Canada (Attorney General) v. Tipple

Canada (Attorney General) v. Tipple
Court (s) Database
Federal Court Decisions
Date
2011-06-24
Neutral citation
2011 FC 762
File numbers
T-1295-10, T-1315-10
Notes
Digest
Decision Content
Federal Court
Cour fédérale
Date: 20110624
Docket: T-1295-10
Docket: T-1315-10
Citation: 2011 FC 762
Ottawa, Ontario, June 24, 2011
PRESENT: The Honourable Mr. Justice Zinn
BETWEEN:
ATTORNEY GENERAL OF CANADA
Applicant
and
DOUGLAS TIPPLE
Respondent
AND BETWEEN:
DOUGLAS TIPPLE
Applicant
and
ATTORNEY GENERAL OF CANADA
Respondent
REASONS FOR JUDGMENT AND JUDGMENT
[1] These are two separate applications for judicial review, both of which relate to the same decision of a member of the Public Service Labour Relations Board (PSLRB), D. R. Quigley, (the Adjudicator) who was assigned to hear and determine the grievance of Douglas Tipple relating to his dismissal from Public Works and Government Services Canada (PWGSC). The two applications, T-1295-10 filed by the Attorney General of Canada and T-1315-10 filed by Mr. Tipple, were not consolidated under Rule 105 of the Federal Courts Rules, SOR/98-106; however, as they challenge different aspects of the same decision, they were heard together. Accordingly, these reasons will address both applications and a copy shall be placed in each of the Court’s files.
[2] Both parties submit that the Adjudicator made errors or unreasonable findings with respect to the remedies that he awarded or failed to award as a consequence of his primary finding that Mr. Tipple was dismissed from his employment contrary to the Public Service Labour Relations Act, SC 2003, c 22 (PSLRA). Although this primary finding is not at issue, the analysis of the issues that are in dispute requires an understanding of the facts underpinning the primary finding of dismissal contrary to the PSLRA.
Background
[3] Mr. Tipple is an executive with a specialty in real property. In 2004, PWGSC undertook a new strategy known as “The Way Forward,” which was implemented to reduce costs relating to accommodation for the federal public service. I. David Marshall, the Deputy Minister of PWGSC at the time, decided to recruit executives from the private sector to act as “special advisors” to accomplish this goal. PWGSC hired Mr. Tipple to be responsible for real property, and David Rotor to be responsible for procurement. Mr. Tipple signed a three-year contract (from October 11, 2005 to October 6, 2008) at an annual salary of $360,000.00 and with a performance bonus of 15% if certain benchmarks were met. His letter of offer also provided that “Your services may be required for a shorter period depending upon the availability of work and continuance of the duties to be performed …”
[4] Mr. Tipple began working in his new position in October 2005 and ultimately relocated his family from Toronto to Ottawa. In his first year, he met the target objectives and saved PWGSC $150 million.
[5] During his time at PWGSC Mr. Tipple advocated for the transformation of PWGSC into a Crown corporation. However, the government did not envision PWGSC as a Crown corporation or anticipate any major outsourcing of jobs, and PWGSC employees were preparing a campaign to challenge any such outsourcing. From April to June 2006, Deputy Minister Marshall had discussions with Yvette D. Aloïse, Acting Associate Deputy Minister, during which she expressed her view that Mr. Tipple’s role as special advisor was “not working out.”
[6] Nonetheless, in June 2006, Mr. Tipple received a performance review which rated his performance at the highest possible rating (“surpassed”) and he was paid his negotiated 15% bonus. The comments attached to the review were highly complimentary. Furthermore, Mr. Marshall approved the payment of Mr. Tipple’s upcoming membership fee for the National Club in Toronto in June 2006.
[7] Then, from June 25 to 30, 2006, Mr. Tipple and Mr. Rotor traveled to the United Kingdom to meet with officials regarding that country’s approach to business transformation. Mr. Tipple was accompanied by his wife and he added some vacation days to the business trip, all at his own expense and with the approval of Mr. Marshall.
[8] PWGSC made the plans for the trip and arranged meetings with UK officials. Catherine Dickson, an employee of the Canadian High Commission in the UK, was responsible for arranging the meetings. There were problems with the planning of Mr. Tipple’s schedule resulting, it appears, from miscommunication between PWGSC and the Canadian High Commission. During his time in the UK Mr. Tipple was invited to attend procurement-related meetings, but given that procurement was Mr. Rotor’s responsibility, Mr. Tipple decided to attend only the real estate-related meetings within his area of expertise.
