Kosteckyj v Paramount Resources Ltd

In the Court of Appeal of Alberta

Citation: Kosteckyj v Paramount Resources Ltd, 2022 ABCA 230

Date: 20220628

Docket: 2101-0099AC

Registry: Calgary

Between:

Olga Kosteckyj

Respondent

(Plaintiff)

- and -

Paramount Resources Ltd.

Appellant

(Defendant)

_______________________________________________________

The Court:

The Honourable Justice Thomas W. Wakeling

The Honourable Justice Dawn Pentelechuk

The Honourable Justice Bernette Ho

_______________________________________________________

Memorandum of Judgment of The Honourable Justice Thomas W. Wakeling

Memorandum of Judgment of The Honourable Justice Dawn Pentelechuk

and The Honourable Justice Bernette Ho

Concurring in the Result in Part

Appeal from the Judgment by

The Honourable Justice E.J. Sidnell

Dated the 24th day of March 2021

Filed on the 22nd day of April 2021

(2021 ABQB 225, Docket: 2001-08899)

_______________________________________________________

Memorandum of Judgment

_______________________________________________________

Wakeling J.A.:

I.

Introduction

[1]

Paramount Resources Ltd. appeals Justice Sidnell’s judgment¹awarding Olga Kosteckyj,

a former employee, damages of $107,247.97 for constructive dismissal after a summary trial.²

[2]

I would allow the appeal and reduce the amount of judgment from $107,247.97 for

constructive dismissal to $97,190.56 for wrongful dismissal.

II.

Questions Presented

[3]

Paramount Resources admitted in its amended statement of defence that it terminated Ms.

Kosteckyj’s employment without cause on April 22, 2020.³The parties agree that Ms. Kosteckyj

is entitled to damages in lieu of reasonable notice.⁴The question is whether those damages should

be based on her compensation as of April 1, 2020, the date Ms. Kosteckyj claims Paramount

Resources constructively dismissed her, or her compensation as of April 22, 2020, the date she

claims Paramount Resources wrongfully dismissed her. This question creates three more specific

questions.

[4]

First, did Justice Sidnell commit a reversible error in granting Ms. Kosteckyj permission

to amend her claim to plead that Paramount Resources constructively dismissed her on April 1,

2020, when she waited until the commencement of the summary trial on February 11, 2021 to

apply for permission to amend? Her preamendment claim alleged only that Paramount Resources

dismissed her on April 22, 2020.

[5]

To establish constructive dismissal a plaintiff-employee must prove, from an objective

perspective, that the plaintiff-employee’s employer failed to substantially discharge an essential

obligation in the employment contract and that the plaintiff-employee declined to accept the new

terms of employment within a reasonable period of time.

¹Judgment roll filed April 22, 2021. Appeal Record 34. See Kosteckyj v. Paramount Resources Ltd., 2021 ABQB

225.

²Summary trial is the ideal procedure for wrongful dismissal and constructive dismissal claims. Usually there are no

factual disputes and the only issue that divides the parties is the length of the reasonable notice period.

³Amended Statement of Defence, ¶ 12. Appeal Record 8.

⁴Kosteckyj v. Paramount Resources Ltd., 2021 ABQB 225, ¶ 5.

Page: 2

[6]

Second, was the summary trial judge wrong to conclude that Ms. Kosteckyj proved that

Paramount Resources constructively dismissed her on April 1, 2020?

[7] Did Ms. Kosteckyj prove that she did not agree to the new terms of employment introduced

on April 1, 2020? She carried on working for the next three weeks without indicating that she did

not accept those terms.

[8]

If the summary trial judge erred in concluding that Paramount Resources constructively

dismissed Ms. Kosteckyj on April 1, 2020, should she have adjudged that Paramount Resources

wrongfully dismissed Ms. Kosteckyj on April 22, 2020?

[9]

Paramount Resources does not contest Justice Sidnell’s determination that Ms. Kosteckyj

was entitled to nine months’ termination notice.

[10] If Ms. Kosteckyj failed to prove the essential elements of a constructive dismissal cause of

action, but proved the essential elements of a wrongful dismissal cause of action, what

compensation level must be used to determine the value of her employment benefits in the nine-

month period? Is it the level of compensation to which she was entitled as of April 22, 2020, the

date Paramount Resources wrongfully dismissed her, or March 31, 2020, the level of compensation

to which she was entitled before the April 1, 2020 compensation reductions were implemented?

III.

Brief Answers

A. Amendment of Pleadings

[11] Justice Sidnell committed no reversible error in granting Ms. Kosteckyj permission to

amend her statement of claim at the commencement of the trial.

[12] There is a strong presumption in favor of allowing amendments to pleadings after the close

of pleadings. The burden is on the nonmoving party to provide a compelling reason to support its

objection – significant harm to a legitimate litigation interest.

[13] Paramount Resources did not discharge this burden. It knew before Ms. Kosteckyj applied

for permission to amend that she alleged Paramount Resources had constructively dismissed her

and had ample time to consider its position. The amendment application could not have taken

Paramount Resources by surprise.

B.

Constructive Dismissal

[14] Justice Sidnell correctly adjudged that Ms. Kosteckyj proved, from an objective

perspective, that the changes Paramount Resources introduced to her employment contract on

April 1, 2020 constituted substantial changes to essential obligations Paramount Resources had in

the employment contract.

Page: 3

[15] But the summary trial judge erred in holding that Ms. Kosteckyj proved that the altered

employment terms were the product of a unilateral act on the part of Paramount Resources and

that she did not consent to them. Ms. Kosteckyj never stated that she either refused to accept the

changes Paramount Resources introduced on April 1, 2020 or had not made up her mind before

April 22, 2020, the date Paramount Resources terminated her employment. The fact that she

worked for three weeks doing the same tasks from the same office is clear evidence that she

accepted the reduced level of compensation. The reasonable period to make up her mind – she was

a healthy, knowledgeable and informed person – expired no more than ten business days after

April 1, 2020.

[16] Given that Paramount Resources admitted in its statement of defence that Paramount

Resources terminated her employment on April 22, 2020 and failed to pay her the amount she

would have earned had it provided her with reasonable notice of her termination date, Ms.

Kosteckyj is entitled to judgment for wrongful dismissal as of April 22, 2020.

[17] As neither Paramount Resources nor Ms. Kosteckyj appealed Justice Sidnell’s

determination that Paramount Resources was obliged to provide Ms. Kosteckyj with nine months’

notice of her employment termination date, that is the period I will utilize in calculating her

damages. The proper level of compensation is that to which she was entitled on April 22, 2020.

The amount due is $97,190.56.

IV.

Statement of Facts

A. Paramount Resources Terminated Ms. Kosteckyj’s Employment

[18] Ms. Kosteckyj is a professional engineer.⁵

[19] On October 15, 2013 Ms. Kosteckyj commenced employment as a senior integrity engineer

with Apache Canada Ltd.⁶

[20] Paramount Resources acquired Apache Canada’s business in August 2017.⁷

[21] On March 27, 2020 Paramount Resources announced that it would implement a “cost

reduction program” effective April 1, 2020.⁸This included across-the-board reductions to salaries

and benefits.⁹For Ms. Kosteckyj, it meant a base salary reduction – ten percent – from $154,800

⁵Affidavit of Olga Kosteckyj sworn October 28, 2020, ¶ 8. Extracts of Key Evidence of the Appellant 5.

⁶Kosteckyj v. Paramount Resources Ltd., 2021 ABQB 225, ¶ 1.

⁷Id. ¶ 1.

⁸Id. ¶ 2.

⁹Id.

Page: 4

to $139,320, the suspension of employer RRSP contributions of six per cent of her salary, a delay

to or cancellation of her bonus, and no further access to seminars or training.¹⁰

[22] On April 22, 2020 Paramount Resources terminated Ms. Kosteckyj without cause as part

of additional measures to decrease its costs¹¹and paid her statutory termination pay of five weeks’

salary.¹²

[23] In July 2020 Ms. Kosteckyj sued Paramount Resources¹³for wrongful dismissal, seeking

damages equal to the value of the benefits she would have received had her employment lasted

another twelve months based on her compensation package “[a]t the time of dismissal”. She listed

her salary and various benefits as they were before the cost reduction program.¹⁴

[24] On November 5, 2020 Ms. Kosteckyj applied to have her claim determined by way of

summary trial, repeating her claim that Paramount Resources terminated her employment without

notice on April 22, 2020.¹⁵

[25] She alleged in her summary trial brief filed on January 22, 2021 that Paramount Resources

constructively dismissed her on April 1, 2020.¹⁶

¹⁰Id. ¶ 3.

