Case information

Employment law — Wrongful dismissal — Failure to provide reasonable notice — Damages — Employment contract — Interpretation — Whether Hamilton v. Open Window Bakery, 2004 SCC 9, [2004] 1 S.C.R. 303, has any application in analysis under Matthews v. Ocean Nutrition Canada Ltd., 2020 SCC 26, [2020] 3 S.C.R. 64, of wrongful dismissal damages for indefinite term employee — Whether clause 2.6 of universal shareholder agreement, which makes no reference to termination of employment, clearly and unambiguously excludes common law damages for wrongful dismissal under part two of Matthews test — If Hamilton could apply in circumstances of an indefinite term contract, was it absolutely clear and unambiguous that employer had an alternative, less onerous means of performance, other than providing compensation for work, providing notice of termination and paying employee as before during notice period? — What analysis is to be used in review of employer’s exercise of discretion that impacts employee’s compensation, and what limits may be imposed on that discretion by obligations of reasonableness and good faith?

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

The applicant was terminated from his position at the respondent company. The applicant applied for summary judgment regarding damages owed to him by the respondent for failure to provide reasonable notice of termination. The parties disagreed on whether the applicant’s damages should also include any loss of the payments he received as a participant in the respondent company’s optional shareholder profit sharing (“SHPS”) program. Applying Matthews v. Ocean Nutrition Canada Ltd., 2020 SCC 26, [2020] 3 S.C.R. 64, the summary trial judge first found that the SHPS payments were a part of the applicant’s compensation as an employee of the respondent. At the second step of Matthews, the trial judge held that because the unanimous shareholder agreement unambiguously authorized the company to buy back employee-owned shares at any time on 90 days’ notice, the applicant’s damages for the loss of SHPS payments during the reasonable notice period were likewise limited, following the principle in Hamilton v. Open Window Bakery, 2004 SCC 9, [2004] 1 S.C.R. 303, that a defendant’s least onerous method of performing a contract should be the basis for calculating damages. The Court of Appeal unanimously dismissed the applicant’s appeal.