Russo v. Kerr, 2010 ONSC 6053, a decision of the Ontario Superior Court, addresses some of the more esoteric elements of the interplay between wrongful/constructive dismissal and mitigation of damages. Russo is noteworthy for the approach it takes to the question of an employee's right to sue for damages during a period of working notice.

Mr. Russo was a 53 year-old employee who had given 37 years of service to the Defendant. When the Defendant ran into financial difficulties, it hired an analyst to make recommendations geared toward returning the Defendant to profitability. The analyst recommended an across-the-board wage deduction, but singled out four employees, Mr. Russo included, for an even greater reduction in wages. Mr. Russo had a compensation package well in excess of $100,000 reduced to about $60,000.

Mr. Russo's lawyer informed the employer that Mr. Russo did not acquiesce to this reduction in pay. The difficulty most plaintiffs face in such a situation, however, is that leaving the job might be viewed as quitting. Accordingly, leaving a job (even as a result of constructive dismissal) can reduce an employee's claim for damages or even extinguish an employee's chance to sue for wrongful/constructive dismissal. On the advice of counsel, Mr. Russo voiced his objections to the terms of the new contract but continued to work. He commenced a lawsuit claiming constructive dismissal while serving working notice with the Defendant, and well before the expiration of a reasonable notice period.

Interestingly, Russo contained no analysis of the common law principle that an employee can effectively quit during a working notice period by suing for constructive dismissal (see, for example, Suleman v. British Columbia Research Council, 1990 CanLII 746 (BC C.A.)). The Defendant appears not to have taken that position in Russo.

The Supreme Court of Canada made clear in Evans v. Teamsters 2008 SCC 20 that a constructively-dismissed employee might owe a duty to continue working for the employer in order to mitigate damages. In Russo, the parties agreed there had been a constructive dismissal.

The court found that Mr. Russo was constructively dismissed. Damages were payable in an amount representing the difference between what Mr. Russo would have earned during a reasonable notice period (22 months in these circumstances) and what he would earn under the altered agreement.

In an article published by the Law Times, counsel for the Defendant in Russo is quoted as saying the decision makes clear that Mr. Russo's employment will be over at the end of a 22 month notice period. With respect, I do not agree with that statement.

Gray, J. wrote the following:

"As applied to this case, the plaintiff can remain in the workplace under the changed terms as a means of mitigating his damages, but only for the period of reasonable notice. If he elects to remain in the workplace under the changed terms beyond the period of reasonable notice, with the consent of the defendant, it must then be concluded that he has accepted a new contract of employment under the changed terms after the expiry of the period of reasonable notice."

This excerpt specifically contemplates employment beyond a period of reasonable notice. It seems to me that Gray, J. was saying that a plaintiff's non-acquiescence in a constructive dismissal cannot create an indeterminate period of damages. Rather the period of damages is limited by the traditional concept of a reasonable period of working notice. Continuing to work after a reasonable notice period would indicate that Mr. Russo accepts the reduced remuneration going forward.

Evans states that a dismissed employee has a duty to attempt to mitigate damages, and that duty can sometimes be discharged by taking a different job with the old employer. Framed as mitigation (instead of acquiescence), the new contractual arrangement is no different from obtaining employment with a new company. If Mr. Russo were terminated at the end of the 22 month period, I would submit he would be entitled to sue based on the new contract just as he would be if he had been terminated after 22 months with a new employer.

Russo showcases two parties that found an arrangement which eludes so many others in the employment law context. Mr. Russo would work and be paid for that work. Viewing the relationship as terminated after the notice period would be an unfortunate result indeed. It seems the foundation of the working notice arrangement was recognition by both parties of continued mutual benefits. I see no reason why Mr. Russo could not continue working under the new contract until such mutual benefits cease.

Tevlingleadle filed the following on behalf of Mr. Somerville:

Notice of Application

Affidavit No. 1 of Darryl Somerville

Affidavit No. 1 of Chris Forguson

The BC Court of Appeal overturned the trial decision awarding $100,000 in punitive damages.

This case concerned the assessment of damages for wrongful dismissal in a contract which expressly limits an employer's obligation to employ to the availability of work, whether so-called consequential damages are available to a wrongfully dismissed employee and the relationship between an award of punitive damages and special costs.

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Class counsel attended the Vancouver Courthouse on the morning of July 15, 2010 and addressed submissions to the Honourable Madam Justice Ballance regarding process which should be followed to determine the entitlement of persons who are not currently class members, to share in the settlement proceeds.

The court directed that counsel provide written submissions by the end of August as to the appropriate process to be followed.

