



COURT 
    OF APPEAL FOR BRITISH COLUMBIA




Citation:


Saalfeld 
          v. Absolute Software Corporation,







2009 
          BCCA 18



Date: 20090121

Docket: CA036271

Between:

Jennifer 
    Saalfeld

Respondent

(
Plaintiff
)

And:

Absolute 
    Software Corporation

Appellant

(
Defendant
)




Before:


The 
          Honourable Madam Justice Huddart




The 
          Honourable Madam Justice Saunders




The 
          Honourable Madam Justice Neilson








N.T. 
          Mitha
D. Rideout


Counsel for the Appellant




C. 
          Forguson


Counsel for the Respondent




Place 
          and Date of Hearing:


Vancouver, British Columbia




30 October 2008




Place 
          and Date of Judgment:


Vancouver, British Columbia
21 January 2009













Written 
          Reasons by
:




The 
          Honourable Madam Justice Huddart




Concurred 
          in by:




The 
          Honourable Madam Justice Saunders (P. 18, para. 34)
The Honourable Madam Justice Neilson (P. 21, para. 44)



Reasons 
    for Judgment of the Honourable Madam Justice Huddart:

[1]

This appeal from an award of damages for wrongful dismissal challenges 
    the trial judge's determination of the appropriate notice period and her inclusion 
    in the award of compensation for loss of the right to participate in the appellants 
    stock option plan.  The trial judges reasons for judgment are indexed at 
    2008 BCSC 760.

Facts

[2]

In October 2006, the appellant company, Absolute Software, offered 
    employment to the respondent, Ms. Saalfeld, as a Federal Territory Manager 
    at a base annual salary of $60,000 as part of its initiative to seek sales 
    of its anti-theft software products to the U.S. federal government.  Despite 
    its title, Ms. Saalfelds job did not include any managerial or supervisory 
    duties.

[3]

Absolute Software contacted Ms. Saalfeld after her posting on the website 
    Monster.ca had caught the interest of a recruiting agency working with it: 
    the respondent had ten years experience in software sales and some expertise 
    selling to the United States federal government.

[4]

From June 2005 until accepting the job offer from Absolute Software 
    in October 2006, Ms. Saalfeld was employed as a salesperson by ACL Systems, 
    a successful software company headquartered in Vancouver.  The job at Absolute 
    Software offered her a slightly higher base salary, significant potential 
    for earnings based on sales in the U.S. federal government territory, stock 
    options, as well as reduced travel.  In consequence, she accepted the appellants 
    written offer of employment made on 16 October 2006.

[5]

On 25 October 2006, Absolute Software granted her 5,000 stock options, 
    as it did all new employees, to be earned at the rate of 1,250 per year.  
    Under the terms of the Share Option Plan, the first 1,250 were to vest on 
    25 October 2007, priced at $6.00 per unit.  The Share Option Plan included 
    these relevant provisions:

1.1    In this Share Option Plan:

(z)         The words
the last 
    day on which the Officer or Employee worked for the Company or a Subsidiary 
    of the Company
means, with respect to an Officer or Employee whose employment 
    has been terminated by the Company or a Subsidiary of the Company

i.     
    other than for cause, either

(A)       
    the day specified by the Company  in writing to the Officer or Employee as 
    being the last day on                                       which the Officer 
    of Employee is to work for the Company ; or

(B)       
    if such Officer or Employee is given pay in lieu of advance notice of a pending 
    effective date of termination, the day on which such notice of termination 
    is given in writing by the Company or such Subsidiary to the  Officer or Employee; 
    and

ii.    
    for cause, the day on which the notice of termination was given.



3.6    No option may be exercised after:

(a)         
    ; or

(b)         in the case of an Officer 
    or Employee, 5:00 p.m. Pacific Standard Time on the last day on which the 
    Officer or Employee worked for the Company or Subsidiary of the Company

[6]

Ms. Saalfeld began to work for Absolute Software on 13 November 2006, 
    sharing her territorys quarterly sales target of $650,000 with a U.S. based 
    account executive.  On 24 July 2007, Absolute Software terminated her employment 
    without cause.  The company paid her one week's salary in lieu of notice, 
    salary and benefits accrued to that date, including commissions, and refunded 
    her contributions to the Employee Share Ownership Plan.

