Date: October 8,
2002
Docket: No.
S016687
Registry:
Vancouver
IN THE SUPREME COURT
OF BRITISH COLUMBIA
BETWEEN:
Julie
Winterburn
PLAINTIFFS
AND:
Domtar
Inc
DEFENDANT
Counsel:
N.R. Howell, for the plaintiff.
M. Cooperwilliams, for the defendant.
¶ 1 McEWAN J.:— The plaintiff
Julie Winterburn is a chemical engineer.
¶ 2 The
defendant is a company incorporated under the laws of Canada. It is registered
extra-provincially in British Columbia and, at material times, operated a mill in the
province manufacturing specialized paper products.
¶ 3 Ms.
Winterburn was hired by Domtar on March 16, 1999, with the title of "Manager, Quality
Control", in the Technical Department. The position entailed, among other things,
ensuring paper quality standards and involved the management of 12-13 people.
¶ 4 When
Ms. Winterburn was hired by Domtar she had over ten years experience in the pulp and paper
field. She had worked for a company called Atlantic Packaging in Whitby, Ontario. She was
happy with her position there and was apparently secure. In 1998 she nevertheless
submitted her resume to two different recruiters to see what opportunities for advancement
might exist outside her own workplace.
¶ 5 From
about June of 1998 on, Domtar had been looking for an engineer with the qualifications to
fill a new Quality Manager position. In about February of 1999 Domtar received Ms.
Winterburn's resume. She appeared to have the sort of experience Domtar was looking for,
so Robert McFadden, then Domtar's Manager of Human Resources at its Vancouver mill,
contacted her to discuss the job they had in mind. Domtar was keen enough to meet with Ms.
Winterburn that she was flown out to Vancouver immediately so that a Cuban vacation she
had planned would not postpone an offer if Domtar found her suitable.
¶ 6 On
March 10, 1999, following Ms. Winterburn's attendance in Vancouver, Domtar made an offer.
It included the following terms:
We have highlighted the major aspects of the offer below:
| 1. |
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Your salary will be
$75,000 per annum, deposited after deductions in equal semi-monthly payments in the
chartered bank of your choice. General salary reviews are normally conducted annually.
You will be entitled to coverage under the various parts of the
salaried health and welfare package and the salaried pension plan, and which may be
amended from time to time.
The various benefits will be reviewed with you.
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| 2. |
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You will be entitled to 3
weeks vacation commencing in the year 2000. Vacation for 1999 will be prorated. The
vacation policy will be reviewed with you.
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| 3. |
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The Company will pay for the cost of
moving and transportation from Oshawa, Ontario to Greater Vancouver for you and your
immediate family, and after approval of proper estimates from several reputable moving
companies, of which one will be selected. In addition, the Company will pay your
reasonable expenses for meals and temporary accommodation for up to 60 days for your
family in Vancouver, providing the accommodation is approved in advance by the Manager of
Human Resources. The company will also pay for storage of your personal effects for up to
thirty days after arrival in Vancouver, if required, providing this is approved in advance
by the Manager of Human Resources.
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| 4. |
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You and/or your spouse will be
provided with up to 2 air economy round trips from Oshawa to Vancouver for the purpose of
securing accommodation.
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| 5. |
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To assist you in relocating to
Vancouver, we have offered you the follows:
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| (a) |
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To advance, on security of
a second mortgage in a form approved by the Company's solicitors, up to $45,000 at an
annual interest rate of 5% to be used in the purchase of your personal living
accommodation. The second mortgage will be repaid in 180 equal monthly blended payments of
principal and interest. The payments will commence 6 months after the purchase of the new
residence. In the event you cease to be an employee of the Company for any reasons, the
whole amount then outstanding will be due and payable within 30 days.
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| (b) |
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To pay legal fees, disbursement and
real property transfer tax in connection with the purchase and mortgage for your personal
living accommodation in Vancouver.
