McAlpine v. Econotech Services Ltd.,


2004 BCCA 111

Date: 20040302

Docket: CA030761


D. Wendy McAlpine


Respondent by Cross Appeal



Econotech Services Ltd.


Appellant by Cross Appeal





The Honourable Mr. Justice Lambert

The Honourable Madam Justice Saunders

The Honourable Mr. Justice Smith


D.G. Crane

Counsel for the Appellant
(Respondent by Cross Appeal)

H.S. MacDonald

Counsel for the Respondent
(Appellant by Cross Appeal)

Place and Date of Hearing:

Vancouver, British Columbia

December 15, 2003

Place and Date of Judgment:

Vancouver, British Columbia

March 2, 2004


Written Reasons by:

The Honourable Madam Justice Saunders

Concurred in by:

The Honourable Mr. Justice Lambert
The Honourable Mr. Justice Smith

Reasons for Judgment of the Honourable Madam Justice Saunders:

[1]            The question in this case is the employer’s liability for the ending of long-term employment of an employee absent on a lengthy medical leave.  The learned trial judge dismissed the claim for damages for wrongful constructive dismissal, holding that it was not shown that “there had been a breach of a fundamental term of the contract of employment of the plaintiff such as would allow [him] to conclude that there has been a constructive dismissal”, and that “this is, rather, a case in which the plaintiff became ill and unable to provide the services required of her by the terms of her employment.”  His reasons for judgment may be found at (2003) 25 C.C.E.L. (3d) 140, 2003 BCSC 568.

[2]            The appellant Ms. McAlpine contends that the trial judge erred in law in failing to give reasons for rejecting her claim that her employer, the respondent Econotech Services Ltd., repudiated her contract, that he erred in fact and law in holding that the employment contract had been frustrated by her illness, and that he erred in fact and law in failing to find the employer had repudiated her contract.  At the heart of these submissions on appeal and at trial is the contention that Econotech was required, by statute or contract, to do more than it did to accommodate Ms. McAlpine in her return to work and that its failure to do so amounted to a constructive dismissal.

[3]            The respondent cross appeals on the order that each party bear her or its own costs.

[4]            To the extent the appeal challenges findings of fact, the scope of review is limited to consideration of whether there was a body of evidence which could “properly, judicially and reasonably” support the conclusion of the trial judge: Van Mol (Guardian ad litem of) v. Ashmore (1999), 58 B.C.L.R. (3d) 305, 1999 BCCA 6, application for leave to appeal dismissed [1999] S.C.C.A. No. 117.

[5]            I turn to the circumstances.  This is a case of long service.  In 1973, Ms. McAlpine, 24 years of age, was hired by the two co-owners of the fledgling Econotech Services Ltd. to work in its pulp and paper testing laboratory in British Columbia.  Over the years Econotech expanded its business.  The trial judge found that Ms. McAlpine played an important role in the company’s technical success and in its expansion.

[6]            In 1992 Ms. McAlpine began to show signs of depression and in November 1992 went on medical leave.  She was then manager, fibre testing department, working a 30 hour four day week, earning a monthly salary of $3,770 plus bonuses.

[7]            After exhausting other short-term benefits, Ms. McAlpine started to receive long-term disability benefits through Econotech’s coverage with Manulife.  The disability coverage with Manulife provided benefits for two years for a person disabled from his or her own employment, and thereafter only if disabled from all employment.  As the two years neared its end, Ms. McAlpine was still on medical leave, under medical care and in receipt of disability benefits.  Manulife broached the possibility of Ms. McAlpine gradually returning to work and in early January 1995, Econotech agreed with Manulife that Ms. McAlpine should return to work as a senior microscopist on a gradual basis.  The plan was that Ms. McAlpine initially would work at home, reading slides, to the extent of about 25 percent of her normal workload.  To relieve Ms. McAlpine of the pressure of time, it was agreed she would be paid on a fee per slide basis.  Manulife would reduce the benefits proportionate to the amount of work performed by Ms. McAlpine.  She would continue to receive medical, dental and extended health benefits.  The correspondence confirming the plan spoke of her return to work in six months.

[8]            With the return to work plan in place, Manulife then extended Ms. McAlpine’s coverage for disability from own employment by three months to June 17, 1995, and then again to July 17, 1995, when it ultimately discontinued the benefit payments on the basis she was not disabled from all employment.