[7]

Ms. Saalfeld found alternative employment shortly before the summary 
    trial held on 26 May 2008 after what the trial judge called a reasonably 
    diligent job search.  The evidence relating to Ms. Saalfelds job search 
    consists of these statements from her examination of discovery on 23 April 
    2008:

Q:
Ill 
    ask you some questions, Ms. Saalfeld, regarding your search for other work.  
    And youve produced a number of documents from tabs 36 through 42 of your 
    list of documents.  Its in your list of documents the companies that are 
    here are Oracle?



[Ms. Saalfeld]:
Mmm-hmm.



Q
Theres 
    also Microsoft?



[Ms. Saalfeld]:
Yes.



Q
And 
    a company called RHI?



[Ms. Saalfeld]:
Correct.



Q
Theres 
    also Business Objects?



[Ms. Saalfeld]:
Yes, it is.



Q
And 
    also a company called Lock Search?



[Ms. Saalfeld]:
Yes.



Q:
These 
    documents that youve produced appear to run from the period from August 13
th
, 
    through to November 19
th
, so I just want to focus on that period.



[Ms. Saalfeld]:
Okay.



Q:
From 
    August 13
th
to November 19
th
, are these five companies 
    the only five companies that you contacted for work?



[Ms. 
    Saalfeld]:
I believe so.

Q
Did 
    you keep a diary or a log of any companies that you contacted in your efforts?



[Ms. 
    Saalfeld]:
No.

[8]

Absolute Software pled failure to mitigate, but did not pursue this 
    allegation at trial.

The Trial Judges Decision

[9]

The trial judge concluded the respondent was entitled to five months 
    notice. After taking guidance from
Bardal v. Globe and Mail Ltd.
(1960), 
    24 D.L.R. 140 (Ont. H.C.J.), and

Ansari v. British Columbia Hydro and 
    Power Authority
, [1986] 4 W.W.R. 123, 2 B.C.L.R. (2d) 33 (S.C.), she 
    explained why at para. 30 of her reasons for judgment:

[30]
In
this case, the plaintiff had been employed for over 
    ten years in software sales and had developed some special expertise in working 
    with the U.S. federal government and its agencies.  She was recruited by the 
    defendant but I do not find that she was induced to leave her previous employment 
    to the extent that inducement should be given significant weight in determining 
    the reasonable notice period.  Her position with the defendant was a responsible 
    and relatively senior one although it did not carry management responsibilities. 
     It took the plaintiff some nine months to find another job, despite conducting 
    a reasonably diligent search.  The defendant did not allege failure to mitigate. 
     The length of the plaintiff's subsequent job search does not determine the 
    reasonable notice period, but it provides some evidence putting into question 
    the transferability of sales skills generalization and supporting that the 
    brevity of employment may affect a subsequent job search.

[10]

In assessing the damages flowing from the appellants failure to give 
    the appropriate five months notice, the trial judge concluded the respondent 
    was entitled to be compensated for her loss of the stock options as she would 
    have exercised them on their vesting date.  On the trial judges construction 
    of the employment contract, the respondent would have been entitled to those 
    options if proper notice had been given because for the purpose of assessing 
    damages, the employment continues throughout the reasonable notice period 
    (at para. 51).