¹¹Id. ¶ 4.

¹²Affidavit of Olga Kosteckyj sworn October 28, 2020, ¶ 43. Extracts of Key Evidence of the Appellant 13 &

Amended Statement of Claim filed September 29, 2020, ¶ 6. Appeal Record 5.

¹³Appellant's Factum ¶ 9.

¹⁴Amended Statement of Claim filed September 29, 2020, ¶¶ 5, 6, 8 & 9. Appeal Record 4-5.

¹⁵Application for Summary Trial filed November 5, 2020, ¶ 3. Appeal Record 11 (“The Defendant terminated her

employment on April 22, 2020, without cause, reasonable notice or pay in lieu of reasonable notice at common law”).

¹⁶Kosteckyj v. Paramount Resources Ltd., 2021 ABQB 225, ¶ 27 (“In her Summary Trial brief, Ms. Kosteckyj

included several paragraphs under the heading ‘Paramount’s unilateral changes to the employment contract on April

1, 2020 amounted to constructive dismissal’. Paramount responded in its Summary Trial brief to this argument by

agreeing that the test for constructive dismissal was articulated by the Supreme Court of Canada in Potter v New

Brunswick Legal Aid Commission, 2015 SCC 10 and applying it to the facts”), ¶ 28 (“At paragraph 60 of its Summary

Trial Brief, Paramount raises the Plaintiff’s failure to plead constructive dismissal”) & ¶ 30 (“Paramount argues that

it was unable to introduce evidence in response to Ms. Kosteckyj’s claim for constructive dismissal. However, this is

contrary to the position taken in Paramount’s Summary Trial Brief, where is it said: ‘The Plaintiff did not assert that

she had been constructively dismissed until after she was actually dismissed.’ In other words, Paramount knew Ms.

Kosteckyj had asserted that she claimed constructive dismissal after her termination, and before Paramount filed its

Summary Trial Brief. As noted, Paramount’s Brief addressed the Potter test for determining whether an employee has

been constructively dismissed. Based on Paramount’s own materials, I cannot find that Paramount was taken by

surprise or prevented from introducing new evidence when Paramount knew of the constructive dismissal argument

and addressed that argument in its own Summary Trial Brief”).

Page: 5

[26] Paramount Resources addressed this claim in the summary trial brief it filed on January 29,

2021:¹⁷

The Plaintiff purports once again to effectively argue that she was ‘constructively’

dismissed as of April 1, 2020 ... . Paramount submits that the Plaintiff was actually

terminated on April 22, 2020. The Plaintiff did not assert that she had been

constructively dismissed until after she was actually dismissed. The Plaintiff cannot

now disregard her actual termination ex post facto. For that matter the Plaintiff

cannot suggest that she was constructively dismissed and then argue her

employment was not ‘terminated’. The Plaintiff never asserted she was

constructively dismissed nor has that been plead. Nor has she alleged in her

Affidavit, filed in support of her Application for Summary Trial, that she

considered herself to be constructively dismissed.

B.

The Summary Trial Justice Held that Paramount Resources Constructively

Dismissed Ms. Kosteckyj and Awarded Damages for Nine-Months’ Notice

Based on Her Pre-Reduction Salary

[27] Justice Sidnell heard the summary trial on February 11, 2021.

[28] At the outset of the summary trial, Ms. Kosteckyj applied for permission to amend her

pleadings to add an alternative constructive dismissal claim based on the April 1, 2020

compensation reduction program.¹⁸

[29] The trial judge reserved her decision.

[30] After receiving additional written submissions on this application following the summary

trial,¹⁹Justice Sidnell allowed Ms. Kosteckyj’s application.

[31] The trial judge properly rejected Ms. Kosteckyj’s argument that no amendment was

necessary, noting that her pleadings allege termination on April 22, 2020 and “[w]ithout the

¹⁷Id. ¶ 28.

¹⁸Id. ¶ 14 (“At the commencement of the Summary Trial hearing, Ms. Kosteckyj made an application to amend her

Amended Statement of Claim to add the following paragraph: In the alternative, Paramount constructively dismissed

Kosteckyj by unilaterally reducing Kosteckyj’s salary by 10%, and cancelling the 2019 Bonus Plan, the 6% RRSP

matching program and all seminars and training on April 1, 2020”).

¹⁹Id. ¶ 15.

Page: 6

proposed amendment, the facts underpinning the allegation of constructive dismissal are not before

the Court”.²⁰

[32] Justice Sidnell was satisfied that the amendment did not prejudice Paramount Resources,²¹

largely on the basis that it knew before it filed its brief for the summary trial that Ms. Kosteckyj

asserted constructive dismissal.²²

²⁰Id. ¶ 16. This proposition is clearly correct. See PetroFrontier Corp. v. Macquarie Capital Markets Canada Ltd.,

2022 ABCA 136, ¶ 22 per Wakeling, J.A. (“pleadings are important. They identify the issues a court must resolve”);

Al Rawi v. Security Service, 2010 EWCA Civ. 482, ¶ 18; [2010] 4 All E.R. 559, 565, aff’d, [2011] UKSC 34; [2012]

1 All E.R. 1 per Lord Neuberger, M.R. (“a civil claim should be conducted on the basis that a party is entitled to know,

normally through a statement of case, the essentials of its opponent's case in advance, so that the trial can be fairly

conducted, and, in particular, the parties can properly prepare their respective evidence and arguments for trial”) &

Banque Commerciale S.A. v. Akhil Holdings Ltd., 169 C.L.R. 279, 286 (High Ct. Austl. 1990) per Mason, C.J. (“The

function of pleadings is to state with sufficient clarity the case that must be met ... . In this way, pleadings serve to

ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against

him or her and, incidentally, to define the issues for decision”). See also A. Zuckerman, Zuckerman on Civil

Procedure: Principles of Practice 328-29 (4th ed. 2021) (“The process of identifying the issue in dispute is carried out

by exchanging statements of case, previously known as pleadings. ... In a statement of case, a party needs to state all

the material facts pertinent to their case. Where a claimant has not pleaded a fact necessary to establish a particular

cause of action, the court has no jurisdiction to give judgment on that point”).

²¹Kosteckyj v. Paramount Resources Ltd., 2021 ABQB 225, ¶ 29 (“Paramount argues that it will be prejudiced in a

variety of ways if an amendment pleading constructive dismissal is permitted: (a) Paramount was unable to introduce

any evidence in response to the claim of constructive dismissal. (b) Paramount limited its cross-examination of Ms.

Kosteckyj on her Affidavit to her understanding of the Cost Reduction Program and did not explore any steps she took

as a result of it. (c) Because the application to amend was made after all of the evidence was submitted, Paramount

did not have the opportunity to introduce evidence of the ‘reasonable Paramount employee’ who was also affected in

the same manner as Ms. Kosteckyj. (d) There is no evidence on whether Ms. Kosteckyj mitigated her damages and

whether she was required to continue her employment despite ‘varied terms’”).

²²Id. ¶ 27 (“In her Summary Trial brief, Ms. Kosteckyj included several paragraphs under the heading ‘Paramount’s

unilateral changes to the employment contract on April 1, 2020 amounted to constructive dismissal’. Paramount

responded in its Summary Trial brief to this argument by agreeing that the test for constructive dismissal was

articulated by the Supreme Court of Canada in Potter v. New Brunswick Legal Aid Commission, 2015 SCC 10 and

applying it to the facts”), ¶ 28 (“At paragraph 60 of its Summary Trial Brief, Paramount raises the Plaintiff’s failure

to plead constructive dismissal”) & ¶ 30 (“Paramount argues that it was unable to introduce evidence in response to

Ms. Kosteckyj’s claim for constructive dismissal. However, this is contrary to the position taken in Paramount’s

Summary Trial Brief, where is it said: ‘The Plaintiff did not assert that she had been constructively dismissed until

after she was actually dismissed.’ In other words, Paramount knew Ms. Kosteckyj had asserted that she claimed

constructive dismissal after her termination, and before Paramount filed its Summary Trial Brief. As noted,

Paramount’s Brief addressed the Potter test for determining whether an employee has been constructively dismissed.

