In Yates v Langley Motor Sport Centre Ltd ( 2022 BCCA 398) Justice Bauman finally definitively answered the issue of whether or not CERB payments received by a terminated employee are deductible from wrongful dismissal damages that cover the same time period .
The answer was NO, they are not deductible and thus the windfall goes to the benefit of the employee, not the employer.
The analysis was largely based on social policy. The concluding words say it all:
“Whether the payments are in the end to be repayable by the plaintiff is of no concern to the defendant employer. It is a matter between the plaintiff and the authorities administering the plan .”
This is the first appellate decision on this issue, and as this is a federal law, it is my understanding that all lower courts in Canada are obligated to follow it.
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In Rutledge v Markhaven ( 2022 ONSC 3183) Justice Dow awarded 22 months notice to a 43 year old Executive Director of a long term care home with just under 21 year service .
The Defendant alleged just cause because they claimed that she had breached her fiduciary duty by agreeing with a service provider of the Defendant to promote one of their employees who worked in the defendant’s premises with whom she was having a romantic relationship. However it was determined by the Court that :
- No such relationship existed at the time of the promotion
- The Plaintiff disclosed the relationship at the time to the HR department and that the Board of Directors knew about the relationship a short time later.
- The Board took no action regarding this matter until months later and only when an employee complained.
The Judge therefore found that the Board of Directors condoned the Plaintiff’s actions. When asked in the investigation whether she had been romantically involved, the Plaintiff admitted it .
The interesting part of the case is the Judge also awarded $50,000 for bad faith damages . This seems to be largely based on the manner in which the Defendant conducted their investigation. The Judge noted the following concerns:
- Although the Plaintiff was told that the investigation would be conducted by an independent third party, it was in fact conducted by a “investigation business associated with defence counsel”
- The defendant secured information from the Plaintiff without her prior knowledge.
- It conducted parts of the investigation at a local Tim Hortons where many of the Defendants went for coffee, thereby failing to conduct the investigation in a confidential manner.
- ” Portions of the investigation file were not produced under the guise of solicitor – client privilege.”
- The scope of the investigation was expanded.
The Plaintiff went on disability leave prior to her dismissal and led evidence that her psychological condition was caused by the investigation.
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In Aware Ads Inc. v. Walker 2022 ONSC 6121 , Justice Centa assessed costs in an action where the Plaintiff former employer was suing the Defendants ex employee and the new employer seeking to prevent Walker from joining the Plaintiff’s competitor.
Costs were awarded on an elevated scale for the following reasons:
1.No basis or reasonable grounds to bring the motion ;
2.It failed to demonstrate a strong prima facie case to support its serious allegations;
3.The Plaintiff initially sought extraordinarily broad relief, such as a Mareva and Mills order, a CPL, and discovery aid of injunction and inspection order. It withdrew these reliefs only after delivering its factum. It then revised the relief sought several times thereafter.
4.The relief sought was viewed as an effort to “punish” the Defendant instead of protecting legitimate business interest.
5.For one of the Defendants, it completely abandoned all relief sought after putting him through significant expense and time.
It is important to note that the Plaintiff had previously sought an interim injunction along the same lines , which was also dismissed. They then tried to get a second kick of the can by way of this interlocutory injunction and failed miserably.
Quere: Will they still proceed to trial to seek a permanent injunction after having to pay almost half a million dollars in costs ?
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In Chin v Beauty Express Canada Inc., 2022 ONSC 6178 Justice Morgan had a situation where the Plaintiff, a 69 year old aesthetician , worked first for 14 years for Company A , which then went bankrupt, and then 6 years for the Defendant. She worked inside a Bay store so after the change in employer her bosses and her work location stayed the same.
When deciding the length of service upon which to assess notice the two choices proposed by the parties was 20 years or 6 years. The Judge rejected both of those choices and instead examined what advantage the Defendant had when it hired the Plaintiff who already had 14 years experience on the job. The judge concluded that given the limited skill set involved in the job, she should only get one half of the notice that she would have got if she had been a 20 year employee. He thus awarded the Plaintiff 10 months notice.
The important thing to realize about this case is that the break in service was due to a bankruptcy and not a sale of either shares or assets . Therefore the law is clear that the bankruptcy ended her employment with Company A and that the Defendant was not a successor employer, either under the common law or the ESA.
However, in this situation the Judge was still prepared to give consideration to the fact that the Defendant in effect inherited an experienced employee and thus saved the time and expense of training a new employee.
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In Miawpukek First Nation v. Howse, 2022 FC 1501 (CanLII) Justice Furlanetto reviewed the decision of an adjudicator under the Unjust Dismissal section of the Canada Labour Code who, having found that the complainant had been unjustly dismissed from her position of Director of Training & Development, ordered her reinstated but to any position other than her former position. The Adjudicator also imposed a set of conditions on her reinstatement , including a one year probationary period, that she not supervise anyone and that she take training.
The Federal Court determined that the Adjudicator had exceeded their jurisdiction and that the power to reinstate was limited to the same position that the complainant held at the time of termination.
My Comment :
It seems that if the adjudicator finds that reinstatement is not appropriate, then the only remedy would be a payment in lieu of reinstatement as it is not within the power of the adjudicator to require the employer to either create a position or displace an innocent employee from their position so that the complainant can be reemployed.
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In Lake v. La Presse, 2022 ONCA 742, the trial judge had assessed an 8 month notice period for a 52 year old General Manager with 5.5 years service making $185,000. However the trial judge reduced the notice period by 2 months on the grounds of poor mitigation.
The Court of Appeal reversed the reduction and said the trial judge erred for the following reasons:
1. The Judge said that as time went on the Plaintiff should have looked for lesser positions such a salesperson. The Court held that this was an error and that the Plaintiff is always entitled to look for comparable employment and that she need not lower her sights as time went on.
2. The trial judge said that she was aiming too high in applying for VP jobs. The Court found that the trial judge focused too much on the titles of the positions the Plaintiff was applying for and ignored the Plaintiff’s evidence that the jobs she was applying for were of the same nature as hers, despite their loftier titles.
3. The trial judge admitted that she had no evidence before her on this issue , but went on to infer that if there were VP jobs available there must have also been more junior jobs available and that if the Plaintiff had applied for such junior jobs, she likely would have got one. The Court stated that the employer has to show not only that such jobs actually exist ( on which point no evidence was led) but that if she had applied she would have obtained that job.
The law seems to be that the employer must not only show that the Plaintiff failed to pursue comparable employment but that if the Plaintiff had done so that they would have had a job before the end of the notice period.
The first part of the test is not hard to prove but the second part is almost impossible. Many job applicants meet the qualifications of a job ad but do not get the job. There may be many qualified candidates but only one position. The job may go to the most qualified applicant or to the GM’s lazy nephew.
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