“Amount Equal to 12 Months Salary” Includes Bonus Says ONCA:

In Nader v. University Health Network, 2022 ONCA 856, the Court of Appeal had a termination clause which entitled the employee to
an amount equal to 12 months salary in the event of termination by UHN without just cause.

The Plaintiff was terminated without just cause but the trial judge held that this did not include the bonus, even though historically the Plaintiff had received a bonus.

The Court of Appeal had this to say :

[4] However, we are satisfied that the motion judge erred in denying the appellant the performance-based bonus payable under the Employment Agreement. The Employment Agreement clearly provided for a discretionary annual performance-based bonus of up to 25% of the appellant’s annual base salary. The motion judge found that there was a dearth of evidence concerning the bonus – no evidence as to the appellant’s performance and whether he would have been eligible for 25% or some lesser amount. This finding overlooks evidence in the record establishing that the appellant was paid bonuses of approximately 25% for 2018 and 2019, and slightly less on a pro-rated basis for 2020, up to the termination of his employment. The Employment Agreement provided for payment “of an amount equal to 12 months salary” in the event of termination by UHN without just cause. “Salary” was undefined. The appellant’s uncontroverted evidence was that the bonus was a substantial and integral part of his overall compensation. The motion judge found that the appellant’s health care spending account, an amount required to be under the Employment Agreement in addition to “base salary”, was owing as part of the appellant’s compensation on termination. That finding was not appealed.

[5] Like the health care spending account, the bonus is properly
considered part of the compensation owed on termination. Termination deprived the appellant of the opportunity to earn the bonus for the year ahead and in our view it is reasonable to infer that he would have earned it. The respondent offered no basis for finding otherwise.

My Comments :

The term used in the agreement was ” salary”. If the agreement had said ” base salary only” the outcome may have been different. However one must be careful when using that language because under the ESA both termination and severance pay are based on regular wages which can include bonus payments. Therefore if you had a clause which provided the correct number of weeks pay to be in compliance with the ESA but limited it to base pay only then you could be in violation of the ESA as it did not include the bonus amount in the calculation.

Nobody said that employment law was easy.

If you like a copy of this case, email me at barry@barryfisher.ca

To book a mediation date go to www.barryfisher.ca

Secret Recording By Employee Not Just Cause in Certain Circumstances:

In Rooney v GSL Chevrolet Cadillac ( 2022 ABKB 813 ) Justice Feasby had situation where an employee who believed that he was being subject to unfair disciplinary suspensions decided to secretly record conversations with his supervisor.

The Court noted that generally speaking:

” Recording conversations in the workplace will often cause irreparable damage to the relationship of trust between employee and employer and be just cause for termination.”

However in this case, the actions of the employee did not constitute just cause for two reasons:

1) The employer did not have an express policy prohibiting such conduct that was brought to the attention of the employee, and

2) ” [91] Perhaps a more significant difference from Shalagin is that by the time of the first recording by Mr. Rooney, the employer-employee relationship was already frayed by tensions between Mr. Rooney and his supervisors, Mr. Rooney had an emerging appreciation that there. had been a fundamental change in his terms of employment, and a suspension without pay had been imposed on Mr. Rooney without any basis in the terms of employment. Mr. Rooney resorted to what, in ordinary times, is rightly viewed as an unethical tactic to deal with what the arbitrator described in British Columbia Government and Service Employees’ Union as a “relationship power imbalance.” Mr. Rooney’s actions in recording conversations with his supervisors were justified because GSL exerted its power over Mr. Rooney by imposing unilateral changes on his employment terms and disciplined him contrary to his terms of employment.

My Comments :

This case seems to say that if the Court finds that you did not have a valid reason to secretly record your employer or co-worker, then you can be fired for just cause but if you had a good reason then it is not just cause.

This creates a real problem for the Plaintiff’s lawyer. Your client tells you they have a secret recording of a conversation with the boss which is relevant to the lawsuit. You listen to it and determine that although it is relevant, it probably not that helpful to your case. However, you must include this document in your clients’ Affidavit of Documents as it is relevant, but to do so you run the real risk that the employer will now allege after acquired just cause.

Possible solution: Settle the case before you have to file your Affidavit of Documents.

