Mitigation Income = 37% of Previous Income Not Deducted from Damages:

In Mackenzie v 1785863 Ont Lt ( 2018 ONSC 3442) Pierce J determined that 65 year old General Manager with 5 years service making $65k was entitled to 9 months reasonable notice .

In that notice period the Plaintiff had first earned $2,000/ month and then $1500 / month in mitigation income in a very much reduced job.

Applying the OCA decision in Brake v PJ-M2R Restaurant , as the Plaintiff  could not have been required to take these jobs as mitigation, the fact that he chose to do so means that the income does not count as mitigation income so as to reduce his notice damages. In the original Brake decision the mitigation income was a mere pittance, about $300. Here the mitigation income was 37% of his old income and it too was ignored.

What is the cutoff  before  mitigation income is counted ? Stay tuned for further cases to answer this vexing question.

    OCA Says Future Bonus Payments Are Not Wages:

    In Bois v MD Services ( 2017 ONCA 857) the Ontario Court of Appeal reviewed the situation where an employee resigned after the end of the calendar year in which the bonus was based upon but before the payment date had occurred.

    The relevant clause in the bonus plan reads as follows:

    In any given year, you must be a permanent employee of the CMAH Group of Companies on December 31 of the year for which the incentive is paid and continue to be so employed on the payment date(s) to receive a payment. Any employee who is no longer employed with the organization or has given notice of termination prior to the payout date will not be eligible to receive a payment.

    The Plaintiff’s argument was as follows:

    The appellant submits the motion judge erred in her interpretation of ss. 11(5) and 13 of the ESA, which state:

    11(5) If an employee’s employment ends, the employer shall pay any wages to which the employee is entitled to the employee not later than the later of,

    (a) seven days after the employment ends; and

    (b) the day that would have been the employee’s next pay day.

    13(1) An employer shall not withhold wages payable to an employee, make a deduction from an employee’s wages or cause the employee to return his or her wages to the employer unless authorized to do so under this section.

    [10]      The appellant contends that where a bonus has been awarded for a year, but at the time of the employee’s resignation future bonus installments remain to be paid-out, s. 11(5) of the ESA effectively operates to accelerate the employer’s obligation to pay-out future installments, notwithstanding language in an incentive plan requiring the employee to be actively employed at the date of any future pay-outs. To the extent that the terms of the VIPs sought to disentitle the appellant to the future installments, they were void as they contravened s. 13(1) of the ESA.

    The Court however found under the language of the plan, the bonus payments were not ones that the Plaintiff was ” entitled to” as the Court held that:

    It was open to the parties to agree how and when any bonus was declared, earned, accrued and would be payable: Kielb v. National Money Mart Company, 2017 ONCA 356 (CanLII), at para. 12.

    By the terms of the VIPs, the appellant was not entitled to the three bonus installments whose pay-out dates fell well after the date of his resignation. While those three installments would constitute wages payable upon each of the future pay-out dates, they were not “wages to which the appellant [was] entitled” when he resigned and his employment ended. Accordingly, we see no basis to interfere with the motion judge’s conclusion that where, as in circumstances such as those of the present case, the entitlement to an incentive plan payment does not arise until after an employee’s resignation or the expiration of the reasonable period of notice of termination, a plan’s requirement that the employee be actively employed at the time of a future pay-out does not contravene s. 11(5)of the ESA.

    [17]      Nor does such an active employment provision contravene s. 13(1) of the ESA, as the future pay-outs do not constitute “wages payable to an employee” at the time of his resignation.

    I have trouble with this decision for a number of reasons:

    The Court said that the parties can decide when a bonus would be earned. Since the definition of “wages” in section 1 of the ESA includes bonuses as wages, according to this decision, the parties can define for themselves when a wage is earned, even if their private definition differs from the common  use of the same word in a statute.

