In Oriotakis v Pennisula Employment Services Ltd ( 2021 ONSC 998) Justice Dumphy had reason to comment on a number of topics relating to both the calculation of reasonable notice and how to calculate damages regarding commissions over a notice period.
- Assessing Notice: : Although the plaintiff had the fancy title of Business Development Manager , he did not supervise anyone and was actually a salesman. This is what the judge said about the issue of how important is was to determine if this was a senior position . The entire debate regarding the relative seniority or degree of responsibility of the employee’s position is, in my view, a product of an overly literal approach to the application of the so-called “Bardal factors” examined by our courts in considering the question of reasonable notice. These factors that are better understood as guidelines to approach the consideration of a problem rather than an exhaustive and mathematically determinative formula. For better or for worse, the determination of the level of reasonable notice at common law is a highly fact-specific exercise permitting few precise comparisons from case to case, an observation that does not preclude deriving helpful guidance as to appropriate ranges in particular.
 There are few questions more vexing than that of determining reasonable notice under the common law of the employment contract as it has evolved over the years. Difficulty is not a reason not to undertake the task nor does conflict in the jurisprudence render subjective a task that is intended to be undertaken objectively and on a principled basis. The fact of the matter is that the Legislature has had any number of opportunities to wrestle with the problem and lay down clear rules to be followed in all cases. They have not done so or, perhaps more accurately, they have consistently mandated only minimum standards leaving contract and the common law to fill in the remaining blanks. This indicates to me an implicit acceptance by the Legislature that the fact-specific analysis demanded by the common law remains a viable and even desirable means of approaching the question.
The Judge then undertakes a painstaking analysis of the various cases presented to him by counsel and comments on how they are similar or different from the case before him.
This approach is a common judicial approach and has always troubled me. Howard Levitt years ago in his book counted 107 separate factors considered by the Courts in assessing reasonable notice. If there are that so many factors to consider, then there is simply no certainty or ability to predict an outcome. If every case of wrongful dismissal requires this intense examination, then how could any employer or employee reasonably determine what reasonable notice is when the most important factor would seem to be the identity of the judge.
This is why, back in the 1980’s, I started the Wrongful Dismissal Database so that the profession and the judiciary would have access to aggregate information that would give some guidance to determining reasonable notice and therefore over time would hopefully create more certainty over notice periods.
I suspect that lawyers use the WDD to find cases that support their position without showing the judge the full range of the report. This may result in the judge picking one extreme position over the other whereas the data would actually show that the average and or the mean of the cases would produce a less extreme result.
I would respectfully suggest that judges, on their own initiative , could ask counsel to produce a report such as the WDD in their submissions. I acknowledge that there may be other such programs but I admit to my personal bias. This would at least give the judiciary a broader and fairer picture of what comparable cases have done in the past .
2. Importance of Age as a Bardal Factor: In this case the Plaintiff was 56 but only employed for 2 years and 4 months. This is what the judge had to say on the relevance of the Plaintiff’s age.
In my view, it would be an error to make age the dominant consideration in arriving at a determination of reasonable notice in a case such as the present one. Such a reliance would create needless obstacles in the way of employees securing fresh employment at Mr. Iriotakis’ age and would be quite counterproductive in the long run. Age and the prospects of securing alternate employment are factors but these must be considered along with others and with a proper degree of balance.
It seems the Judge was concerned that emphasizing age could have an adverse effect on the willingness of other employers to hire other employees in the future. It does not seem that either parties led any evidence on this issue . What was in evidence is that no one questioned the plaintiff’s mitigation efforts and that it actually took him considerably more than the notice period to actually find a job. Perhaps age was a factor in that employers are often reluctant to hire older workers.
3. COVID Effect. The plaintiff was terminated in late March 2020 after the first COVID shutdown. This is what the judge said :
 I was asked to make findings about the job market and the possible impact of Covid-19 on Mr. Iriotakis. I have little doubt that the pandemic has had some influence upon Mr. Iriotakis’ job search and would have been reasonably expected to do so at the time his employment was terminated in late March 2020. However, it must also be borne in mind that the impact of the pandemic on the economy in general and on the job market, in particular, was highly speculative and uncertain both as to degree and to duration at the time Mr. Iriotakis’ employment was terminated. The principle of reasonable notice is not a guaranteed bridge to alternative employment in all cases however long it may take even if an assessment of the time reasonably anticipated to be necessary to secure alternative employment is a significant factor in its determination. I must be alert to the dangers of applying hindsight to the measuring of reasonable notice at the time when the decision was made to part ways with the plaintiff.
Presumably this mean that if the termination had taken place later in the year when we all realized that COVID shutdowns were the new normal, that Justice Dunphy would have awarded a longer notice period. Will lawyers have to present evidence as to what people were thinking at the time of the termination a s to how long this COVID nightmare would continue ? How does even collect such evidence?
