Nahnychuk v. Elite Retail Solutions Inc.

2004 BCSC 746 Nahnychuk v. Elite Retail Solutions Inc.

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Nahnychuk v. Elite Retail Solutions Inc., 2004 BCSC 746 Date: 20040604 Docket: S032401 Registry: Vancouver Between: Michael Nahnychuk Plaintiff And Elite Retail Solutions Inc. Defendant Before: The Honourable Mr. Justice Ralph Reasons for Judgment (In Chambers) Counsel for the plaintiff R.G. Yeager Counsel for the defendant E. Montague Date and Place of Trial/Hearing: March 26, 2004 Vancouver, B.C. [1] On January 17, 2003, Michael Nahnychuk was dismissed from his employment as a Lead Investigator with Elite Retail Solutions Inc. ("Elite") where he had been employed since July 2001. He seeks damages for wrongful dismissal and says that the notice period to which he was entitled should be extended by reason of the bad faith conduct of his employer in the manner of his dismissal. Mr. Nahnychuk is 42 years old. Elite admits that the dismissal was wrongful in that insufficient notice was given to Mr. Nahnychuk, but denies that it acted in bad faith in dismissing him. [2] Elite provides security services to a variety of retail stores. Prior to his employment with Elite, Mr. Nahnychuk had extensive experience in similar employment. At the time of his hiring by Elite, however, he was working as a process server, having been dismissed from a loss prevention supervisor position in 2000. [3] From July 1, 2001, to May 1, 2002, Elite

employed Mr. Nahnychuk as an investigator, a position providing security at a variety of retail operations and deterring or apprehending shoplifters. In May 2002 he was promoted to the position of Lead Investigator. The position is a lower level management position with supervisory responsibilities. Mr. Nahnychuk supervised up to 12 investigators, reporting to the Manager of Field Operations who in turn reported to the vice-president of the company. His hours of work would at times exceed 8 hours per day and 40 hours per week, particularly during busy times of year for the retail industry. In October 2002 Mr. Nahnychuk's monthly salary was increased from $2600 to $3000. [4] In addition to the position of Lead Investigator, Mr. Nahnychuk participated in the company's development of a consulting division and both the company and Mr. Nahnychuk hoped that he would become more involved in that side of the business as it progressed. [5] Beginning around October 2002, Mr. Nahnychuk experienced significant turmoil in his marital and family life. He sought some time off to deal with the problems facing him. In particular, he sought time in December, the busiest time of the year for retailers and for Elite and a time when typically no staff or management were given time off. He was given time off from December 20 to December 25. The defendant says, however, that Mr. Nahnychuk's

performance had deteriorated and there appeared to be no end in sight to the performance issues. [6] On January 17, 2003, Elite terminated Mr. Nahnychuk's employment. He was given 2 weeks' severance pay, which was held back for a few days pending the production of certain property that Elite required Mr. Nahnychuk to return. Elite was of the view that, in providing two weeks' severance pay in lieu of notice, it was meeting the requirements of the Employment Standards Act, R.S.B.C. 1996, c. 113. [7] Mr. Nahnychuk retained counsel within a few days of his termination. His counsel wrote to Elite on January 24, 2003, and all communications between the parties after that date were through counsel. In the legal process which followed, Elite alleged that there was cause to dismiss Mr. Nahnychuk. That defence was abandoned in October 2003 following the examination for discovery of a representative of Elite. [8] Following his termination, Mr. Nahnychuk applied to eight prospective employers in the retail security and investigation field. He reviewed newspaper employment sections and internet sites. He has deposed that the retail security industry is relatively small and a relatively close one, being comprised of 10 to 16 employers mostly located in the Lower Mainland. As a result it is his view that this feature of the business worked against him in his search for employment similar to

the position he had held. Not having found similar employment, he began in June to look at other types of employment. In August he found work in sales in the construction business, which is not a salaried position. By November 14 he had not yet received any income from that employment. [9] The issues raised are: 1) the amount of reasonable notice to which Mr. Nahnychuk was entitled; 2) whether there was bad faith conduct by Elite such that the notice period should be increased; 3) whether Mr. Nahnychuk's award should be reduced by reason of his failure to take reasonable steps to mitigate his damages; 4) whether vacation pay is payable during the period of reasonable notice. [10] The factors to be considered in determining what is reasonable notice were identified in Bardal v. Globe and Mail Ltd. (1960), 24 D.L.R. (2d) 140 (Ont. H. Ct.) and recognized in Machtinger v. HOJ Industries Ltd., [1992] 1 S.C.R.

986. The factors are: 1) the character of the employment, 2) the length of service, 3) the age of the employee, 4) the availability of similar employment. [11] In considering these factors, I note that of the 18½ months during which Mr. Nahnychuk was employed by Elite, 8½ months were in the lower level management position. The position of lead investigator, however, had the prospect of participation in what was hoped to be the addition of a consulting component of the company's business. Mr. Nahnychuk had prior experience in retail security work but was not employed in that field at the time of his hiring. The evidence indicates that, while there are a number of employers of retail security investigators, Mr. Nahnychuk had somewhat limited prospects for similar employment. Mr. Nahnychuk's age of 42 is not a barrier to finding other employment. [12] Counsel for both parties referred to a number of decisions which in their submissions were pertinent in considering the factors as they apply to Mr. Nahnychuk's position. Based on the decisions, counsel for Mr. Nahnychuk submitted that the appropriate period of reasonable notice to Mr. Nahnychuk is in the range of 6 months. This period does not include the additional length of notice period claimed by Mr. Nahnychuk as compensation for the manner in which he was dismissed. Counsel for Elite submitted that the appropriate range of

reasonable notice is between 2 and 4 months, but that such period should be reduced for Mr. Nahnycuk's failure to take reasonable steps to mitigate his loss. [13] I have reviewed the cases referred to by counsel and have considered their submissions on the applicable factors. I conclude that the reasonable notice to which Mr. Nahnychuk was entitled is a period of 4 months. [14] Mr. Nahnychuk identifies a number of matters that he says support a finding that Elite acted in bad faith in the manner in which it dismissed him. As a result, he says that he should be entitled to an extension of the notice period as recognized in Wallace v. United Grain Growers Ltd., [1997] 3 S.C.R.