[9] Subsequent to the trip it was suggested that Mr. Tipple had missed meetings. Mr. Tipple maintained that the trip was a success, that he attended all meetings relating to real estate, and that the procurement meetings he did not attend were not the focus of his trip or part of his mandate. Notwithstanding Mr. Tipple’s contention that he had not missed meetings, the Government of Canada sent letters of apology to the Government of the UK on July 12, 2006. The letters suggested the missed meetings were the fault of Mr. Tipple and Mr. Rotor. One letter, for example, which was sent by the Acting High Commissioner of Canada to the UK, stated that “I would like to apologize most sincerely for the behaviour of Messrs. David Rotor and Douglas Tipple …” Letters of apology were also sent by Yvette D. Aloïse, Acting Associate Deputy Minister, on behalf of Mr. Marshall.
[10] On July 12, 2006, Mr. Marshall and Mr. Tipple met to discuss the trip; however, at that time Mr. Tipple was not informed about the letters of apology and it was not until August 9, 2006, that he became aware of them. On the same day he learned that the trip report he had prepared had been leaked to Daniel Leblanc, a reporter at The Globe and Mail. Mr. Leblanc made allegations that parts of the report had been plagiarized; they had not been. The version of the report leaked to Mr. Leblanc was a preliminary version which had not included the references contained in Mr. Tipple’s final report. The letters of apology and a number of emails were also leaked to The Globe and Mail.
[11] From August 15 to 18, 2006, The Globe and Mail published a series of articles suggesting that Mr. Tipple and Mr. Rotor had “left a trail of cancelled meetings” and raised allegations of plagiarism and unethical behaviour. Mr. Tipple felt that the articles contained “a number of false, disparaging and defamatory statements and imputations” which caused emotional distress and were damaging to his personal well-being and reputation.
[12] Throughout the ensuing media storm, Mr. Tipple repeatedly requested that PWGSC defend him against the allegations in the media and that he be allowed to respond personally to them. Mr. Tipple insisted that he had not missed any meetings, but PWGSC representatives told the media that the meetings were “cancelled because of logistical problems.” PWGSC refused to allow Mr. Tipple to speak to the media and assured him it would develop a media plan. Mr. Tipple wanted PWGSC to take a more proactive approach, and repeatedly expressed dissatisfaction with its actions vis-à-vis the media. Mr. Tipple claims PWGSC never developed a media plan but instead sacrificed his reputation in the interest of “damage control.”
[13] In response to the media attention, PWGSC launched an internal investigation into the UK trip. The investigation (the Minto Report) exonerated Mr. Tipple. The Minto Report found, among other things, that despite the administrative confusion, “… both advisors appear to have used their time in a responsible and productive manner … [and] that all expenses claimed and approved will be reasonable and approved in accordance with prescribed rules.” The report was not made public.
[14] On Friday, August 25, 2006, Mr. Marshall met with the Minister of PWGSC. They discussed Mr. Tipple’s work and whether the hiring of the private sector executives was working effectively. Mr. Marshall reflected on their conversation over the weekend and by Monday, August 28, 2006 had decided to terminate Mr. Tipple’s employment, allegedly because Mr. Tipple had delivered his key commitments, The Way Forward was ahead of schedule, PWGSC could not absorb further changes, no major initiatives were left for Mr. Tipple, and because Mr. Tim McGrath, Acting Assistant Deputy Minister for Real Property at PWGSC, was sufficiently up to speed to assume any further work required for The Way Forward.
[15] At the hearing before the PSLRB Mr. Marshall testified that no integration or organizational structure analysis was done prior to Mr. Tipple’s dismissal. Mr. Tipple testified that prior to his dismissal, he was never told that his performance was unsatisfactory, that The Way Forward had reached its saturation point, or that there was a possibility he could be laid off.