Discussion

The Notice Period

[11]

The appellant submits the award warrants this Courts intervention 
    because it is outside the range of reasonableness, entirely disproportionate 
    to judicial precedent, and like the award in
Cronk v. Canadian General 
    Insurance Company
(1995), 128 D.L.R. (4
th
) 147, 25 O.R. 
    (3d) 505 (C.A.) at 158-59, one that has the potential of disrupting the practices 
    of the commercial and industrial world, wherein employers have to predict 
    with reasonable certainty the cost of downsizing or increasing their operations, 
    particularly in difficult economic times.  This erroneous result may have 
    been influenced, the appellant suggests, by the trial judges findings, unsupported 
    by the evidence, that the respondents sales position was a responsible and 
    relatively senior one although it did not carry management responsibilities 
    (at para. 30) and that there was a slight degree of inducement (at para. 
    23).  In the appellants view, the range of reasonable notice on the facts 
    of this case would be three weeks to two months.

[12]

I do not accept that the inducement could have played much, if any, 
    role in the trial judges determination of the appropriate notice period.  
    She was clear that she did not give that factor significant weight (at para. 
    30) probably because the evidence does not support a finding of inducement 
    as that concept is understood in the jurisprudence:
Timm v. Juran Institute 
    (Canada) Ltd
., [2004] O.T.C. 615 (Ont. S.C.J.);
Wright

v. Feliz Enterprises Ltd.,
2003 BCSC 267;
Ansari
,
supra
.  As in
Shinn v. TBC Teletheatre B.C.
, 2001 BCCA 
    83, 85 B.C.L.R. (3d) 75, McEachern C.J.B.C., dissenting in part, at para. 
    10, it seems obvious the respondent lost nothing that could relate to the 
    determination of his notice period by accepting this employment.  The respondent 
    had been in her previous employment for 16 months.  She presented no evidence 
    to suggest that either she or the appellant anticipated a difficult job market 
    when she was hired or if she were terminated.  She was looking for an opportunity 
    to advance her software sales career; the appellant offered her that opportunity 
    and nothing more.  As with any sales job, continuance of employment would 
    depend on demonstrable results.

[13]

I have similar difficulty with finding that the trial judge ascribed 
    much significance to the senior nature of the respondents employment.  
    On the evidence, the trial judge could only have meant that the respondents 
    function was important to the appellant.  Ms. Saalfeld was an inside salesperson 
    who, together with another salesperson, was responsible for developing a new 
    market for Absolute Software under the supervision of the Territory Sales 
    Manager (responsible for 19 territories).  While the trial judge discussed 
    at some length the diminishing importance given by courts to the character 
    of the employment in determining appropriate notice, she recognized (at para. 
    29) the important factors were those set down in
Bardal
and
Ansari
:  the respondents age (35), her length of service (nine 
    months), her position (a shared quarterly sales target of $650,000 in a market 
    new to the employer), and availability of similar employment.  As I read the 
    reasons of the trial judge, she gave primary importance to the last factor.

[14]

The appellants main submission is supported by the decision in
Foster 
    v. Kockums Cancer Division Hawker Siddeley Canada Inc
., [1993] 8 W.W.R. 
    477, 83 B.C.L.R. (2d) 207 (C.A.), where this Court affirmed the importance 
    of determining a range of reasonableness from recent British Columbia precedents.  
    The exercise of looking to comparables and adjusting for differences permits 
    a reasoned objective analysis, not only by a court, but by all who must determine 
    reasonable notice in particular circumstances.  (See also
Cassell & 
    Co. Ltd. v. Broome,
[1972] 1 All E.R. 801, [1972] A.C. 1027 (H.L.);
Bavaro v. North American Tea, Coffee & Herbs Trading Co.
, 
    2001 BCCA 149, 86 B.C.L.R. (3d) 249; and
Shinn,

supra
, 
    at para. 28, Prowse J.A., concurring in part).