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| (c) |
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If you require temporary financial
assistance to complete the purchase of a home in Vancouver, the company will provide
temporary financing, appropriately secured up to 90% of your equity in your present home,
interest free for a period of up to 90 days, and such longer time as authorized by the
Vice President and Resident Manager. Any extension will bear interest at the prime bank
rate plus one half of one percent. All equity advances are payable to the company at the
time you receive proceeds from the sale of your principal residence in
Oshawa.
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| (d) |
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An allowance of a maximum of the
equivalent of one month's gross salary at the rate in effect following the transfer to
cover any incidental expenses incurred during the move and the purchase of your new
residence in Vancouver. |
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| 6. |
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In the event the Company, in its absolute
discretion, decides to terminate the relationship in the first year of your employment for
other than performance related matters, you will be entitled in lieu of any notice or
other claim or entitlement arising out of the employment to an amount equal to one month's
salary. After 2 years, normal severance provisions under B.C. law will apply. |
|
¶ 7 The
plaintiff considered the offer and replied on March 12, 1999:
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My husband and I have
carefully considered your offer of employment for the position of Manager, Quality Control
in your Technical department. We have agreed that this would be a good move for my career
and our family. Presently I have two concerns to be addressed before we proceed further.
In view of my experience and expertise, I feel a salary of $90,000 per annum would be
appropriate. Secondly, four weeks vacation with one week supplemental after five years
would be appropriate, given my length of service in the industry. |
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If you are in agreement with these two
terms, I would like to discuss some of other minor points of the offer of employment. I
look forward to your response. |
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¶ 8
Mr. McFadden replied on March 14, 1999. He made an improved offer, significant
features of which were an increase in salary to $80,000 and a change in the offer of
mortgage assistance from $75,000, to a $30,000 interest free loan forgivable over five
years and a $45,000 mortgage. The terms on which the $30,000 was advanced were as follows:
|
To advance, on security of
a promissory note in a form approved by the company's solicitors, $30,000 interest free
and which $6000 will be forgiven on completion of each full year of service for the first
5 years of employment. In the event you cease to be an employee for the Company, for any
reason, the whole amount then outstanding will be due and payable within 30 days. |
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¶ 9
Ms. Winterburn says that in the conversations leading up to the final offer
she understood Mr. McFadden to be offering $30,000 conditional only upon her remaining
with Domtar for five years.
¶ 10 In
any event, Ms. Winterburn signed the March 16, 1999 communication and moved with her
husband and two-year-old daughter from Ontario to Vancouver. This required her husband to
leave his job in Ontario as well and take a chance on obtaining new employment in the
Vancouver area.
¶ 11
There is no suggestion that Ms. Winterburn did not perform her duties at
Domtar capably. She was nevertheless terminated, along with nine other people, on
September 13, 2001 for what Domtar termed "external business reasons that commands
[sic] the company to take drastic measures to ensure its further competitiveness".
¶ 12 At
issue in this proceeding is what, if anything, Ms. Winterburn is entitled to from Domtar
as a result of her termination without cause.
¶ 13 When
Ms. Winterburn relocated to the lower mainland of British Columbia she accepted the
$30,000 Domtar had agreed to advance, and the $45,000 mortgage it had offered to assist in
the relocation. The $30,000 was secured by a promissory note that characterized the
advance as a "Home Relocation Loan". It provided:
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FOR THE VALUE RECEIVED,
the undersigned hereby promises to pay Eddy Specialty Papers Division, Domtar Inc., at
Island paper Mills, 1010 Derwent Way, Annacis Island, Delta, British Columbia, the sum of
Thirty Thousand Dollars ($30,000.00 Cdn), interest free, of which the sum of Six Thousand
Dollars ($6,000.00 Cdn) will be forgiven on completion of each full year of service in the
employment of Eddy Specialty Papers Division, Domtar Inc. after April 12, 1999. |
|
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If the undersigned ceases to be an
employee of Eddy Specialty Papers Division, Domtar Inc. for any reason, the whole amount
then outstanding will be due and payable within thirty days of the date employment ceased. |
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It was signed by Ms. Winterburn and witnessed.
