Wallace v United Grain Growers Ltd, 1997 CanLII 332, [1997] 3 SCR 701 is a leading decision of the Supreme Court of Canada in the area of Canadian employment law, particularly in determining damages arising from claims concerning wrongful dismissal.

[d] Iacobucci J described damages arising from wrongful dismissal as forming part of the wages exemption under the Bankruptcy Act, stating: 65.

There can be no doubt that if the employer opted to require the employee to continue working during the notice period, his or her earnings during this time would constitute wages or salary under s. 68(1) of the Act.

However, at a minimum, I believe that in the course of dismissal employers ought to be candid, reasonable, honest and forthright with their employees and should refrain from engaging in conduct that is unfair or is in bad faith by being, for example, untruthful, misleading or unduly insensitive....While agreeing with the majority in most respects, McLachlin J (as she then was) differed on two points: As a result, in addition to restoring damages for reasonable notice to 24 months, she would have also restored the award for aggravated damages.

Finally, there are other equally effective ways to remedy wrongs related to the manner of dismissal which do not affect the prospect of finding replacement work.The increase in reasonable notice that was suggested by the SCC came to be known as the "Wallace bump,"[28] and claims that included it became so frequent that the courts began to criticize the practice.

[31] Subsequent jurisprudence has identified several key areas where an employer's conduct will constitute bad faith that will attract Wallace damages:[32]