[15]

The trial judge's reasons do not reveal that analysis.  However, the 
    respondent submits that the recent jurisprudence

supports a 
    notice period of five to six months in short service cases.  While B.C. precedents 
    are consistent that proportionately longer notice periods are appropriate 
    for employees dismissed in the first three years of their employment, I see 
    little support for the proposition that five to six months is the norm in 
    short service cases for employees in their thirties or early forties whose 
    function is significant for their employer, but not one of senior management.  
    I further see no support for a floor of six months as the trial judge appears 
    to have understood the respondents counsel to have suggested to her.  That 
    proposition was not put to us.  Absent inducement, evidence of a specialized 
    or otherwise difficult employment market, bad faith conduct or some other 
    reason for extending the notice period, the B.C. precedents suggest a range 
    of two to three months for a nine-month employee in the shoes of the respondent 
    when adjusted for age, length of service and job responsibility:
Zeidel 
    v. Metro-Goldwyn Mayer Studio Inc
., 2004 BCSC 1415;
Duprey v. 
    Seanix Technology (Canada) Inc
., 2002 BCSC 1335; 20 C.C.E.L. (3d) 
    136;
Woolard v. Unum Life Insurance Co. of Canada
, 2002 BCSC 
    1178, 4 B.C.L.R. (4
th
) 333;
Mitchell v. Paxton Forest Products 
    Inc
., 2001 BCSC 1802, affd 2002 BCCA 532, 174 B.C.A.C. 205;
Kussman 
    v. AT & T Capital Canada, Inc.
, 2000 BCSC 268, 49 C.C.E.L. (2d) 
    124.

[16]

Nevertheless, I am not persuaded the trial judges award in this case 
    is unreasonable.  The factor that appears to have loomed largest in her analysis 
    was the nine months it took the respondent to find employment.  While the 
    evidence of the respondents job search between the date she received notice 
    of the termination of her employment and the date she obtained new employment 
    is paltry, it is legitimate to take that evidence into account in assessing 
    the availability of alternative employment.  Neither party led evidence as 
    to the market in which the respondent was competing for employment as a senior 
    software salesperson.  It seems both her counsel and the trial judge considered 
    the appellants failure to pursue its pleaded allegation of failure to mitigate 
    rendered such evidence unnecessary in light of the authorities:
Bavaro
, 
    supra
;

Beglaw v. Archmetal Industries Corp
., 2004 BCSC 1369, 
    36 C.C.E.L. (3d) 265;
Longshaw v. Monarch Beauty Supply Co.
,

[1996] 3 W.W.R. 365, 14 B.C.L.R. (3d) 88 (S.C.);
Athey v. Steve 
    Marshall Motors Ltd.
(1996), 23 C.C.E.L. (2d) 114 (S.C.);
Frederick 
    v. International Fund Raising Consultants Ltd.
, [1991] B.C.J. No 3420 
    (S.C.); and
Paradis v. Skyreach Equipment Ltd
., 2002 BCSC 32.

[17]

Of these cases,
Bavaro
is the closest comparable.  On 
    appeal, this Court accepted it was reasonable to fix a notice period for a 
    35-year-old purchasing manager discharged after 14 months employment at six 
    months.  Mr. Bavaro found subsequent employment, some ten and a half months 
    later, with a job that required him to move to New York.  Ms. Saalfelds position 
    involved less responsibility than that of Mr. Bavaro, who, as one of six department 
    managers, supervised four employees, managed a purchasing budget of $50 million 
    annually and reported to the managing director.  Ms. Saalfeld was employed 
    for significantly less time, and her job search lasted for about the same 
    length of time as Mr. Bavaros, although she found employment that allowed 
    her to remain in Vancouver.

[18]

In the absence of an error in principle, the test on appeal is not 
    whether I would have made the same award had I been the trial judge, it is 
    whether the trial judges award was beyond the range of reasonableness in 
    all the circumstances.  In light of
Bavaro
, while the award 
    on the evidence before the trial judge was on the very high end of an acceptable 
    range, I cannot accept the appellants submission that it warrants appellate 
    intervention.  Thus, I would not give effect to the first ground of appeal.

Share Option Plan

[19]

Absolute Software alleges the trial judge erred by failing to properly 
    apply the agreement between the parties to determine the damages that flowed 
    from the failure to give reasonable notice, and by implying the term lawful 
    into clause 1.1(z) of the Share Option Plan.