Based on Paramount’s own materials, I cannot find that Paramount was taken by surprise or prevented from

introducing new evidence when Paramount knew of the constructive dismissal argument and addressed that argument

in its own Summary Trial Brief”).

Page: 7

[33] The summary trial judge concluded that Paramount Resources constructively dismissed

Ms. Kosteckyj:²³the cost reduction program was a change to²⁴and breach of²⁵her employment

contract and Ms. Kosteckyj had no obligation to decide whether this change was a repudiation of

the contract in the twenty-five days between when she was informed of the program and her

termination.²⁶

[34] Justice Sidnell found that Ms. Kosteckyj’s common law notice entitlement was nine

months²⁷and awarded damages of $107,247.97 based on her salary and benefits as they existed

before the cost reduction program was implemented.²⁸

[35] On April 22, 2021 the Clerk of the Court of Queen’s Bench filed the judgment.²⁹

C.

Paramount Resources Appealed

[36] On April 15, 2021 Paramount Resources filed a civil notice of appeal against the whole

judgment.³⁰

[37] But its factum did not contest Justice Sidnell’s determination that nine months was

reasonable notice. And nothing Mr. Beeman, counsel for Paramount Resources, said in oral

argument suggested his client contested that assessment. I proceed on the basis that Paramount

Resources accepted nine months was reasonable notice.

V.

Applicable Alberta Rules of Court

[38] Rule 3.65 of the Alberta Rules of Court³¹states as follows:

3.65(1) Subject to subrule (5), before or after close of pleadings, the Court may

give permission to amend a pleading.

…

²³Id. ¶ 41.

²⁴Id. ¶ 34.

²⁵Id. ¶¶ 39 & 41.

²⁶Id. ¶ 38.

²⁷Id. ¶ 57.

²⁸Id. ¶ 85.

²⁹Appeal Record 34.

³⁰Id. 36.

³¹Alta. Reg. 124/2010.

Page: 8

(4) If the Court directs or allows a pleading to be amended at trial,

(a) the amendment must be recorded in writing by the court clerk, and

(b) no order need be filed.

VI.

Analysis

A. The Late Amendment to the Statement of Claim Did Not Prejudice

Paramount Resources

[39] Paramount Resources argues that the summary trial judge’s decision to permit Ms.

Kosteckyj to amend her claim to add constructive dismissal at the commencement of the hearing

caused it an unacceptable degree of prejudice. That Paramount Resources addressed constructive

dismissal in its summary trial brief does nothing, I am told, to obviate the prejudice arising from

being unable to bring evidence in response to the claim.

[40] I cannot agree.

[41] There is a strong presumption in favor of allowing amendments after the close of pleadings,

save only if the nonmoving party demonstrates a compelling reason not to.³²“A compelling reason

exists if the proposed amendment will significantly harm a legitimate litigation interest of the

nonmoving party or the amended pleading will contravene the public interest in promoting

expeditious and economical dispute resolution”.³³

[42] The last-minute amendment did not cause significant harm to a legitimate litigation interest

of Paramount Resources or contravene the public interest in expeditious and economical dispute

resolution.

[43] First, Paramount Resources must have anticipated this application. It could not have been

taken by surprise.³⁴Ms. Kosteckyj, in her summary trial brief filed on January 22, 2021, two weeks

³²AARC Society v. Canadian Broadcasting Corp., 2019 ABCA 125, ¶ 53; 449 D.L.R. 4th 208, 230, leave to appeal

ref’d, [2019] S.C.C.A. No. 221 per Wakeling, J.A. (“A court should exercise its discretion and allow a party to amend

a pleading after the close of pleadings unless there is a compelling reason not to. The nonmoving party bears the

burden of demonstrating that there is a compelling reason not to allow the proposed amendment”); Knelsen Sand &

Gravel Ltd v. Harco Enterprises Ltd., 2021 ABCA 385, ¶ 103 (“Pleadings, as a rule, may be amended at any point

during the litigation process”) & Pace v. Economical Mutual Ins. Co., 2021 ABCA 1, ¶¶ 49 & 53; 19 Alta. L.R. 7th

1, 17 & 20 (“The bar for the moving party that needs leave to amend a pleading is very low. .... A court should allow

a party, after the close of pleadings, to amend its pleading unless the non-moving party can advance a compelling

reason not to”).

³³Pace v. Economical Mutual Ins. Co., 2021 ABCA 1, ¶ 4; 19 Alta. L.R. 7th 1, 5.

³⁴Kosteckyj v. Paramount Resources Ltd., 2021 ABQB 225, ¶ 30 (“Paramount knew Ms. Kosteckyj had asserted that

she claimed constructive dismissal after her termination, and before Paramount filed its Summary Trial Brief. As

Page: 9

before the commencement of the trial, put Paramount Resources on notice that she was alleging

constructive dismissal.³⁵

[44] Second, Paramount Resources could have asked for permission to cross-examine Ms.

Kosteckyj and lead new evidence. It could have made this request before the trial commenced or,

if this was not possible, at the commencement of the trial. Ms. Kosteckyj was present and could

easily have been cross-examined. And no doubt it could have called the witness it needed to

introduce the evidence it thought relevant. Like the summary trial judge,³⁶I fail to see what

prevented Paramount Resources from bringing evidence on the issue of constructive dismissal had

it chosen to do so.

[45] Third, the trial judge reserved her decision on the amendment application and invited the

parties to file written argument. Paramount Resources had ample time to consider its position. ³⁷

[46]

Although Paramount Resources objected to the amendment, it provided no concrete

explanation for the detriment the late amendment imposed on it. Bare assertions of prejudice

premised on vague claims about the existence of further evidence are no more helpful on appeal

than they were before the summary trial judge, nor can they be employed to block an otherwise

appropriate amendment to pleadings.

[47] And the only relevant evidence Paramount Resources identified when pressed by the

summary trial judge – apart from the absence of evidence from Ms. Kosteckyj that she considered

herself constructively dismissed³⁸that has no relevance to the alleged prejudice to Paramount

noted, Paramount’s Brief addressed the Potter test for determining whether an employee has been constructively

dismissed. Based on Paramount’s own materials, I cannot find that Paramount was taken by surprise or prevented

from introducing new evidence when Paramount knew of the constructive dismissal argument and addressed that

argument in its own Summary Trial Brief”).

³⁵Respondent's Factum ¶ 25; Transcript of February 11, 2021 Hearing 4:39-5:1 (“Mr. Beeman: ... The subject of the

constructive dismissal was only raised for the first time in the plaintiff's brief, which was filed January 22. ... Of

course, I felt obligated to respond to them in our brief January 29”) & 6:15-22 (“The Court: But of course you knew

that this was a live issue because that's why you addressed it in your brief. Mr. Beeman: Right. I would acknowledge

the plaintiff's (indiscernible) for the first time in written argument that the plaintiff was constructively dismissed”). In

this judgment text that appears completely in upper case has been converted to a more familiar mix of upper and lower

case letters.

³⁶Kosteckyj v. Paramount Resources Ltd., 2021 ABQB 225, ¶ 30.

³⁷Transcript of February 11, 2021 Hearing 82:21-26 (The Court: Mr. Beeman, … one of the things that I'm thinking

about is … the constructive dismissal. I think I have to address that, but subject, of course, to a ruling on the

amendment, first of all, I guess depends on whether an amendment is required and then, secondly, as to whether or

not Ms. Joss is going to be successful in that. So as I said, I'm not making that ruling, but I want to address everything

at this hearing so that no matter what the outcome is of that ruling, it can be dealt with”).

