidance for the many
cases still outstanding.
McEachern, C.J. also spoke of skilled
professional employees. At p. 39 he said:
. . .in my view, it is not necessary
minutely to investigate the degree or level of
specialization of these plaintiffs. It is enough to
observe that they are highly skilled graduate engineers
whom B.C. Hydro was satisfied to employ in responsible
positions. Those factors alone are sufficient to entitle
these employees to a longer notice period than in many
other cases.
Also, I do not consider it useful to
make distinctions between these professional employees who
did or did not supervise other employees. Such a concept
is pervasive in some disciplines, but it is not a
particularly relevant consideration when employees are
professionally skilled and are employed because of such
skill.
McEachern, C.J. spoke of the age factor at p.
40:
Advancing years are also an important
factor to be considered along with years of service
because age bears so importantly upon the prospects for
other similar employment. The Court cannot be unmindful of
the fact that employment opportunities for older engineers
are extremely limited.
[21] The plaintiff is 61 years of age. In his
long, professional career he has specialized in radiology. He has
not practiced general medicine. Radiology is a limited field and
the opportunities for work in that field are few. He has
assiduously tried to replace his employment, without success. He
does not have experience in the new MRI technology and is less
attractive to a prospective employer compared to a radiologist who
has that training. I expect that he will continue to have great
difficulty in replacing the employment, given his age and the
limited field in which he practices.
[22] In Wallace v. United Grain Growers
Ltd. (1997), 36 C.C.E.L. (2d) 1 (S.C.C.), Iacobucci, J.
delivering the majority judgment said at p. 32:
In determining what constitutes
reasonable notice of termination, the courts have
generally applied the principles articulated by McRuer,
C.J.H.C. in Bardal v. Globe and Mail Ltd. . .
This Court adopted. . .[the factors
spoken of in Bardal] in Machtinger v. HOJ
Industries Ltd., [1992] 1 S.C.R. 986 (S.C.C.), at p.
998. Applying these factors in the instant case, I concur
with the trial judge's finding that in light of the
appellant's advanced age, his 14 year tenure as the
company's top salesman and his limited prospects for
re-employment, a lengthy period of notice is warranted.
Wallace was 59 years of age and was dismissed
after 14 years of service. In Wallace the trial
judge found 24 months' notice period was reasonable; the Court of
Appeal reduced it to 15 months and the Supreme Court of Canada
restored the trial judge's award.
[23] The defendants submit that the plaintiff's
part-time work for Dr. Fraser from 1990-1996 should result in a
shorter notice period. I do not agree. The plaintiff's loss arises
from the failure to give reasonable notice and the court must
consider the earnings of the plaintiff at the time of termination,
not the remuneration he had received in previous years and average
it out. It is the court's function to put the employee in the
position he or she would have been in had reasonable notice been
given. Reversing the situation, if an employee in the past had
worked full-time but at the time of termination was working
part-time, should the court average the full-time and part-time
work to determine a reasonable notice period? I think not. The
issue was addressed in Monti v. Hamilton-Wentworth (Regional
Municipality), [1999] O.J. No. 2527 (Ont. S.C.J.). At pp.
3 and 4, Riley, J. said:
I will deal first with a discrete issue
raised by counsel, whether the notice period should be
shorter for a so called "part-time" employee
than for a "full-time" employee. In my view, it
should not. No matter how many hours per week an employee
works, he or she is still a permanent employee, and
entitled to appropriate notice of compensation in lieu
thereof. The difference in compensation between an
employee who works five hours per week and one who works
50 hours per week will simply be reflected in their salary
per week, month, or year, and the compensation in lieu of
notice based upon those hours. Indeed, in this era of
"job sharing" and of professionals who might
work 60 hours per week or more, compared with a permanent
employee who might work 30 hours per week or even less, it
becomes problematic to even define what constitutes
"part-time" employment, let alone to determine
by what quantum the notice period should be reduced in the
event of termination of employment.
In my view, a permanent employee who has
worked 20 hours per week for 10 years is entitled to the
same period of notice as an employee who has worked 40
hours per week for the same 10 years. Obviously the
quantum of compensation for such notice will differ, just
as their salaries did, based upon hours of service per
week and their respective responsibilities. The fact that
Dr. Monti worked at the Clinic for only seven, 10 or 12
hours per week does not detract from her 22 years of
permanent employment, which entitles her to appropriate
notice based upon those years and compensation in lieu of
such notice, based upon the number of hours she worked per
week.
[24] With respect to the plaintiff's assertion
that he was promised remuneration for his duties as medical
director, I find for him. Dr. Stringer's evidence on the point was
vague and unsatisfactory. He departed from his Discovery evidence.
The defendants reduced the plaintiff's percentage of gross
billings from 27% to 25% and imposed new duties upon him which he
had not assumed before. I find the defendants made the promise
which Dr. Bachynski alleges, a promise which he accepted. He is
entitled to receive $10,000 yearly during the notice period.
[25] Given the plaintiff's age, his length of
service, the restricted character of his work and the difficulty
he has encountered in replacing it, I find that a 24 month notice
period is reasonable.
[26] Counsel agree that the plaintiff earned
approximately $100,000 in the last year of his employment and that
figure will be used to calculate his loss of earnings over the
notice period of 24 months. The defendants are entitled to receive
credit of $26,000, the sum he earned after October 20, 1999.
[27] The plaintiff is entitled to costs of the
action. At the moment, I am inclined to award costs at Scale 3.
Counsel are at liberty to submit on the issue of costs if they
choose to do so, either orally or in writing.
"G.R.B. Coultas, J."
The Honourable Mr. Justice G.R.B. Coultas
