Please using the questions, I wrote below as guideline, Help draft a paper summarizing your understanding of this prima facie case and its importance to employment contract law:

a.Who are the stakeholders?

b.What are the main issues for each stakeholder?

c.What are the key legal issues based on Canadian employment laws?

d.Which issues do you think became the central focus of the court case?

e.Are damages for mental distress available to a former employee because of termination?

f.Can the calculation of reasonable notice be extended as a direct result of the employer's conduct during termination?

g.What do you think was the outcome or ruling in this court case?

h.What legal precedents do you think were set because of this case?

Below is the

Wallacev.United Grain Growers Ltd., [1997] 3 S.C.R. 701

Jack WallaceAppellant

v.

United Grain Growers LimitedRespondent

Indexed as:Wallacev. United Grain Growers Ltd.

File No.:24986.

1997:May 22; 1997:October 30.

Present:Lamer C.J. and LaForest, L'HeureuxDub, Sopinka, Gonthier, Cory, McLachlin, Iacobucci and MajorJJ.

on appeal from the court of appeal for manitoba

Bankruptcy Property of bankrupt Salary, wages or other remuneration Undischarged bankrupt bringing action for wrongful dismissal Whether damages for wrongful dismissal included in "salary, wages or other remuneration" Bankruptcy Act,R.S.C., 1985, c.B3, s.68(1).

Civil procedure Wrongful dismissal Undischarged bankrupt seeking damages for wrongful dismissal Whether undischarged bankrupt can bring action for wrongful dismissal in his own name.

Employment law Wrongful dismissal Employee summarily discharged seeking damages for wrongful dismissal -- Trial judge awarding employee damages based on 24month notice period and aggravated damages Whether Court of Appeal erred in reducing reasonable notice period to 15 months Whether Court of Appeal erred in overturning aggravated damages award Whether action can be brought for "bad faith discharge" Whether employee entitled to punitive damages.

In 1972 a printing company wholly owned by the respondent decided to update its operations and seek a larger volume of commercial printing work.The appellant, W, met L, the marketing manager of the company's publishing and printing divisions, to discuss the possibility of employment.W had the type of experience L sought, having worked approximately 25 years for a competitor that used a particular type of press.W explained to L that as he was 45 years of age, if he were to leave his current employer he would require a guarantee of job security.He also sought several assurances from L regarding fair treatment and remuneration.He received such assurances and was told by L that if he performed as expected, he could continue to work for the company until retirement.W was hired and enjoyed great success at the company; he was the top salesperson for each of the years he spent in its employ.In 1986 he was summarily discharged without explanation.W issued a statement of claim alleging wrongful dismissal.In its statement of defence, the respondent alleged that W had been dismissed for cause.This allegation was maintained until the trial commenced.The termination of W's employment and the allegations of cause created emotional difficulties for him and he was forced to seek psychiatric help.His attempts to find similar employment were largely unsuccessful.Prior to his dismissal, W made a voluntary assignment into personal bankruptcy, and remained an undischarged bankrupt when he commenced his action against the respondent.The trial judge struck out his claim for damages for breach of contract, holding that a claim for damages for wrongful dismissal based on lack of notice vests in the trustee in bankruptcy, and concluded that the action in that regard was a nullity from the outset.W's attempt to appeal the trial judge's ruling was stayed by the Court of Appeal pending completion of the trial.The trial resumed and subject to the outcome of the appeal on the bankruptcy issue, W was awarded damages for wrongful dismissal based on a 24month notice period and$15,000 in aggravated damages resulting from mental distress in both tort and contract.The trial judge refused to award punitive damages.The Court of Appeal reversed the trial judge's findings with respect to W's capacity to maintain an action for breach of contract, concluding that W had the right to continue his action for wrongful dismissal in his own name in the absence of the trustee.It also allowed the respondent's crossappeal.It reduced the reasonable notice period to 15 months, on the basis that the trial judge may have allowed an element of aggravated damages to creep into his assessment and that recent awards in such cases had been getting too high, and overturned the award of aggravated damages.

Held(La Forest, L'HeureuxDub and McLachlin JJ. dissenting in part on the appeal):The appeal should be allowed in part and the crossappeal dismissed.

PerLamer C.J. and Sopinka, Gonthier, Cory, Iacobucci and Major JJ.:W can maintain an action for wrongful dismissal in his own name.While under theBankruptcy Act, an undischarged bankrupt has no capacity to deal with his or her property and no distinction is made with respect to whether that property was acquired before or after the assignment in bankruptcy,s.68(1)carves out an exception to this general rule where the property in question can be characterized as "salary, wages or other remuneration".To remain true to the spirit of the Act, this exception must include an award of damages for wrongful dismissal.The measure of such damages is the salary that the employee would have earned had the employee worked during the period of notice to which he or she was entitled.The fact that this sum is awarded as damages at trial in no way alters the fundamental character of the money.Several courts have interpreted the phrase "salary, wages or other remuneration" broadly.The public policy considerations that inform the section offer further support for interpreting it broadly.

