Judicial Discretion in Reasonable Notice – Return of the Wallace Bump?

In Wilsher v Olympic Wholesale, 2026 ONSC 3620 Justice Woodley held that a 55 year old Night Shift Supervisor with 17 years service, was wrongfully terminated and entitled to 33 months notice.

This 33 months was comprised of 19 months’ reasonable notice plus an extension of 14 months due to bad faith and unfair dealings in the termination of employment.

This case is important because the extension of notice periods for bad faith conduct is not common in modern reasonable notice analysis.  Although this case hails from outside Alberta, it could still be relevant here.

Facts

The following were the pertinent facts found by the Court:

• Wilsher (“Willsher”), a supervisor for Olympic Wholesale (“Olymipic”), was terminated with cause having been found engaging in a practice of “topping up” time cards.
• The practice of “topping up” balanced time cards involved employees who worked through a designated break period. Topping up allowed them to leave early while getting credit for working through a scheduled break. There was reliance by the departing employee upon others to adjust their time records, making it appear that they had worked to the end of their shift.
• At 55 years old, Willsher had been an employee of Olympic for 17 years, originally as a warehouse labourer but ascending to night shift supervisor by the time of his termination.
• The court examined if Olympic had just cause for the termination of Willsher’s employment.
• Olympic’s workforce had been unionized in 1994 and utilized a “card punch clock” system for time tracking and reporting.
• As a Night Shift Supervisor, Willsher had access to the time tracking management system. He was shown how to change worker’s hours by his former supervisor.
• Olympic investigated the conduct of Willsher and following it’s conclusion, Willsher was terminated on the basis of committing fraud against Olympic.
• Willsher had never received a reprimand from Olympic in his 17 years of service.
• Olympic did not investigate Willsher’s claim that the “topping up” practice was widespread and that other Night Shift Supervisors engaged in it.

Analysis / Conclusion

Justice Woodley held that Olympic failed to justify the termination of Willsher for cause. Applying the facts to the tests articulated in McKinley v. BC Tel, 2001 SCC 38 (CanLII), [2001] 2 SCR 161 whether the evidence established the employee’s deceitful conduct on a balance of probabilities and if so, whether the nature and degree of the dishonestly warranted dismissal. Conduct that had been condoned by the employer is insufficient to justify dismissal, allowing the Justice to reach his conclusion on the basis that:

1. The exercise of “topping up time cards” was a well-known and long standing practice among the entire night workforce and the supervisors;
2. The plaintiff did not personally benefit from his actions; and
3. The employees he was supervising had 40 guaranteed work-weeks, which was found within the collective bargaining agreement.

In assessing reasonable notice damages, the Justice evaluated many factors about the investigation that warranted additional damages, concluding that he was entitled to 33 months’ severance pay, as follows:

[129] In the present case, there is sufficient evidence that Olympic engaged in bad faith and unfair dealings when dismissing Willsher that would justify awarding an extended notice period to Willsher. This evidence, includes inter alia, the following:

1. The “investigation” specifically targeted Willsher without any attempt to determine the nature and extent of the “topping up” practice.
2. No other supervisors were interviewed about the “topping up” practice, nor were other supervisors’ edits of employees’ timesheets audited in the course of the “investigation” as, according to Peroff, Olympic “was not required to prove the plaintiff’s case”.
3. Willsher’s October 5, 2023 “interview”, conducted by Peroff and Sousa, closely resembled an interrogation and not an investigation or interview. The meeting was implemented without notice, without explanation, without due process, without representation and was conducted in a high-handed, one-sided and biased manner, intended to intimidate Willsher.
4. Willsher’s replacement, Jacob Bailey, who assumed Willsher’s position as Night Shift Supervisor in October 2023, was terminated in December 2025 (immediately prior to trial) “for the same practice” which supports a finding that Willsher’s termination was personal, directed, and intended to remove Willsher from the company, not to correct or prevent the “topping up” practice from continuing.
5. The termination letter provided to Willsher on October 5, 2023, accused him of “fraudulent behaviour” and “theft of time”. Willsher’s ROE recorded “dismissal/suspension” and prevented him from obtain unemployment benefits. Further, Willsher was not provided with any references after 17 years of employment with Olympic and, as such, he was inhibited in his search for new employment and mitigating his losses.

[130]      Despite attempts to secure new employment, Willsher has been unable to find a new job and has suffered embarrassment and humiliation at the hands of Olympic. In these circumstances, Willsher is entitled to damages in the form of an extended notice period extended to the date of release of this decision which equates to a further 14 months’ notice, for a total notice period of 33 months.

My Take

Judicial discretion is an important aspect of our judicial system allowing judges to consider the nuances of a particular context or matter. Poor behavior by employers is often reflected in punitive or aggravated damage awards. However, in this instance Justice Woodley determined that while the conduct of the employer was sufficient to extend the notice period, punitive or aggravated damages were not justified as: “the actions of Olympic in terminating the employment of Willsher do not rise to a level that would warrant punitive damages.”

The reasoning in this case is interesting, but unusual in modern reasonable notice analysis.  The basis for extending notice periods due to bad-faith conduct is historically based in the decision Wallace v United Grain Growers, [1997] 3 SCR 701.  For years, this was actually called the “Wallace Bump”.  A subsequent decision of the SCC – Honda Canada Inc. v Keays, 2008 SCC 39 – explicitly found that bad faith can result in aggravated damages but should not result in an extension of the notice period.  There are very few cases after Keays which have awarded a Wallace Bump.

Willsher was awarded a 14-month extension of the notice period, which amounted to an additional award of approximately $72,000, perhaps a distinction without a difference for Mr. Willsher, but interesting legal analysis for the legal community.

Justice Woodley’s reminder that punitive damages are not intended to be compensatory but rather used to deter unacceptable conduct [para. 133] provides a further insight into the judicial mind that was looking to compensate Willsher for his loss of employment. Caution should be exercised for investigations that are merely exercises in confirmation of an incident, as mere conduct may not be separated from a commonly held practice.

For plaintiffs the characterization of the award may not make a difference to them, but this decision has the potential to create uncertainty as to the threshold of additional damages or conversely the factors that would extend a notice period.

Addition caution will be required for plaintiffs who are using various generic AI platforms to inform themselves of potential damage claims or notice periods, as this case is most likely to be seen as an outlier.

There are rumors that this decision is being appealed.  We’ll all have to wait and see.

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