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FAQ's Cases - Stewart McKelvey

FAQ's Cases - Stewart McKelvey

FAQ's Cases - Stewart McKelvey

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Page: 14[37] When parties contract for a specified period of notice or pay in lieu they arechoosing to opt out of the common law approach applied in Bardal. In doing so,the parties should not be taken as simply attempting to replicate common lawreasonable notice. The Alberta Court of Appeal explained as follows in Brown v.Pronghorn Controls Ltd., 2011 ABCA 328, 515 A.R. 128, at para. 47:If the contract entitles the employee to payment ofmoney, howsoever calculated, on termination, that rightto that money is contractual. As such, the parties werenot bound to specify an entitlement that is equal or evenanalogous to the quantum of reasonable notice that thecommon law might require if the contract was silent.2012 ONCA 425 (CanLII)Damages for contractually stipulated notice or pay in lieu should not beanalogized directly to damages for common law reasonable notice. The partieshave specifically contracted for something different; it is an error to simply equatethe two.[38] This case demonstrates this point. Here, the maximum entitlement underthe agreement is twelve months, which is approximately half of the upper end ofthe range of damages for wrongful dismissal at common law. The agreementalso limits the damages to a quantum based on the appellant’s base salary.Therefore, the contractually stipulated damages exclude the bonus (valued at upto one-half the appellant’s base salary), car allowance and other benefits fromthe calculation, which would be included in total compensation under the

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