¶ 14 In
addition to the $80,000 salary Ms. Winterburn negotiated with Domtar, employees at her
level also participated in a profit sharing plan. The plan was calculated on 8% of base
salary multiplied by a factor determined by the profitability of the company. The bonus
was paid annually on a calendar year basis. In 2000 the unit multiplier was $1.95 which
meant a payment of $12,851.28 to Ms. Winterburn. In 2001 the value of a unit was $0.77.
That would have meant an entitlement of $5307.46 for Ms. Winterburn had she worked through
2001.
¶ 15 The
terms Domtar offered Ms. Winterburn to "lessen the impact" of her termination
were:
| (a) |
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a "termination
allowance" of 9 weeks pay calculated at $14,911.71; |
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| (b) |
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repayment of $18,000 of the $30,000
"forgivable loan" (2 anniversaries having passed) by October 14, 2001; |
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| (c) |
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repayment of the mortgage balance
(then $41,707.83) 90 days after termination; |
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| (d) |
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continuation of group insurance,
medical and dental plans to November 15, 2001. |
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Additional arrangements were offered with respect to the
pension plan, share purchase plan and the payout of vacations.
¶ 16 Ms.
Winterburn's position is that she is entitled to a much longer period of notice in the
circumstances than nine weeks. She cites the factors in Bardal v. Globe and Mail Ltd.
(1960), 24 D.L.R. (2d) 140 (Ont. H.C.) per McRuer, C.J.H.C. at page 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 availability of similar employment, having regard to the
experience, training and qualifications of the servant. |
|
¶ 17
She submits that these factors have been expanded in more recent times in such
cases as Wallace v. United Grain Growers Ltd., [1997] 3 S.C.R. 701. In that case, Mr.
Justice Iacobucci noted, among other things, that the fact that an employee had been
"induced" to leave previous secure employment may properly be "included
among the considerations which tend to lengthen the amount of notice required".
¶ 18 Ms.
Winterburn claims that she was induced to leave a secure position in a manner that should
lengthen the notice period. She further submits that the fact that she was some four and a
half months pregnant at the time she was terminated should weigh in the balance. Lastly
she submits that the peremptory manner in which Domtar demanded repayment of the
"loan" and mortgage and purported to withhold her termination allowance should
also be a factor in assessing a longer period of notice.
¶ 19
Having regard, first of all, to the factors in Bartle (supra) I make the
following observations:
(a) |
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The character of the
employment and the availability of similar employment having regard to experience,
training and qualification of the servant: |
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¶ 20 Ms.
Winterburn is a highly trained person who has developed significant specialized skills
within the field of chemical engineering that are particularly adapted to paper making
and, in another skills dimension, in the specialized field of quality assurance.
¶ 21
While these skills are adaptable to other circumstances, Ms. Winterburn's best
opportunities would be found in using the skills and experience she was able to apply at
Domtar.
¶ 22 The
evidence is that these positions are somewhat limited and the opportunities occasional.
¶ 23 I am
of the view that while Ms. Winterburn had some responsibility to supervise staff, her
place at Domtar really depended on her technical skills and her acquired skills in the
field of quality assurance and less on the specifically "managerial" character
of her job.
(b) Age:
¶ 24 Ms.
Winterburn is 37 years old. She is at about the minimum age she would have to be to have
acquired the degree of training and experience she can offer a prospective employer. Age
is not a particular factor in this case.
(c) Length of service:
¶ 25
Length of service, as such, is not a factor in this case. Ms. Winterburn did
not have the opportunity to give a substantial part of her working life to Domtar. It is,
rather, a case, in her terms, of her being willing to make a long-term commitment to the
company, and of the company unilaterally frustrating the expectations that had led her to
make major adjustments in her life.
¶ 26
Additional factors I am urged to consider in this case include:
(d) Inducement:
¶ 27 Ms.
Winterburn claims that she was "induced" to leave secure employment to come to
work for Domtar. She suggests that the fact that Domtar was willing to offer the loan and
mortgage package it did and to raise its initial salary offer to "sweeten the
deal" were inducements to leave her previous employment. She also submits that the
fact that Domtar wanted to see her as soon as possible and "make it happen" is
an indicator of inducement as well.