The outstanding issue is the entitlement to share in the settlement proceeds of persons who were mailed notice of the class proceeding, and the required opt-in process for NON BC RESIDENTS, but at the wrong address. The Court will consider whether NON BC RESIDENTS who did not in the period January - May, 2005 reside at the address to which Freightliner mailed notices, who did not receive notice in some other way, and who, if notified, would have opted-in, should share in the remaining funds available for distribution.

Written submissions will be provided in accordance with the Court's direction, and the Court will then determine what further steps are required.

Class counsel attended the Vancouver Courthouse on the morning of June 15, 2010 to appear before the Honourable Madam Justice Ballance, and to obtain directions as to the process which should be followed to determine the entitlement of persons who are not currently class members, to share in the settlement proceeds.

Unfortunately, due to a mixup between Freightliner counsel and the Court Registry staff, the matter was not properly set down for hearing.

Counsel for Freightliner will be coordinating a new date so that directions can be received, and we can move forward to complete the distribution.

When a new date is set, we will advise here.

In connection with the distribution of settlement funds, certain individuals have indicated either to TevlinGleadle, Faskens, solicitors for Freightliner, or the actuaries who are handling the distribution that they feel entitled to share in the distribution, even though they are not currently class members. As we understand it, there are currently 14 individuals who have indicated a concern of this sort. These individuals advise, in the main, that they were employees of Freightliner, residing and working in the US at the time of the certification of the action as a class proceeding. They all say they did not receive a mail out in accordance with the Certification Order. Freightliner itself handled the mail out. These 14 individuals say they did not have the opportunity to opt-in that they should have had if notice was given properly. The individuals seek to be included in the distribution of the funds now held for the current class. The actuaries have estimated the claims of the 14 persons who wish to be included in the distribution to be approximately $182,000.

As matters currently stand, the class is constituted according to the certification process mandated by the court. The class currently sharing in the distribution includes 116 non-BC residents who opted in, after learning of the class proceeding and the opt-in process required by the Certification Order.

There is potentially a large group of non-residents who did not opt in. The 14 individuals who now seek to be included may be the only ones who did not receive a mail out, but there may be others.

Freightliner's counsel has advised TevlinGleadle that Freightliner intends to propose to the court that the balance of settlement funds held for distribution to those who are currently class members be used to pay the claims of persons who did not opt in due to problems with the mail out.

TevlinGleadle, the actuaries, and Peter Gregg, representative plaintiff are all of the view that if certain individuals did not receive a mail out from Freightliner as required by the Certification Order, Freightliner itself should address the concerns of the said individuals itself, by voluntarily paying the proportionate claims of those individuals, if valid (and any valid claims of others who may not have received a proper mail out).

If the claims of non-BC residents who did not opt in are not addressed in this way, their claims could be pursued in separate litigation, as the Certification Order did not deal with their claims.

Class counsel, and counsel from Faskens will appear before the Case Management Judge, Madam Justice Ballance, on either May 31st or June 1st, 2010, to address the issue of what process ought to be followed to determine if any other persons should be allowed to advance a claim to share in the distribution due to lack of proper notification at the Certification stage.

The actuaries conducting the distribution of the Western Star Pension Class Action settlement require additional information to locate those who are or may be entitled to receive a portion of the settlement funds.

The first distribution has been made, but a number of cheques have not been delivered or cashed, presumably due to incorrect address information.

The list of persons who were to receive cheques, but for whom correct addresses are required can be viewed by clicking the link below:

- Recipients of First Distribution - Missing Address List.

Also, there is a large group of people potentially entitled to receive apart of the second distribution, for whom address information and proof of BC residency during the relevant time is required. The list of persons for whom additional addresses are required, and who MAY be entitled to a distribution can be viewed by clicking

- Potential Recipients of Second Distribution - Missing Address List.

YOUR HELP IS REQUESTED. Please click both links above and send current contact information for any of the persons on the list to

Rose Wong
Demner Consulting Services Ltd.
280 – 2025 West 42nd Avenue
Vancouver, B.C.
V6M 2B2

Phone: 604-266-2445
Fax: 604-266-1530
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We are working with John Christie and Michael Demner, consulting actuaries, who have studied records available from various sources and have determined the appropriate step to take for the first distribution of settlement funds.

We are pleased to announce that the first distribution of the settlement proceeds is now under way. The highlights of the findings of the actuaries are:

The "master list" of persons who at any time had an interest in the Western Star Non-Bargaining Pension fund contains 742 names of persons who might be eligible for a distribution

164 former members were eliminated from possible distribution because they and their beneficiaries had no interest in the pension fund as at October 1, 2001, and thus were precluded from sharing

230 beneficiaries will receive cheques in the first distribution, as they are clearly entitled to share and current addresses are available (these persons were still pension fund beneficiaries as at October 2, 2001, and at the relevant class proceeding "residency period" (January 12, 2005 to May 19, 2005) they were BC residents, or they properly opted into the class proceeding)

There are 302 persons who will not receive cheques in the first distribution but might receive cheques in the second distribution. Of this group, 165 persons currently reside in BC and 137 persons currently reside outside BC. To receive a distribution, each of these beneficiaries will need to demonstrate residency in BC during the "residency period".

