Increase in UBER Earnings Post Dismissal Not Deducted from Damage Award :

In Degenedza v CIBC ( Federal Court Docket T-1399-19) Justice Strickland was judicially reviewing the decision of an adjudicator under the Unjust Dismissal provisions of the Canada Labour Code .

The Plaintiff had worked at the CIBC making $60,400 /year as Senior Investigator. He also worked on the side as an UBER driver making about $10/hour for about 10 hours a week.

After termination he increased his UBER hours to 60 a week and thus made $600/ week. The Adjudicator treated the extra $500 as mitigation income and reduced the damages accordingly.

The Court found that this was wrong and contrary to the Ontario Court of Appeal decision in Brake which held that mitigation earnings from a substantially inferior job should not be deducted from an employee’s damage award.

This is what the Court said :

” To illustrate this point, a terminated employee might seek but be unable to find work of similar responsibility and salary. However, not being able to afford not to work, they will instead take a lesser job and work more hours in an effort to keep the wolf from the door. Or possible take two or three lesser jobs to the same end. It is difficult to see how working more hours in lesser paying position(s) can serve as a straight dollar for dollar substitute for the amount that could have been earned less hours under the original employment.”

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Sexual Assault is by Definition Serious Misconduct :

In AG Growth International Inc v Dupont ( 2021 ABQB) Justice Little, sitting on appeal from a decision of the Provincial Court found that the trial judge had made a error of law when he failed to begin his analysis of the actions of the Plaintiff by starting with the premise that a sexual assault is automatically at the high end misconduct.

This is a brief summary of the incident:

a) before January 9 RT ( a female coworker)  and Mr. Dupont were workplace acquaintances, but they were not good friends;

(b) at about 8:00 a.m. on January 9 Mr. Dupont asked RT to go on a date with him and in reply she said “maybe”;

(c) at about 9:25 a.m. on January 9 Mr. Dupont approached RT while they were both working at the Westeel facility in Olds, Alberta and asked her if she was chilly and said “Now that you’re single we can go on a date”;

(d) Mr. Dupont then reached over and lifted RT’s hoodie and Tshirt, exposing the area of her body extending from her bellybutton to her bra, including her bra;

(e) Mr. Dupont did this because he wanted to flirt with and “hit on” RT, and he wanted to show her that he “liked her a lot”;

(f) Mr. Dupont did not intend to lift RT’s T-shirt when he lifted her hoodie;

(g) Mr. Dupont did not intend expose any part of RT’s body when he lifted her hoodie;

(h) Mr. Dupont’s actions caught RT by surprise, and caused her to be anxious, distressed and embarrassed, and caused her to fear Mr. Dupont;

(i) RT immediately swore at Mr. Dupont and slapped his hand away;

This what the Court said about the correct way to start the analysis in a case of this nature :

IV. Analysis

Ground One: Level of Seriousness of Misconduct

[8] Determination as to whether summary dismissal is justified requires an analysis of the proportionality of the employer’s response to the misconduct. That analysis begins with a determination of the seriousness of the misconduct.

[9] Consideration of the following excerpt from the trial decision suffices to dispose of the appeal on this first ground:

[87] In the present case, Mr. Dupont’s action constituted a single, brief and isolated incident of unwanted touching of RT, for the purpose of flirting with RT in order to pursue a romantic relationship with her. Upon realizing that his advances were not welcome he did not persist, but immediately desisted and walked away.

   [88] While I do not discount the effect that his actions had upon RT, they fall at the low end of the “spectrum of seriousness” referred to at para 205 of Foederer and cited at para 90 in Willow Park Golf Course Ltd.

[10] A finding that intentional and unwanted touching for a sexual purpose (Trial decision para 83) constitutes sexual harassment at the low end of the spectrum of seriousness ignores our Court of Appeal’s determination that sexual assault is at the high end of that spectrum:

Sexual assault, by its very definition, is serious misconduct: Calgary (City) v CUPE Local 37, 2019 ABCA 388 at para 11)

[11] Recognizing that Calgary v CUPE dealt with the standard of review of an arbitrator’s decision, it nevertheless stands for the proposition that in this case, the trial judge’s starting point in the proportionality analysis should have been that the impugned conduct was on the high end of the spectrum of seriousness.