¶ 28 I do
not think that is quite the correct characterization of what happened. Although Ms.
Winterburn was happy with her previous employer she was interested in improving her
situation and had given her resume to "head hunters" to see what was available.
When her application came to the attention of Domtar they moved decisively to ascertain if
Ms. Winterburn would meet their needs, but I cannot find that there was anything
importunate about their approach.
¶ 29 The
situation was rather that of parties who bargained in the implicit faith that they were
dealing with a relationship that could last some time. Mr. McFadden allowed that Domtar
was not seeking a short-term employee although he did say that nothing was guaranteed. In
context, I do not think the 5-year and 15-year commitments represented by the loan and
mortgage respectively were "inducements" but they do reflect the parties' mutual
understanding that the arrangement had the potential to last.
(d) Pregnancy:
¶ 30 Ms.
Winterburn submits that her pregnancy should be accounted in the analysis of her position
in two ways. First, she submits that to the degree there is an overlap between the
maternity leave to which she was entitled and the appropriate notice period, the notice
period should be extended. What unfortunately happened in this case is that Ms. Winterburn
delivered a child on February 17, 2002 but the baby died. She was, in the circumstances,
paid 15 weeks maternity leave, under Canada's Employment Insurance Scheme.
¶ 31 I
have no difficulty accepting that during that period of time Ms. Winterburn would not have
been available to her employer had she continued to work, and that during that period of
time she was effectively unable to look for work. The relevant principle was enunciated by
Madam Justice Allan of this court in Whelehan v. Laidlaw Environmental Services Ltd.,
[1998] B.C.J. No. 847 Vancouver Registry No. C974146. There, at paragraphs 18 to 20, Madam
Justice Allan observed:
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[18] It is
useful to compare the underlying purposes of reasonable notice and maternity leave. The
law requires employers to provide dismissed employees with compensation for an adequate
period of time to enable them to pursue suitable re-employment without unreasonable
financial disadvantage. The philosophy behind maternity leave is that women who are
pregnant are entitled to a leave of absence from their jobs in order to accommodate
childbirth and they are entitled to the assurance that their job tenure is secure during
the period of their absence. That philosophy is reflected in s. 56 of the Employment
Standards Act, R.S.B.C. 1996, c. 113 ("the Act") which provides that the
services of an employee on maternity leave are deemed to be continuous for the purposes of
calculating vacation entitlement, pensions, medical benefits or other plans beneficial to
the employee. |
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[19] The policy basis
underlying maternity leave - protecting pregnant women against penalties with respect to
their job tenure and other terms of their employment by reason of pregnancy and childbirth
-- would be defeated if an employer could terminate a pregnant employee at the
commencement of her maternity leave so that her period of notice was spent during that
leave. |
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[20] I conclude that Ms.
Whelehan's maternity leave should not coincide with the applicable notice period which I
have determined to be eight months. |
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¶ 32
The second point Ms. Winterburn makes is that the simple fact that Ms.
Winterburn was pregnant when she was terminated should be taken into account as a factor
that should lengthen the notice period. The issue came up in Woolard v. Urban Life
Insurance Company of Canada Ltd., 2002 BCSC 1178, although it did not need to be decided
on the facts. The court quoted from Harris Wrongful Dismissal 1999 edition (Ontario: Don
Mills) Vol. II at paragraph 125:
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It is conceivable to argue
that an individual who was fired during pregnancy, whether or not that termination was due
to the pregnancy itself, ought to have greater compensation than one normally would expect
in ordinary circumstances. The argument may presumably be made that a terminated pregnant
woman has very little opportunity of finding alternate employment in a realistic market
place. For that reason one could possibly argue that compensation should follow through to
the date of delivery of the baby and following a period of pregnancy leave, the real
notice obligation should start. This, of course, is strictly speculation and no authority
exists to support this proposition. (at p. 7-17) |
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¶ 33
I think I would have difficulty with the concept that a person's choice to
become pregnant could become an employer's problem beyond the extent of the accommodations
presently built into our law, notwithstanding the textbook authors' observation that such
an argument is "conceivable". In the specific unhappy circumstances of this
case, however, apart from taking account of the potential for overlap of the pregnancy
leave and the notice period, I do not think the plaintiff's pregnancy has been shown to
have had any particular bearing on her opportunities to find other employment. Even if it
had, I do not see how a condition that was not known to Domtar at the time of the
termination could impose any obligation on Domtar. Ms. Winterburn suggested that this
factor was analogous to "age" but the parallel is inexact, age being both
inevitable, and generally apparent.
