Notice Only Starts From Filing ESA Form 1:

In Wood v CTS of Canada  Co. ( 2017 ONSC 5695, Justice Sproat held that in a mass termination under the ESA of Ontario that the employer only gets credit for working notice, under both the ESA and the common law of reasonable notice, from the date that the Form 1 is filed with the Ministry of Labour and then is posted in the workplace.

Furthermore, in any week of working notice that the employee works in excess of the maximum overtime ( usually 48 hours ) that week does not count as working notice.   In this case the Employer gave termination letters on April 17, 2014 giving them working notice ending March 27, 2015 , some 11 months. However all that working notice was useless as the Employer did not file the Form 1 until May 12, 2015.

Termination and Disability Interaction in a Fixed Term Contract:

In Schram v Govt of Nunavut ( 2017 NBQB 143 ) the Plaintiff  was terminated 18 months before the end of the fixed term in her contract. However 8 months later she became disabled and remained so until one year after the end of her fixed term contract.

The Court found that she was entitled to her full salary for the 18 months remaining in her contract, even though she would have been unable to work for the last 10 months. Moreover, for the 1 year after her fixed term contract expired and while she was disabled, she was entitled to receive her LTD payments, which was about 66% of her salary.

However she was not entitled to receive overtime pay from the date upon which she became disabled. 

Duty of Good Faith Applied In Interpreting Termination Clause:

In Mohamed v Information Systems Architects (ISA)  ( 2017 ONSC 5708) Judge Perell was faced with a termination clause in an independent contractors’ agreement that included a provision that said ISA could terminate the fixed term agreement if ” ISA determines that it is in ISA’s best interest to replace the Consultant for any reason. ”

As the same clause listed other grounds for termination like substandard performance , cancellation of project and breach of the agreement, the Court held that this clause was not only vague and uncertain but to interpret it to mean that this gives an unfettered right on behalf of ISA to terminate the Consultant was contrary to the general doctrine of good faith as an operative principle of contract . ( Bhasin v Hrynew 2014 SCC 71). As this provision was held to be invalid, he was entitled to be paid out the balance of his fixed term. 

Another ESA Termination Clause Bites the Dust:

In Nogueira v Second Cup ( 2017 ONSC 6315) Justice Morgan was faced with determining the validity of this termination clause :

If the Second Cup terminates your employment, it will comply with its obligations under the employment standards legislation in the province in which you work (the ‘Employment Standards Act’).

The judge held that this clause did not oust the common law term of reasonable notice. This is what he said on that issue :

10]           It is evident that the clause in Machtinger is considerably more explanatory than that in the case at bar. In Machtinger, the employer went out of its way to advise the employee of what he would get (or, more accurately, what he would not get) upon termination. Likewise, in Roden v. Toronto Humane Society, 2005 CanLII 33578 (ON CA), 2005 CanLII 33578, the Court of Appeal found a termination clause displaced the common law where it provided that the employee would receive “the minimum amount of advance notice or payment in lieu thereof as required by the applicable employment standards legislation”. Along similar lines, in Farah v. EODC Inc., 2017 ONSC 3948 (CanLII), the contract provided that, “Upon termination, the Applicant would only be entitled to the statutory entitlements prescribed under the Employment Standards Act” [emphasis added].

[11]           No such explanation or warning sign appears in clause 13 of the Employment Agreement here. Using the barest possible language, it says nothing more than that the employer will obey the statute. The new employee being asked to sign this contract could be forgiven for assuming that the clause is there to reassure her that none of her rights are being curtailed, when in fact the very opposite is true.

[12]           It is evident that the Defendant, as employer, is responsible for drafting the Employment Agreement. It is addressed to the Plaintiff in the form of a letter agreement and refers to the employee as “you”. To the extent that an ambiguity exists in interpretation, the Employment Agreement should be interpreted contra proferentem against the employer as drafter. As Stinson J. stated in Singh v. Qualified Metal Fabricators Ltd. [2010] OJ No 4219, at para. 15, “I am not prepared to find that the Employment Agreement operated to nullify or detract from the implied common law requirement of reasonable notice of termination”…especially “having regard to the power imbalance that exists between an employer and employee as a matter of course.”

[13]           In my view, the words of the Employment Agreement are ambiguous at best. They do not convey the meaning that the Defendant attaches to them, and I do not see them as curtailing in any way the common law principal of reasonable notice or pay in lieu thereof.

There now seems to be at  least three basic attacks on ESA contracts that the Ontario Court of Appeal  has endorsed.

