Screwing Around on Setting Discovery Dates Leads to Striking of Defence:

In  Ferguson v. Yorkwest Plumbing Supply Inc. 2022 ONSC 479 Associate Justice Jolley decided that “enough was enough” with roadblocks that the defendant had cosnstruced to delay a simple wrongful dismissal action .

This is what the Defendant did;

1. Defence counsel repeatably ignored Plaintiff’s counsel agreement on dates for discoveries following a failed mediation.

2. The Plaintiff then served a notice of examination 10 days forth, which the defence responded to 7 days later saying that neither he nor his client were available.

3. Again Plaintiff’s counsel asked for dates and again defence counsel ignored him. Plaintiff counsel again served a new notice and this time defence counsel said that he could not attend due to ” medical reasons”.

4. Plaintiff’s counsel served a third notice which the defence also ignored. Plaintiff obtained d a Certificate of Non Attendance and brought a motion before Morgan J. who ordered discoveries to be completed by February 28th and warned that if the defendant failed to comply he would suggest that there be ” an admonishment directed at the Defendant”.

5. The defendant failed to attend on the set date because there was a dispute as to who was to be examined first.

6. Noting that this was a Simplified Procedure of a relatively straightforward dismissal case and the vulnerability of terminated employees, the Court struck the Statement of Defence, leaving the Plaintiff to proceed to a motion for summary judgement in which the Defendant has no say.

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Another Ontario Case Decides CERB Does Not Reduce Wrongful Dismissal Damages:

In  Henderson v. Slavkin et al., 2022 ONSC 2964 Justice Carole Brown again dealt with the CERB issue .

She held that in this particular case, CERB did not reduce the wrongful dismissal damages for the following reasons:

First, the Plaintiff had not ceased working for reasons related to COVID-19 ( as required by Section 6 (1) (a) of the CERB act , rather she was let go because her employer was retiring and shutting down his dental practice. Therefore the Judge concluded that the plaintiff might have to repay the CERB.

Second, the Judge somehow determined that CERB was intended ” as an indemnity for wage loss related to COVID-19, not for wage loss arising from an employer’s breach of an employment contract. ”

Third, justice dictated that the allocation of risk of repayment should not fall upon the Plaintiff as she was a older and long serving employee.

My Comments :

All of the cases which have said that CERB is not to be deducted from wrongful dismissal damages point to the fact that the plaintiff may have to repay CERB.

I am personally unaware of this ever happening nor am I aware of any section of the CERB Act which would even be grounds for a repayment in these circumstances.

If anyone knows of a repayment obligation arising from a wrongful dismissal payment, please contact me.

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Court Nixes Valid Termination Clause Because of Illegal Conflict of Interest and Confidentiality Clause

In Henderson v. Slavkin et al., 2022 ONSC 2964 Justice Carole Brown dealt with the legality of an ESA Termination  Clause.

The actual termination clause itself was found to be OK but both the confidentiality clause and the conflict of interest clause had the following sentence

A failure to comply with this clause above constitutes both a breach of this agreement and cause for termination without notice or compensation in lieu of notice. 

The trouble was that in both of these clauses the list of items that would constitute a breach was so broad that it vastly exceeded the concept of wilful misconduct under the ESA. For instance, the confidentiality clause defined confidential information as including any information about the assets of the employer. Presumably if the employee told a relative that her employer owned the building they worked out of, that this would constitute a breach.

Here is the funny part. This agreement was between a 63 year old receptionist and two 70+ year old dentists who were shutting down the dental practice and retiring. The employment agreement should have just covered the employer’s liability for termination costs, but instead the author of the agreement threw in these extra and completely unneeded clauses. Had they not included the one sentence referred to above, the ESA termination provisions would have been upheld, and because the plaintiff received 6 months working notice, this Plaintiff would have received zilch additional monies.

This case teaches us that defects in a termination clause can be found not only in the termination clause itself but also in any employment agreement that deals with termination. Thus lawyers should carefully review all agreements and policies to make sure that they do not offend the ESA.

This can include:

All parts of the employment agreement

Confidentiality Agreements

Solicitation Agreements

Stock Options and Bonus Plans

Policy manuals and statements

Ownership of intellectual Rights and inventions.

In essence, any  agreement or policy that refers to the fact that a breach of that policy will lead to termination without compensation could invalidate any otherwise enforceable termination clause.

This issue really only affects employees under the Ontario Employment Standards Act as, unlike other jurisdictions, it does not use the concept of just cause but rather the much more limited concept of wilful misconduct.

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