In the world of employment, Wallace v. United Grain Growers Ltd. established a duty on the part of employers to act in good faith while in the course of dismissal. In the decade or so following that decision, virtually every wrongful dismissal included an allegation of bad faith.
Terminating an employee is tough. The conversation in which the employer provides the employee with notice of termination can be awkward. Given how difficult terminations are, for both the employer and the employee, courts hold employers "to an obligation of good faith and fair dealing in the manner of dismissal."
The issue of good faith and bad faith in contractual relations is distinct from the issue of calculating damages due to the failure of the employer to provide reasonable notice of termination. There was no need in this case to determine whether or not the employer acted in bad faith as the same outcome can be determined without the need to determine the bad faith issue.