[16] On August 31, 2006, Mr. Marshall terminated Mr. Tipple’s employment. Mr. Rotor was dismissed on the same day. Mr. Tipple was given compensation equal to one month’s pay. He was not given any reasons for the termination other than that Mr. Marshall had accepted a recommendation from his staff that the special advisors’ responsibilities be transferred to and merged with those of the respective Assistant Deputy Ministers. Mr. Tipple testified that his termination was highly unusual given that there was no transition plan for transferring responsibilities from him to Mr. McGrath, no analysis of the work plan, and no briefing of his staff, and that he was asked to leave the premises immediately. Mr. Tipple also testified that he had been hired to complete the implementation as well as the planning of The Way Forward, and that the implementation phase was not yet complete. Mr. Tipple testified that if he had been hired as an “idea person” and only for planning and not implementation, he would not have relocated his family to Ottawa.
[17] The next day The Globe and Mail reported on the dismissal and suggested it was caused by Mr. Tipple’s misconduct during the UK trip.
[18] Mr. Tipple filed Statements of Claim in the Ontario Superior Court commencing actions against both PWGSC and The Globe and Mail. The wrongful dismissal action against PWGSC was stayed; the defamation action against The Globe and Mail continues. He also filed a grievance with PWGSC regarding his dismissal which he subsequently referred to adjudication under the PSLRA. The Adjudicator upheld Mr. Tipple’s grievance, in part. It is that decision that is under review in these applications.
[19] Mr. Tipple was unable to secure permanent employment after his termination. He had no income in 2007 and only $38,172.00 of income in 2008. This was not due to a lack of effort on his part as he contacted 15 executive recruiters and 37 consulting firms attempting to obtain work. He was told by recruiters that until he was vindicated, he was “basically off limits,” and that a search of his name on the internet brought up unflattering and damaging articles that questioned his integrity. Mr. Tipple did attempt to obtain a position with a private firm to pursue real-property assets that might be offered for sale by the Government of Canada, but PWGSC refused to grant him permission to pursue the opportunity due to its post-employment policy that imposed a 12-month waiting period on accepting employment in the private sector of the sort he considered.
[20] Mr. Tipple testified that as a result of his termination he suffered “bouts of low self esteem, lack of confidence, stress, anxiety, feelings of betrayal, humiliation and hurt feelings” and that the ordeal had been “very emotional and traumatic and my mental and physical health have been affected.”
[21] The Adjudicator upheld Mr. Tipple’s grievance and awarded him a total of $1,358,454.58 in damages. The largest portion of this sum was damages for lost wages ($688,751.08), damages for lost performance bonus ($109,038.46), and damages for lost employee benefits ($109,038.46). None of those damage awards is challenged or under review.
[22] The Adjudicator also awarded Mr. Tipple an amount of $125,000.00 in damages for psychological injury and $250,000.00 in damages for loss of reputation. The Attorney General has challenged those damage awards and asks the Court to set them aside.
[23] Mr. Tipple requested the Adjudicator to order PWGSC to pay the full costs of his legal representation. The Adjudicator determined that he did not have authority to award costs under the PSLRA but that he did have jurisdiction to compensate a loss incurred by one party where the loss occurs as a result of the other party’s actions. The Adjudicator found that PWGSC’s continued failure to fully disclose relevant documentation in a timely manner and in compliance with the disclosure orders made by the PSLRB “considerably and unduly” lengthened the hearing and led to numerous letters from Mr. Tipple’s counsel seeking compliance with the orders as well as numerous case management conferences. The Adjudicator found that Mr. Tipple had incurred additional legal costs as a result of the PWGSC’s failure to comply with the disclosure orders. Accordingly, while no costs were awarded to Mr. Tipple, the Adjudicator ordered PWGSC to pay Mr. Tipple damages for obstruction of process equal to the additional legal costs incurred, an amount the parties agreed was $45,322.03. Mr. Tipple asks the Court to set aside the Adjudicator’s holding that the PSLRB has no jurisdiction to award costs. The Attorney General asks the Court to set aside the award of damages for the obstruction of process.
[24] The Adjudicator awarded Mr. Tipple interest on the damage awards, noting that it was justified by s. 226 of the PSLRA as well as the decisions in Nantel v Canada, 2008 FCA 351 and Canada (Attorney General) v Morgan, [1992] 2 F.C. 401 (CA). The Adjudicator found that it was appropriate to adopt the Canada Savings Bonds rate to calculate the interest owed to Mr. Tipple. In his reasons for decision the Adjudicator specifically stated that Mr. Tipple was not claiming interest up until the date of the decision, but had limited his claim for the period from October 1, 2006 to October 6, 2008 and, accordingly, interest was awarded only for that period. Mr. Tipple submits that the Adjudicator erred, and maintains that he did not so limit his claim. He asks this Court to set aside and remit back to the Adjudicator this part of the decision.