¶ 34 Ms.
Winterburn submits that an additional factor in assessing the appropriate length of notice
is the defendant's failure, in the circumstances, to act in good faith as that concept was
described in Wallace v. United Grain Growers Ltd., [1997] 3 S.C.R. 701. In that case, at
paragraph 98, Mr. Justice Iacobucci noted:
|
[98] The
obligation of good faith and fair dealing is incapable of precise definition. However, at
a minimum, I believe that in the course of dismissal employers ought to be candid,
reasonable, honest and forthright with their employees and should refrain from engaging in
conduct that is unfair or is in bad faith by being, for example, untruthful, misleading or
unduly insensitive. In order to illustrate possible breaches of this obligation, I refer
now to some examples of the conduct over which the courts expressed their disapproval in
the cases cited above. |
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¶ 35
Ms. Winterburn contends that her treatment by Domtar was unduly insensitive in
the manner in which Domtar demanded repayment of the loan and mortgage and purported to
withhold her severance allowance against those obligations. The defendant has conceded
that it was wrong to immediately demand those sums be repaid and that they should have
been expressed to be repayable at the end of the notice period. In any event, Ms.
Winterburn has paid back the mortgage.
¶ 36 The
"loan" remains in issue in that Ms. Winterburn takes the position that Mr.
McFadden orally represented to her that the $30,000 advance was conditional only upon Ms.
Winterburn remaining with Domtar for five years, and that inasmuch as she had at all times
been willing to live up to her end of that bargain she should not be expected to repay it.
¶ 37 Even
if I were to accept that Mr. McFadden made such a representation, or did not articulate
the arrangement Domtar wished to make in exactly the terms of the subsequent written
communication, there is nothing on the evidence that would persuade me I ought to treat
the oral representation as the "real" contract and the subsequent confirmation
as superfluous. The agreement was embodied in the March 16, 1999 letter. Ms. Winterburn
had the opportunity to review it and signed it. The fact that neither party was then
dwelling on negatives does not change the fact that the agreement plainly did not include
the particular terms Ms. Winterburn now claims were the actual arrangement in the event
that Domtar unilaterally terminated the employment relationship.
¶ 38 One
authority the plaintiff relies on is Singh v. Empire Life Insurance Co., [2002] B.C.J. No.
1854 (B.C.L.R.). That case and others like it are readily distinguishable from the case at
bar. Singh is one of a class of cases where an agreement is made - although it may be
expressed to be "interim" to a final contract - and the consideration passes on
the faith of its terms (i.e. the person starts work). In such circumstances, subsequent
terms introduced into the "written" agreement sometimes fail on the basis that
they amount to unilateral alterations to the contract without consideration. Such
situations are distinguishable from this case because the written terms which followed
upon the oral discussions between the parties were received and considered by Ms.
Winterburn before she performed any part of her obligations under the contract. That is
critical to the only point that matters. It simply is not the law that discussions leading
up to terms put in writing, executed before the contract is performed, supercede the
written contract. That argument must fail.
¶ 39 The
plaintiff submits in the alternative that the oral representation by Mr. McFadden was of
sufficient force to bring the case within Bank of Montreal v. Murphy, [1985] B.C.J. 1767
(B.C.C.A.) where at paragraph 10 Mr. Justice Lambert observed in the context of a
guarantee:
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Where an oral
representation is intended to carry sufficient force, either as a representation of fact
(a warranty) or representation of intention (a promise), to modify the legal relationships
of the parties and induce the person to whom it is made to enter into a contract, orally
or in writing, the representation will bind the person who makes it and will form a part
of the total legal relationship between the parties. |
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¶ 40
In this case it is clear that anything Mr. McFadden said was intended as a
prelude to, or description of, an arrangement that would be reduced to writing. I am sure,
as I have observed earlier, that he did not dwell on negative contingencies when he spoke
to Ms. Winterburn. They were however contemplated and embodied in the written agreement
that was forwarded, and that Ms. Winterburn signed. She did so in circumstances affording
an adequate opportunity to consider what that writing meant. That agreement is unambiguous
about the terms on which the loan was given. This submission must fail as well.