³⁸Id. 6:18-22 & 28-30 (“Mr. Beeman: ... I would acknowledge the plaintiff's … [claim] for the first time in written

argument that the plaintiff was constructively dismissed. The point is the plaintiff has not given any evidence that she

considered that the cost reduction ... were a constructive dismissal. It's only an argument that's been now advanced by

Page: 10

Resources – seems to relate to whether the “reasonable Paramount employee” would have

considered the cost reduction program to be constructive dismissal.³⁹

[48] I agree with the summary trial judge that such evidence was not necessary in the reasonable

person inquiry⁴⁰and her conclusion:⁴¹

Paramount argues that it was unable to introduce evidence in response to Ms.

Kosteckyj’s claim for constructive dismissal. However, this is contrary to the

position taken in Paramount’s Summary Trial Brief, where … it said: “The Plaintiff

did not assert that she had been constructively dismissed until after she was actually

dismissed.” In other words, Paramount knew Ms. Kosteckyj had asserted that she

claimed constructive dismissal after her termination, and before Paramount filed its

Summary Trial Brief. As noted, Paramount’s Brief addressed the Potter test for

determining whether an employee has been constructively dismissed. Based on

Paramount’s own materials, I cannot find that Paramount was taken by surprise or

prevented from introducing new evidence when Paramount knew of the

constructive dismissal argument and addressed that argument in its own Summary

Trial Brief.

her counsel. ... [I]f I'd known that there was going to be an argument that she'd been constructively dismissed, I would

have addressed that issue, both in cross-examination of the plaintiff and in evidence as by ... the defendant”), 57:21-

35 (“Mr. Beeman: ... whatever notice period ... this Court determines, we have to look at what would the employee

have received during that period. So my friend ... suggested ... that Ms. Kosteckyj could have sued for wrongful

dismissal ... or for constructive dismissal ... and somehow worked through the notice period. ... So if I understand the

argument is that Ms. Kosteckyj could have alleged that she ... was constructively dismissed. So the difficulty with that

argument is Ms. Kosteckyj did not do that. And ... she didn't provide any evidence that she might have considered it

or she was going to do it. Simply no evidence whatsoever”) & 61:9-13 (“Mr. Beeman: ... first of all, it hasn't been

pled. That she was constructively dismissed. There's no evidence that she registered a discontent. There's no sort of

evidence as to what the reasonable person concluded with respect to those changes. And certainly there was the

opportunity to explore that when … Paramount's litigation representative was cross-examined”).

³⁹Id. 5:22-31 (“Mr. Beeman: ... we would suggest that there's prejudice here ... . First of all, there has to be a substantial

decrease in the person’s compensation ... and, more importantly, there's an objective test as to whether a reasonable

person would consider that Paramount no longer intended to be bound by the employment contract. So those are

significant issues which were not addressed in any way in the evidence”), 6:41-7:13 (“Mr. Beeman: ... As an example,

the evidence seems clear that ... the cost reduction measures were imposed upon every Paramount employee. So

respectfully we could address those issues as to whether other employees -- the reasonable person would have

considered that there had been a constructive dismissal. The Court: ... I think that that is in evidence. At least I've read

your client's Affidavit, and I've read your brief, and my understanding it is clearly in evidence that the April 1, 2020

salary and benefit reductions were across the board with salary reductions for everybody and a higher amount for

directors and officers. So I think that evidence is in front of me. Mr. Beeman: Yeah. My point is we would simply ...

further evidence, further cross-examinations the issue of constructive dismissal”) & Appellant's Factum ¶ 36.

⁴⁰Kosteckyj v. Paramount Resources Ltd., 2021 ABQB 225, ¶ 31.

⁴¹Id. ¶ 30 (emphasis added).

Page: 11

[49] The summary trial judge did not, as Paramount Resources asserts, “fail to consider the

serious prejudice to Paramount”⁴²– she considered it and found that Paramount Resources did not

meet its burden of demonstrating it. There is no basis to interfere with her discretionary decision

to allow the amendment.⁴³This ground of appeal fails.

B.

Justice Sidnell Correctly Identified the Test for Constructive Dismissal

[50] There are two different scenarios in which the law treats the conduct of an employer as the

constructive dismissal of an employee.

[51] An employer constructively dismisses an employee if the employer fails, from an objective

perspective⁴⁴– a reasonable person in the employee’s situation⁴⁵– to substantially discharge an

⁴²Appellant's Factum ¶ 22.

43

St Isidore Co-op Limited v. AG Growth International Inc, 2020 ABCA 447, ¶ 18; 16 Alta. L.R. 7th 54, 63

(“determining whether to allow an amendment of a statement of claim … are matters of discretion owed deference by

this Court absent palpable and overriding error”) & RPC Limited Partnership v. SNC-Lavalin ATP Inc, 2018 ABCA

423, ¶ 20; 96 C.L.R. 4th 140, 145 (“Identification of the legal test applicable to amendments to pleadings is a question

of law reviewable on a correctness standard. Consideration of whether the evidence tendered can satisfy that test is a

question of mixed fact and law and is entitled to deference absent palpable and overriding error or an extricable error

of law. The decision to allow an amendment to pleadings is discretionary and as such, absent legal error, it is a decision

entitled to deference on appeal”).

⁴⁴Potter v. New Brunswick Legal Aid Services Comm’n, 2015 SCC 10, ¶¶ 37, 39 & 63; [2015] 1 S.C.R. 500, 522-23

& 534.

⁴⁵Id. at ¶ 39; [2015] 1 S.C.R. 500 at 523 per Wagner, J. (“Once it has been objectively established that a breach has

occurred, the court must turn to the second step of the analysis and ask whether, “at the time the [breach occurred], a

reasonable person in the same situation as the employee would have felt that the essential terms of the employment

contract were being substantially changed”) & ¶ 63; [2015] 1 S.C.R. at 534 (“the perspective at the second step of the

first branch of the test, at which the issue is whether the breach was substantial, and in the second branch of the test is

that of a reasonable person in the same circumstances as the employee”) (emphasis in original).

Page: 12

essential obligation⁴⁶in the employment contract ⁴⁷to the detriment of the employee,⁴⁸and the

employee, (i) within a reasonable time⁴⁹(ii) declines to accept the new terms of employment.⁵⁰

⁴⁶Potter v. New Brunswick Legal Aid Services Comm’n, 2015 SCC 10, ¶ 34; [2015] 1 S.C.R. 500, 521-22 per Wagner,

J. (“The first branch of the test for constructive dismissal ... has two steps: first, the employer’s unilateral change must

be found to constitute a breach of the employment contract and, second, if it does constitute such a breach, it must be

found to substantially alter an essential term of the contract”). See also Farber v. Royal Trust Co., [1997] 1 S.C.R.

846, 858 per Gonthier, J. (“Where an employer decides unilaterally to make substantial changes to the essential terms

of an employee’s contract of employment and the employee does not agree to the changes and leaves his or her job,

the employee has not resigned, but has been dismissed. Since the employer has not formally dismissed the employee,

this is referred to as ‘constructive dismissal’”). Not surprisingly, this is the same test that is generally applied when

the promise breaker is not an employer. Bethel United Church of Jesus Christ Apostolic of Edmonton v. North Pacific

Properties Ltd., 2022 ABCA 224, ¶¶ 123 & 126 (“Not all a promisor’s breaches of a promise made in a contract are

of sufficient importance to justify a promisee declining to discharge its obligations under the contract. Some breaches

are of such a minor nature as not to relieve a promisee of the burden of its promises. A promisee must honor its

commitments and sue the promissor for damages. .... Only if the court concludes that the promisor’s performance

deficit is substantial will the promisee have the option to treat the promisor’s performance deficit as a substantial

breach justifying the promisee’s refusal to discharge the promisee’s end of the bargain”).

⁴⁷The term may be either express or implied. Potter v. New Brunswick Legal Aid Services Comm’n, 2015 SCC 10, ¶

37; [2015] 1 S.C.R. 500, 522-23 per Wagner, J. See Stacey v. Consolidated Foods Corp. of Canada, 76 N.S.R. 2d 91

(Sup. Ct. Tr. Div. 1987) (the Court held that the employer’s decision to reassign the plaintiff to a lesser position was

not constructive dismissal because the employment contract authorized the employer “at its option, by written notice,

effective immediately ... [to] reclassify the employee as regional vice-president of sales or division sales manager”).

