View cases - Stewart McKelvey

- 24 -contractual breach if the damages are “such as may fairly and reasonably be considered eitherarising naturally ... from such breach of contract itself, or such as may reasonably besupposed to have been in the contemplation of both parties.”[56] Mr. Justice Bastarache applies the Hadley principle to contracts of employment in thefollowing manner (at paras. 56, 57 and 58):2011 SKQB 318 (CanLII)56 We must therefore begin by asking what was contemplated by the parties at thetime of the formation of the contract, or, as stated in para. 44 of Fidler: “[W]hat didthe contract promise?” The contract of employment is, by its very terms, subject tocancellation on notice or subject to payment of damages in lieu of notice withoutregard to the ordinary psychological impact of that decision. At the time the contractwas formed, there would not ordinarily be contemplation of psychological damageresulting from the dismissal since the dismissal is a clear legal possibility. Thenormal distress and hurt feelings resulting from dismissal are not compensable.57 Damages resulting from the manner of dismissal must then be available only ifthey result from the circumstances described in Wallace, namely where theemployer engages in conduct during the course of dismissal that is “unfair or is inbad faith by being, for example, untruthful, misleading or unduly insensitive” (para.98).58 ... In Wallace, the Court held employers “to an obligation of good faith and fairdealing in the manner of dismissal” (para. 95) and created the expectation that, inthe course of dismissal, employers would be “candid, reasonable, honest andforthright with their employees” (para. 98). At least since that time, then, there hasbeen expectation by both parties to the contract that employers will act in good faithin the manner of dismissal. Failure to do so can lead to foreseeable, compensabledamages. ...[57] Finally, Mr. Justice Bastarache concludes his analysis of the jurisprudence with thefollowing statement (at para. 59):