Issues
[25] The parties have identified several issues. The first three issues are advanced by the Attorney General of Canada; the remaining two are advanced by Mr. Tipple:
a. Did the Adjudicator err in awarding damages of $125,000.00 for psychological injury?
b. Did the Adjudicator err in awarding damages of $250,000.00 for loss of reputation either because he erred in finding that PWGSC had a duty to protect Mr. Tipple’s reputation or because the amount awarded was not supported by the evidence?
c. Did the Adjudicator err in awarding damages of $48,322.03 for obstruction of process either because he did not have jurisdiction to award such damages or because he erred in finding that the conduct amounted to an obstruction of process?
d. Did the Adjudicator err in finding that he has no jurisdiction to award costs to a successful party?
e. Did the Adjudicator err in limiting interest on the awards to the period from October 1, 2006 to October 6, 2008?
[26] All of these issues relate to the remedial jurisdiction of an adjudicator hearing a grievance under s. 228(2) of the PSLRA which provides as follows:
228. (2) After considering the grievance, the adjudicator must render a decision and make the order that he or she considers appropriate in the circumstances. …
228. (2) Après étude du grief, il tranche celui-ci par l’ordonnance qu’il juge indiquée. …
Standard of Review
[27] The standard of review for most of the issues in dispute is reasonableness as they involve questions of mixed fact and law warranting deference to the view of the Adjudicator. However, despite the parties’ agreement that the standard of review for the costs issue is correctness, a fulsome analysis is required before accepting their joint submission, given that there appears to be conflicting jurisprudence.
[28] In Canada (Attorney General) v Mowat, 2009 FCA 309, from which an appeal to the Supreme Court was heard and is currently under reserve, the Federal Court of Appeal determined that the appropriate standard of review for the Canadian Human Rights Tribunal’s decision on whether it had the authority to award costs was correctness. In conducting the standard of review analysis the Federal Court of Appeal, relying on the Ontario Court of Appeal’s decisions in Taub v Investment Dealers Association of Canada, 2009 ONCA 628, at para. 65 and Abdoulrab v Ontario (Labour Relations Board), 2009 ONCA 491, at para. 48, supported the proposition that where there are two conflicting but reasonable lines of authority interpreting the same statutory provision, it is not reasonable for a court to uphold both: see Mowat at para. 45. The Court of Appeal in Mowat agreed with the Ontario Court of Appeal that accepting contradictory interpretations of a statute as reasonable would potentially conflict with the rule of law and the need for consistency to enable parties appearing before the Tribunal to know how to conduct their affairs.
[29] Some subsequent cases of this Court have followed Mowat and imposed the correctness standard where a question of statutory interpretation requires certainty and consistency: see, as examples, Canada Post v Canadian Union of Postal Workers, 2010 FC 154; Bonamy v Canada (Attorney General), 2010 FC 153; and Office of the Superintendent of Bankruptcy v MacLeod, 2010 FC 97.
[30] Concerns regarding consistent interpretation are significant here because the PSLRB has come to differing conclusions regarding its authority to award costs. In Matthews and Canadian Security Intelligence Service, [1999] CPSSRB No 31, the Public Service Staff Relations Board, the predecessor to the PSLRB, determined that it did have jurisdiction to award costs. However, since the Court of Appeal’s decision in Mowat, the Board has determined that it does not have authority to award costs; in addition to the decision under review, see Ménard v Public Service Alliance of Canada, 2010 PSLRB 124.
[31] It might be suggested that the Court of Appeal’s finding in Mowat that conflicting decisions on statutory interpretation are to be reviewed on the correctness standard is inconsistent with the Supreme Court’s recent decision in Smith v Alliance Pipeline Ltd, 2011 SCC 7, where the Court applied the reasonableness standard to the decision of the National Energy Board regarding the parameters of its authority to award costs. At paras. 38-39, the Court wrote:
Finally, on this branch of the matter, Alliance argues that adoption of the reasonableness standard would offend the rule of law by insulating from review contradictory decisions by Arbitration Committees as to the proper interpretation of s. 99(1) of the NEBA. I am unable to share the respondent's concern. In Dunsmuir, the Court stated that questions of law that are not of central importance to the legal system "may be compatible with a reasonableness standard" (para. 55), and added that "[t]here is nothing unprincipled in the fact that some questions of law will be decided on [this] basis" (para. 56; see also Toronto (City) v. C.U.P.E., at para. 71).