[15] Since a sexual assault is what occurred, the whole analysis ought to have been conducted with that finding in mind: Calgary v CUPE para 33

[16] Having commenced the correct analysis but from the incorrect starting point, the trial judge’s decision cannot survive review on a correctness standard.

My Comments :

Presumably the analysis should have been as follows

1) Did the conduct amount to sexual assault ?

2) If yes, then this is serious misconduct .

3) Are there any mitigating factors which would indicate that termination for just cause  was  a disproportionate  response ?

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Retraining Costs Allowed Even Through Plaintiff Did Not Get a New Job Within the Notice Period:

In Cordeau-Chatelain v Total E&P Canada Ltd ( 2021 ABQB 794 Justice Price has a situation where an employee who was awarded 18 months notice had reasonably retrained herself in a new career at a cost of about $18,000 . Because of this retraining, she obtained a job in her new career but well after the end of the 18 months notice period .

This what the Judge said :

[87] The other claimed expenses relate to Ms. Cordeau-Chatelain’s costs of retraining as an executive leadership coach. TEPCA argues that these expenses are not compensable because they arose out of her termination itself, rather than from the lack of notice. In other words, even if TEPCA had provided her with adequate notice, she would still have incurred the retraining expenses. The Defendant points to Ms. Cordeau-Chatelain’s statement that her termination “ended her career”, suggesting that any termination, even if not wrongful, would have required her to switch professions.

[88] Employers are generally entitled to terminate employment agreements, provided they give reasonable notice: Christianson at para 21. Damages for insufficient notice are awarded for breach of contract, but where sufficient notice is provided there is no breach and therefore no liability for damages: Deputat at para 8.

[89] With respect, TEPCA’s argument misses the point. Expenses that arise from the improper termination of a contract are compensable because there was a breach of contract. The question is not just about the nature of the expenses, but also the circumstances under which they were incurred.

[90] In this case I find that Ms. Cordeau-Chatelain had to incur retraining expenses because she was wrongfully terminated.

My Comments:
In my opinion the Judge got it wrong. The measure of damages in a contract breach case is to put the party in the same position that  they would have been had the contract not been breached ( Hadley v Baxendale ) .
If the plaintiff had been given 18 months working notice, then there would have been no breach of contract but  she still would have had to change careers and to do she still would have to incurred the education  expense.
The expense must be related to the breach and terminating someone without just cause itself is not a breach of contract.

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Plaintiff Wins $34,000 in Expense Reimbursement Even After Signing Release:

In Dolski v. Staples Canada ULC ( 2021 MBQB 29) Justice Kroft had a situation with the following chronology:

2)Plaintiff was terminated without cause and was given a settlement offer containing a release.

3) Few days later the Plaintiff signs the Release.

4) Few days later the Defendant invites her to submit her outstanding expenses.She submits expenses for $16,000 and they pay it .

5) A few months later she submits another $34,000 of expenses. The Defendant admits they are legit but refuses to pay because of the Release.

The Court found that the release did not block her entitlement for the following reasons:

The Release referred to many items being released but did not refer to expenses, nor was it discussed the the termination meeting, thus there was no meeting of the minds on this issue.

The Defendant knew that the Plaintiff had a claim for expenses and intentionally got her to sign the release first.

Although not referred to in the reasoning one cannot ignore the fact that they voluntarily paid the first $16,000 after the release was signed and only denied payment when they were presented with another legitimate but much larger request.

Although not referred to in the decision, it appears that the Plaintiff did not have a lawyer when she signed the release.

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Costs of $80,000 Awarded in Summary Motion:

In Rahman v. Cannon Design Architecture Inc., 2021 ONSC 7624 Justice Dunphy awarded $40,000 for partial indemnity pre Rule 49 offer and an additional $40,000 thereafter the Rule 49 offer on a substantial indemnity basis.

The Court considered the following factors :

1. One should not second guess the strategic litigation choices made by the winner.
2. There was a large amount of money at issue ( $300,000) and a large number of issues.
3. Including a number of issues and parties that had a faint hope of success is not a practice to be encouraged.

Here is the interesting point. The Defendant won the motion thus these costs were awarded against the Plaintiff.

I am advised by Plaintiff counsel that they have filed an appeal on the merits so this part of the case may also be considered by the appeal .

By the way, this was a one day motion. Not bad pay for a days work.