    Imagine that the parties had an agreement which said as follows:

    Your wage will be $5,000 per month, payable on the last day of each calendar month. However you are only entitled to that payment  if  you are actively employed on the last day of that month. Therefore if you die, resign, or are terminated for wilful misconduct before the last day of the month, you will not receive $5,000 for that month. If you are not employed as of the end of the month, instead of receiving $5,000 for the month, you will only receive the minimum wage as prescribed by the Employment Standards Act of Ontario, which is currently $14.00 per hour.

    According to the OCA, this clause would  be enforceable as the parties get to decide under what conditions the employee is entitled to his or her wages.

    I believe that the Court failed to appreciate that there  is a fundamental difference between when you earn an entitlement and when that entitlement is payable.

    Having earned the entitlement by performing all that is required of you, you may agree to defer being able to demand that payment until a later date. For instance, many commission plans say that your commission is earned on orders shipped in one month and payable on the 25th of the month following. If you quit work on the 2nd day of the month, you would have earned the commission but you could not legally enforce that entitlement until the 25th of that month.

    If  I bought a car from you today for $20,000 and agreed to make payment for it in 30 days, it would  be commonly understood that as of today I owe you $20,000 but that do not have to pay you until 30 days hence.

    Why doesn’t the same logic apply to the wage /  bonus  issue?





    Staying on LTD after Termination Can Be Evidence of Frustration :

    In Roskaft v RONA ( 2018 ONSC 2934) Pollak J. had a situation where 10 year employee went on STD and then LTD in 2012. In 2014, the Insurer found that the employee was permanently disabled from performing both his own and any occupation.  One year later, the employer reviewed the file and concluded that the contract had become frustrated, terminated him and paid him his ESA minimums.

    The plaintiff sued for wrongful dismissal but even at the time of the trial in 2018 he was still on LTD and had never taken the position that he was able to return to work. He had been disabled at that time for 6 years.

    The Court decided that an employer could rely on post termination evidence of frustration not in their possession at the time of the termination as long as it related to the nature and extent of the employees’ condition  at the time of termination.

    This evidence can support a finding that at the time of termination there was no reasonable likelihood that the employee could return to work within a reasonable time.

    Driver Banished by Customer = Lack of Work under CLC :

    In Merz v TST Trucking Ltd ( YM2707-10977) CLC Adjudicator Lederman had a situation where a driver was assigned a route serving Purolator, an important client of TST. As a result of an apparent incident between Mr. Mertz and some Purolator employees, Purolator told TST that would no longer let Mertz come on their property. TST then terminated Mertz.

    The Adjudicator found that whether or not Purolator was right or wrong in their assessment of Mertz’s actions, the banishment effectively ” precluded him from continuing in his job function ” and that this constituted a lack of work, therefore the adjudicator had no jurisdiction under the Unjust Dismissal section of the Canada Labour Code. The Adjudicator noted that the employer had no other routes available.

    It is unclear if the employer had no other vacant routes available or had no other routes at all. If for instance TST could have moved another of its drivers onto the Purolator route and had Mertz drive that other route, then there would have been no lack of work.

    If Mertz could have simply switched routes, then this case stands for the troubling proposition that even an unreasonable action by the employers’ client can lead to the dismissal of the employee.


    Frustration Does not Apply When Employer Refuses To Let Employee Perform Other Jobs:

    In Complex Services v Milloy ( 2018 ONSC 3590) Justice Conway, on appeal, had the following situation:

      Ms. Milloy worked for Complex at its Niagara casino for 10 years, initially as a hostess and later as a table games dealer. In February 2007, at the request of her doctor, Ms. Milloy was placed on modified duties due to a work-related repetitive injury to her right shoulder. She had surgery in July 2007 and returned to work. By April 2008 her doctor told her that her injury was permanent and she could no longer work as a table games dealer.
    3      Ms. Milloy was given modified duties in various departments at the casino for another two years. During this time, Complex told her to seek alternate employment within the casino that was not a table games dealer position. Ms. Milloy applied for 16 to 22 jobs at the casino, including positions that she had previously held and for which she had received excellent reviews. However, her applications resulted in three interviews and no job offers.
    4  On June 3, 2010, Complex terminated Ms. Milloy on the basis of frustration of contract. Ms. Milloy sued for wrongful dismissal.
    The Employer took the position that the plaintiff’s employment was frustrated because she could not perform any job at the casino. However as noted above, the reason she did not obtain an accomodated position is because the employer chose someone else for a position which the plaintiff presumably was both qualified for and capable of doing. The Court assumed that the reason the Employer did this was because the other person may have been more qualified than the plaintiff.
    The trial judge called this ” self induced frustration”, presumably because it was the Employers’ actions which prevented the plaintiff  from finding an alternative position within her medical restrictions.
    The trial judgement was upheld and it was found that the plaintiff  had been wrongfully dismissed.
    Lets us assume that the Employer truly believed that the person they hired to do the job was superior to the plaintiff but that the plaintiff did still meet the qualifications of the job.
    Under normal circumstances, in a non- union environment the Employer is free to hire the best candidate .
    However, as this was a situation involving the placement of a disabled employee through the process of accommodation, does not the Ontario  Human Rights Code require accommodation to the point of undue hardship?
    Surely it is not an undue hardship for an employer to place a qualified disabled employee into a vacant  position ahead of a superior non-disabled candidate.
    It does not appear that this was argued at the trial. If this had been framed as a human rights violation   as well as a wrongful dismissal action then the possible award could have been much higher. In fact it could have involved an order to reinstate the employee as well as monetary damages.

    Attending Your Own Trial Can be Bad for Your Case:

    In Holm v Agat Laboratories ( 2018 ABQB 415 ) Justice Horner had a situation where he found that the plaintiff had been constructively dismissed due to a demotion. He awarded 4 months notice to a 1 year middle manager making $100k

    In discussing the credibility of the defence witness, a Mr Dasanti, the judge found that he was not credible.

    However the Judge on went to say as follows:

    61      Desanti gave evidence that the revenue from the Air Services Division represented approximately 1% of Agat’s overall gross revenue. Even so, Desanti attended court every day of the five-day trial. I view this level of attention to this matter as disproportionate to its seriousness and further evidence of Agat’s hard ball and intimidating tactics.

    The judge went on and awarded $20,000 for aggravated damages.

    As I understood the concept of an open courtroom in Canada, the public is free to attend any trial they want ( unless an exclusion order is made) to see our justice system in action. In this case it was a participant in the trial who exercised his contitutional right to attend a public trial.

    In return this judge held that fact against the defendant.

    Does that seem right?



    Ont SC Awards $100K Punitive & $25K Moral Damages to President

    In Ruston v Keddo Mfg (2011) Ltd ( 2018 ONSC 2919 ) Justice Chiappetta awarded 19 months notice to 54 year old President making $289,000/ year with 11 years service.

    However the interesting part of this case is the extraordinary damages. The judge set out in detail why she awarded these damages :

    1. During the termination meeting the employer told the plaintiff that if he sued the defendant for wrongful dismissal , they would counterclaim against him. He sued. They counterclaimed for $1.7 million dollars alleging fraud.
    2. The Defendant admitted threatening another terminated employee in the same fashion.
    3. The Defendant threatened him at the termination meeting by reminding him how expensive lawyers can be. In the course of the litigation the Defendant first told the Court that they would have 25 witnesses, then just before the trial 5 witnesses, then they only called 3.
    4. The Defendant did not allege cause at the time of termination, and did so for the first time in the defence and counterclaim.
    5. The Defendant called no evidence regarding the allegations of fraud, performance, personal attacks or improper disbursement of company funds for his personal benefit.
    6. The Defendant alleged damages in the counterclaim of $1.7 millions but after their expert testified, the Defendant dropped their claim to $1.00. The defendant had no intention of proving damages and just did this to intimidate the plaintiff.