Indeed, the standard of reasonableness, even prior to Dunsmuir, has always been "based on the idea that there might be multiple valid interpretations of a statutory provision or answers to a legal dispute" such that "courts ought not to interfere where the tribunal's decision is rationally supported" (Dunsmuir, at para. 41).
I also note that in Nolan v Kerry (Canada) Inc, 2009 SCC 39, at para. 35, the Supreme Court had previously applied the reasonableness standard to the Ontario Financial Services Tribunal’s finding regarding the scope of its costs-granting authority.
[32] Alliance Pipeline Ltd involved s. 99(1) of the National Energy Board Act, RSC 1985, c N-7, which gives the National Energy Board jurisdiction to determine compensation including “all legal, appraisal and other costs” that had been reasonably incurred by the expropriated party. The order under review in Alliance Pipeline was an order that the legal costs to be paid were to include the legal costs incurred in a court action commenced by the pipeline company against the expropriated owner. Section 24 of the Financial Services Commission of Ontario Act, 1997, SO 1997, c 28, gave the Financial Services Tribunal jurisdiction to “order that a party to a proceeding before it pay the costs of another party or the Tribunal’s costs of the proceeding.” In Nolan the order under review was an order that the costs were to be paid from the Trust Fund, in light of it not being a party to the proceeding.
[33] The apparent inconsistency between Mowat and these decisions can be resolved by distinguishing between the jurisdiction to award costs at all, which was considered in Mowat, and the scope of the authority to award costs, which was considered in Alliance Pipeline and Nolan. The first is a true question of jurisdiction, the second is not. As was stated by the Supreme Court in Nolan, at para. 34:
The inference to be drawn from paras. 54 and 59 of Dunsmuir is that courts should usually defer when the tribunal is interpreting its own statute and will only exceptionally apply a correctness standard when interpretation of that statute raises a broad question of the tribunal's authority. [emphasis added]
[34] In this case, the jurisdiction of the Adjudicator to award costs is at issue; it is a broad question of the Board’s authority and this points to using the correctness standard. However, two of the other elements of the standard of review analysis point to the reasonableness standard: the existence of a privative clause in s. 51 of the PSLRA and the purpose of the statutory scheme, which includes the efficient settlement of disputes; see Canada (Attorney General) v Amos, 2009 FC 1181, at para. 26.
[35] Notwithstanding that these two considerations point to a reasonableness standard, the final factor in the standard of review analysis, the expertise of the decision maker, points to a correctness standard of review given that, as suggested by Mr. Tipple, the Adjudicator was not relying on his expertise in labour law but rather was applying an appellate-court decision regarding the jurisdiction of human rights tribunals to award costs. Accordingly, I agree with the parties that when one conducts the required standard of review analysis it indicates that correctness is the appropriate standard for dealing with the Board’s jurisdiction to award costs.
Analysis of Issues
1. Damages for Psychological Injury
[36] In his grievance, Mr. Tipple sought damages in the amount of $250,000.00 "arising from PWGSC's unfair, disingenuous, reckless, capricious, arbitrary, and high-handed conduct." The Adjudicator quoted from and relied on the Supreme Court’s decisions in Wallace v United Grain Growers Limited, [1997] 3 SCR 701 and Honda Canada v Keays, 2008 SCC 39, in awarding him $125,000.00 as damages for “psychological injury.”
[37] Prior to Wallace, there had been an ongoing debate as to whether an employee in a wrongful dismissal action could be awarded damages for more than his or her lost wages and benefits during the period of reasonable notice. In Wallace, the Court considered a wrongful dismissal action of a 59-year old employee with 14 years of exemplary service. By any standard, the conduct of the employer in the manner of the dismissal was objectionable. After being the company’s top salesperson for each year he worked for the company, Mr. Wallace was summarily dismissed with no explanation when only a few days earlier he had been complimented by senior managers on his work performance. In a letter provided after the dismissal, the former employer stated that the main reason for the termination of Mr. Wallace’s employment was his inability to satisfactorily perform his duties. The company defended the wrongful dismissal suit alleging that it had cause to terminate Mr. Wallace’s employment and it maintained that defence for two years until just before trial when it was dropped. Mr. Wallace provided evidence that the allegation of cause created emotional difficulties for him and he was required to seek psychiatric help. Mr. Wallace was unable to find alternative employment following the dismissal and the trial judge determined that his inability to secure employment was largely as a result of his peremptory dismissal and the employer’s subsequent actions which made employment in his field “virtually impossible.”