[20]

It is not disputed that the measure of damages for breach of an employment 
    contract is what the employee would have received if the contract had been 
    performed according to its terms:
Nygard International Ltd. v. Robinson
(1990), 46 B.C.L.R. (2d) 103 (C.A.); and
Iacobucci v. WIC Radio Ltd
., 
    1999 BCCA 753, 72 B.C.L.R. (3d) 234.  Nor is it disputed that the Share Option 
    Plan was integral to the employment contract.  Thus, the loss of its value 
    to the respondent is properly to be compensated.

[21]

Absolute Softwares point is that the respondent would not have been 
    entitled to exercise a stock option after 24 July 2007, the date on which 
    she received notice of her dismissal, whether [she] received 1 month or 5 
    months notice or pay in lieu.  In other words, the breach of the reasonable 
    notice duty did not cause Ms. Saalfelds loss of the entitlement to exercise 
    her stock options; her dismissal did.  In the appellants view, the wording 
    of the Share Option Plan provides that an employees entitlement to options 
    ceases on the date notice is given.  Thus, it is inconsequential whether 
    the right to receive stock options would have vested within the notice period, 
    had she received proper notice.  Once dismissed, she could not have exercised 
    them.  This, Absolute Software maintains, is the effect of the employment 
    agreement, properly construed.

[22]

The trial judge disagreed with this interpretation, as she explained 
    at paras. 51 and 52 of her reasons:

[51]      
    I am persuaded by the plaintiff's submissions on this issue.  There is no 
    doubt that the parties can agree to a contract that would deprive a dismissed 
    employee of options during a period of notice even if the dismissal was wrongful; 
    that is a matter of construction of the contract as a whole.  I find that 
    the parties did not make such an agreement in this case, upon proper construction 
    of the contract.  The option plan here referred to notice.  The principle 
    that dismissal without cause must be upon reasonable notice and that employment 
    continues to the end of the reasonable notice period has been recognized on 
    numerous occasions by our Court of Appeal.  Though
Martell
[
v. Ewos 
    Canada Ltd. and Statkorn Holdings ASA
, 2005 BCCA 554] was somewhat different 
    from this case, in that the employer had alleged cause, nevertheless the principle 
    it states is applicable:  that, for the purpose of assessing damages, the 
    employment continues throughout the reasonable notice period.

[52]      
    I find that the plaintiff's entitlement to damages for the loss of her option 
    rights is not precluded by the terms of the contract, properly construed.

[23]

The trial judge accepted Ms. Saalfelds submissions regarding the stock 
    options, outlined at para. 43:

[43]    Counsel 
    for the plaintiff argued, on the other hand, that the words whose employment 
    has been terminated by the company defined in paragraph (z) and used in paragraph 
    3.6 should be taken to refer to
lawful
termination of employment.  The 
    plaintiffs position is that there was no lawful termination until the plaintiff 
    had received reasonable notice:  thus, if reasonable notice was five months, 
    her employment
was not
lawfully
terminated until December 24, 2007.

[Emphasis in original]

[24]

In effect, Absolute Software submits, the trial judge impermissibly 
    read the word lawful into paragraph (z) of the Share Option Plan where the 
    agreement was effective without it:
Life Innova Capital Inc. v. Perceptronix 
    Medical Inc
., 2008 BCSC 1132. The appellant seeks to distinguish
Veer 
    v. Dover Group Corp. (Canada) Ltd/Société Dover Canada Ltée
(1999), 
    45 C.C.E.L. (2d) 183, 2 B.L.R. (3d) 234 (Ont. C.A.), where the court construed 
    the meaning of termination as lawful rather than unlawful dismissal, 
    and other cases where the stock option agreement is ambiguous as to the determinative 
    termination date:
Gryba v. Moneta Porcupine Mines Ltd.
(2000), 
    5 C.C.E.L. (3d) 43 at para. 51, 139 O.A.C. 40, and
Iacobucci
,
supra
.  In those cases where the employment contract contains ambiguity, 
    the contract, including the stock option agreement, is given the construction 
    most favourable to the employee on the principle of
contra proferentem
.