⁴⁸Potter v. New Brunswick Legal Aid Services Comm’n, 2015 SCC 10, ¶ 37; [2015] 1 S.C.R. 500, 522-23 per Wagner,

J. (“to qualify as a breach, the change must be detrimental to the employee”).

⁴⁹Id. (“At the first step of the analysis, the court must determine objectively whether a breach has occurred. To do so,

it must ascertain whether the employer has unilaterally changed the contract. If an express or an implied term gives

the employer the authority to make the change, or if the employee consents to or acquiesces in it, the change is not a

unilateral act and therefore will not constitute a breach”). See H. Levitt, The Law of Dismissal in Canada (3d ed.

loose-leaf rel. 2022-05) § 5:7 (“after management changes a term of employment, an employee must make a

determination of whether to accept the change or notify the employer that he or she is treating the change as

constructive dismissal. After that period elapses, the employee may be deemed to have accepted the position and may

be estopped from then claiming a constructive dismissal”) & 2 D. Harris, Wrongful Dismissal 3-32.32(11) (loose-leaf

ed. 2020 – release 8) (“Whether the basis for an alleged constructive dismissal is a change in remuneration, a demotion

or a demand to relocate, the employee must elect to either accept or reject the unilateral change within a reasonable

time. … If the employee elects to accept the unilateral change and remain in his or her modified job, he or she will be

said to have condoned the modification(s). Such condonation, in turn, will estop him or her from later arguing that the

changes signalled … constructive dismissal”).

⁵⁰Potter v. New Brunswick Legal Aid Services Comm’n, 2015 SCC 10, ¶ 37; [2015] 1 S.C.R. 500, 522-23 per Wagner,

J. (“the court. . . must ascertain whether the employer has unilaterally changed the contract. If an express or an implied

term gives the employer the authority to make the change, or if the employee consents to or acquiesces in it, the change

is not a unilateral act and therefore will not constitute a breach. If so, it does not amount to constructive dismissal”).

See Rowley v. High Strength Plates & Profiles Inc., 2011 ONSC 6221 (the plaintiff-employee accepted a short-term

commission reduction during a challenging period: “Mr. Rowley agreed to accept this temporary cut in his

commission, and in fact indicated that he would try to convince other outside sales personnel to accept a corresponding

cut in their commission”); R. Echlin & J. Fantini, Quitting for Good Reason: The Law of Constructive Dismissal in

Page: 13

[52] An employer that treats an employee in a disrespectful manner and makes the employment

relationship intolerable also constructively dismisses an employee.⁵¹

[53] An employee has the onus to prove on a balance of probabilities the facts that establish the

employer constructively dismissed the employee.⁵²

C.

Justice Sidnell’s Application of the Constructive Dismissal Test Contained

One Reversible Error

[54] I completely agree with the summary trial judge’s determination that Ms. Kosteckyj

established that Paramount Resources, from an objective perspective, failed to substantially

discharge an essential obligation imposed on it by the employment agreement. Paramount

Resources made severe reductions to key or core aspects of Ms. Kosteckyj’s compensation

package.⁵³

[55] As well, there is no doubt that the changes Paramount Resources introduced on April 1,

2020 were to the detriment of Ms. Kosteckyj. Her compensation dropped ten percent. Paramount

Resources also discontinued contributions to her RRSP and delayed or cancelled the bonus

program.⁵⁴

[56] But I disagree with Justice Sidnell’s conclusion that Ms. Kosteckyj did not accept or

acquiesce to the new terms of employment.⁵⁵

Canada 48 (2001) (“An employment contract is not terminated simply by an employer’s wrongful breach of the

contract. Rather, the employee is required to ‘accept’ the employer’s repudiation in order to bring the employment

relationship to an end and recover wrongful dismissal damages”) & White and Carter (Councils) Ltd. v. McGregor,

[1962] A.C. 413, 444 (H.L.) per Lord Hodson (“It is settled as a fundamental rule of the law of contract that repudiation

by one of the parties to a contract does not itself discharge it”).

⁵¹Potter v. New Brunswick Legal Aid Services Comm’n, 2015 SCC 10, ¶ 33; [2015] 1 S.C.R. 500, 521 per Wagner, J.

⁵²Id. at ¶ 60; [2015] 1 S.C.R. at 532 (“The onus is on the employee to prove that an act constitutes constructive

dismissal. The employee must prove on a balance of probabilities that the employer’s unilateral act breached the

contract and that that breach substantially changed the essential terms of the contract”) (emphasis added).

⁵³Professional Institute of the Public Service of Canada v. Northwest Territories, [1990] 2 S.C.R. 367, 380 per Cory,

J. (“Wages and working conditions will always be of vital importance to an employee”).

⁵⁴Kosteckyj v. Paramount Resources Ltd., 2021 ABQB 225, ¶ 2.

⁵⁵Brown v. Pronghorn Controls Ltd., 2011 ABCA 328, ¶ 24; 344 D.L.R. 4th 1, 10 (a finding of constructive dismissal

may only be set aside if it is clearly wrong – palpable and overriding error – assuming the trial judge correctly

identified the governing legal test).

Page: 14

[57] Ms. Kosteckyj bore the onus to prove that she declined to accept within a reasonable time

period the new terms of employment and that the change was unilateral in nature. She has not

discharged this burden.⁵⁶

[58] First, the fact that she continued to work in the same office discharging the same tasks as

she did before April 1, 2020 for three weeks is indisputable evidence that she had accepted the

new terms of employment.⁵⁷This is not a case where the employer directs an employee to

undertake different tasks or relocate to undertake different or the same tasks.

⁵⁶Potter v. New Brunswick Legal Aid Comm’n, 2015 SCC 10, ¶ 60; [2015] 1 S.C.R. 500, 532 (“The onus is on the

employee to prove that an act constitutes constructive dismissal. The employee must prove on a balance of

probabilities that the employer’s unilateral act breached the contract and that that breach substantially changed the

essential terms of the contract”) (emphasis added) & Gray v. Sara Lee Corp. of Canada, 45 Man. R. 2d 82, 87 (Q.B.

1986) (“the plaintiff was constructively dismissed by the defendants but ... he failed within a reasonable time to take

and declare a position whether or not to accept the job as branch sales manager. ... [H]e must be held to have waived

by delay his right to sue ... for constructive dismissal”). But see McGuinty v. 1845035 Ontario Inc., 2020 ONCA 816,

¶ 24; 154 O.R. 3d 451, 458 (“A claim that the employee has condoned a breach or course of conduct [the second

Potter form of constructive dismissal] is a defence to a claim of constructive dismissal and the burden is on the

employer to establish it”).

⁵⁷Courts seldom clearly state the cutoff point that separates employee condonation from noncondonation. Most of the

time a court is content to state that the employee has accepted the new terms of employment as a result of his or her

choice to continue working for a specified period. They do not state that the result would have been different had the

plaintiff-employee ceased working at some specific point. E.g., Baggio v. Incognito Software Inc., 2006 BCSC 515,

¶¶ 84-85 (the Court held that a plaintiff-employee who worked for twelve months after what she unsuccessfully alleged

was the unilateral introduction of new terms had accepted them); Wedding v. Motorola Canada Ltd., 99 C.L.L.C.

¶210-008, 141,053, (B.C. Sup. Ct. 1998), aff’d, 1999 BCCA 752 (“after she was finally told on June 30, 1994 that she

would not have responsibility for profit and loss, she remained with the defendant for a further 11 months and accepted

a promotion with a salary increase. ... She has ... condoned the breach”); Boyer v. Badger Daylighting Inc., 2009

SKQB 210, ¶ 21; 354 Sask. R. 181, 184 (the Court held that a plaintiff-employee who worked for seven months after

the unilateral introduction of new terms had accepted them); Gray v. Sara Lee Corp. of Canada, 45 Man. R. 2d 82

(Q.B. 1986) (the Court held that a plaintiff-employee who continued to work for five months after the unilateral

introduction of new terms of employment had accepted them); Belanger v. Hospital Dietary Service Ltd., [1983] O.J.

No. 2051 (Dist. Ct.) (the Court held that a plaintiff-employee who worked for seven months after the unilateral

introduction of new terms of employment had accepted them); Mushumanski v. Inco Ltd., [1987] O.J. No. 1477 (Dist.