  1. Failure of consideration. ( Hobbs v TDI Canada Ltd , 2014 ONCA 44783)
  2.  Finding of an ambiguity in the wording. ( Wood v Fred Deeley Imports Ltd ( 2017 ONCA 158)
  3. Finding that any part of the  termination clause is contrary to the ESA and thus the whole provision is held to be invalid even if there is a severability clause. ( North v Metaswitch Networks Corp, 2017 ONCA 790)

What future grounds for attack exist in the future?

If and when it happens you will read about it first on this blog.

Unproven Allegations of Sexual Assault and Sexual Harassment Extend Notice Period:

In Smith v Vauxhall Co-Op Petroleum Limited ( 2017 ABQB 525) Justice Dario had a situation where she had to determine the proper notice period for a 57 year old Divisional Manager of 22 years service who made $70,000 per year.

The employer had alleged just cause , including an allegation of sexual assault and sexual harassment. .The Judge found that these particular allegations  were unproven.

In assessing the proper notice period ( which she found to be 20 months ) the Judge commented as follows:

[ 152] Based on the Bardal Factors, I find Mr. Smith would be entitled to a notice period of 20 months. He is entitled to such an award given his length of service, level of seniority, and the difficulty he may have had securing comparable employment.

[153]      In calculating Mr. Smith’s notice period, I have also taken into consideration Ms. AM’s allegations of sexual harassment and sexual assault: see Elgert at para 68. Consequently, I have assessed the notice period as higher than it would normally be for someone in similar circumstances. This is due to the impact the allegations may have had on Mr. Smith’s ability to find new employment.

Here is the kicker. This assessment of 20 months was a provisional assessment solely for the purpose of a potential appeal.

In fact the Judge upheld the discharge for just cause on the basis that the Plaintiff had engaged in a pattern of personal harassment of, but not sexually assaulted or sexually harassed,  his female subordinate. The other element of just cause was that he lied to his employer during the investigation about the nature of his relationship with the female subordinate.

That is what you call a Pyrrhic Victory.

Quite frankly, 20 months notice would see to be the correct notice period under normal circumstances so it is odd that the judge emphasized that she would have  awarded  an increased notice period because of the unproven allegations of sexual assault and sexual harassment.



Two Pronged Test for Lack of Work Issue in Canada Labour Code:

In Chabot v Ottawa Media ( 1987 CanLII 6335 (CA LA) Adjudicator Francois Bastien commented on the test to be used in determining whether an employer could rely on the ” lack of work” or ” discontinuance of a function ” exemption from the unjust dismissal section of the Canada Labour Code ( Section 242 (3.1) (a) ). I note that although the CANLII cite is 1987 the case was actually decided in 2017.

The Adjudicator confirms that it is a two  stage process:

  1. There must be a valid economic justification. Generally  speaking this mean that the Employer must show that they did not simply replace the dismissed employee     with another employee. However they need not show that the job duties have been eliminated as it is perfectly proper to lay off one employee and then to redistribute his or her duties amongst  the remaining employees. The onus of proof for this stage is on the Employer.
  2. Once it has been shown that there was a real layoff, the employer must show that they had a reasonable explanation for choosing the employee in question as the one to be laid off.

The Adjudicator made the following comments on this second branch of the test :

[113]   This leaves the issue of the “reasonable explanation for the choice of employee laid off”, the second prong of the afore-mentioned test described in Thomas, supra.

[114]   In her review of a passage from the Christie, England, Christie, Employment Law in Canada (Loose leaf, 3rd edition, 1998) textbook cited and relied on by the adjudicator in Rogers Cablesystems, supra, para. 40, Federal Court judge Eleanor R. Dawson, as she was at the time, restores its context by citing in turn the preceding and following passages. They read:

Unlike some other country’s legislation, which expressly encompasses the notion of unjust selection procedures in layoffs, s. 240 does not empower adjudicators to review the intrinsic fairness of such procedures. Nevertheless, the fairness of selection procedures is relevant as evidence in determining whether the employer’s motive is to terminate the claimant for economic organizational reasons or for some other reason unrelated to the layoff conditions. As Adjudicator Swan puts it, an adjudicator can review the selection procedure applied by the employer in order to determine whether it was utilized as a “colorable attempt to avoid the restrictions on unjust dismissal set out in the Code “. [footnotes omitted]

The quote is then followed by this passage:

Those words are generally interpreted as establishing a test of subjective intention: does the employer intend to release the claimant for economic reasons or for some other reason? The employee carries an “evidentiary” burden of raising a prima facie case of bad motive on the employer’s part, whereupon the onus shifts to the employer to “clearly” establish a “reasonable explanation for the choice of the employee to be laid off’. It must be emphasized that adjudicators will review the employer’s selection procedures only for this limited purpose of ascertaining the presence of a bona fide motive. The choice of appropriate selection procedures, however, is for the employer alone to make, be it operational factors, straight seniority, comparative skill and ability, or a mixture of both seniority and ability. Indeed, the employer can even choose on the basis of who is paid the least. If the employer makes comparative skill and ability the determinative factor, adjudicators will review the employer’s decision only so far as is necessary to ensure that there is no bad faith; adjudicators will not second-guess the substantive correctness of the employer’s decision since the employer has the superior expertise to make such judgments, not the adjudicator. 

