In Nagribianko v Select Wine Merchants ( 2016 ONSC 490) Sanderson J. , in an appeal from a Small Claims Court judgement, had the following comments about probationary employment :
40) A reasonable person in the same circumstances as the Respondent/Plaintiff would have understood the term “probation” to mean a period of tentative employment during which Select would determine whether the Respondent/Plaintiff would be a suitable employee and would decide whether or not to make him a regular/non probationary employee.
41) On his own evidence, the Plaintiff /Respondent understood that during the 6 month probationary period he would be at risk. He may have believed that the employer would find him to be a suitable employee, but a reasonable person in those circumstances would also have understood that that might not happen.
42) A reasonable person would have understood, and on his own evidence, the Plaintiff/Respondent did understand that probationary is inherently unstable and tentative.
43) Probationary employment, on its face and by its nature, is inconsistent with any inducement or promise of long-term employment.
I find the comment in paragraph 43 most interesting. On many occasions an employee who claims that they have been induced away from prior secure employment then signs an employment contract with a probationary clause. This case stands for the proposition that the mere existence of a probationary clause would likely negate the issue of inducement. This concept would apply whenever the employee was terminated, whether during or after the probationary period, because it is evidence at the time of hiring as to what was is the mind of the contracting parties. This case also stands for the proposition that a reasonable person, having decided to leave his or her current position and join a new employer, would know that there was not any promise of long term employment if the new agreement contained a probationary clause.
Of course, if the probationary period exceeds three months, the employee is still entitled to his termination pay under the Employment Standards Act of Ontario, even though the he or she was properly terminated pursuant to the probationary regime. Therefore a probationary clause in excess of three months should contain a clause that limits one’s recovery to a termination within the probationary period to one weeks termination pay plus benefits and accrued vacation pay, as long as the probationary period is less than one year.
In fact, if the probationary clause was in excess of three months and purported to say that an employee could be terminated within the notice period without just cause and without any notice, then there is a good argument that the entire clause would be illegal as it offends the ESA. This would mean that employer had lost the protection of the probationary clause and the employee would be entitled to common law reasonable notice.
In Gagnon & Associates v Jesso ( 2016 CarswellOnt 233) Gordon RSJ decided that a 10 year Senior Salesperson of a small HVAC company was required to give two months notice of his resignation, especially when he knew that the other senior salesman would;d be leaving his employment on the same day.
This is one of the few “wrongful resignation” cases that the Courts have dealt with.
The Court determined that the loss incurred by the company for the failure to provide proper notice was $35,164, based on lower sales after his abrupt departure.
In Maasland v City of Toronto ( 2015 CarswellOnt 19525) Mew J. awarded 26 months notice in a constructive dismissal case involving a 57 year old Senior Engineer with 25 years service earning $142,000 / year. He also found that she did not fail to mitigate her damages by not applying for a job offer with York Region as this would have involved a commute of 50 km.
There was no mention of any special circumstances that pushed this notice period above what was previously considered to a the “cap’ of 24 months.
In Lalani v Canadian Standards Association ( 2015 CarswellOnt 19003) Diamond J. dealt with a clause in a bonus plan that required the employee to be “actively employed” at the end of the fiscal year to be entitled to a payout of the bonus. The employer paid the employee a prorated bonus for the period up to his actual date of termination plus the 34 week termination and severance period under the Employment Standards Act but not for the balance of the 24 month notice period.
The Court held that ” While the plaintiff may be notionally an employee during his 24 month notice period, he is no longer an “active employee” and does not qualify for the STIP payment.”
The interesting aspect of this case is not that the term “active employment” was found to be different than the period of reasonable notice, but rather that both the termination pay period of 8 weeks and the severance pay period of 26 weeks were both determined to be ” active employment “.
Section 62(1) of the ESA ( which deals with Termination Pay ) reads as follows:
If an employer terminates the employment of employees without giving them part or all of the period of notice required under this Part, the employees shall be deemed to have been actively employed during the period for which there should have been notice for the purposes of any benefit plan under which entitlement to benefits might be lost or affected if the employees cease to be actively employed. 2000, c. 41, s. 62 (1).
However no such parallel provision exits for severance pay in the ESA. This is because severance pay is a different concept than termination pay. Termination pay is a substitute for termination notice and thus must mimic what the employee would have received had he or she been given actual working notice. Severance pay however is an entitlement to receive a lump sum payment and in fact cannot be provided by giving working notice.
This case treats both statutory payments as constituting “active employment” and thus may have the effect of expanding the rights of dismissed employees to bonus plans.
In Keenan v. Canac Kitchens Ltd., 2016 ONCA 79 the Court upheld a 26 month notice period for a husband and wife who both worked as dependant contractors for Canac as Delivery and Installation Leaders., which were determined to be supervisory/ foreman positions. The husband had 32 years with Canac and was 63. The wife had 25 years with Canac and was 61 .
There are a few aspects of this case that are interesting;
1) The Court did not lessen the notice period because they were dependant contractors as opposed to employees.
2) Even though there were no special circumstances other than the usual Bardal factors of age, service and position, the Court had no trouble upholding a 26 month notice period, thereby shattering the myth that 24 months is a cap.
3) Most important, at least to me, is that winning counsel was Matthew Fisher ( my son ) and his partner Bram Lecker.