Signing Contract on First Day of Work OK if Employee Actually Did Not Start Real Work That Day :

In Cottrill v Utopia Day Spa and Salons ( 2017 BCSC 704) Judge Harris was faced with the issue of the validity of an employment contract which was signed on the first day of employment.

Most Courts have ruled that an employment contract containing a restrictive termination clause ( restricting the employee to only the minimum requirements upon termination contained in the Employment Standards Act ) is not enforceable if it is first introduced to the employee on or after the first day of work.

The theory behind this principle is that the deal was already made before the start of work, in that the parties agreed before the actual first day of work on the essential terms of employment, including position, start date and compensation. As this oral agreement did not have a termination clause, the law imposes a term into the agreement that the employee can only be terminated without just cause upon receiving reasonable notice of termination.

For the Employer to introduce a new term, that is a an express termination clause, requires the Employer to now provide fresh consideration, failing which the termination clause is of no effect.

In this case the employee was hired 11 years ago. The Judge described the hiring process as follows:

12      In April of 2004, the plaintiff was interviewed for a position by Ms. Fell. She was subsequently called back for a “practical interview” in a group setting, in which she and other applicants were asked to perform skincare services on staff. She later received a telephone call from Ms. Fell in which Ms. Fell told her that she had been successful and that her first day would be on May 3, 2004.
13      On the first day, she went through an orientation program, which included meeting with various representatives of the company and signing a written contract of employment.
However in deciding that the contract was still valid, this is what the Judge had to say:
13      That said, I will consider the plaintiff’s submission that the 2004 and 2014 written employment contracts do not apply to the plaintiff for lack of consideration. The plaintiff suggests that she was employed on an oral agreement, which provided for common law notice and that it was not effectively modified by the subsequent employment contracts.
114      I start with the general proposition that the standard principles of contract law apply in the employment setting. As noted by Madam Justice Dardi in DeGagne v. Williams Lake (City), 2015 BCSC 816 (B.C. S.C.):
20 The essence of any legally enforceable contract is consensus ad idem; there is no contract without the required meeting of the minds. Both parties to an alleged contract must have manifestly expressed an intention to be legally bound by the agreement and the parties must be shown to have reached consensus on the essential terms of the alleged contract. The parties must have expressed those essential terms such that “their meaning can be determined with a reasonable degree of certainty” by the courts: Frolick v. Frolick, 2007 BCSC 84 (B.C. S.C.) at para. 30.
115      The parties must therefore have reached an agreement on the essential terms for the employment contract to be enforceable.
116      Here, the plaintiff asserts that an oral employment contract was formed in the telephone call in which the plaintiff was told she was “hired”, while the company contends that Ms. Fell told the plaintiff that “she was successful in her interview and to come in for an orientation”. I am not persuaded that, given the effluxion of time, either the plaintiff or Ms. Fell recall precisely what was said in the 2004 phone call. However, I am satisfied from their evidence, that the telephone discussion was brief and that there was no discussion of the terms of the plaintiff’s employment. Although in some circumstances, the court may imply reasonable terms to give effect to the unexpressed intentions of the parties, it must be satisfied that it is appropriate to do so. In this case, I am not satisfied there was any discussion of the essential terms of the employment relationship in the telephone call. I find the written contract of employment was executed before the plaintiff commenced her position as a skincare therapist.
117      I accept Ms. Fell’s testimony that on May 3, 2004, she followed her usual practice with the plaintiff, which was to go through all the required paper work, the company policies, and the terms of the employment contract. The plaintiff does not dispute that she was asked by Ms. Fell if she was comfortable signing the contract and whether she wanted to obtain legal advice. The plaintiff also did not dispute that Ms. Fell reviewed the contract with her, line by line.
118      Further, in cross-examination, when the plaintiff was asked about her 2004 telephone call with Ms. Fell, she testified that she was told by Ms. Fell she “was going to be hired and to show upon on May 3 at the Langley location”. Despite the plaintiff’s suggestion that, as she had trained on the first day, she had worked prior to signing the contract, her evidence was that she did not start her work duties with the company until after she signed the contract.
119      In my view, the instant case can be distinguished from the decision in Francis in which the employee had signed a full offer letter prior to signing a more restricted formal agreement and from the decision in Holland in which the employee had been working for nine months prior to being presented with a written agreement.
120      The decision in Rejdak can also be distinguished. In that case, the evidence supported that the employer and employee had agreed to the salary, position title, and start date on the phone prior to the employee starting work and that the employee had done a full days’ worth of worth before being presented with the written contract. I am not able to find that the plaintiff and the company discussed such essential terms as salary and benefits during the phone call.
121      I find that this case is more analogous to the situation in Bern v. Amec E & C Services Ltd., 2007 BCSC 856 (B.C. S.C.). In that case, Mr. Justice Bauman (as he then was) held that the contractual relationship between the parties did not crystallize until the plaintiff had reviewed all the terms of the written contract. He emphasized that the plaintiff did “not begin performing his duties of employment” until after the written contract had been signed. Here, I find that the plaintiff’s first day was an orientation day, in which she toured the spa facilities, was advised on general procedures and policies, and reviewed the contract of employment. There is no evidence that she provided any skincare services prior to signing the agreement. I am not satisfied that she could be said to have commenced her duties as an employee prior to signing the contract.
122      I, therefore, find that the 2004 agreement was valid and in effect during the plaintiff’s employment.
I have a number of concerns with this decision:
1) The legal  analysis should start with the premise that reasonable notice is a term of the employment unless the party claiming  otherwise can prove the contrary. Thus the onus of proof in this case always rests upon the Employer to prove that the essential terms of the agreement were not discussed in the earlier two interviews or the phone call prior to the first day of employment. Here the Judge reverses the onus , finds that neither party can really remember what was discussed 11 years ago ( DUH!!)  and finds therefore that the Plaintiff loses.
2) There is no dispute that when she showed up on May 3rd, she had not even seen the termination clause. There is no evidence  to believe that she was not paid for her attendance on May 3. What possible policy reason could there be to distinguish between an ” orientation day ” and a ” skin care day “?  What if the orientation and training period had lasted 2 days or 2 months before the employee actually did any productive work ?
This area of law is confusing enough, and now employees have to have an exact  memory of the day they were hired, what time of day they first saw the contract and what activities they did and did not do immediately before and after the signing of the employment contract. This is completely unrealistic.
How onerous could  it possibly be to simply tell an Employer that if they wish to restrict the common law duty to provide reasonable notice of termination, that they must provide the employee with that information before the first day of work so that the Employee can have a realistic opportunity to assess whether or not they wish to be employed under those terms?