This is similar to the analysis when one brings a human rights complaint in respect to whether or not a layoff was discriminatory. In most cases there is a legitimate reason, free of human rights issues, in deciding whether to reduce the work force. However, in deciding which employee stays and which is laid off , this decision is sometimes improperly affected by Code based criteria.

For instance, a front line manager may be told that he has to reduce his team by one member but is not given any guidance on how to select the appropriate candidate for layoff. The manager then uses illegal criteria, ie age, disability or gender, to decide that this employee is to be laid off. This would be a breach of the Human Rights Code.

It seems that this same  analysis now applies to unjust dismissal terminations. If the Adjudicator determined that the predominant motivation behind choosing the complainant over one of his co-workers for lay off was done in bad faith, then the Adjudicator has jurisdiction over the case. Absent the employer proving just cause, the default remedy would then be  reinstatement.

What would constitute bad faith ? In the case in question the Complainant argued that the reason that they laid him off was because he had a long standing feud with a co-worker about which he had complained about to management and they had done nothing about it. The Adjudicator found that the Employer had simply chosen the most qualified candidate to stay, ( who was not the co-worker with whom the Complainant had the feud )  and that was not the Complainant.

Bad faith can be many things. The only restriction is a lawyers’ creativity.

This case means that Adjudicators will now  look more closely at Employers who contest  jurisdiction under this provision and give more opportunities for Complainants  to argue that even though there was a legitimate shortage of work, the selection of who would be selected for lay off was so flawed that the result is a unjust discharge and that reinstatement with full back pay is the appropriate remedy.

This case should be a consideration when deciding whether a federally regulated employee should  proceed by way of an unjust dismissal remedy under the CLC or a wrongful dismissal action in the Courts.


Intentional Delay in Issuing ROE Results in $1,000 Damage Award:

In Ellis v Artsmarketing Services Inc (2017 CanLII 51563 (ON SCSM), Prattas DJ had a situation where he found that the Employer intentionally delayed issuing an EI Record of Employment for 5 months and then said that the employee quit on the ROE.

Here is what the Judge said about this issue:

The Record of Employment and inconvenience damages

[55]           There was some confusion as to the ROE. The plaintiff testified that she asked for it right

away, while the defendant said that since she was not terminated from the company but merely from the particular campaign it did not have to provide her with the ROE.

[56]           An employer is required to provide a ROE directly to Service Canada within seven (7) days of an interruption of earnings. Even if the defendant felt that it had not terminated the plaintiff from the company on April 1, 2016, it certainly knew by June 2016 when it was served with the Plaintiff’s Claim, which had been commenced on May 31, 2016. Yet despite this the defendant did not issue a ROE until August 12, 2016 and when it did issue it the defendant declared that the reason of termination was that the plaintiff had “quit”.

[57]           If the plaintiff had “quit” as alleged by the defendant, then, why didn’t the defendant issue the ROE much earlier than August?

[58]           This intentional act of the employer in inordinately delaying issuing the ROE and the declaration of “quit” resulted in the plaintiff being denied employment benefits, which in turn resulted in financial hardship of the plaintiff who had to borrow money from others, including family members, to meet her needs. 

[59]           It is trite to repeat that an employer must promptly submit the ROE whenever there is an interruption in earnings. This was acknowledged by Shifman in his testimony. It is obvious that the dithering by the defendant for about five months before submitting the ROE is inexcusable and caused the plaintiff stress and inconvenience for no good reason.

[60]           Jurisprudence has allowed the recovery of inconvenience damages under a variety of circumstances. See the following cases: Jarvis v. Swans Tours Ltd. [1973] 1 All ER 71; Fuller v. Healey Transportation Ltd. (1978), 1978 CanLII 1693 (ON SC), 22 O.R. (2d) 118; Tanglewood (Sierra Homes) Inc. v. Bell [2010] O.J. No. 2344; Foghi v. MCI Travel Ltd., [2013] O.J. No. 1759; Karampatos v Torabipoor, [2004] O.J. No. 4255;  

[61]           Taking into consideration what the plaintiff went through as a result of the defendant’s deliberate act of not promptly submitting the ROE and the initial rejection of the plaintiff’s application for employment benefits, I think that the sum of $1,000 is an appropriate, fair and proper amount under these circumstances for inconvenience damages to be paid by the defendant to the plaintiff.   