[38] The trial judge awarded Mr. Wallace wrongful dismissal damages based on a 24-month period of notice. The Court of Appeal reduced that award to 15 months, concluding that the trial judge had improperly let an element of aggravated damages creep into the assessment of the notice period.
[39] In restoring the 24-month award, the Supreme Court held that “to ensure that employees receive adequate protection, employers ought to be held to an obligation of good faith and fair dealing in the manner of dismissal, the breach of which will be compensated for by adding to the length of the notice period.” Subsequently, increased damages for the breach of this obligation became known as “Wallace damages.”
[40] Some ten years later the Supreme Court reconsidered its approach in Wallace in the Honda decision. Two difficulties had been created by the Wallace decision. First, it was unclear what employer conduct would result in Wallace damages being awarded. Second, there were no principles set out in Wallace to guide one in determining the measure of the Wallace damages.
[41] In Honda, the Supreme Court moved away from the concept that aggravated damages awarded in wrongful dismissal actions extended the notice period that had been the norm under Wallace; rather, it held that they are to be calculated based on established principles: the dismissed employee is entitled to those damages that are the reasonably foreseeable losses arising from the breach. The Court affirmed that there is an obligation on an employer to effect a dismissal in good faith and that where the manner of dismissal results in harm to the employee, damages within the contemplation of the parties are compensable. Justice Bastarache, writing for the majority, explained, at paras. 59-60, that:
To be perfectly clear, I will conclude this analysis of our jurisprudence by saying that there is no reason to retain the distinction between "true aggravated damages" resulting from a separate cause of action and moral damages resulting from conduct in the manner of termination. Damages attributable to conduct in the manner of dismissal are always to be awarded under the Hadley principle. Moreover, in cases where damages are awarded, no extension of the notice period is to be used to determine the proper amount to be paid. The amount is to be fixed according to the same principles and in the same way as in all other cases dealing with moral damages. Thus, if the employee can prove that the manner of dismissal caused mental distress that was in the contemplation of the parties, those damages will be awarded not through an arbitrary extension of the notice period, but through an award that reflects the actual damages. Examples of conduct in dismissal resulting in compensable damages are attacking the employee's reputation by declarations made at the time of dismissal, misrepresentation regarding the reason for the decision, or dismissal meant to deprive the employee of a pension benefit or other right, permanent status for instance (see also the examples in Wallace, at paras. 99-100).
In light of the above discussion, the confusion between damages for conduct in dismissal and punitive damages is unsurprising, given that both have to do with conduct at the time of dismissal. It is important to emphasize here that the fundamental nature of damages for conduct in dismissal must be retained. This means that the award of damages for psychological injury in this context is still intended to be compensatory. The Court must avoid the pitfall of double-compensation or double-punishment that has been exemplified by this case. [emphasis added]
[42] The Supreme Court thus reaffirmed that it was appropriate to make an award of moral damages to compensate a former employee for injury suffered as a result of the conduct of the employer in the manner of termination where it was within the contemplation of the parties at the time the contract was made that injury would be caused by such conduct. Situations where moral damages could be awarded were stated by the Court to include the following:
i. Where the manner of dismissal caused mental distress;
ii. Where the employee's reputation is attacked by false declarations made at the time of dismissal;
iii. Where the employer misrepresents the reason for the decision to terminate the employment;
iv. Where the termination is effected to deprive the employee of a pension benefit or other employment right, such as permanent status;
v. Where the employer communicates a wrongful accusation of misconduct to potential employers of the dismissed employee;
vi. Where the employer refuses to provide a letter of reference after the termination;
vii. Where the employer makes statements that reassure the employee about his future while at the same time contemplating the termination of his employment;
viii. Where the employer fails to communicate to the employee a decision it has made to terminate the employment despite knowing that the employee was in the process of making costly decisions (such as selling his home) in anticipation of continued employment;
ix. Where the employer made the decision to terminate the employment of an employee when he was on disability leave, but failed to so inform the employee until he had returned to work following the leave causing him to suffer major depression; and
x. Where changes that will affect the continuation of employee’s employment, such as salary adjustments, are not disclosed to the employee but he learns of the changes and his termination through newspaper advertisements placed by the employer.