Ct. 1987) (the Court held that a plaintiff-employee who worked for eight months after the unilateral introduction of

new terms of employment had accepted them); MacEwen v. M.F. Schurman Co., 34 C.C.E.L. 2d 29 (P.E.I. Sup. Ct.

1998) (the Court held that a plaintiff-employee who worked for eighteen months after the unilateral introduction of

new terms had accepted them) & Mosher v. Twin Cities Co-operative Dairy Ltd., 5 C.C.E.L. 72 (N.S. Sup. Ct. Tr.

Div. 1984) (the Court held that a plaintiff-employee who had worked for eight months after he had been demoted from

vice-president finance to treasurer accepted the demotion). See Raypold v. McEvoy Oilfield Services, 2 A.R. 134, 138

(Alta. Sup. Ct. Tr. Div. 1977) (the trial judge may have concluded that the fact the plaintiff-employee stayed on the

job for roughly two weeks after his supervisor terminated him while impaired undermined his claim the employer had

terminated him).

Page: 15

[59] I am satisfied that no more than ten business days⁵⁸after April 1, 2020 constituted a

reasonable period of time for Ms. Kosteckyj, a professional engineer and a healthy, knowledgeable

and informed person, to collect the information she needed to assess the state of the employment

market for professional engineers in Calgary and elsewhere, to consult legal counsel to ascertain

her rights and obligations as an employee and to make an informed and prudent decision on the

merits of rejecting or accepting the new employment terms.⁵⁹In drawing this line, I am not taking

into account the employee’s length of service. This fact has nothing to do with an employee’s

ability to make a prudent decision on the merits and demerits of continuing to work for lesser

compensation. Both a short-service and long-service employee, assuming other important

attributes are comparable, will be in the same position to assess the merits of accepting or rejecting

the new compensation level.

58

See Farquhar v. Butler Bros. Supplies Ltd., [1988] 3 W.W.R. 347, 349-50 (B.C.C.A.) per Lambert, J.A. (“A

constructive dismissal occurs when the employer commits either a present breach or an anticipatory breach of a

fundamental term of a contract of employment, thereby giving the employee a right, but not an obligation, to treat the

employment contract as being at an end. ... The employee's decision must be made within a reasonable time. But he

is entitled to a few days, or even a couple of weeks, to think it over”); Watson v. Seacastle Enterprises Inc., 2007

BCSC 365, ¶ 56, 56 C.C.E.L. 3d 270, 280 (“Nine days was a reasonable time for the plaintiff to continue working

without being seen to have condoned her employer’s unilateral modification of her contract”); Greaves v. Ontario

Municipal Employees Retirement Board, 129 D.L.R. 4th 347, 351 (Ont. Gen. Div. 1995) per Cumming, J. (“In any

event, the change in the reporting relationship announced October 6, 1993, was the final straw, from Mr. Greaves’

standpoint. He resigned the next day”) & Duplessis v. Irving Pulp & Paper Ltd., 47 N.B.R. 2d 11, 19 (C.A. 1983) (the

Court held that the plaintiff-employee had “promptly” rejected the new employment terms) & Belanger v. Hospital

Dietary Service Ltd., [1983] O.J. No. 2051, ¶ 2 (Dist. Ct.) (“Upon being advised of this instant demotion, the plaintiff

was given some time to consider his position so that he could advise whether he would accept the demotion or not.

After a few days, the plaintiff decided; to accept the offer”). Contra, Belton v. Liberty Ins. Co. of Canada, 72 O.R. 3d

81, 91 (C.A. 2004) per Juriansz, J.A. (“The vulnerability of employees who believe they may have been constructively

dismissed and the difficulty of making the life-altering decisions they face must be recognized. In this context, it is

understandable that such employees may wish to try to adjust to the new terms and conditions without affirming the

employer's right to make these changes and before taking the radical step of advancing a constructive dismissal claim.

Allowing employees reasonable time to assess the new terms before they are forced to take an irrevocable legal

position not only addresses their vulnerability, but also promotes stability and harmonious relations in the workplace”).

⁵⁹But see H. Levitt, The Law of Dismissal in Canada § 5:7 (3d ed. loose-leaf rel. 2022-05) (“The length of time that

an employee can continue working under the new conditions, before the court will deem those conditions to have been

accepted, is a matter for the court’s discretion in each case. The following factors will be considered: the employee’s

previous length of service; the position; whether the employee expresses continued dissatisfaction while trying out the

new position; how clearly the new position has been delineated; and whether the employee continues to protest the

decision”) & 2 D. Harris, Wrongful Dismissal 3-32.32(15) loose-leaf ed. 2020 – release 8) (“At some undefined (and

probably undefinable) point … following the employer’s communication of the unilateral changes to the employee,

the conclusion of condonation becomes unavoidable, taking into account the character of the employment, the

temperament of the parties, and all the surrounding circumstances”).

Page: 16

[60] An employee without the attributes of Ms. Kosteckyj may require additional time to collect

the information needed to make a prudent and informed decision.⁶⁰But it would be a rare case that

a reasonable period would exceed fifteen business days.

[61] An employee confronted with a reduced compensation package has to decide whether

continued employment under less generous terms will prove in the short, medium and long term

to provide him or her with greater benefits than other potential employment opportunities in the

same time frames. A thoughtful person will do his or her best to estimate how much time it will

take to find a new job that pays more than the reduced compensation the current job offers. The

inquiry will also take into account whether the business climate will improve and when so that the

current employer may be in a position to increase employee compensation. If the market for the

skills the employee possesses is depressed the answer is obvious – accept the new terms and hope

that the economy returns to normal as quickly as possible.

[62] Most of the time the answer is self-evident – it is better to be employed than unemployed.⁶¹

While the employee is undoubtedly in a stressful situation, the answer to the key question is usually

obvious and not difficult to discover.

[63] An employer that decides to substantially reduce the compensation of its employee

complement most likely does so because of a challenging business environment⁶²and needs to

know almost immediately if some members of the current workforce are not prepared to accept

the new terms. The departure of some employees may require the employer to reorganize its

workforce or search for new employees who are willing to accept the new terms of employment.

⁶⁰See Streight v. Dean, 2002 BCSC 399, ¶ 54 (“I am satisfied that the plaintiff [a forty-five-year-old with a learning

disability and limited language and math skills] made her decision to accept the defendant’s repudiation of the

employment contract within a reasonable time. In arriving at my conclusion, I have considered the age as well as the

limited education and work experience of the plaintiff. ... When it became apparent that the changes to her

remuneration were very significant ... the plaintiff acted quickly [almost immediately]”) & Galizia-Bas v. Pardy,

[1990] B.C.J. No. 2142 (Sup. Ct.) (“In assessing ... [whether the respondent acted within a reasonable time], the court

would have to consider the circumstances, that is, that she had come to Canada from Spain to work for the appellant

and she had no friends or relatives in B.C. She was essentially alone, particularly during the first few months of the

contract. ... In all the circumstances I would hold that her decision to carry on and work from May through to

September was reasonable and that she had not abandoned her right to damages for constructive dismissal”).

⁶¹Tilbe v. Richmond Realty Ltd., 11 C.C.E.L. 2d 11, 20 (B.C. Sup. Ct. 1995) per Newbury, J. (“A court cannot be

blind to the fact that jobs are scarce, especially in a declining real estate market, and that usually, some job is better

than no job”). See Farquhar v. Butler Bros. Supplies Ltd., [1988] 3 W.W.R. 347 (B.C.C.A.) (the plaintiff-employee

rejected a substantial salary cut and left his job on January 16, 1985; he was out of work for 3.5 months before he

found a job paying him a salary equal to that he was earning at Butler Brothers after the pay cut; all other employees

stayed and the employer was eventually able to reinstate their pre-reduction salaries).

⁶²Affidavit of Greg Byrgesen sworn January 10, 2021 and filed January 13, 2021, ¶ 27 (“On March 27th, 2020

Paramount announced a significant ... Cost Reduction Program ... to address the ongoing financial issues facing

Paramount including, ... the historically low commodity prices and an oil price war, Covid-19, and an overall reduction

in Paramount’s 2020 capital spending”). Extracts of Key Evidence of the Appellant 216.