I believe that this may be the first time that damages for “inconvenience damages ” for delaying the issuance of an ROE has been awarded in a wrongful dismissal case.

On the issue of reasonable notice the Judge awarded 9 months notice to a 9.2 year part time sales rep whose age was over 50.

The Judge also noted the submission by the paralegal for the Plaintiff on the issue of reasonable notice by referring to his use of the Fisher Wrongful Dismissal Database, a publication which I am somewhat familiar.

Severance Offers Not Accepted Cannot Be Plead:

In Ramos v Hewlett-Packard ( Canada ) ( 2017 ONSC 4413 Justice Ryan Bell found that it was inappropriate for the Defendant to plead in their Defence that they had ” offered the plaintiff a reasonable settlement package”.

She offered two reasons for this :

1) The offer contained in the termination letter was intended to settle the matter and thus was without prejudice even though it did not say that it was without prejudice.

2) ” What constitutes reasonable notice will be an issue for the trial judge to determine, what Hewlett- Packard offered to Ms Ramos is irrelevant.

My Comment:

If the Defendant had actually paid the amount in the offer to the Plaintiff, then the Court would be able to judge whether the notice provided was reasonable. In my reading of thousands of wrongful dismissal cases , it seem that where the employer actually pays what they think reasonable notice is, the Courts’ assessment of reasonable notice is lower than where the employer only pays the ESA minimums and then litigates over the amount of reasonable notice.

Court Confirms that Lower Skilled Employees Have Tougher Time Getting a Job Thus Should Get Longer Notice Periods:

In McLeod v 1274458 Ontario Inc ( 2017 ONSC 4073) Hood J . had to determine the notice period for a 48 year old mover making $40K with 18 years service.

In commenting on the relevance of the character of employment the Judge said :

29 The plaintiff had worked as a driver and mover for the defendant for 18 years and was 43 years old when terminated. He had no special training or qualifications. The defendant argues that, because the plaintiff lacks special skills and was not a specialized employee, the notice period should be reduced.

30 When Bardai was decided in 1960, it was to some extent a different work environment than today. The longer notice period for senior management employees or highly skilled and specialized employees and a shorter notice period for lower rank or unspecialized employees as suggested by the defendant may have been appropriate in 1960. If anything, in today’s world and economy, that has changed. Those with skills and specialties change jobs frequently and rapidly. Those without skills and specialties, I believe, find it more difficult to find employment.

He went on to award 12 months notice.

Series of Fixed Term Contracts Over 38 Years Yields Zilch Severance:

In Burns v University of New Brunswick ( 2017 NBQB 104) Justice Glendening had to decide whether the failure to offer a new contract to the plaintiff after a relationship of multiple contracts over a 38 year time span was a wrongful dismissal requiring reasonable notice .

The Judge said no, for the following reasons:

   I agree with the factors set out in the pre-trial brief of UNB which support the finding of fixed term contracts between Burns and UNB (ELP):

•         No continuous employment between the parties.  All ELP contract employees were told repeatedly that there was no guarantee of work in the future;

•         Contracts varied in length, duties and position.  Burns had the opportunity to and did negotiate terms of his contract;

•         Rate of pay was discussed and negotiated;

•         Burns refused contracts and, in particular, November 2015;

•         Records of Employment were issued over the years;

•         Burns did not receive benefits or pension from ELP or UNB;

•         Burns did contribute to the Public Service Shared Risk Plan under terms as established by PNB;

•         Burns did not receive vacation or sick time but he did receive vacation pay in his statement;

•         Burns had no authority over staff members or any students; and

•         Burns received the following training between 1978 and 2016:

–     three annual conferences in 1991 and two between 1991 and 2015;

–     one six hour session in 2008 and one three hour session as a workshop in 2013; and

–     a two day workshop at UNB’s College of Extended Learning in 2012.


[17]                              I find that an employee whose contract is not renewed at the conclusion of a fixed term contract is not entitled to reasonable notice.  The case law indicates that the contract is simply terminated and neither party is under any obligation to continue the contract of hiring.  I find that the contracts were clear and comprehensive.  I find that Burns was not an indefinite hire employee but rather a contract term employee.  There were no ambiguities to be interpreted in regard to termination.   Burns is not entitled to any reasonable notice.  The plaintiff was not wrongfully dismissed.

In Ontario, this plaintiff still would have been entitled to both termination pay and severance pay under the Employment Standards Act, which would have come to around 34 weeks, depending on if and when the gaps in employment were  in excess of 13 weeks.