Dec 1, 2014

Gismondi: Duty of Good Faith and Fair Dealing

Gismondi v. Toronto (City of), 2003 CanLII 52143 (ON CA)

FACTS: City is restructuring, positions are being changed and reduced. Employees (EE) are told they must compete for jobs. The Employer (ER) indicated that it would check references and previous performance reports. EE didn’t think the City's process was fair because the person who got the job he wanted had his or her references checked while his were not. He sued for wrongful dismissal and requested the remedy of reinstatement.

HISTORY: The trial judge dismissed the EE's application for reinstatement but used Wallace damages to increase EE’s reasonable notice period from 18 months to over 24 months. The trial judge did not specify how much of the award was due to Wallace Damages but indicated that the interview process was unfair and that Gismondi was treated differently from other candidates.

COURT OF APPEAL: Disagreed with the trial judges award for Wallace damages. In order to get Wallace damages, bad faith has to be a component of the manner of dismissal. This behaviour was absent on behalf of the ER and the interview process does not qualify for this type of damage. The court of appeal examined cases where Wallace damages were applied and found a common thread of intent, malice and blatant disregard for the EE during termination. As the TJ found that none of these factors were present during dismissal the EE did not qualify for Wallace damages.

HELD: For ER. The EE’s award reduced from 116 weeks to 80 weeks

RATIO: In order to qualify for Wallace Damages, the ER must have acted with intent, malice and blatant disregard for EE during termination.