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Another COVID Unionized Workplace Case:

In Ontario Power Generation v The Power Workers Union , Arbitrator John Murray made the following award regarding OPG’s COVID Vaccine Policy:

1. OPG’s policy said that if an employee refused to be vaccinated then they must undergo a twice weekly test at the employee’s cost.
The Arbitrator ruled that OPG must cover the cost of the test but that the employee must do the test on their own time for which they will not be compensated.

2. OPG policy said that if the employee both refuses to get vaccinated and refuses the testing, then they would be placed on an unpaid leave of absence for 6 weeks and then if they still refuse, the employee would be terminated with just cause. This part of the policy was upheld.

3. Certain employees are allowed one hour of paid to attend an indoor gym for physical exercise. OPG policy restricts the use of the indoor gym to only those fully vaccinated. This part of the policy was upheld, with a note that the unvaccinated could still exercise outside.

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Another 24 Month Notice Period :

In Skowron v. ABC Technologies Inc., 2021 ONSC 3734 Justice Myers awarded 24 months to an 61 year old Technical Manager making $146K with 26 years total service ( with a 11 months break in service 17 years prior).

This how the Judge dealt with the issue of the break in service :

[28] I accept that there was a legal break in Mr. Skowron’s employment with the defendant. I do not think that finding that the plaintiff has been an employee of the defendant for just 17 years fairly encapsulates the length of employment from the perspective of a sixty year old man who is now unemployed and is looking for a new job however. I do not think it matters if I find the length of service to be specifically 22, 24, or 26 years. The Bardal process is not mathematically precise. Nor is it intended to be so.

Winning Plaintiff counsel was my son Matthew Fisher of Lecker & Associates. Again .

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BC Court Extends Notice Period Because of COVID and No CERB Reduction:

In Snider v. Reotech Construction Ltd.( 2021 BCPC 238) Justice Alexander first determined that the notice period for a 42 year old construction labourer with 2.4 years service was 4 months. The Judge then added a 2 week COVID bump.

“To that, I would add an additional two weeks based on the
challenges posed by COVID-19 and the availability of similar employment, as contemplated by the Bardal factors. The defendant terminated the claimant during a serious global pandemic. He has retrained but still has not found another job. In the circumstances, I find that four and a half months is the appropriate notice given the claimant’s inability to find alternate and available employment.”

On the CERB issue, the Court noted the different trial outcomes but preferred the non deductibility argument because of the apparent uncertainty as to whether CERB would be repayable by the Plaintiff.

” Counsel’s submissions about the government website and the claimant’s opinion about his understanding of the CERB scheme do not constitute evidence that is determinative of whether CERB benefits must be repaid. There is no evidentiary basis to support the finding one way or the other about the deductibility of CERB benefits.”

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CERB Deductible for Wrongful Dismissal Damages Says BC SC:

In Yates v. Langley Motor Sport Centre Ltd ( 2021 BCSC 2175) Justice Mayer determined that the reasonable notice period for a 30 year old Marketing Manager and Events Co-ordinator making $60,000 with only 8.5 months service was 5 months.

However he deducted $10,000 of CERB payment from the award for the following reasons:

Deduction of CERB Benefits

[35] The evidence establishes that after her temporary layoff commenced, Ms. Yates obtained CERB from the Government of Canada in the amount of $12,000. Langley Hyundai submits that the portion of these benefits paid during the reasonable notice period determined by this Court should be deducted. It is my understanding that the maximum CERB payable to Ms. Yates per month was $2,000. Accordingly, in my view the amount at issue is $10,000 which is the amount. I conclude Ms. Yates obtained in CERB payments during the five-month notice period I have found she was entitled to

[36] My understanding of the basis of Langley Hyundai’s submission is that it is appropriate to deduct CERB payments as there is no requirement for Ms. Yates to return such benefits and therefore an award against it for payment in lieu of benefits, for the same period that she received CERB benefits, without deduction, would constitute impermissible double recovery.

