The employer, Public Works and Government Services Canada (PWGSC), was found to have breached its duty of good faith in terminating Douglas Tipple because it failed to take reasonable steps to protect his reputation from the effects of press statements which PWGSC knew to be false: Tipple v Canada (Attorney General), 2012 FCA 158. Tipple had been hired from the private sector to serve as a special adviser on cost-reduction. He met his targets, saved his employer $150 million and received the best possible performance reviews. PWGSC seems, however, to have regarded his proposal to turn the department into a Crown corporation as a bad one, and the view was expressed (in spite of his achievements) that he was ‘not working out’. Then came a fateful business trip to London with a colleague, where Tipple was to attend meetings with UK officials that had been scheduled by the Canadian High Commission. There was some kind of mix-up, because Tipple was signed up for meetings that were outside his remit and more properly within those of the colleague. He attended the meetings that were within his bailiwick. On Tipple’s return, he found out that PWGSC had sent letters to the UK government apologising for his non-attendance at meetings and that his trip report had been leaked to the press. Media reports of ‘a trail of cancelled meetings’ followed; an internal investigation exonerated Tipple, but was not made public. He was terminated shortly afterwards but was unable to find a new job because of the black cloud hanging over him.

An adjudicator awarded Tipple $1.4 million in damages for wrongful termination, which included amounts for psychological injury and loss of reputation. PWGSC challenged the award for loss of reputation, which was set aside by the Federal Court but restored by the Federal Court of Appeal. Applying Wallace v United Grain Growers Ltd, [1997] 3 SCR 701, the appeal court concluded that while there is no freestanding duty to protect an employee’s reputation, in circumstances where there has been wrongful termination, the Wallace duty of good faith requires the employer to protect the employee from reputational loss suffered as a result of allegations that the employer knows to be false and that impair the employee’s ability to find a new job. Here, the employer clearly failed to do that, in not correcting the false statements or allowing Tipple to defend himself. There was no evidence to show that PWGSC’s media plan was anything but a self-serving exercise at Tipple’s expense.

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