[9]            At about the time the benefits were terminated, Ms. McAlpine, who had been working approximately ten hours per week, asked Econotech to increase her hours of work.  She still was suffering from depression, could not return to the workplace and wished to perform work from home. Her doctor opined that she remained disabled.  Econotech, on the basis of the medical information, pursued reinstatement of the disability benefit payments, concluding unsuccessfully with an appeal process ending in May 1996.

[10]        The trial judge described the effectiveness of the return to work program:

[31]  During the initial six months there was, in fact, little, if any, progress.  The plaintiff continued to do species identification work at home and had done some limited training sessions but had declined to add limited business development work to what she was doing.

[32]  By July of 1995, the plaintiff was asking to increase her hours, but still advised that she was not ready for work outside her home, any work at Econotech or any customer contact. 

[33]  The medical report dated July 18, 1995, documented significant restrictions on her ability to perform the tasks associated with her position as manager, fibre testing department.

[34]  The reality of the situation by July 1995 was that despite the plaintiff’s request for more hours she remained wholly unable to perform major portions of her job description, including supervision of her department and customer contact and development.

[35]  Through 1996 the plaintiff continued to decline to participate in major features of her job description while asking to perform other tasks which were not part of her original job function or description.

.  .  .  .  .

[37]  In her evidence at trial the plaintiff testified that at no time between November 1992, when she went on medical leave, and December of 1997, when the present action was commenced, did she feel that she was able to return to her full time position.  She went on to acknowledge that she did not respond to the defendant’s offer to have her return to her employment or provide them with updated medical information they requested.

[38]  By April 1996 when the plaintiff asserts that she was constructively dismissed she had been away from her full time position with the defendant for 3½ years.  During that time period the defendant had (a) maintained her position for her and not replaced her; (b) continued to provide her with the full employees’ benefit package; (c) attempted a graduated return to work which had shown no appreciable progress; and (d) made considerable efforts on her behalf to have Manulife restore her long term disability benefits.

[11]        Ms. McAlpine continued on medical leave through 1996.  The work she was asked to do declined significantly and after April 1996 she was asked to read slides on only three occasions, on those occasions at Econotech’s offices.  In October 1996 she asked the company for an early retirement package in a letter that stated: “Being a loyal employee, I don’t feel comfortable looking for work elsewhere, so I respectfully request that our ties be broken.”  In November 1996 Econotech replied with a proposal that she work as an independent consultant.  Nothing came of that suggestion and in December 1997 Ms. McAlpine commenced this action, alleging that Econotech had constructively dismissed her in April 1996 by failing to provide her “with a minimum of nine hours of work per week in accordance with the gradual return to work program” and “failing or refusing to provide [her] with an explanation for its failure to provide the Plaintiff with such work”. 

[12]        The trial judge dismissed the claim, holding:

[39]  This is not a case of constructive dismissal.  Indeed, the evidence has established none of the prerequisites to establishing such a claim.  This is, rather, a case in which the plaintiff became ill and unable to provide the services required of her by the terms of her employment.

[40]  I am wholly unable to find that the plaintiff, on a balance of probabilities, has shown that there has been a breach of a fundamental term of the contract of employment of the plaintiff such as would allow me to conclude that there has been a constructive or wrongful dismissal.

[41]  It was not for the plaintiff to dictate to her employer the “new” or changed terms of her employment, nor should the employer, in the present circumstances, be criticized for its considerable efforts at accommodating the plaintiff.  In my view, the evidence establishes that those efforts at accommodation were undertaken in hopes of allowing a valued employee to return to her original position.

[42]  Regrettably, those efforts were unsuccessful.

[43]  The plaintiff has failed to meet the burden on her.  The action is dismissed.

[13]        Ms. McAlpine contended at trial that her employment contract was at an end.  Econotech took the position it had not acted to terminate the contract and if it was ended, it was by frustration.  The trial judge’s reasons on the liability issue start from the assumption the employment contract was at an end (although his reasons for judgment on the costs issue acknowledge that Econotech contended the contract had not terminated), and focus on the two alternative avenues whereby it could have been brought to an end around the time pleaded by Ms. McAlpine, April 1996.