[25]

I agree, as did the trial judge, with the proposition that the Share 
    Option Plan governs the rights and responsibilities of both parties.  Where 
    an agreement is clear as to when the right to exercise an option terminates, 
    it governs.  This was the case in
Brock v. Matthews Group Ltd.
(1991), 34 C.C.E.L. 50, 43 O.A.C. 369.  At paras. 21-22, the Ontario Court 
    of Appeal explained:

[The trial judge] held that Brock could have exercised his option up to November 
    8, 1985, the expiration of the period of reasonable notice, and he made his 
    calculations of the numbers on that basis.

With 
    respect, we are of the view that he was in error.  Brock was discharged from 
    his employment on November 8, 1984.  He had, in law, a right to reasonable 
    notice or compensation in lieu of such notice.  But the proper focus of the 
    question relating to the interpretation of the share option agreements is 
    not the determination of the period of reasonable notice or the quantification 
    of compensation in lieu thereof.  The proper focus of that question is the 
    meaning, within the contemplation of the option agreements, of the words notice 
    of dismissal, dismissal and ceasing to be an employee.  In our view, 
    that meaning is the same for all of the events described

[26]

The Ontario Court of Appeal came to the same decision on a differently 
    worded stock option agreement in
Kieran v. Ingram Micro Inc.
(2004), 33 C.C.E.L. (3d) 157, 189 O.A.C. 58, noting at para. 56 that, under 
    Ontario law, the employee would be entitled to damages for the loss of the 
    stock option benefit as it formed part of his compensation, absent contractual 
    terms to the contrary, in the presence of which those terms govern.

[27]

In this case, the words governing the termination of the right to exercise 
    an option (assuming one has vested) are the last day on which the Officer 
    or Employee worked for the Company   I do not agree with the appellant that 
    the Share Option Plan clearly defines those words to mean the date of notice.

[28]

Paragraph 1.1(z) of the agreement provides two alternate definitions. 
     The first applies where an employee is given written notice of the last 
    day on which [(s)he] is to work for the Company.  In that event, the specified 
    day is the date on which the right to exercise a vested option terminates. 
     The specified day might be the date of notice or it might be a date months 
    after the date of notice if, for example, working notice is given (whether 
    reasonable or unreasonable in length).  However, Absolute Software does not 
    rely on that definition within the provision, and rests its argument on the 
    second definition.  Having given Ms. Saalfeld one weeks pay in lieu of advance 
    notice of a pending effective date of termination, it argues, her right to 
    exercise the stock option terminated on the date of receipt of that notice.

[29]

Ms. Saalfeld submits that the preamble of the provision makes the definition 
    inapplicable to a person whose employment has not been lawfully terminated. 
     According to Ms. Saalfeld, although she was given one weeks notice of the 
    termination of her employment and paid for that week, her employment was not 
    terminated at common law because she did not receive reasonable notice:
Dunlop 
    v. British Columbia Hydro & Power Authority
, [1989] 2 W.W.R. 518, 
    32 B.C.L.R. (2d) 334 (C.A.). Her counsel suggests the second definition in 
    paragraph 1.1(z) of the Share Option Plan applies only where the underlying 
    employment agreement contains a termination provision. Ms. Saalfelds agreement 
    contained no such clause.  Thus, her counsel submits, she is entitled not 
    only to reasonable notice, but to be treated as an employee until the notice 
    period fixed by the court comes to an end.  Included among the benefits lost 
    when Absolute Software dismissed her without reasonable notice was the value 
    of the stock option rights.  The trial judge found as a fact that she would 
    have exercised her option to acquire 1,250 shares at the time they would have 
    vested, and then immediately sold them.

