December 2, 2014

Amendments to Alberta’s PIPA passed third reading last night:

In Consbec Inc. v. Walker, the BC SC awarded damages to an employer against an employee for failure to give reasonable notice of resignation:

[220]     Peter worked for Consbec for approximately five years. He was hired to “grow the business”, and that never changed during the entire time that Peter worked for Consbec. He was dispatched to the Maritimes and later to the Western Division to open up opportunities for Consbec in the drilling and blasting business. In order to do so, he was required to look for business. After locating a project and searching for information about the project, in consultation with Richard, a bid was made. The bid was made based on Consbec’s cost. Although Peter was the only employee, both in the Maritimes and in the west, it was necessary to have an employee in the area so as to do the work that I have described.

[221]     Peter owed Consbec notice to give Consbec sufficient time to replace him. As a result of Peter’s abrupt exit, Consbec sent Trevor to assess the situation and make sure that potential customers knew that, despite Peter’s departure, Consbec was still doing business in the west. Mr. Mitchell was moved in quickly and took the position that Peter held. Had Peter given the notice that he was required to give, at law, Consbec may have hired a new employee. They argue that they were left with no other choice but to move Mr. Mitchell, who was experienced in the Central Division, to Kamloops to look after Consbec’s business interests.

[222]     There is no point in trying to determine the proper notice that Peter should have given Consbec. All that would do would lead to speculation as to what Consbec would have done and whether the notice was sufficient, given the factors set out in Sure-Grip.

[223]     Consbec seeks damages on the cost of bringing Trevor to Kamloops and moving Mr. Mitchell and his family to Kamloops.

[224]     Peter argues that Consbec must prove its damages. He argues that the notice he should have been required to give is two weeks. He argues that there was little disruption in business for Consbec as all the information for active projects was known at head office. The foreman was on site at the Langvista 1 project and was reporting to Jeff Walker. I conclude that there was no disruption to the Langvista 1 project. Further, Peter pointed to the fact that there is no loss of earnings as a result of his not giving reasonable notice.

[225]     However, that is not the test. The test is one of opportunity, as stated in Sure-Grip and demonstrated in Aquafor Beech at para. 40:

The notice period gave Mr. Maunder an opportunity to work through transition matters with Mr. Whyte and Mr. Dainty. It gave him an opportunity to retain Brad Beech to take over some of Mr. Whyte’s projects. It gave him an opportunity to retain a headhunter to hire new employees, although it is clear to me that Mr. Maunder did not do so until well after the notice period. There is nothing to suggest that a longer notice period was required or would have made any difference.

[226]     This opportunity was not given to Consbec.

[227]     Consbec has been unable to provide the receipts for travel for Trevor and Mr. Mitchell to Kamloops. When Consbec moved its office in 2012 to its present location, the documents were accidentally thrown out. Mr. Sawdon, in consultation with Mr. Mitchell and Trevor, was able to estimate those expenses.

[228]     Peter objects to these estimates since, knowing that these documents existed, at no time in its list of documents, did Consbec list them. I am prepared to consider Mr. Sawdon’s evidence as to these costs, as well as Mr. Mitchell’s evidence, who was able to recall his expenses and their specifics as reimbursed by Consbec.

[229]     What I must assess are the damages that Consbec suffered as a result of Peter leaving his job without notice.

[230]     Mr. Sawdon estimated the cost of having Trevor come to British Columbia at $11,135.00. It took Trevor two and a half days to drive from Sudbury to Kamloops. He remained in Kamloops for approximately one month. Mr. Sawdon calculated Trevor’s costs in his testimony as follows:

Q         And what types of expenses did you include in those calculations?

A          Beginning with Trevor, Trevor drove to British Columbia. It’s approximately 3600 kilometres. Our per kilometre payment is about well it is at that time 40 cents.

Q         40?

A          40.

Q         40 cents per kilometre?

A          40 cents per kilometre.

Q         Okay?

A          He would have been unproductive as he was driving out and he would have been paid at approximately $40 per hour, assuming he drives a hundred kilometres an hour it would have been 36 hours and he would have had a per diem of approximately $125 a day to cover his room and board for the three days that it took him to come out. And that simply would be multiplied by two to reflect his return to Sudbury. And while he was in Kamloops, I believe his Sudbury to Sudbury time was 43 days, I believe, and so 37 of those days he would have been actually in Kamloops, and I simply went by the per diem of $125 a day which appears reasonable.

[231]     I find Mr. Sawdon’s calculations and estimations reasonable Consbec incurred a cost of $11, 135.00 to place Trevor in British Columbia.

[232]     Mr. Mitchell testified that Consbec reimbursed him $9,781.11 for expenses he incurred in selling his house in the Sudbury area. Those expenses consisted of $8,167.00 for a commission he incurred and the balance was for legal expenses. These expenses were documented. Mr. Mitchell testified that he incurred moving expenses in the amount of $12,000.00 to $13,000.00 with AMJ Campbell Movers to move the Mitchells’ possessions to British Columbia. Mr. Mitchell said he paid for these expenses and was reimbursed by Consbec. Mr. Mitchell said he incurred the sum of $5,000.00 for the land transfer tax for the purchase of his home in Kamloops and Consbec reimbursed him. Mr. Mitchell said he was paid approximately $29,700.00 for travel expenses between Sudbury and Kamloops. That amount represents nine trips by air, six of which were promised by Consbec to the six-member Mitchell family to return to Ontario for Christmas. The Christmas trip represents about $12,000.00. This totals $56,981.11. Taking an average of the proposed moving expenses and excepting flying the Mitchell family back to Ontario for Christmas, I find that, as a result of Peter’s departure and failure to give notice to Consbec, that Consbec incurred damages in the amount of $44,981.11 to replace Peter with Mr. Mitchell.

[233]     Had Peter given reasonable notice to Consbec of his resignation, this amount might have been less. Consbec may have hired somebody in British Columbia. Peter’s actions prevented them from making that choice and considering other options.

[234]     I assess damages against Peter for the failure to give reasonable notice in the amount of $56,116.11.


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