Page: 17

As noted some years ago, “an enterprise decides to enter into an employment relationship because

it expects the benefits flowing from a worker's presence to exceed the costs associated with having

an employee and thus advance the business' interests”.⁶³An employer cannot make this calculation

without knowing what its obligations to its employees are.

[64] Many of the same reasons that cause an enterprise offering employment to a person who is

not an employee to make the offer open for acceptance for a relatively short time frame apply if

the enterprise is forced to restructure its terms of employment. In the latter scenario, an employer

needs to know which members of the workforce have accepted the altered terms of employment

so that it can accurately assess the employee’s actual costs to the business.⁶⁴

[65] A worker who confronts dramatically different conditions of employment also needs to

decide promptly if he or she wishes to continue as an employee.⁶⁵Human beings, as a rule, do not

like uncertainty. They value stability and predictability.⁶⁶

⁶³Canada Safeway Ltd. v. United Food & Commercial Workers, Local 401, 26 L.A.C. 4th 409, 424 (Wakeling 1992),

aff’d, 93 C.L.L.C. 14,055 (Alta. Q.B. 1993), aff’d, 162 A.R. 306 (C.A. 1995).

⁶⁴See Hill v. Peter Gorman Ltd., 9 D.L.R. 2d 124, 129 (Ont. C.A. 1957) per Laidlaw, J.A. (“The single question

arising in this case is whether or not such an agreement [to a unilateral change in employment terms] should be implied

… by reason of the fact that the respondent remained in the employ of the appellant [for sixteen months] and accepted

the amount of the commissions payable to him less the deductions made by the appellant during a considerable period

after … the president of the appellant company, gave notice … that such deductions would thereafter be made. The

learned Judge … made a finding of fact in the clearest possible language: ‘That Hill [continuously objected to the

deductions made by the appellant from the commissions and] never did accept the deduction as being part of the terms

of his employment’”) & 132 per MacKay, J.A. (“Where an employer attempts to vary the contractual terms, the

position of the employee is this: He may accept the variation expressly or impliedly in which case there is a new

contract. He may refuse to accept it and if the employer persists in the attempted variation the employee may treat this

persistence as a breach of contract and sue the employer for damages, or while refusing to accept it he may continue

in his employment and if the employer permits him to discharge his obligations and the employee makes it plain that

he is not accepting the variation, then the employee is entitled to insist on the original terms”).

⁶⁵See Schellenberg v. Marzen Artistic Aluminum Ltd., [1986] B.C.J. No. 1190, ¶ 26 (C.A.) per Taggart, J.A. (“While

he is entitled to a reasonable time to consider what he will do consequent on the action of his employer in reducing

his commission income, where, as in this case, an employer says in effect: accept this reduction in your income or

leave my employment, the employee must make it clear to the employer he will only continue in the employment on

the basis of the former arrangement as to commission income. If the employee does not make that clear to the employer

it is open to the court to conclude the employee has elected not to accept the employer’s conduct as repudiation of the

contract of employment”). See Marriott v. Oxford and District Co-operative Society, Ltd., [1969] 3 All E.R. 1126,

1128 (C.A.) per Lord Denning, M.R. (“Does he lose his redundancy payment simply because he stayed on for three

or four weeks whilst he got another job? I think not. He never agreed to the dictated terms [reduced salary and lesser

position]. He protested against them. He submitted to them because he did not want to be out of employment. By

insisting on new terms to which he never agreed, the employer did, I think, terminate the old contract of employment”).

⁶⁶Schauer, “Precedent”, 39 Stan. L. Rev. 571, 597 (1987) (“The ability to predict what a decisionmaker will do helps

us plan our lives, have some degree of repose, and avoid the paralysis of foreseeing only the unknown”).

Page: 18

[66] For these reasons, a bright-line test is useful for both employers and employees. It is also

an attractive precedent for most other actors,⁶⁷a point cogently made by Professor Garner and his

judicial coauthors in The Law of Judicial Precedent:⁶⁸

To a society aspiring to live under the rule of law, it’s no small thing to ensure that

citizens can determine in advance what the law will require of them and have a

chance to conform their conduct to it.

…

… To facilitate social coordination, the answer we choose may be less important

than that an answer simply be chosen and be clear. A system of precedent – the

promise that future cases will be decided as similar past cases were decided – helps

ensure that people can know what the law will be when applied to them, their

actions, and their enterprises. Productive social coordination stands strong on the

basis of (relatively) ascertainable ground rules.

[67] Second, even if I had not concluded that the reasonable period for Ms. Kosteckyj to make

up her mind had not expired before April 22, 2022, it was incumbent upon her to lead evidence

that she did not accept the new terms of employment, or, at the very least, she had not yet made

up her mind. She failed to do this.

[68] Had Ms. Kosteckyj made such a claim, the trial judge may have been reluctant to accept

her evidence. It would have been at odds with what a reasonable person in her situation would do

and completely inconsistent with the position she took in her statement of claim and her amended

statement of claim. In both these claims she alleged that “[o]n April 22, 2020, Paramount

terminated Kosteckyj’s employment without cause, reasonable notice or pay in lieu of reasonable

notice at common law”.⁶⁹Ms. Kosteckyj did not assert in these important legal documents that

Paramount Resources constructively dismissed her on April 1, 2020. And the amended statement

of claim was filed almost six months after April 1, 2020.

[69] The factors that determine how much time is reasonable for an employee to decide whether

to continue doing the same tasks at the same site but for less compensation may not be the same

⁶⁷Can v. Calgary Police Service, 2014 ABCA 322, ¶ 123; 315 C.C.C. 3d 337, 398 per Wakeling, J.A. (“Benchmarks

of validity must be as simple as possible and easy to understand”) & Johnson v. Agnew, [1980] A.C. 367, 390-91 (H.L.

1979) per Lord Wilberforce (“One would think that the law as to so typical a set of facts would be both simple and

clear. It is no credit to our law that it is neither. Learned judges in the Chancery Division and in the Court of Appeal

have had great difficulty in formulating a rule and have been obliged to reach differing conclusions”).

⁶⁸B. Garner, C. Bea, R. Berch, N. Gorsuch, H. Hartz, N. Hecht, B. Kavanaugh, A. Kozinski, S. Lynch, W. Pryor, T.

Reavey, J. Sutton & D. Wood, The Law of Judicial Precedent 11 & 12 (2016).

⁶⁹Amended Statement of Claim filed September 29, 2020, ¶ 5. Appeal Record 4.

Page: 19

as those in play if an employer alters the employee’s work or where it is performed.⁷⁰This question

is not before me and I do not answer it.

D.

A New Damage Assessment Is Necessary

[70] My determination that Justice Sidnell erred in holding that Paramount Resources

constructively dismissed Ms. Kosteckyj on April 1, 2020 requires me to reconsider her damages

award.

[71] Given that Paramount Resources admitted in its statement of defence that “[o]n April 22,

2020, Paramount terminated the Plaintiff’s employment without just cause”, I must assess the

damages to which she is entitled as a result of this admission.

[72] Table A records the factors that I have taken into account in assessing the damages at

$97,190.56.

Table A

Paramount Resources – Damages Reassessment

Damages Assessed at Trial

Nine months’ salary and benefits April 1, 2020 – December 31, 2020

using compensation immediately before April 1

Damages for

Damages Reassessed

Nine months’ salary and benefits April 22, 2020 – January 22, 2021

using compensation as at April 22

Damages for

reasonable

notice

Annual

amount

Proportional

amount

Annual

amount

Proportional

amount

Description

reasonable

notice

Description

$139,320.00⁷¹

Base annual salary

2020

RRSP contribution

2020 6%

Health and dental

benefits

$154,800.00

$9,288.00

$1,244.00

75%

$116,100.00 Base annual salary

2020

$6,966.00 RRSP contribution

2020 6%

$1,244.00 Health and dental

benefits

75%

--%

$104,490.00

$--⁷²

$00.00

$1,244.00⁷³

100%

$1,244.00

⁷⁰See Greaves v. Ontario Municipal Employees Retirement Board, 129 D.L.R. 4th 347, 361 (Ont. Gen. Div. 1995)

per Cumming, J. (“Courts have generally found that the employee has not consented to the new arrangement [new

duties] unless and until a reasonable ‘trial period’ has lapsed in which the employee can decide whether or not she or

he wishes to work permanently under the change. The determination of a reasonable trial period depends on how long

it ought reasonably to take a person in the employee’s position to assess the suitability of the new working

arrangement”).