[30]

This submission by the respondent is consistent with this comment of 
    Gouge J.A. for the Ontario Court of Appeal in
Veer
, 
    supra
at para. 14:

In my view voluntary termination refers to a termination that is consensual 
    or initiated by the employee, whereas involuntary termination is that initiated 
    by the employer.  In either case, the termination contemplated must, I think, 
    mean termination according to law.  Absent express language providing for 
    it, I cannot conclude that the parties intended that an unlawful termination 
    would trigger the end of the employee's option rights.  The agreement should 
    not be presumed to have provided for unlawful triggering events.  Rather, 
    the parties must be taken to have intended that the triggering actions would 
    comply with the law in the absence of clear language to the contrary.

[31]

It is also consistent with the approach of this Court as explained 
    by Thackray J.A. in
Martell

v. Ewos Canada Ltd. and Statkorn 
    Holdings ASA
, 2005 BCCA 554
,
218 B.C.A.C. 241 at para. 26, 
    quoting from the reasons of the trial judge:

The termination was not of his volition, but rather was that of the employer.  
    It has been found to have been unlawful.  In the circumstances, the employer 
    cannot thus benefit from having wrongfully dismissed the plaintiff.  The correct 
    course is that the plaintiff will be entitled to benefits which he would have 
    had a right to claim, had he been employed.

[32]

On the other hand, Absolute Software submits that this Courts decision 
    in
Dunlop
has been overtaken by more recent decisions of the 
    Supreme Court of Canada, where that court has recognized that an employer 
    can discharge its implied obligations under an employment contract either 
    by giving reasonable notice or by providing pay in lieu of notice:
Wallace 
    v. United Grain Growers Ltd
., [1997] 3 S.C.R. 701 at paras. 65 and 
    75, 152 D.L.R. (4
th
) 1. I read that decision as requiring employers 
    to give reasonable notice that the contract is about to be terminated, and 
    the payment of damages for failure to do so.  It does not support the proposition 
    that providing pay in lieu of notice is an alternative means of lawfully terminating 
    employment, effective on the date of the payment.  The payment is a remedy 
    for the failure to give the appropriate notice.  I see nothing in
Ansari,
supra,
or
Tull v. Norske Skog Canada Limited
, 2004 BCSC 
    1098, 34 C.C.E.L. (3d) 225, that suggests payment in lieu of notice terminates 
    the employment contract unless that payment compensates for reasonable notice.

[33]

As a result, I am not persuaded that the Share Option Plan is clear 
    that the right to exercise stock options terminates on the day of notice.  
    As in
Veer,
without express language to the contrary, it cannot 
    be presumed that the preamble in paragraph 1.1(z), an Officer or Employee 
    whose employment has been terminated by the Company, contemplates those officers 
    or employees unlawfully terminated.  The essential question is whether participation 
    in the Share Option Plan was a benefit of employment lost by reason of the 
    employers breach of the employment contract.  In my view, it was.  Since 
    Ms. Saalfeld is entitled to damages for any benefits she would have accrued 
    if the employment contract had been performed according to its terms until 
    the end of the reasonable notice period, she is entitled to damages for the 
    loss of her option rights.  There being no reason to interfere with the trial 
    judges valuation of the benefit she lost, I would dismiss the appeal.

The Honourable Madam Justice Huddart

Reasons 
    for Judgment of the Honourable Madam Justice Saunders:

[34]

I have had the privilege of reading in draft form the reasons for judgment 
    of Madam Justice Huddart.  I agree with her, for the reasons she has given, 
    we should not interfere with the award of damages for the appropriate notice 
    period.  I agree as well the appeal of the damage award relating to the share 
    options should be dismissed, but for somewhat different reasons.

[35]

The question is the loss to Ms. Saalfeld from the appellants failure 
    to give reasonable notice, found by the trial judge to extend past the date 
    on which Ms. Saalfelds right to receive share options would have vested.