[14]        Accepting for this discussion that the employment contract is at an end, how could that have occurred?  Absent terms in the contract bringing it to an end on a certain event occurring, such as the expiry of a period of time, there are a limited number of avenues whereby a contract of employment may be terminated.  There may be overt termination by an employer or resignation by an employee, or either party may otherwise repudiate the contract, or the contract may be frustrated.  As this is not a case of overt termination or resignation and the contract is clearly at an end, the contract was otherwise repudiated by the employer through a constructive dismissal, ended by frustration, or was repudiated by the employee such as through commencement of the action as in Zaraweh v. Hermon, Bunbury & Oke (2001), 94 B.C.L.R. (3d) 223, 2001 BCCA 524 and Suleman v. British Columbia Research Council (1990), 52 B.C.L.R. (2d) 138, [1990] B.C.J. No. 2707.  It is useful to bear in mind all of these alternative mechanisms that may end an employment contract as they explain how it may be that an employment relationship has ended against the wishes of the employee, but without dismissal by the employer.

[15]        Ms. McAlpine contends there was repudiation by the employer, that is, constructive dismissal in early 1996.  Econotech posed frustration as the contract ending device in the event the contract was found to have ended before the litigation was started.  The third alternative, repudiation by the employee such as may happen when legal action is commenced while the contract is alive, was not explored at trial, nor was there need to. 

[16]        The allegation here was that the contract was terminated sometime in early 1996 by constructive dismissal, that is, through Econotech’s repudiation of the contract.  A constructive dismissal is said to occur when the conduct of the employer is found to repudiate the contract.  In Farber v. Royal Trust Co., [1997] 1 S.C.R. 846, 145 D.L.R. (4th) 1 (S.C.C.), Gonthier J., writing for the Court, approved at 13 this passage from an article entitled “Constructive Dismissal” in Brian D. Bruce, ed., Work, Unemployment and Justice (Montreal: Themis, 1994) 127 at 129 by Sherstobitoff J.A. of the Saskatchewan Court of Appeal:

A constructive dismissal occurs when an employer makes a unilateral and fundamental change to a term or condition of an employment contract without providing reasonable notice of that change to the employee.  Such action amounts to a repudiation of the contract of employment by the employer whether or not he intended to continue the employment relationship.  Therefore, the employee can treat the contract as wrongfully terminated and resign which, in turn, gives rise to an obligation on the employer’s part to provide damages in lieu of reasonable notice.  [emphasis added]

[17]        In order to answer the central question the substance of the contract must be known.

[18]        The appellant contends that the contract contained a gradual return to work provision that required Econotech to do more than it did to keep Ms. McAlpine working.  This contractual requirement, she contends, came either from an express agreement which modified the employment contract, or by necessary inference or application of legal obligations arising from the Human Rights Code, R.S.B.C. 1996, c. 210. While the statement of claim refers to an obligation to provide at least nine hours of work a week, the appeal proceeded on the submission that there was a requirement both to send more slide work to Ms. McAlpine at home and to find other work that she was able to perform.  This is so, she says, even though her medical condition never did allow her to resume her managerial duties.

[19]        Both Ms. McAlpine and Econotech had valued their employment relationship and wished that Ms. McAlpine would return to her position.  In that spirit they embarked upon the return to work program suggested by the carrier of the disability benefits, Manulife.  But the trial judge, while not saying so in the language of contract law, did not find that a gradual return to work was an express term of the contract.  This is evident from the following passages:  “This is . . . a case in which the plaintiff became ill and unable to provide the services required of her by the terms of her employment”; “It was not for the plaintiff to dictate to her employer the ‘new’ or changed terms of her employment”; and “In my view, the evidence establishes that those efforts at accommodation were undertaken in hopes of allowing a valued employee to return to her original position”.

[20]        The content of the contract between the parties is a question of fact.  The question for this Court is whether the above findings of fact are supported by the evidence.  After reviewing the exhibits and the transcripts, I conclude there is a body of evidence upon which those findings may be made, which includes the correspondence confirming the return to work plan which was reproduced in the reasons of the trial judge, the evidence of the conversations held before and at the commencement of the return to work program, and the evidence of the parties’ communications between the time Ms. McAlpine’s long-term benefits were discontinued and she commenced this action.  It follows that I would not interfere with these conclusions.

