CLC Adjudicators Can Easlily Order Substantial Indemnity Costs in Unjust Dismissal Cases.

In Amer v Shaw Communications (2023 FCA 237 ) Justice Gleason of the Federal Court of Appeal ruled that it is appropriate for an adjudicator under the Unjust Dismissal section of the Canada Labour Code to order substantial indemnity costs to the winning employee, even where the conduct of the Employer was not exceptionally bad .

This is what the Court said:

[100] In the case at bar, the appellant was of limited means, earning just under $40,000.00 per year when employed by the respondent. In addition, she was a single parent. Given the amount of damages awarded in the instant case, which were limited to out-of-pocket losses for a relatively short period and a modest amount of severance pay, it is entirely possible that the fees charged by the appellant’s counsel might have been close to or perhaps even exceeded the amount of damages awarded. Were this the case, the appellant would have been worse off for pursuing the complaint than she would have been had she not filed a complaint. Such a result would be the antithesis of a remedial order and defeat the purpose of the unjust dismissal provisions in the Code.

[101] On the other side of the ledger, the appellant was faced with a large respondent, with substantial resources and the ability to pay experienced labour counsel, who mounted a lengthy case over several days of hearing and through lengthy written submissions.

[102] In the circumstances, I believe that it was reasonably open to the Adjudicator to have awarded the appellant substantial indemnity costs. Anything less may well have led to a denial of any real remedy. There is ample authority from other adjudicators to support the award, and it is allowable under the jurisprudence from this Court. Moreover, the award is in keeping with the
purpose behind the unjust dismissal provisions in the Code.


My Comments:

Given the rationale of this decision, it would seem that the default position in these types of cases would be to award substantial indemnity in most Unjust Dismissal cases because the scenario that the award would be severely diminished if such costs were not awarded is true in most of these cases. Remember that this remedy is not open to managers so that most of the Complainants are modest wage earners.

The fact that a losing Complainant cannot face an adverse costs award makes this  under utilized remedy in many  ways  superior to a civil action where the usual rule is partial indemnity costs and the plaintiff could be subject to a substantial  adverse costs award.

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Vacation Pay Not Owing over Notice Period:

In Grimaldi v. CF+D Custom Fireplace Design Inc., 2023 ONSC 6708 Justice Bordin was asked by the Plaintiff to award him vacation pay over the 5.5 months of reasonable notice that he was awarded.

This is what the Court ruled :

101] As in Cronk, to award the plaintiff damages for vacation pay, on top of an award of full salary for the period of notice to which he was entitled (which necessarily includes payment of his salary for any vacation he may have taken had he worked during that notice period) is to provide double indemnity, or put another way, to provide compensation for a loss that he has not suffered.

[102] I find Mr. Grimaldi is not entitled to vacation pay.

My Comments: This issue occasionally comes up in my mediation practice. The only exception to this rule would be if the employee received their vacation pay added to each pay check but for the majority of people who simply take their vacation and continue to be paid during their vacation, this case would apply .

However since under the ESA vacation pay is payable on total earnings, not just the base wage, what if during the notice period an employee would have received a bonus? As vacation pay is probably owing on that bonus, would it not be logical to award vacation pay on the bonus only?

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Losers in Dufault v Ignace Ask OCA to Overturn Waksdale :

In the recent case of Dufault v The Corporation of the Township of Ignace , Justice Pierce held on a number of grounds that the termination clause contradicted the ESA and was thus void.

Some of the grounds were new and some were old and well established .

Among the old and well established grounds was the 2020 Ontario Court of Appeal case of Waksdale v Sweden North America Inc where the court found that because the common law concept of just cause is different than the higher standard of wilful misconduct under the ESA, a termination provision which states that upon a dismissal for just cause the employee is not entitled to any notice or pay in lieu of notice violates the ESA and is thus void. As a consequence the employee is entitled to what they would have received had the void clause not existed, which is either common law reasonable notice or the balance of the fixed term.

Well, the Defendant in this case wants the Ontario Court of Appeal to ”
revisit and overturn its 2020 decision in Waksdale v Swegon North America Inc. In that regard, the Defendant (Appellant) requests that this matter be heard by a five-member panel ”

The Appellants will have an uphill battle. Waksdale has been cited 47 times according to CanLll. I believe that it would be extremely unlikely that the OCA would overturn their own decision on this seminal employment case.

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