[37] Langley Hyundai refers to the Government of Canada website which indicates that “[a] severance payment does not impact an individual’s eligibility for the CanadaEmergency Response Benefit”: https://www.canada/ca/en/services/benefits/ei/cerbapplications/ questions.html, at page 3/7. Further, Langley Hyundai submits that under the common law severance pay constitutes damages arising from wrongful dismissal and not employment income. For these reasons they submit that severance pay does not disqualify an individual from receiving, or in this case retaining, CERB payments pursuant to the Canada Emergency Response BenefitAct, S.C. 2020, c. 5, s. 8. That is, in Langley Hyundai’s submission, payment in lieuof notice to Ms. Yates will not result in her having to repay CERB benefits.

[38] Langley Hyundai relies upon the decision of the Supreme Court of Canada inIBM Canada Limited v. Waterman, 2013 SCC 70 [IBM], as binding authority on how courts are to approach the question of whether a collateral benefit should bededuced from payment in lieu of notice.

[39] In IBM the Supreme Court considered whether pension benefits received by a dismissed employee should be deducted from damages for wrongful dismissal. The Supreme Court concluded that pension benefits were a type of deferred compensation for the employee’s service and constitute a type of retirement savings and were not intended to be an indemnity for wage loss resulting from unemployment. For these reasons the Supreme Court agreed with the decisions of the courts below that pension benefits were not deductible from an award for wrongful dismissal: IBM, at para. 4.

[40] The Supreme Court stated that a collateral benefit (being a benefit flowing to a plaintiff and connected to the defendant’s breach), would be considered compensating advantage justifying a deduction from a damages award for wrongful dismissal when the advantage is one that (a) would not have accrued to the plaintiff if the breach had not occurred, or (b) was intended to indemnify the plaintiff for the sort of loss resulting from the breach: IBM, at paras. 27-2

[42] I agree with the finding of Justice Gerow in a recent decision of this Court,Hogan v. 1187938 B.C. Ltd., 2021 BCSC 1021 [Hogan], in which Gerow J. stated as follows:

[100] The plaintiff received $14,000 in CERB payments in 2020. The CERB payments raise a compensating advantage issue. If the CERB payments are not deducted the plaintiff would be in a better position that he would have been if there had been no breach of the employment contract. 

[101] But for his dismissal, the plaintiff would not have received the benefit. The nature of the benefit is an indemnity for the wage loss caused by the employer’s breach of contract. There is no evidence that the plaintiff contributed to obtain the benefit by paying for it directly or indirectly.

[43] In this case I find that CERB payments would not have been payable to Ms. Yates if she had not been terminated from her employment with Langley Hyundai – which termination constitutes a breach of her employment contract justifying payment in lieu of notice. Further, I find that CERB payments are a benefit intended by the Government of Canada to be an indemnity for the loss of regular salary arising from Langley Hyundai’s breach of Ms. Yates’ employment contract. Unlike an employee funded pension or a private disability insurance policy Ms. Yates did not contribute to the benefit.

[45] Ms. Yates relies upon Jack Cewe Ltd. v. Jorgensen, [1980] 1 S.C.R. 812, inwhich the Supreme Court of Canada found that damages for wrongful dismissal are earnings for unemployment insurance purposes, on the basis that such earnings arise out of employment. In that case the Supreme Court found “… the payment of unemployment insurance contributions by the employer was an obligation incurred by reason of respondent’s employment. Therefore, to the extent that the payment of those contributions resulted in the provision of unemployment benefits, these are a consequence of the contract of employment and, consequently, cannot be deducted from damages for wrongful dismissal.” (at p. 813). The same cannot be said with respect to CERB benefits in that the source of these benefits does not originate from contributions made by either Ms. Yates or Langley Hyundai as a result of her employment. Rather, the government funds used to pay CERB are likely from all sources of government revenue

[47] I do not find, on the available evidence, that Ms. Yates’ will be required to repay CERB benefits if she obtains an award of damages for wrongful dismissal. I conclude that CERB benefits of $10,000 which were received by Ms. Yates should be deducted from the award of damages.

My Comments :

This issue keeps on coming up in various trial  decisions in different provinces  with different outcomes but has not yet been ruled upon by any Court of Appeal .

Following September 2020 and until September 2021 , EI is also no longer repayable from wrongful dismissal damages according to Order 8.

Will the same result flow as with CERB ?

However there is one very important difference between non repayable CERB and non repayable EI. The employee, or that matter the employer, did not contribute to CERB but both parties contribute to EI, therefore the SCC comments in Jack Cewe Ltd. v. Jorgensen will probably result in that the Plaintiff will not have to repay EI but the Defendant will not get credit for these payments in calculating wrongful dismissal damages.