[21]        The appellant also contends that a graduated return to work was required by the Human Rights Code, and that a breach of that obligation amounted to a repudiation of the contract.

[22]        The Human Rights Code provides in s. 13:

13(1)  A person must not

(a)   refuse to employ or refuse to continue to employ a person, or

(b)   discriminate against a person regarding employment or any term or condition of employment

because of the . . . physical or mental disability, . . . of that person . . .

      (4)   Subsections (1) and (2) do not apply with respect to a refusal, limitation, specification or preference based on a bona fide occupational requirement.

[23]        Ms. McAlpine, referring to British Columbia (Public Service Employee Relations Commission) v. B.C.G.S.E.U. (“Meiorin”), [1999] 3 S.C.R. 3, contends that the behaviour of Econotech amounted to unlawful discrimination on the basis of mental disability.  She refers to Skopitz v. Intercorp Excelle Foods Inc. (1999), 43 C.C.E.L. (2d) 253, [1999] O.J. No. 1543 (C.J.), and Rowbotham v. Addison, 2000 BCSC 218 in support of the proposition that a duty to accommodate may extend to providing an employee with an opportunity for a graduated return to work, breach of which will be a violation of her human rights.  She also refers to Lehman v. Davis (1993), 16 O.R. (3d) 338 (Ont. Ct. Gen. Div.) for the proposition that violation of her human rights may provide a claim for constructive dismissal.

[24]        In my view, Skopitz and Rowbotham v. Addison do not assist Ms. McAlpine.  Unlike this case, they concerned situations in which a gradual return to work was not made available by the employer.  This, in contrast, is a case in which the trial judge found that a plan of gradual return to work was made available to Ms. McAlpine, and that by the time her disability benefits were terminated, some four months after expiry of the contractual two-year disability benefit period and six months from the commencement of the return to work program “there was, in fact, little, if any progress”.  The trial judge also found that she had “declined to add limited development work to what she was doing” and “[t]he reality of the situation by July 1995 was that despite the plaintiff’s request for more hours she remained wholly unable to perform major portions of her job description. . .”.  This continued through 1996, and as she testified, at no time between commencement of the medical leave and commencement of the action did she feel she was able to return to her full time position. Nor did she respond to a request for updated medical information.  Without commenting on the larger issue of a contractual obligation to provide a program of gradual return to work, absent a bona fide occupational requirement otherwise, these findings, well supported by evidence, answer the appellant’s submission.

[25]        In these circumstances one could not say that Ms. McAlpine had been denied an opportunity of a gradual return to work.  Nor could one say that Econotech had repudiated the contract of employment.  In my view the trial judge did not demonstrate error in his conclusion that a constructive dismissal was not proved.

[26]        Ms. McAlpine also complained on appeal that Econotech had failed to communicate with her and that it had suggested in November 1996 that she become an independent contractor, in combination thereby repudiating the employment agreement.  This submission, neither pleaded nor dealt with by the trial judge, in my view cannot succeed in the circumstances here present.  While there may have been gaps in Econotech’s communications with Ms. McAlpine as the period of medical leave stretched out, it is clear from the evidence that Ms. McAlpine, too, did not always respond to requests the company made.  Nor, in my view, does offering Ms. McAlpine another status which was never implemented amount to dismissal.  It would not be for this Court, given the findings of the trial judge that the employer made “considerable” efforts to ensure Ms. McAlpine’s employment, to accede to this submission.

[27]        There was throughout the submissions on this issue the proposition that Econotech was required to continue to provide either part-time or full-time work for Ms. McAlpine at those tasks she believed she could perform.  Regrettably those functions did not include the substance of her managerial duties.

[28]        Whatever may be the extent of the legal obligation arising from cases such as Alberta Dairy Pool v. Alberta (Human Rights Commission), [1990] 2 S.C.R. 489, Meiorin and Central Okanagan School District No. 23 v. Renaud, [1992] 2 S.C.R. 970, it does not extend in my view to a contractual obligation to amend a job by deleting a component which is significant both in time and responsibility, such as the managerial duties here.

[29]        It follows I would not interfere with the conclusion that constructive dismissal was not proved.

