Canadian Employment Law Today

Wood v. Fred Deeley Imports Ltd., the court also preferred an interpretation of the NCA favouring Galea where it could reasonably be interpreted in more than one way. In the court's view, the term "any incen - tive," in the NCA, suggested that more than one incentive might be made available to her upon her dismissal. e court thus read the word "Plans" into the term "Annual Incen - tive Plan." On this basis, the court awarded damages of $437,434 for payments owing to Galea during the transition period un- der the MIP (although MIP terms excluded payments post-termination), DPSP and ESP, among other damages. Despite the award of MIP payments, Galea was not awarded pay - ment in lieu of stock vesting under the PSP because plan terms prohibited vesting sub- sequent to Galea's dismissal. Significantly, the court also awarded Ga- lea $250,000 in moral damages and $500,000 in punitive damages due to Walmart's con- duct after January 2010. In awarding moral damages, the court cited the Supreme Court of Canada's decisions in Wallace v. United Grain Growers Inc. and Keays v. Honda Canada Inc., and confirmed an employer's duty of good faith and fair dealing in the course of dismissing an employee. e court held that damages for a breach would be available to Galea if they were reasonably foreseeable, and Galea had no obligation to tender medical evidence to support her claim for them. e court found that in January 2010 Cheesewright decided to "dismiss or deni - grate (Galea) to the point where she might resign…. She was, as she (put it), left to 'twist in the wind'." Galea testified that after January 2010, she felt like she was floun - dering; the February 2010 announcement caused her embarrassment; and the respect she had earned in the preceding eight years had been taken away. e circumstances af - fected her physically and mentally while, to Walmart's knowledge, her husband was in poor health, and she was her family's sole income earner. Eleven months post-termi - nation, Walmart discontinued Galea's sal- ary and, without her knowledge, her health and dental coverage, despite the clear terms of the NCA. Walmart also delayed answer- ing undertakings until the eve of trial, and made a "torrent of productions" in the course of trial. e court found that such behaviour prolonged Galea's anguish over her case. In awarding punitive damages, the court cited the Supreme Court of Canada's deci - sion in Whiten v. Pilot Insurance Company, holding that such damages may be "awarded in exceptional cases against a defendant for 'malicious, oppressive and highhanded' mis- conduct that 'offends the court's sense of de- cency.'" e court referred to the power im- balance between the parties; Cheesewright's arbitrary alteration of her performance rat- ing; Walmart's ultimatum that she choose between a probationary position or a sever- ance package; and its apparent indifference to the litigation process. "Although the same facts form the basis of awarding punitive damages as those for awarding (compensa - tory) damages," the court held, the real con- cern was to avoid over-compensating Galea. e court found that Walmart's misconduct occurred at such a high level and with such high visibility that punitive damages "suf - ficient to serve the objectives of denuncia- tion… and deterrence" were necessary. Employer takeaways Galea's case warns employers of the sig- nificant financial risks they assume when enacting job changes designed to force an employee's departure. Walmart paid a sig- nificant price for such conduct, as well as for post-termination tactics viewed by the court as hardball or indifferent to her situ- ation. e case also demonstrates that com- mon law objectives to compensate wrong- fully dismissed employees will continue to inform the manner in which courts interpret contractual severance terms. For more information see: • Galea v. Wal-Mart Canada Corp., 2017 CarswellOnt 19522 (Ont. S.C.J.). • Paquette v. TeraGo Networks Inc., 2016 CarswellOnt 12633 (Ont. C.A.). • Wood v. Fred Deeley Imports Ltd., 2017 CarswellOnt 2408 (Ont. C.A.). • Wallace v. United Grain Growers Inc., 1997 CarswellMan 456 (S.C.C.). • Keays v. Honda Canada Inc., 2007 Car- swellOnt 1874 (S.C.C.). • Whiten v. Pilot Insurance Company, 2002 CarswellOnt 537 (S.C.C.). Canadian HR Reporter, a Thomson Reuters business 2018 January 31, 2018 | Canadian Employment Law Today CREDIT: VALESTOCK/SHUTTERSTOCK ABOUT THE AUTHOR RICH APPIAH Rich Appiah is principal of Appiah Law, an employment and labour law firm in Toronto. He may be reached at rich@appiahlaw.com or (416) 900-3715. Walmart's misconduct occurred at such a high level and with such high visibility to warrant significant punitive damages.

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