    The total judgment, excluding costs came to approximately $600,000.. The trial lasted 11 days. I suspect that the Plaintiff will be awarded costs on a substantial indemnity basis. Each side had two lawyers at trial. Total cost to the Defendant must be north of a million bucks after they pay their own lawyers.

    Note . This case is not yet reported but you can get a copy from Plaintiff’s counsel, Andrew Monkhouse of Monkhouse Law. It should be online in a few days.

    BC Court Gives Lower Notice to Dependant Contractor than Employee:

    In Pasche v MDE Enterprises ( 2018 BCSC 701) Justice MacDonald awarded only 13 months notice to a 67 year old estimator with 18 years service .

    Having first determined that the plaintiff was a dependant contractor and not an independent contractor, in deciding how much notice of termination he was entitled to the Judge said the following :

    110      After reviewing the numerous cases, I award the plaintiff 13 months’ notice. This is because I have found that the plaintiff is a dependent contractor rather than an employee and is therefore entitled to less notice than if he were an employee.
    This is not the law in Ontario where the Court of Appeal has made it clear that dependant contractors are entitled to the same notice as employees . ( See Keenan v Canac Kitchens 2016 ONCA 79 where the Court awarded 26 months to a dependant contractor)
    In this BC case the Judge gave no policy rationale for why a dependant contractor should get less notice than a regular employee. This distinction is even more unfair as the evidence showed that at this workplace some of the estimators were treated as contractors and some were treated as employees.

    Court Invalidates ESA Contract for not Including Benefits, Again:

    In King v DST Systems ( 2018 ONSC 533} Dow J.was faced with an   ESA termination clause that referred to ” pay” but did not refer to benefits. Moreover the clause also said ” and you shall have no further or other entitlement in that regard”,
    The Court said as follows:
    “The failure to specify all types of remuneration available as part of severance due and owing is contrary to my understanding of Justice Laskin’s analysis in Wood v. Fred Deeley Imports Ltd., supra. I am reinforced in this understanding by the defendant’s acknowledgment they did not provide for all the types of remuneration it was providing to the plaintiff as part of the payment of the two weeks’ notice.”
    His last sentence is somewhat concerning because it seems to imply that if the employer had in fact provided benefits over the ESA notice period that that would somehow remedy the situation. Wood v Fred Deeley however makes it clear however that we are only to look at the wording of the contract, not the actions or inactions of the Employer at the time of the discharge. This was intended to disallow the Employer from ” bootstrapping” an illegal agreement into a lawful termination agreement by filling in the deficiencies at the time of discharge.
    I have not set out the actual contract language as the decision did not do so. It certainly would be better for the development of the law if judges set out the full clause under review so that the reader would know exactly what language was either invalidated or upheld.

      Release Does Not Oust the Jurisdiction of a CLC Unjust Dismissal Adjudicator:

      In Li v Bank of Montreal ( 2018 CarswellNat 1229 ) Adjudicator Webster had a situation where a dismissed employee signed a release after receiving legal advice, got the money ( and probably spent it) but afterwards initiated a Section 240 Unjust Dismissal complaint under the Canada labour Code.

      Citing various Federal Court decisions , the Adjudicator said that she had no jurisdiction to dismiss the complaint simply because the employee signed a release before she had filed her complaint.

      In her final paragraph she said :

      The Agreement and Release signed by the parties in April of 2017 is not a bar to the hearing of the Complaint of unjust dismissal, but may be an important consideration with respect to an appropriate remedy if the dismissal is found to be unjust.

      How to avoid this outcome?

      As there is very short 90 day window for a complaint to be filed, if the release was signed after the 90 days then the employee would be barred from even filing a complaint.

      I suppose the prudent federal employer will have to first wait 90 days, then make inquiries if a complaint has been filed and only then settle with the employee.

      Sounds stupid , no? That the law for ya.