[43] In light of Honda, moral damages for such conduct are compensatory in nature; as the Supreme Court stated, the award is to reflect “the actual damages” suffered.
[44] In this case, the Adjudicator concluded that “Mr. Tipple has met the test found in [Honda] and that the respondent’s failure of its obligation of good faith and fair dealing in the manner of termination caused him psychological injury that was in the contemplation of the parties.”
[45] The Adjudicator found that PWGSC breached its obligation of good faith and fair dealing in the manner of dismissal because of the following:
i. PWGSC had misrepresented its reason for terminating Mr. Tipple’s employment. It was found that the evidence showed that Mr. Tipple was not laid off “because of a lack of work or the discontinuance of a function but that his termination was disguised by a contrived reliance on the [Public Service Employment Act] and that it was a sham or a camouflage.”
ii. Mr. Tipple had relocated his family to Ottawa because he was told that his appointment would be for three years and possibly longer.
iii. Mr. Marshall approved the UK trip, approved payment of the National Club fees, and awarded Mr. Tipple a “surpassed” rating and a 15% bonus. As a result, Mr. Tipple had no indication of the upcoming termination although Mr. Marshall testified that he was already contemplating ending the employment.
iv. Mr. Marshall told Mr. Tipple not to worry about the press coverage regarding the UK trip, and despite meeting with him regularly did not indicate that he was considering terminating his employment or that letters of apology had been sent regarding the UK trip.
v. Mr. Marshall did not share the Minto report with Mr. Tipple.
vi. Mr. Marshall terminated Mr. Tipple with no warning and told him there was nothing to discuss and that he was to leave the premises immediately.
[46] In sum, the Adjudicator found that “Mr. Marshall acted in a disingenuous and callous manner in terminating Mr. Tipple’s employment … [he] lulled Mr. Tipple into a false sense of security … such conduct was unfair or was in bad faith by being untruthful, misleading and unduly insensitive to Mr. Tipple.”
[47] The Attorney General does not dispute the jurisdiction of the Adjudicator to award damages based on the principles set out by the Supreme Court in Honda; however, it submits that the award of $125,000.00 in this case was excessive, unreasonable, not in accord with previous cases where such damages were awarded, and unsupported by the evidence. Further, it is submitted that the Adjudicator failed to provide any reasons to support the quantum of damages awarded other than reducing by half the $250,000.00 Mr. Tipple had claimed due to a lack of medical evidence.
[48] The Attorney General cites a number of “leading” cases involving damages for mental distress following dismissal from employment. Each decision awarded much less than the amount awarded to Mr. Tipple: Lumsden v Manitoba, 2009 MBCA 18 ($25,000.00); Brien v Niagara Motors Ltd, 2009 ONCA 887 ($0.00); Cooke v HTS Engineering Ltd, [2009] OJ No 5650 (ONSC) ($3,500.00); Bru v AGM Enterprises, 2008 BCSC 1680 ($12,000.00); Wallace, supra ($15,000.00), Beggs v Westport Foods Ltd, 2010 BCSC 833 ($20,000.00); Chapell v Canadian Pacific Railway, 2010 ABQB 441 ($20,000.00); Pagliaroli v Rite-Pak Produce Co Ltd, 2010 ONSC 3729 ($25,000.00); and Piresferreira v Ayotte, 2010 ONCA 384 ($45,000.00). These decisions are enumerated in a table at para. 39 of the Attorney General’s memorandum in T-1295-10, and the Attorney General submits that the table illustrates that the maximum award for damages for mental distress resulting from the manner of termination is $45,000.00, with an average award of $17,500.00.