The trial judge's award of damages in the amount of 24 months' salary in lieu of notice should be restored.In light of W's advanced age, his 14year tenure as the company's top salesman and his limited prospects for reemployment, a lengthy period of notice is warranted.Another factor to be considered is whether the dismissed employee was induced to leave previous secure employment.Although the trial judge did not make specific reference to the inducement factor in his analysis of reasonable notice, in the circumstances of this case the inducements made, in particular the guarantee of job security, are factors which support his decision to award damages at the high end of the scale.

Bad faith conduct in the manner of dismissal is another factor that is properly compensated for by an addition to the notice period.The contract of employment has many characteristics that set it apart from the ordinary commercial contract.Individual employees on the whole lack both the bargaining power and the information necessary to achieve more favourable contract provisions than those offered by the employer, particularly with regard to tenure.This power imbalance is not limited to the employment contract itself, but informs virtually all facets of the employment relationship.The point at which the employment relationship ruptures is the time when the employee is most vulnerable and hence most in need of protection.In recognition of this need, the law ought to encourage conduct that minimizes the damage and dislocation (both economic and personal) that result from dismissal.To ensure that employees receive adequate protection, employers ought to be held to an obligation of good faith and fair dealing in the manner of dismissal, breach of which will be compensated for by adding to the length of the notice period.While the obligation of good faith and fair dealing is incapable of precise definition, at a minimum 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.

While a dismissed employee is not entitled to compensation for injuries flowing from the fact of the dismissal itself, where an employee can establish that an employer engaged in bad faith conduct or unfair dealing in the course of dismissal, injuries such as humiliation, embarrassment and damage to one's sense of selfworth and selfesteem might all be worthy of compensation depending upon the circumstances of the case.Often the intangible injuries caused by bad faith conduct or unfair dealing on dismissal will lead to difficulties in finding alternative employment, a tangible loss which the Court of Appeal rightly recognized as warranting an addition to the notice period.However, the intangible injuries are sufficient to merit compensation in and of themselves.Bad faith conduct which affects employment prospects may be worthy of considerably more compensation than that which does not, but in both cases damage has resulted that should be compensable.The trial judge documented several examples of bad faith conduct on the part of the respondent.While the award of the equivalent of 24 months' salary in lieu of notice is at the high end of the scale, it is not unreasonable when all the relevant factors are taken into account and there is accordingly no reason to interfere.

There is no reason to interfere with the conclusion of the courts below that there was insufficient evidence to support W's claim that he had a fixedterm contract for employment until retirement.

With respect to damages for mental distress, the Court of Appeal was correct in concluding that there was insufficient evidence to support a finding that the respondent's actions constituted a separate actionable wrong either in tort or in contract.In circumstances where the manner of dismissal has caused mental distress but falls short of an independent actionable wrong, however, the employee is not without recourse.The trial judge has discretion in such circumstances to extend the period of reasonable notice to which an employee is entitled.

W is unable to sue in either tort or contract for "bad faith discharge".The Court should not imply into the employment contract a term that the employee would not be fired except for cause or legitimate business reasons.The law has long recognized the mutual right of both employers and employees to terminate an employment contract at any time provided there are no express provisions to the contrary.A requirement of "good faith" reasons for dismissal would be overly intrusive and inconsistent with established principles of employment law.Similarly, the tort of breach of a good faith and fair dealing obligation with regard to dismissals has not yet been recognized by Canadian courts.Such radical shifts in the law are better left to the legislatures.

The courts below were correct in finding that there is no foundation for an award of punitive damages.

PerLa Forest, L'HeureuxDub and McLachlin JJ. (dissenting in part on the appeal):W's action was not precluded by his bankruptcy.Damages in lieu of reasonable notice constitute "salary, wages or other remuneration" for the purposes of bankruptcy legislation and hence are recoverable.Moreover, damages for breach of the implied obligation of good faith are recoverable because of the personal nature of the cause of action.

To determine the period of reasonable notice in a wrongful dismissal action, the court examines the characteristics of the particular employment relationship relevant to the employee's prospects of finding a similar position.The manner of dismissal should only be considered where it impacts on the difficulty of finding replacement employment, and absent this connection, damages for the manner of termination must be based on some other cause of action.The fact that some courts in the past have considered factors unrelated to prospects of reemployment in determining the notice period has rendered the law uncertain and unpredictable.To continue on this path would only increase that uncertainty and unpredictability.The law affords other remedies for employer misconduct in the manner of dismissal not affecting prospects of reemployment, and has now developed to the point that to these traditional actions may be added breach of an implied contractual term to act in good faith in dismissing an employee.Recognition of an implied term in the employment contract of good faith in relation to the dismissal of employees is supported by previous decisions, academic commentary and related developments in other areas of contract law.To the extent that recognition of such a term may be seen as a new development, it falls within the scope of the incremental stepbystep revision approved inWatkinsandSalituro.

The trial judge fixed the period of reasonable notice at 24 months on the basis of a careful assessment of W's prospects of reemployment, and there is no reason to interfere in his assessment.The trial judge's award for the damages claimed by W for mental distress and loss of reputation should also be upheld.These are general damages flowing directly from the employer's breach of the implied term of good faith and fair dealing and are therefore compensable.

There is no reason to interfere with the trial judge's conclusion that the respondent did not engage in sufficiently harsh, vindictive, reprehensible and malicious conduct to merit an award representing punitive damages.

Thank you.