[30]        The other substantive issue raised was frustration.  Ms. McAlpine contends that the trial judge erred in finding that the contract was frustrated and we have been referred to the discussion of this subject, in the context of an overt dismissal of an employee suffering from a malady that impaired his work performance, in Yeager v. R.J. Hastings Agencies Ltd., [1985] 1 W.W.R. 218 (B.C.S.C.).  For the reasons expressed earlier, I do not see the issue of liability here as dependent on this issue.  I consider, however, that the facts found by the trial judge support a conclusion that the contract was frustrated by Ms. McAlpine’s lengthy medical disability prior to commencement of the action, which would have then repudiated the contract in any event. 

[31]        I would not accede to the appeal on this ground.

[32]        The third issue is the sufficiency of the reasons for judgment.  On behalf of Ms. McAlpine it is said that the trial judge failed to analyze or even identify arguments made by Ms. McAlpine.  Relying upon R. v. Shepherd, [2002] 1 S.C.R. 869, it is said that we cannot give effect to the statutory right of appeal and therefore should refer this for a new trial.

[33]        I do not agree.  In my view the basis for the decision is apparent in the reasons for judgment.  Although not all sub-issues were dealt with separately, the reasons for judgment, in the context of the pleadings and the evidence, are sufficient to allow a meaningful appeal.

[34]        The last issue is Econotech’s cross appeal from the decision not to award costs in its favour.  I take this cross appeal to be brought on principle and not in the expectation of recovery.

[35]        On costs the trial judge held:

[3]   Under the rules and the authorities, costs are assessed and awarded on the basis of broad discretions that are constrained by a variety of principles.  The present case is an unusual one, in my view.  While, in essence, it was a wrongful dismissal action brought by the plaintiff on the basis of what she asserted as a constructive dismissal, the employer defended the action in part on the basis that she remained an employee but unable to work because of illness.  That illness and its effect on her is, in my view, a key component of what went on both in the commencement of the action and the matter proceeding to trial. 

.  .  .  .  .

[6]   I have very little hesitation in saying that the employer’s position was articulated far more clearly and fully at the trial than it was at least during the period from April 1996 until the date when the plaintiff received the letter from Dr. Becker suggesting that she should become a consultant for them.  The nature of her illness, the lack of any reasonable communication over an extended period, and in all probability her financial difficulties at that time, combined, in my view, in this plaintiff to create not just a view that she had legal rights that had been violated but an almost overwhelming feeling that she had been abandoned by those closest to her. 

[7]   I do not for a moment suggest that the employer did not make efforts to accommodate and deal with the plaintiff’s illness.  In fact, in my written reasons I have made specific findings that they did make such efforts.  But if their communications had been forthright and maintained, they may well have avoided the situation that followed.

[8]   I do not find that there is misconduct in any sense on the part of the employer.  It may well have flowed from them simply not knowing how to deal with the situation at the point in which I suspect they really came to the conclusion she was unable to return and unlikely ever to return.  Regardless of that, the lack of communication was a key component mixed with the other items I have touched on. 

.  .  .  .  .

[10]  I consider this case to be unusual for the reasons I have mentioned.  I would not consider for a moment awarding the plaintiff costs in the circumstances, but that is not the application that I am facing.  Mr. Crane has asked that in the circumstances of this case, both parties bear their own costs despite the plaintiff’s lack of success at trial.  In my view, in what I consider to be very unusual circumstances, that is the appropriate order, and I make the order that both parties will bear their own costs in this case.

[36]        Costs are at the discretion of the trial judge.  However that discretion must be exercised judicially.  In my view it is not proper to disallow costs on the basis of a party’s conduct where, as with the communication issue here, that conduct is unrelated to the action and was not found to be a ground of liability.  Nor is the state of a party’s health or financial hardship a sound basis for departing from the usual rule.

[37]        I find I must conclude that the basis relied upon by the trial judge to deny Econotech’s costs is not sufficient to depart from the usual rule.  In my view, the cross appeal must be allowed.


[38]        For the reasons earlier stated I would dismiss the appeal and would allow the cross appeal.

“The Honourable Madam Justice Saunders”


“The Honourable Mr. Justice Lambert”


“The Honourable Mr. Justice Smith”