[49] Although Mr. Tipple did not dispute the assertion of the Attorney General that “This table illustrates that the maximum award for mental distress from the manner of termination is $45,000” that statement requires some clarification. It may be that the Attorney General is correct in stating that the most awarded by a court for damages for what it has termed to be “damages for mental distress” is $45,000.00; however, courts have made greater awards for moral damages which, although not solely for mental distress, contain a component compensating the terminated employee’s psychological injury. For example, in Zesta Engineering Ltd v Cloutier, 2010 ONSC 5810, Justice Stinson awarded $75,000.00 for the “moral damages” resulting from the manner of termination and its effect on Mr. Durante. At paras 335 and 336 the trial judge outlined the basis of this award as follows:
In my view, Zesta's actions surrounding the termination of Durante's employment amply demonstrate bad faith on its part. Its conduct included the following:
(a) Durante was subjected to a series of intimidating interrogations by Bernard Eastman, who on several occasions essentially threatened Durante's livelihood.
(b) Durante was dismissed over the telephone, on his first day of vacation, five days before Christmas, for confirming the "sting" on Marcel Jones. In effect, he was fired for telling the truth or, to put in another way, for choosing the wrong side in a vicious dispute rooted in family issues.
(c) Durante was provided with no severance (not even his Employment Standards Act minimums) and his benefits were immediately discontinued.
(d) Zesta pursued an extended, cavalier and single-minded approach in fighting Durante's employment insurance application for two years, and then failed to attend the ultimate hearing.
(e) Zesta commenced a companion action for fraudulent conveyance against Durante and his wife, many years after having knowledge of the conveyance, and maintained it despite the reconveyance to Durante of his interest in the matrimonial home. This was a source of additional stress, worry and expense for both him and his wife.
(f) Zesta and the Eastmans pursued the foregoing course of conduct, notwithstanding Durante had been a highly loyal career employee with an otherwise unblemished work record, who had been treated and considered as an extended family member, while fully aware of the significant impact such conduct would have on Durante and his family.
The evidence of Durante and his wife was that Durante was devastated, stressed and sad. His upset and angst at this treatment was evident while he testified before me, almost a decade after his dismissal. The toll on him and his family has been significant, and long lasting, and is ongoing. In the circumstances, I award Durante $75,000 in moral damages in keeping with the principles described by Bastarache J. in Honda, supra (at para. 59).
[50] In addition to the submission that the award in Mr. Tipple’s case was not in keeping with other awards, the Attorney General submits that damages for non-pecuniary injuries, such as psychological damage, are to be generally fixed at a modest rate subject to variation depending on the degree of suffering in a particular case: Vancouver (City) v Ward, 2010 SCC 27.
[51] The Supreme Court awarded Mr. Ward $5,000.00, a modest amount; however, it is noted that the context there was significantly different than that before the Adjudicator in this case. The Supreme Court explained at para. 71:
Mr. Ward was never touched during the search and there is no indication that he suffered any resulting physical or psychological injury. While Mr. Ward's injury was serious, it cannot be said to be at the high end of the spectrum. This suggests a moderate damages award. [emphasis added]
[52] The Attorney General lastly submits that the Adjudicator relied solely on Mr. Tipple’s “limited” testimony which was unsupported by medical evidence and therefore submits that Mr. Tipple was entitled, at best, to a nominal amount of damages for psychological injury. Cited in support is the following passage from Martin v Goldfarb et al (1998), 41 OR (3d) 161 (CA):
I have concluded that it is a well established principle that where damages in a particular case are by their inherent nature difficult to assess, the court must do the best it can in the circumstances. That is not to say, however, that a litigant is relieved of his or her duty to prove the facts upon which the damages are estimated. The distinction drawn in the various authorities, as I see it, is that where the assessment is difficult because of the nature of the damage proved, the difficulty of assessment is no ground for refusing substantial damages even to the point of resorting to guess work. However, where the absence of evidence makes it impossible to assess damages, the litigant is entitled to nominal damages at best.
[53] I agree with the Attorney General that $125,000.00 is not a “nominal amount”; however, there was evidence supporting some award. This was a case where Mr. Tipple’s testimony about the impact of his former employer’s actions on his psychological state was the only evidence of psychological injury.
[54] The Adjudicator found, at para. 327 of the decision, that on the evidence adduced “the respondent’s failure of its obligation of good faith and fair dealing in the manner of termination caused [Mr. Tipple] psychological injury that was within the contemplation of the parties” and that accordingly Mr. Tipple was entitled to damages for psychological injury. It is clear that the Adjud