[36]

It is clear, on authority of this Court, the implied term in the employment 
    contract is that each party must give reasonable notice of termination to 
    the other.  The implied term is not a term to the effect that the employer 
    may give pay in lieu of notice:
Dunlop v. BC Hydro & Power Authority
(1988), 32 B.C.L.R. (2d) 334 at 338, [1989] 2 W.W.R. 518 (C.A.), Lambert J.A.  
    The corollary of this proposition is, as said by Southin J.A. in
Nygard 
    Int. Ltd. v. Robinson
(1990), 46 B.C.L.R. (2d) 103 at 107 (C.A.):

That compensation, that is to say, damages for the breach are what 
    the innocent party would have received or earned depending on the nature of 
    the contract had it been performed according to its terms.

See 
    also
Iacobucci v. WIC Radio Ltd.
, 1999 BCCA 753, 72 B.C.C.R. 
    (3d) 234, and
Gillies v. Goldman Sachs.
, 2001 BCCA 683, 95 B.C.L.R. 
    (3d) 260.

[37]

This means, in my view, the remedy for Ms. Saalfeld is the value of 
    the emoluments she would have earned during the notice period had she continued 
    to work until its end.

[38]

It is, of course, open to the parties to agree to, as part of the contract 
    of employment, the length of notice to which the employee is entitled and 
    the monetary and benefit package that will be provided to the employee in 
    the event employment is terminated without cause.

[39]

My learned colleague has referred to
Veer v. Dover Corp. (Canada) 
    Ltd. / Société Dover Canada Ltée
(1999), 45 C.C.E.L. (2d) 183, 2 B.L.R. 
    (3d) 234 (Ont. C.A.),
Gryba v. Moneta Porcupine Mines Ltd.
(2000), 
    5 C.C.E.L. (3d) 43, 139 O.A.C. 40, leave to appeal refd [2001] S.C.C.A. No. 
    92,
Brock v. Matthews Group Ltd.
(1991), 34 C.C.E.L. 50, 43 
    O.A.C. 369, and
Kieran v. Ingram Micro Inc.
(2004), 33 C.C.E.L. 
    (3d) 157, 189 O.A.C. 58., leave to appeal refd [2004] S.C.C.A. No. 423.

[40]

As she has observed, those cases turn on the particular language of 
    the plan before the court.  In this case the language of clause 1.1(z) provides:

1.1    In this Share Option Plan:



(z)         the words
the last 
    day on which the Officer or Employee worked for the Company or a Subsidiary 
    of the Company
means, with respect to an Officer or Employee whose employment 
    has been terminated by the Company or a Subsidiary of the Company

(i.)  
    other than for cause, either

(A)       
    the day specified by the Company  in writing to the Officer or Employee as 
    being the last day on which the Officer of Employee is to work for the Company 
    ; or

(B)       
    if such Officer or Employee is given pay in lieu of advance notice of a pending 
    effective date of termination, the day on which such notice of termination 
    is given in writing by the Company  to the Officer or Employee; and

(ii.) 
    for cause, the day on which the notice of termination was given.

[41]

Absolute Software Corporation contends that clause of the share option 
    plan limits Ms. Saalfelds right to compensation for loss of the opportunity 
    to participate in it.  Respectfully, I do not consider the terms of the share 
    option plan accomplish this result.

[42]

It appears to me the share option plan addresses entitlement to shares.  
    Had Ms. Saalfeld received the notice to which she was entitled, colloquially 
    referred to as working notice, clause (A) of clause 1.1(z)(i.) would apply 
    and Ms. Saalfeld would have had the opportunity to acquire shares.  I do not 
    consider clause (B) of 1.1(z) detracts from that proposition; had she received 
    the working notice to which she was entitled, clause (B) would have been inapplicable.

[43]

It follows I, too, would dismiss the appeal.

The Honourable 
    Madam Justice Saunders

Reasons 
    for Judgment of the Honourable Madam Justice Neilson:

[44]

I have had the opportunity to read the draft reasons for judgment of 
    both Madam Justice Huddart and Madam Justice Saunders.  I agree with the reasons 
    for judgment of both, and I would accordingly dismiss this appeal.

The Honourable 
    Madam Justice Neilson