¶ 41 For
its part Domtar submits that Ms. Winterburn has failed in her duty to mitigate. The
evidence is that she has made numerous contacts in an attempt to find work. Domtar does
not submit that she has not, in general, made reasonable efforts, but submits that with
respect to one particular opportunity she took a position that was unreasonable. The
evidence is that a company called Original Cakerie was seeking someone to implement a
quality control program, and on April 24, 2000 offered Ms. Winterburn a position with a
salary of $55,000. Ms. Winterburn said it seemed like a "great job" but that in
discussions with the company she had asked if they had could improve on the salary and the
three weeks of vacation they offered. The offer was then, rather summarily, rescinded. The
defendant characterized this as an unreasonable rejection by the plaintiff of an offer of
substantially similar employment.
¶ 42
Given the salary she had commanded at Domtar, I do not see how Ms. Winterburn
could be faulted for attempting to negotiate something better from Original Cakerie. She
cannot have anticipated or controlled the company's reaction. She did not, by reason of
attempting to negotiate a better position in that instance, fail to mitigate her damages.
The defence submission is tantamount to saying she should have taken whatever she could
get. That is not what the duty to mitigate implies.
¶ 43 In
summary, Ms. Winterburn was dismissed on September 13, 2001 from a specialized position
for which she was recruited and which struck her as good enough to risk a move across the
country. While there were no guarantees of continued employment, I find that there was a
mutual expectation in the negotiations leading up to Ms. Winterburn's employment, that
provided Ms. Winterburn performed her duties she could continue to work at Domtar. That
expectation underlies the relatively long terms on the loan forgiveness provisions, and
the mortgage. These were advantages to Ms. Winterburn, but were also obligations that
should have been accounted for in properly assessing what it would be fair to allow Ms.
Winterburn as notice. The terms offered Ms. Winterburn on September 13, 2001 had the
effect of plunging her immediately into a situation of financial crisis, with no
employment income and serious financial obligations back to the company.
¶ 44
Considering the nature of Ms. Winterburn's employment, the circumstances under
which she came to work for Domtar, and the difficulty she has faced and will face in
finding comparable employment, I am of the view that the appropriate period of notice is
10 months. I include within that period an allowance for the fact that she should have
been given that period of notice before demand was made for the loan and mortgage
principal repayment, but do not specifically isolate a factor for
"insensitivity".
¶ 45 The
notice period does not include the 15 weeks of maternity leave to which Ms. Winterburn
would in any case have been entitled, in accordance with the principle in Whelehan
(supra).
¶ 46 The
bonus Ms. Winterburn would have received had she continued working through 2001 in the
amount of $5307.46 shall be paid to her. There is no evidence as to any bonus for the part
of 2002 incorporated in the notice period I have allowed, and accordingly I make no
further award under that heading.
¶ 47
Because the third anniversary of the "Relocation Loan" is within the
notice period, and the period on notice equates with service, the amount that must be
repaid is $12,000. The counter-claim is allowed to that extent.
¶ 48 The
benefits which Ms. Winterburn was receiving as part of her remuneration are also payable
for the notice period I have found to be appropriate. The parties have indicated that they
will believe they can agree on those sums. Should there be a need to seek directions
regarding those matters, or special damages, or the application of court order or
contractual interest, there shall be liberty to apply.
¶ 49
While I recognize there is a counter-claim and a theoretical case that success
was divided in some manner, I think the appropriate order taking a comprehensive view of
the litigation, is that the plaintiff is entitled to her costs on scale 3.
McEWAN J.
