Plaintiff Misses $25,000 Bonus because Notice Period is Short by 4 Days:

In Marques v Delmar International ( 2016 ONSC 3448 CanLII ) Diamond J. properly found that entitlement to a bonus was to be calculated as of the end of the reasonable notice period, not the date of termination. The bonus plan guaranteed a ” minimum bonus of $25,000 after your first year of employment”

The Plaintiff first day of work was August 11, 2014. He was terminated on April 7, 2015.

After assessing the Bardal  Principles the judge commented as follows:

The assessment of reasonable notice is certainly an art and not a science. The plaintiff’s age, management position and length of service all warrant consideration. The cases provided by the plaintiff demonstrate a range of reasonable notice periods.

The judge awarded him four months notice taking his notice period to end on August 7, 2015, four days short of his one year anniversary.

The Judge then said :

This is short of the 12 month anniversary of the plaintiff’s commencement dates, and as such the guaranteed $25,000.00 minimum bonus payment is not due and payable by the defendant.

The Plaintiff submitted case law to support a notice period of 7 months. The Defendant submitted no case law at all on the issue of notice.

It gets even worse. In fact the Plaintiff mitigated his damages as of July 27, 2015 which was 3.5 months after termination. Therefore the only real reason for the trial was this bonus issue . The Judge properly determined that the fact that the employee gets a job earlier or later than the notice period is irrelevant ( OCA in Holland v Hostopia ( 2015 ONCA 762 Can LII) . He identified that the determination of the notice period is an art and not a science. In other words he had a broad discretion in setting the notice period.

He exercised that discretion in such a way that the plaintiff failed to get a minimum $25,000 bonus because he missed the mark by a lousy 4 days.


This Plaintiff won the battle but lost the war.

Release Found to be Void due to Unconscionability:

In Saliken v Alpine Aerotech Limited Partnership ( 2016 BCSC 832 CanLII) the Court found that a release signed by the plaintiff at the time of his  termination was invalid due to unconscionability or as the judgement said ” The issue is whether the transaction, seen as a whole, is sufficiently divergent from community standards of commercial reality that it should be rescinded” .

The reasons were as follows:

1) The only consideration paid to the Plaintiff was relief from the alleged obligation to repay the balance of a training loan in the sum of approximately $8,000. The Court found that under the terms of the loan agreement nothing was owing as he did not quit but rather was terminated without cause. Thus there was no consideration for the release.

2) The Plaintiff was required to sign the release on the spot in ” circumstances of distress and concern for supporting his family”. The entire meeting only lasted 15 minutes.

3) The termination documents were false and misleading in that they wrongly suggested that the Defendant had just cause, which they did not.

4) Whether the Release was signed or not the Plaintiff was entitled to his minimum termination payments under the ESA, which was two weeks pay.

5) Given the Plaintiff’s limited education ( Grade 11) and the legalese of the Release, the Judge doubted that the Plaintiff truly understood what he signed. The meaning of the documents was not explained to him at the time .

6) He was told by the Employer that unless he signed the Release he would not receive a cheque for his outstanding wages.

Having set aside the release the Court ordered the Employer to pay 6 months notice to a 54 year old Helicopter Mechanic making a salary of $68,000 who was only with the Employer for 1 year and 3 months.

Lessons to be learnt.

NEVER have a dismissed employee sign a Release on the day of termination.

You pay nothing, you get nothing. Don’t be a cheapskate.

In Nova Scotia a Release May Not Be Effective to Avoid Reinstatement:

In Demone v Composites Atlantic ( 2014 NSLB 163) it was held that a release which gave the ex employee both his statutory minimum notice of 8 weeks plus an extra 19 weeks pay was not sufficent to displace the employees right to seek reinstatement under Section 71(1) of the Labour Standards Code of Nova Scotia.

This section provides for statutory  tenure for employees with over 10 years service, subject to various exceptions, notably just cause or a legitimate layoff . This can only be waived if the employee obtains a benefit from the employer greater than his statutory rights, including the right of reinstatement.