⁷¹Salary before cost reduction program was implemented on April 1, 2020. Kosteckyj v. Paramount Resources Ltd.,

2021 ABQB 225, ¶ 3.

⁷²RRSP contribution was suspended as of April 1, 2020. Id. ¶ 3.

⁷³Amount that the employee actually expended after her benefits were terminated on April 29, 2020. Id. ¶¶ 62 & 63.

Assumes employee incurred no additional costs between December 31, 2020 and January 22, 2021.

Page: 20

73.15%⁷⁴

Wellness account

Life and AD&D

insurance

Professional dues

(APEGA)

Costs of upgrading

Payment on

termination

Less 22 days of

reduced April 2020

salary

$1,000.00

$955.44

67.12%

$671.20 Wellness account

$641.29 Life and AD&D

insurance

$411.60 Professional dues

(APEGA)

$4,499.50 Costs of upgrading

$1,000.00

$955.44

$731.50

$698.58

73.15%⁷⁵

$411.60⁷⁶

$411.60

100%

$411.60

$4,499.50⁷⁷

$14,884.62⁷⁸

$4,499.50

$14,884.62

100%

$4,499.50

$(14,884.62)

$(14,884.62) Payment on

termination

$(8,401.00) Less 22 days of

reduced April 2020

salary

--⁷⁹

$139,320.00

6.03%

--

$--

$107,247.97

$97,190.56

VII. Conclusion

[73] I would allow the appeal in part. The judgment roll filed April 22, 2021 is amended by

substituting “$97,190.56” for “$107,247.97”.

Appeal heard on April 6, 2022

Memorandum filed at Calgary, Alberta

this 28th day of June, 2022

Wakeling J.A.

⁷⁴Proportional amount of annual wellness account for 267 days of benefit (being 73.15% of a year) not including the

start and end dates (instead of the 245 days used at trial for the period between April 29, 2020 and December 31, 2020,

which would be 67.12% of a year)), now between April 29, 2020, when benefits ended, and January 22, 2021 (instead

of to December 31, 2020, which would have been nine months counting from April 1), using a 365-day calendar year.

Assumes payment for the 2021 year is not payable by January 22, 2022 (i.e., employee is not entitled to the full sum

of the account for a second year). Id. ¶¶ 63 & 85.

75

Proportional amount of basic life insurance, dependent life insurance, accidental death and dismemberment

insurance for 267 days of benefit (instead of the 245 days used a trial), now between April 29, 2020, when benefits

ended, and January 22, 2021 (instead of to December 31, 2020), using a 365-day calendar year. Id. ¶¶ 64 & 85.

⁷⁶Amount of professional dues was not prorated for the reasonable notice period. Id. ¶ 79. Assumes employee did not

have to pay for the dues again for the following year before January 22, 2021.

⁷⁷Costs of course employee took after termination in efforts to find new employment. Id. ¶ 80.

⁷⁸Payment for statutory termination pay of five weeks. Id. ¶ 85. Assumes employer paid statutory pay based on

employment up to April 22, not the April 1 date of alleged constructive dismissal.

⁷⁹Amount of salary between April 1, 2020 and April 22, 2020 no longer credited to employer as notice period now

commences after, not before, the April 22 termination.

Page: 21

Pentelechuk JA and Ho JA (concurring in the result):

[74] We have had the benefit of reviewing the reasons of our colleague and agree the summary

trial judge erred in concluding that Ms Kosteckyj had proven she had been constructively

dismissed by Paramount. Our reasons for so concluding, however, differ from those of our

colleague.

[75] There is no dispute that the governing test for constructive dismissal was established in

Farber v Royal Trust Co, [1997] 1 SCR 846 [Farber], and solidified in Potter v New Brunswick

Legal Aid Services Commission, 2015 SCC 10 [Potter]. This appeal engages the first branch of

the Potter test, which asks: (1) whether an express or implied term of the employment contract had

been breached, and (2) whether such a breach is sufficiently serious to constitute constructive

dismissal; that is, whether the breach substantially altered an essential term of the contract. This

second step asks whether a reasonable person in Ms Kosteckyj’s situation would feel that an

essential term of her employment contract had been substantially changed: Potter at paras 32, 37,

39, 63.

[76] Relative to the first step of the analysis, the Court in Potter wrote at para 37:

At the first step of the analysis, the court must determine objectively whether a

breach has occurred. To do so, it must ascertain whether the employer has

unilaterally changed the contract. If an express or an implied term gives the

employer the authority to make the change, or if the employee consents to or

acquiesces in it, the change is not a unilateral act and therefore will not constitute a

breach. If so, it does not amount to constructive dismissal. Moreover, to qualify as

a breach, the change must be detrimental to the employee.

[77] In this case, the employment contract did not contain a clause permitting Paramount to

reduce salary and benefits in response to the cyclical nature of the oil and gas industry. The

reduction of salary and benefits in the range of 16% to 20% was detrimental to Ms Kosteckyj.

However, it was open to Paramount to argue that she either consented to the temporary salary

reduction or that she acquiesced to the change. In either case, Potter tells us this would mean the

change was not unilateral and there was no constructive dismissal.

[78] We agree with our colleague Wakeling JA that the summary trial judge erred in concluding

that Ms Kosteckyj neither accepted nor acquiesced to the new terms of her employment.

[79] There was no evidence Ms Kostckyj had taken any steps to communicate with Paramount

about the reductions nor any evidence that she expressed her dissatisfaction during that 25-day

period. The summary trial judge concluded “There is no obligation on an employee to advise an

employer of an employee’s position on constructive dismissal before termination...”. She further

determined that Ms Kosteckyj was not required to make her decision in the 25 days between the

Page: 22

reduction to her salary and the date when Paramount fully terminated her: Decision at paras 37-

38.

[80] No authority is cited for these conclusions. The summary trial judge’s conclusion was

premised on very scant evidence resulting from her choice to reserve her decision on the

amendment application and have the parties proceed with the summary trial arguments. This was

problematic. By combining these two issues into a contemporaneous decision, she failed to take

into account the full range of concerns related to constructive dismissal; in particular, her chosen

process did not give adequate consideration to the question of whether Ms. Kosteckyj acquiesced

to Paramount’s unilateral changes to her employment contract. While Paramount was able to

address constructive dismissal in its written argument, this is a far cry from being able to fully

explore the issue through questioning and to lead evidence on the issue. Overall, the issue of

constructive dismissal would have benefitted from a more robust record.

[81]

The summary trial judge’s analysis was devoid of important contextual factors including

the backdrop of a global pandemic and a decimated oil and gas industry. Undoubtedly, Ms

Kosteckyj would have been unhappy with her salary reduction, but given the labour market then

existing, her decision to keep working for 25 days strongly suggests she acquiesced to the realities

of her employment situation.

[82] Our colleague Wakeling JA states that a period of 10 business days was a reasonable

amount of time for Ms Kosteckyj to make her decision whether to accept or reject the new terms

of her employment. We prefer to avoid stating a specific time period, particularly in the absence

of argument and submissions on this issue. However, we do find that in the unique circumstances

of this appeal, including having regard for Ms Kosteckyj’s total years of service with Apache and

Paramount, that 25 days was a sufficient period of time for Ms Kosteckyj to decide whether she

would accept Paramount’s changes to her employment contract, or to leave her employment and

claim constructive dismissal.

[83] The appeal is allowed in part. If the parties cannot agree on the amount payable to Ms

Kosteckyj, the matter is remitted to the Court of Queen’s Bench for the determination of damages,

based on her reduced salary and compensation package and a notice period of 9 months.

Appeal heard on April 6, 2022

Memorandum filed at Calgary, Alberta

this 28th day of June, 2022

Authorized to sign for:

Pentelechuk J.A.

Ho J.A.

Page: 23

Appearances:

J.S. Joss

for the Respondent

D.R. Beeman

for the Appellant