Jessen v. CHC Helicopters International Inc.,
 C.L.L.C. 210-032 (N.S.C.A.)
In Jessen v. CHC Helicopters, Justice Oland, writing for the Nova Scotia Court of Appeal, held that a jury award of forty-eight months’ salary for Wallace damages was wholly inordinate given the circumstances of the employee’s termination. Additionally, the court confirmed that Wallace damages are not subject to mitigation.
By way of background, in July 2000, Jessen returned from vacation to discover that her position had been advertised. She had received no notice. Approximately two months later her employer announced that it had created a new position for her. However, it revoked the position the following day. Ms. Jessen was then terminated on a without-cause basis, approximately five months later. She was not provided with a letter of reference and her Record of Employment was issued only after significant delay. At the time of her dismissal, Ms. Jessen had been employed with CHC for approximately two and a half years.
On appeal, the Court reviewed similar cases where Wallace damages had been awarded and concluded that there was a significant disparity between the jury award to Jessen and those in other cases. Specifically, the Court stated that Jessen’s dismissal was not exceptionally egregious, given that there was no public humiliation (e.g. an accusation of theft or fraud or being escorted out of the premises). Ultimately, the jury award was deemed "an erroneous determination of fact that is palpable and overriding, and shocks the conscience of the Court". The Court of Appeal reduced the award to nine months.
Turning to the second issue, the Court relied upon the following comments made in obiter by Justice Weiler in Prinzo v. Baycrest Centre for Geriatric Care (2002), 60 O.R. (3d) 474 (Ont. C.A.):
If this deduction of earned income were also made from the damages awarded in relation to a "Wallace" extension, Prinzo would not effectively be compensated for the injury done to her. This result would appear congruent with the Supreme Court’s view in Wallace that the injuries resulting from bad faith conduct on the part of the employer are "sufficient to merit compensation in and of themselves" irrespective of whether the bad faith conduct affects employment prospects….This issue was not, however, argued before us, and having regard to my earlier conclusions upholding the trial judge, I need not resolve it.
For these reasons, Justice Oland adopted the view that reducing an award of Wallace damages by the amount of earned income does not align with the Supreme Court of Canada’s view that an employee should be compensated for bad faith conduct. Consequently, the nine-month extended notice award was not subject to mitigation income.
This decision is significant as it upholds the principle established in Prinzo and clarifies the issue of whether Wallace damages are subject to the duty to mitigate.
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