No <i>Wallace</i> damages if human rights violation not intentional, court says

Court finds no intentional wrongdoing in employer’s mandatory retirement policy; company was unaware it was prohibited in jurisdiction of satellite office

An employer who violated human rights legislation in constructively dismissing an employee is not necessarily responsible for Wallace damages, the Alberta Court of Appeal has ruled.

Leo Magnan was told he had to retire on Dec. 31, 2004, after he turned 65, by Brandt Tractor Ltd., who had an unwritten mandatory retirement policy. At the time, mandatory retirement policies were allowed in Saskatchewan, where Brandt’s head office was. However, Magnan was a customer support advisor at an Alberta location, where mandatory retirement had been outlawed.

Magnan won a constructive dismissal decision and was awarded three months’ notice by the Alberta Court of Queen’s Bench. The court determined Magnan had planned to retire on March 31, 2005, three months after the forced date. Though Brandt had relented and offered Magnan continued employment after he said he wanted to continue working, the court found it wouldn’t be reasonable to expect him to return because Brandt had expressed “extreme annoyance” with his decision.

Magnan appealed, arguing his retirement date of March 31, 2005, had not been raised in the proceedings and the trial court shouldn’t have made the assumption he would retire on that date. He also believed because Magnan violated his human rights because of his age, he should be entitled to bad-faith damages.

The Alberta Court of Appeal agreed the trial court shouldn’t have found Magnan intended to retire on March 31, 2005, because it wasn’t part of the issues defined for trial. It was mentioned by Magnan he might retire then but not officially established.

However, the appeal court found Brandt’s conduct wasn’t sufficient to warrant an extra award of Wallace damages. Brandt did not intend to violate Magnan’s rights, the court said, it was just working under an incorrect impression of the law in Alberta.

“Brandt says its action was based on its misunderstanding of the terms of human rights legislation in Alberta,” the Court of Appeal said. “Although ignorance of the law would not be a defence to a human rights complaint, there was no evidence of intentional wrongdoing, a condition precedent to obtaining Wallace damages.”

The Court of Appeal awarded Magnan an additional seven months wages and benefits, an entitlement calculated without the March 31, 2005, retirement date, but no additional notice for bad faith.

“While we do not condone Brandt’s ignorance of the law which does not shield it from liability for damages for wrongful dismissal, we are not satisfied the breach of the statute, without more, entitles Magnan to Wallace damages,” the Court of Appeal said.

For more information see:

Magnan v. Brandt Tractor Ltd., 2008 CarswellAtla 1414 (Alta. C.A.).

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