4. CERB : It is clear that CERB is not repayable to the government like EI is. Does the receipt of CERB reduce the amount of wrongful dismissal damages ? This is what Dunphy J. said on this point :
 I agree with the defendant that CERB cannot be considered in precisely the same light as Employment Insurance benefits when it comes to calculating damages for wrongful dismissal. CERB was an ad hoc programme and neither employer nor employee can be said to have paid into the program or “earned” an entitlement over time beyond their general status as taxpayers of Canada. The level of benefit paid (approximately $2,000 per month) was considerably below the base salary previously earned by the plaintiff to say nothing of his lost commission income. On balance and on these facts, I am of the view that it would not be equitable to reduce Mr. Iriotakis’ entitlements to damages from his former employer by the amount of CERB given his limited entitlements from the employer post-termination relative to his actual pre-termination earnings. I decline to do so. ( emphasis in the original)
Thus it seems that if the Plaintiff had made less money and thus the CERB would have been closer to his actual loss, this Judge may have reduced the damages in part because of the receipt of CERB.
Again, why make these unnessary distinctions that further complicate these cases? At what income level is CERB to be taken into account ? Will it vary from judge to Judge? Either it is or is not a deduction from the damage claim.
5. Commission over the Notice Period;
The plaintiff sold a service which produced monthly income, however in accordance with his commission agreement, commissions were only paid after the service had been provided for 8 months . So what happens to those commissions that would have been received within the notice period and what about those commissions that would have come in after the notice period?
The Commission Plan had the following language :
To qualify for any commission or bonus payment you must be actively employed by Peninsula Employment Services Ltd. Entitlement to qualify for any commission or bonus payment will cease immediately upon termination of your employment with Peninsula Employment Services Limited.
Dunphy J. determined that this clause was illegal as it violated the ESA.
 The plaintiff takes the position that to the extent the plaintiff’s contract of employment with the defendant purports to deprive him of commissions on sales made prior to the termination of his employment that are payable afterwards, such provisions are void as contrary to s. 1(1) and s. 11(1) of the ESA that require the payment of all “earned” “wages” and s. 5(1) of the ESA that prohibits contracting out of its minimum standards. In this regard, I agree with the plaintiff in part.
He then determined that the Plaintiff was making a claim for three types of commissions :
A) Commissions that would have been paid to the Plaintiff had he been given reasonable working notice on sales he completed before termination.
B) Commissions that would have been paid to the Plaintiff after the reasonable working notice period on sales he completed before termination.
C) Commissions he may have made on deals that he might have done had he been permitted to work out his notice period.
The Judge applied the simple principal of putting the Plaintiff in the same situation as if he had worked out his notice period . Therefore the results were as follows:
A) Plaintiff wins :
 While the Rules purport to exclude the payment of commission becoming payable during a common law notice period, such exclusion in my view violates s. 1(1), s. 5(1) and s. 11(1) of the ESA and is of no force or effect.
 I have found that the plaintiff was entitled to reasonable notice of the termination of his employment and, in the absence of such notice, to damages in lieu of that notice. Had the plaintiff been given three months working notice – as he was entitled to receive – commissions on sales made by him between six and nine months prior to the termination of his employment would have been both earned and payable by the terms of the Rules whether or not he made a single incremental sale subject only to the passage of time and a determination of the actual payment history of the relevant clients during that period of working notice. Having deprived the employee of the notice to which he was entitled, the employer must put the employee in the same position – as far as money can do – as the employee would have been in at the end of the working notice he or she failed to receive: Paquette v. TeraGo Networks Inc., 2016 ONCA 618 (CanLII) at para. 16. The amount so determined is not commission under the Rules per se but damages calculated as the amount of money that the plaintiff would have received under the Rules but for the breach of contract by the employer. Had he been working as he was entitled to so, he would have been providing services to the employer and the exclusion in the Rules would have had no application.
B) Plaintiff loses:
At the end of the notice period, the plaintiff had no right to be employed and no eligibility to receive commissions under the Rules that governed his ability to earn them. The commissions on prior sales were not fully earned while the plaintiff was still an employee because they remained contingent on the future payment history of each client pursuant to the Rules that created his entitlement in the first place. Such amounts do not fall within the definition of “wages” that have been “earned” under s. 1(1) and s. 11(1) of the ESA. The terms of the Rules are clear and unambiguous on this point.
Crucial to his finding is that these commissions were not “earned ” until the 9 months was up. What if however, the agreement simply stated that commissions were not payable until 9 months after the transaction closed. Could not one say that the commission was “earned” once the deal was confirmed but payment was deferred until a later date. If the commission was earned but not yet payable, certainly that would constitute ” wages ” under the ESA and thus could never be forfeited, as this would be a contracting out of the EA, which is illegal .
C) Plaintiff loses :
 The same reasoning applies with greater force in the case of putative earnings during working notice not given. Had reasonable working notice been given, the plaintiff would have been entitled to his base salary and the portion of commissions on prior sales that became earned and payable during that notice period. Any new sales made would have generated no commissions earned during the period of his active service under the Rules that governed his entitlements. Whether he is assumed to have made new sales at, below or above the rate he was making them before his termination would have no impact on his earnings during that period. To the extent it is relevant, it is hard to imagine how he could have had much in the way of imputed sales during the three-month notice period at all events given that this time frame in fact coincided with the period of hardest pandemic lock-down.
Conflict Note : Winning Plaintiff’s counsel was Kimberley Sebag , an associate at Lecker & Associates at which my brilliant son, Matthew Fisher, is a partner.