Whoever thinks that employment law is easy is very ill informed.

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British Columbia ESA Tribunal Finding Not Binding on Civil Action :

In Read v. Rimex Supply Ltd.( 20121 BCSC 2157) Justice Lamb had a case where the Plaintiff was fired for what the employer thought was just cause. The Plaintiff filed an ESA complaint and the Defendant filed an appeal with Service Canada ( re EI). Both organizations found there was no just cause.

The Plaintiff then started a civil action for wrongful dismissal.

Note that this could not occur under the ESA in Ontario. because under section 97(2) of that Act once you file an ESA complaint for termination and or severance pay you are barred from bringing a wrongful dismissal action unless the complaint is withdrawn in two weeks. 

The Defendant sought to allege just cause in the civil action so the Plaintiff brought a motion for summary judgement to which the Defendant sought a ruling whether the issue of just cause was barred by the principle of issue estoppal.

First of all,  with respect to the ruling by Service Canada on the EI issue, the Plaintiff did not even claim that issue estoppal applied to that ruling . This is what the Court said:

The plaintiff does not seek to apply  issue estoppel to the  Service Canada decisions. The plaintiff acknowledges . and  I agree . that  the Service Canada decisions are not procedurally  robust enough  to justify  the application of issue estoppel. As noted above, there  is no justification  for the conclusions  reached in the Service Canada decisions, and there was limited direct evidence before me about  the procedural steps leading to either decision.   

Anyone who has ever appeared before an  EI Board of Referees ( at least that is what is was called when I appeared before them ) would agree with this assessment.

With respect to the Employment Standards Branch ruling , the Court went through a detailed analysis of the factors leading to the application of issue estoppal. In the end it found that the doctrine of issue estoppal did not apply. This is what was said :

[83]  I am satisfied that  there are significant differences between  the purposes, processes and stakes between  the ESB proceeding and this wrongful  dismissal action. The purpose of the ESB proceeding was to provide basic compensation  for length  of service whereas the purpose of the civil  lawsuit  is to provide compensation for breach of the employment  contract. As outlined above,  the ESB processes are intentionally  more streamlined and efficient  than  the procedures available in a civil lawsuit. Clearly,  the stakes are different between  the two processes. In  the ESB proceeding, the plaintiff sought an award for compensation of $13,220.77 for  length of service. In  the  civil action,  the plaintiff seeks damages of $178,262.17 for wrongful dismissal and an award of $30,000 for aggravated damages, more than  15 times the amount  of the ESB claim. As the court noted in Danyluk, .[i]t would be unfair toan employee who sought out  immediate and  limited relief of $4,000, forsaking discovery and representation  in doing so, to then  say that he is bound  to the  result as it affects a claim for ten times that amount. (at para. 71, citing to Rasanen v. Rosemount Instruments Ltd., 1994 CanLII  608 (ONCA),  [1994] O.J. No. 200 at 290, per Carthy J.A.). The same considerations apply  to the defence of such  claims. 

[84]  This factor weighs decisively  in favour  of the defendant.  In my view,  there  is a potential  injustice  in applying  issue estoppel to the ESB decision in circumstances where  the defendant has not had an opportunity  to fully  defend  the wrongful dismissal claim.  In  these  circumstances, where  the best and perhaps only  evidence regarding the timing of the plaintiff.s wife.s involvement rests with someone other than  the plaintiff,  it would  be unjust  to deprive the defendant of an opportunity  to try to prove just  cause.  

[85]  While there were other steps the defendant may have been able to take within  the ESB process to secure such  evidence,  I am satisfied that  the defendant should  not be penalized  for not taking such steps when  the  stakes were lower and the available processes less robust. As a majority of the Supreme Court of Canada observed at para. 45 of Penner, .where  little  is at stake for a litigant  in the prior proceeding, there may be little incentive to participate in it with full vigour.. Justice Arbour made a similar observation at para. 53 of Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, writing for a majority of the court:   

If, for instance, the stakes in the original proceeding were too minor to generate a full and robust response, while the subsequent stakes were considerable, fairness would dictate that the administration of justice would be better served by permitting the second proceeding to go forward than by insisting that finality should prevail. 

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