If you like a copy of this case, email me at barry@barryfisher.ca

If you like to book a mediation, go to my calendar at www.barryfisher.ca

Court Criticizes Employers’ Failure to Assist Employee’s Job Search:

In Summers v. Oz Optics Limited, 2022 ONSC 6225, Justice Hackland awarded 6 months notice to a 61 year old draftsperson with only 3.5 years service.

The defendant argued that there was was a failure to mitigate. They relied on the fact that he had not applied to a number of jobs that were only presented to him at the trial.

The Judge was not impressed. The judge commented on the Defendants’ tactic as follows:

“On the other hand, the record does make clear, as
noted previously, that the Respondent has been of no assistance to the Applicant in his reemployment efforts.”

“As there is anissue concerning an alleged failure to mitigate, discussed below, I would note that the employer seems to have done nothing to assist the Applicant in transitioning to new employment. In particular, he was terminated summarily and escorted off the premises in front of other employees. This did not allow the Applicant an opportunity two preplan his job search or to investigate alternative employment in advance of termination. The employer has not provided a letter of reference nor was any assistance offered by way of career transition counseling. The employer has not offered to waive the non-solicitation provision in the employment agreement.”

My Comments:

In my mediations I sometimes find that the employers who do the most to criticize the Plaintiff’s job search efforts do the least to help the Plaintiff find a new job.

The best way for an employer to lessen the cost of termination is to help the Plaintiff get a job. These are some of the things that will impress a court that the employer is a mensch and not a jerk:

1) Don’t allege just cause solely as a litigation tactic .

2) Provide as positive a letter of reference as you can at the time of termination.

3) Provide appropriate relocation counselling without having it tied to a release.

4) Pay out the ESA minimums immediately.

5) Send job leads to the plaintiff in a timely fashion, not just at the trial .

6) I admit this somewhat controversial, but consider paying out what you think is reasonable notice without a release, or better still keep the employee on salary continuance for what you think is reasonable notice.

7) Waive or at least limit any non compete or non solicit agreements.

8) Handle the termination itself in a way that shows respect and an understanding about how devastated the employee feels. Do you really have to take his cell phone that day ?

If you would like a copy of this case, email me at barry@barryfisher.ca

For my mediation availability, go to www.barryfisher.ca

Municipal Supervisor Using City Washing Facilities to Wash His Own Truck Not Just Cause :

In  Stevens v. Port Coquitlam (City), 2022 BCSC 2090 Justice Elwood had a situation where a supervisory employee of 7 years ( most of which was in the union) was terminated because he used a municipal facility to wash his own truck, contrary to city policies.

He did not deny this use and acknowledged that he was wrong.

The major issue was whether or not this incident was sufficient cause so that discharge was an appropriate remedy. This is what the Judge said :

[87] However, I find that the City had other sanctions available that could have achieved its legitimate objectives. The City could have suspended Mr. Stevens without pay. It could have required him to attend remedial training. The City also could have convened an employee meeting and used this incident to emphasize the importance of the policy on the use of municipal equipment, even in less serious cases than the copper thefts. It could have required Mr. Stevens to lead the meeting. 

[88] The 2020 Incident reflected poorly on Mr. Stevens’ management skills. However, I am not persuaded the employment relationship was damaged beyond repair. Mr. Stevens was relatively new to management. He needed coaching in the leadership aspects of his position. There is no evidence that he was uncoachable in this regard. Even with a second breach of policy, I am not persuaded his behaviour could not be corrected with a clear warning and
appropriate discipline. 

[89] In short, I find that summary dismissal was not a proportionate response to the misconduct. A reasonable employer informed of the relevant circumstances would not conclude that the employment relationship was damaged beyond repair. 

My Comment:

In my mediations I sometimes find that Plaintiff’s counsel try to defend the indefensible when it comes to their clients’ obvious misconduct. They try to deny clear facts or shift blame to others. This feeds into the employers’ view ( and the Courts’ view) that the employee is beyond rehabilitation if he will not even admit his actions were wrong.

This case shows that it is smarter to simply argue that the punishment does not fit the crime. Taking a company pencil home is not the same as stealing a company truck. There is little reason that an employer cannot issue a short disciplinary suspension for misconduct. Denying or reducing a discretionary bonus may also be a a lesser penalty for misconduct.

Judges and arbitrators seem to love expressions of true remorse made before the dismissal .

If you would like a copy of this case, email me at barry@barryfisher.ca

For my mediation date availability go to www.barryfisher.ca