701. Some of the identified matters in my view reflect the injured feelings and the embarrassment that resulted from the dismissal itself and are not, therefore, matters to which Wallace extends. [15] Others, such as the fact that the meeting in which he was dismissed had been represented to him as a meeting called for the purpose of working on the company's policy manual, may not constitute commendable conduct, but I do not conclude that they amount to bad faith. [16] Mr. Nahnychuk points to the fact that Elite alleged cause for dismissal in the initial communications between counsel subsequent to the dismissal. Elite did not allege cause at the time of dismissing Mr. Nahnychuk. Mr. Nahnychuk had engaged counsel very soon after his dismissal and the defence of cause was advanced by Elite's counsel in response to the demands of Mr. Nahnychuk's counsel. In my view, the responsive step taken by Elite's counsel, which was appropriately withdrawn after the examinations for discovery, was not an act of bad faith in Elite's manner of dismissing Mr. Nahnychuk. [17] Mr. Nahnychuk says that the withholding of his final pay and Record of Employment pending the return of certain items is further evidence of bad faith in the manner in which Elite dismissed him. Elite sought the return of Mr. Nahnychuk's security identification card and his B.C. Security Employee Licence which it understood

was required by law to be surrendered on termination of employment. Although the cards were not returned until a considerable time later, Elite provided Mr. Nahnychuk with his final pay cheque, including two weeks' severance pay, within a few days of his dismissal. Mr. Nahnychuk says that he found this experience to be humiliating, but I do not consider it to be an act of bad faith by Elite. [18] I have considered whether Elite's dismissal of Mr. Nahnychuk at a time when he was experiencing serious marital and family turmoil was an act of bad faith by Elite. The evidence indicates that prior to his dismissal, Elite had been aware of Mr. Nahnychuk's circumstances. In his examination for discovery Mr. Nahnychuk agreed that over the last few months of his employment, Elite's vice-president took time to talk with him and lend a "sympathetic ear as much as possible." Some accommodation of Mr. Nahnychuk's situation was made in providing time off in December 2002. [19] In Singh v British Columbia Hydro and Power Authority, 2001 BCCA 695, the court allowed the plaintiff's appeal and extended the notice period to which he was entitled. The court took into account the fact that the employer had terminated Mr. Singh's employment at a time when, having suffered medical problems, he was attempting to return to work. It is submitted by Mr. Nahnychuk that this circumstance is analogous to the

personal turmoil he was experiencing. The court however, identified Mr. Singh's condition as only one of the factors contributing to the decision to extend the notice period. An additional significant factor in the decision was the fact that the company had provided an inducement to employees to stay with the company. [20] In Wallace, supra, Iacobucci J. stated at ¶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. [21] I am not satisfied that Mr. Nahnychuk has demonstrated that Elite exhibited bad faith in the manner in which it dismissed him. As a result, I decline to extend the period of notice beyond the 4 months noted above. [22] Elite submits that Mr. Nahnychuk's damages should be reduced because of his failure to make reasonable and diligent efforts to find new work. It argues that Mr. Nahnychuk confined his job search to management positions in the security field. I have set out above the steps taken by Mr. Nahnychuk to find employment. The onus to demonstrate failure to mitigate is upon Elite. I am not satisfied that Mr. Nahnychuk failed to

meet his obligation. [23] Mr. Nahnychuk also seeks compensation for vacation pay payable during the period of reasonable notice. Counsel for Nahnychuk referred to Bavaro v. North American Tea, Coffee & Herbs Trading Co., 2001 BCCA 149. In that decision the court referred to the decision in Scott v. Lillooet School District No. 29 (1991), 60 B.C.L.R. (2d) 273 (C.A.). In Scott the court held that a wrongfully terminated employee is not entitled to an award for damages equal to vacation pay for the notice period without evidence of loss or expense associated with the lost vacation benefits. [24] At ¶17 of Bavaro the court stated: Scott does not establish a complete bar to recovery but, rather, bars recovery unless the employee can demonstrate the lost opportunity to take a vacation. [25] Mr. Nahnychuk, not surprisingly, has deposed that he had no opportunity or desire to take a vacation during the time he was searching for employment. As a result, however, he has not offered any evidence of loss or expense associated with the lost vacation benefits. For that reason, I do not see a basis for awarding Mr. Nahnychuk vacation pay for the period of reasonable notice and must decline to make such an award. [26] In summary, Mr. Nahnychuk will be entitled to damages in the amount equivalent to 4 months of employment at a salary of $3000 per month less the 2 weeks' severance pay already paid to him by Elite and to court order interest. [27] I am not aware of any reason why costs should not follow the event, but, because counsel did not speak to costs, they may arrange to do so if they cannot reach agreement upon the issue. "Bryan F. Ralph, J." The Honourable Mr. Justice Bryan F. Ralph