Availability of Other Employment Requires Evidence

The BC Court of Appeal in Munoz v Sierra Systems Group ( 2016 BCCA 140) commented on the burden of proof in the Bardal Factor of availability of other employment .

The Court commented as follows:

48) The employee bears the burden of proving that the notice period should be longer because of the lack of availability of suitable work. As Madam Justice Baker said in Desaulniers v. Wire Rope Industries Ltd., [1995] B.C.W.L.D. 1332 at para. 14 (S.C.):
“If the plaintiff asks the court to depart from the general range of notice periods recognized by other courts in respect of plaintiffs of similar age, seniority and position, she must establish an evidentiary basis for such a departure.”
49) In the present case the trial judge found that “neither party produced cogent evidence of similar employment at the time of termination”. Since it was Mr. Cuesta’s burden to prove a lack of availability of work, this failure falls to him.
50) Typically the burden is met by a plaintiff demonstrating his efforts to find work through job postings and applications made. In this case that evidence was not available because Mr. Cuesta chose to focus on his existing private IT company. There is no suggestion that he did not pursue other work because none was available. Mr. Cuesta deposed that this seemed to be the sensible thing to do:

At first blush it looks like the failure of the Plaintiff to lead this type of evidence would be fatal, however the Court recognized that the burden of evidence is satisfied where the Plaintiff simply shows that his diligent job search has not resulted in a job.

This case reminds us of how important it is for the Plaintiff to present a thorough and comprehensive job search record to not only show the Court that he reasonably mitigated his damages but to  further provide an evidentiary basis to find  that the lack of available jobs is a factor that should extend the notice period.

In my experience as a mediator of employment matters,  comprehensive evidence of this type of mitigation evidence is seen in perhaps 50% of the cases. This failure of the Plaintiff to properly document their job search costs the Plaintiff money at the mediation as it gives the Employer a bargaining chip to reduce the notice period.

Contract must Comply with ESA in the Future to be Enforceable:

In Garreton v Complete Innovation ( 2016 ONSC 1178 ) the Divisional Court, on an appeal from a Small Claims Court matter, found that the time to examine a contract for its enforceability is at the time of execution, not at the precise date of termination.

This was the contractual provision under review:
Otherwise Complete Innovations Inc. may at any time terminate this agreement by providing the Employee with (1) one week notice if their duration of continuous employment with the Company is more than 3 months but less than 1 year. (2) weeks prior written notice of intention to terminate if the Employee duration of continuous employment with the Company is more than 1 year but less than (3) years. If the duration of continuous employment with the Company is more than 3 years each additional year will entitle the Employee to (1) one additional week of notice to a maximum of 8 weeks. … Complete Innovations Inc. shall maintain on your behalf your employee benefits for a period of not less than the period required by applicable statute.

The defect was that it failed to provide for the payment of severance pay under the Employment Standards Act. At the time of her dismissal the plaintiff has just over 2 years service, therefore not entitled to ESA severance pay (as you must  have at least 5 years service unless it is a mass layoff).

The Employer argued that at the time that they terminated her employment, giving only two weeks notice under the contract was legal and it mattered not if she had been terminated after 5 years of service that the contract would not have been in accordance with the ESA and thus the employee would have been entitled to common law reasonable notice.

This is what the Court said on this issue:

23 While the termination clause is therefore void and unenforceable for a CI employee of more than 5 years, is it so for Garreton who was an employee of less than 3 years?
24 Garreton relies on Wright v. Young & Rubicam Group of Cos., 2011 ONSC 4720 (Ont. S.C.J.). In that case, Low J. found that a notice provision in an employment contract was void for potentially violating the Act.
25 In that case, as here, the contract provided for the proper notice under the Act given the employee’s years of employment but was contrary to the severance provisions in ss.64 and 65.
26 In reaching her decision, Low J. relied on Machtinger v. HOJ Industries Ltd., [1992] 1 S.C.R. 986 (S.C.C.); Shore v. Ladner Downs, [1998] B.C.J. No. 1045 (B.C. C.A.) and the obiter comments by M. D. Forrestall J. in Slepenkova v. Ivanov, [2007] O.J. No. 4708 (Ont. S.C.J.) aff’d [2009] O.J. No. 2680 (Ont. C.A.). CI in turn relies on the more recent case of John A. Ford & Associates Inc. v. Keegan, [2014] O.J. No. 3995 (Ont. S.C.J.) where Price J., after considering the above cases disagreed with Low J.’s decision and held that the contract of employment, “must conform to provincial employment standards legislation for the particular employee, in the particular circumstances (para. 150).
27 With the greatest of respect, I disagree with Price J.’s conclusion. In my view, the employment contract must be considered at the time it is executed. If the termination provision is not onside with notice provisions and severance provisions (if applicable) of the Act at the outset, then it is void and unenforceable. Potential violation in the future is sufficient. As Low J. states, “It is not that difficult to draft a clause that complies completely with the Act, no matter the circumstance.”
28 Accordingly, for the above reasons, I find the termination provisions of the Agreement respecting notice to be void and unenforceable.

In the end the the 43 year old Trainer with 2.3 years service who was making $62,500 per year got a 5 month notice period, well above her ESA minimums.

In my opinion this is the correct approach as otherwise an employment contract could be legal one day and void the next, which would add considerable uncertainty to an already difficult time for both employers and employees.

Employers can easily draft clear and legal termination clauses. The Courts should not help them clean up poorly drafted ones.

Cannot Discipline an Employee by Demoting Him

In Cousins v QEC, ( 2016 NUCJ 01) the Nunavut Court of Justice held that because the Employer had a policy on progressive dismissal that did not include demotion as a disciplinary tool, when the Employer demoted the Maintenance Supervisor responsible for 14 plants to a non-supervisory position, this constituted a constructive dismissal. The 16 year employee received 18 months notice, but had it reduced to 11 months due to poor mitigation efforts.

The Court refused to read into the Discipline Policy an implied term that the Employer had the right to use a temporary demotion as part of its discipline tool chest.

Quere, if there had not been a Discipline Policy, would the Court have allowed the disciplinary demotion where they found that discipline was warranted ?

What if the Employer could show that they had just cause to terminate the employment but instead chose to only demote the employee? Would the Employer be penalized for not being tougher on the employee?