This is what the Board said:

24. The Respondent’s letter also refers to what is described as a payment offered to the Complainant on a ‘gratuitous basis’. Section 71(1) of the Code provides a ten year employee with statutory tenure which means that termination may only take place where the employer is able to demonstrate “just cause”. The Code does not contain a pay in lieu of notice provision for employees whose period of employment is ten years or more. Consequently, as Board jurisprudence has shown, an employee of ten years or more who has been wrongfully terminated may seek to be reinstated. It rests with the Board to determine the appropriate remedy where wrongful termination has been established. In the absence of just cause or an exemption under section 72(3) which has not been alleged by the Respondent, the Board is left to ask does the ‘gratuitous payment’ provide the Complainant with a benefit or benefits greater than those provided under the Code? The Board is of the opinion that, based upon the information as presented, the offer of 19 weeks pay is not a benefit greater than the statutory tenure conferred on the Complainant by the Code.
25. It is the finding of the Board that the Complainant in signing the Full and Final Release gave up his rights under the Code and as such the Release, for the purposes of the Code, is invalid pursuant to section 6 of the Code.
VI Disposition
26. Based upon the Board’s finding on the preliminary issues the Complainant is entitled to pursue his complaint under the Code. A hearing will be scheduled in due course to determine the substantive issues arising from the Complainant’s termination.

When that case was ultimately heard by the Labour Board on its merits, it was found that the dismissal was a legitimate layoff ( his job duties were divided between  four existing employees ) and thus reinstatement  was not available. Moreover they seemed to question the validity of the aforementioned Preliminary Order as set out in following quote from 2015 CarswellNS 695.

71. Given the findings of the Board, arising from a full hearing of this matter and despite the preliminary ruling, it is evident that the facts and arguments of this particular case do not lend themselves to making a determination on whether a Release is binding in a situation where an employer is unable to establish that an employee had been permanently laid off by the elimination of a position and was therefore entitled to reinstatement. This, therefore, remains an issue to be determined in a different case based upon the appropriate facts and full argument. Consequently, the Board’s preliminary ruling in DeMone v. Composites Atlantic Ltd., 2014 NSLB 163 (N.S. L.B.) in so far as it relates to this particular issue is varied in accordance with the Board’s findings as set out above.

As this provision is similar to the Unjust Dismissal section of the Canada Labour Code, could this logic also be applied to settlements in the federal sector where an employee receives a common law settlement, signs a release and then pursues a claim for reinstatement ?

One way to avoid this situation may be to only settle the case after the 90 day limitation period in the Canada Labour Code after insuring that no prior complaint has been filed.



Holding Companies of Operating Companies not Common Employers

In Sproule v Tony Graham Lexus Toyota et al ( 2016 ONSC 2220) the Court held that operating companies can be common employers but that is not the case for pure holding companies .

The Court said as follows:

20. The defendants have conceded that there is a potential for a finding at the conclusion of the trial that the operating companies were one “common employer”. The evidence may potentially lead to the conclusion that they all had “effective control over the employee”. However, the defendants’ position with respect to the holding companies is that there is no genuine issue for trial, in that there is no evidence that could possibly give rise to a finding that the holding companies are common employers.
21. I agree with the position advocated by the defendants. The fact that these companies are intermingled financially, even to a great extent, will not result in a finding that they had effective control over the employee. They are holding companies — nothing more, nothing less. They do not exercise directly or indirectly any control over the employees. The doctrine of common employer has no application to them on any analysis of the evidence. As such there is no genuine issue for trial.

Furthermore there is no claim against the individual owners of the companies, even when they are the controlling minds of the employer companies unless there is an allegation of fraud, deceit, dishonesty or want of authority against the individuals.

Yukon Court of Appeal Says Short Service Employees usually get 2-3 months.

In Cabot v Urban Systems ( 2016 YKCA 4) the plaintiff was employed for only 14 months as a Professional Planner. Her age seems to be in the late 40’s.

The trial judge awarded her 6 months notice but the CA reduced it to 4 months.

This is what they said about notice periods for short service employees:

23. For a short term employee the useful starting place in discussing range is the two to three months spoken of in Saalfeld and Hall. The only feature of this case that would extend that range (there being no special circumstances such as inducement, bad faith or a poor labour market) is a level of responsibility not present in those cases.
24. Adjusting the judge’s finding that six months was a reasonable notice period to take account of his erroneous reference to Ms. Cabott’s hope of returning to British Columbia, and considering the range for this type of case which I would put generally at three to four months, I would allow the appeal, set aside the order and grant judgment to Ms. Cabott based upon four months’ notice.

It should be noted that two of the judges in this case ( Mr Justice Goberman and Madam Justice Saunders) are on the BC Court of Appeal , so in essence this could easily be viewed as the BC view of notice for short service cases.