Approximately $3,000,000 is being distributed in the first distribution

Approximately $1,300,000 is being held back for the second distribution and for the expenses of distribution

The first cheques will be mailed to the beneficiaries by the end of September, 2009.

We expect the second distribution will be in the first half of 2010.

Each of the 302 possible beneficiaries requiring further investigation will be receiving a letter asking for further information. Some of the addresses that we have in our records may be incorrect. If you believe that you may be entitled to share in the distribution and you do not receive a letter by October 17, 2009, please contact:

Rose Wong
Demner Consulting Services Ltd.
280 – 2025 West 42nd Avenue
Vancouver, B.C.V6M 2B2
Phone: 604-266-2445
Fax: 604-266-1530

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The $3 million distributed in the first distribution has been divided among the beneficiaries in accordance with the Court Order approving the settlement. For beneficiaries who had not started to receive their pensions, a beneficiary who had long service with Western Star Trucks and was close to retirement will receive a larger distribution than a beneficiary who had shorter service and was further from retirement. For beneficiaries who had started to receive pensions, a beneficiary with a larger pension who was still relatively young will receive a larger distribution than a beneficiary with a smaller pension who was older.

The $1.3 million has been held back from the first distribution in order to provide sufficient funds to pay the second distribution to beneficiaries who require further investigation and to pay the future expenses of administering the settlement. The beneficiaries who have received cheques in the first distribution may be eligible for another cheque in the second distribution, depending on the results of these further investigations.

You can find here a list of potential beneficiaries for whom we do not have a current address. We will be updating this list from time to time as we may discover other invalid addresses. If you see your name on this list or know the current address of someone on the list, please contact Rose Wong using the contact information above.

NOTE: If you cannot open the links, you may need a copy of the free Adobe Reader which you can download from www.adobe.com.

The actuaries appointed by TevlinGleadle (John Christie, Michael Demner) are close to making the first distribution of settlement funds.

We are working with the actuaries and class representative Mr. Peter Gregg to update available information about current addresses, residency at the date of the Certification Order, and expect to be able to authorize release of settlement funds in the next several weeks.

The distribution will occur in phases.

Stage one will be letters to those who are clearly entitled to share in the distribution, and for whom we have current beneficiary information. At this stage, we will also write letters to class members who are beneficiaries, but for whom current address and survivor information is unclear, seeking additional information, to permit delivery of the first distribution amounts. We will complete the first stage by distributing to all those for whom information is available and entitlement is clear. We intend to hold back sufficient funds to ensure that proper distribution occurs to those entitled to share in the net settlement amount. There will be a period of time between the first distribution and the second distribution to permit necessary information to be gathered.

Stage two will involve a distribution of remaining funds to all those entitled to share. It will in all probability be a much smaller distribution that in stage one.

We will continue to work to complete the distribution in accordance with the terms of settlement and the order confirming the settlement.

Work is underway leading to the eventual distribution of settlement funds.

In late-November, 2008, TevlinGleadle appointed Canadian Western Bank ("CWB") to act as trustee of the funds payable by Freightliner pursuant to the settlement.

Freightliner paid the settlement funds to CWB in early December, 2008.

TevlinGleadle has appointed Christie Consulting, a firm of consulting actuaries located in Vancouver, BC to complete the work necessary to distribute funds to those class members who are entitled to share in the settlement.

We have been working since early December with Mr. John Christie, of Christie Consulting, in an effort to obtain necessary factual information from Freightliner and its actuaries, Towers Perrin. Freightliner and its actuaries have considerable information as to pensioner's service and earning histories, relevant personal circumstances, addresses, and past distributions, all of which is required to complete the distribution.

This is not a trivial exercise, in that access is required to information that is held by Freightliner and its actuaries, and must first be obtained and then organized, and analyzed, before individual entitlement can be determined.

We have encountered some challenges in obtaining necessary information but are working steadily toward the eventual goal, which will be a distibution.

It will be at least a number of months before distributions occur. No estimated distribution date is presently known.

Those interested in further information should check here for additional updates.

All persons who think they are entitled to share in the distribution should ensure TevlinGleadle has current contact information by emailing Rose Wong at Demner Constulting This e-mail address is being protected from spambots. You need JavaScript enabled to view it .