Making Secret Recordings of Meetings with Boss May Constitute Just Cause:

In Hart v Parrish & Heimbecker ( 2017 MBQB 68) Justice Edmond upheld the dismissal of 42 year old Merchandising Manager with 15 years service for a series of four separate incidents that the plaintiff had with peers and subordinates.

In essence he was found to have yelled at employees , displayed excessive anger, and similar activity.

These matters were discussed with the Plaintiff on a number of occasions.

34      For the period from October 16, 2013 up to and including the date of his dismissal, the plaintiff surreptitiously recorded meetings with senior management of the defendant. He recorded the meetings by placing his cell phone on the table in the record mode and did not advise the parties that they were being recorded. The plaintiff sought to enter the recordings as an exhibit at the trial. The defendant agreed that the recordings could be entered in evidence and that submissions would be made regarding the weight and relevance of the information contained in the recordings. The recordings commenced shortly after the complaint by Mr. Letkeman.

The Employer claimed that the fact that the Plaintiff made secret recordings of his meetings with management was itself grounds for dismissal. This is what the Judge said about that issue.

97      The plaintiff’s inappropriate use of his cell phone in secretly recording meetings with his superiors does amount to a breach of his confidentiality and privacy obligations to the defendant. The plaintiff admitted on examination for discovery that he knew a breach of the confidentiality obligations could result in termination (examination for discovery transcript of the plaintiff held December 11, 2014, qq. 34 – 45, Exhibit 10).
98      The misuse of his cell phone was also a breach of his personal code of conduct that he prepared as a result of his meetings with Stone Ridge Consulting. In conducting the contextual analysis and assessing the severity of the misconduct, the plaintiff did not disclose the recordings to third parties outside of the defendant other than to his legal counsel and for the purpose of these proceedings.
99      This evidence was considered by me as a factor in determining whether the defendant had just cause for dismissal. However, it is unnecessary for me to decide whether the plaintiff’s use of his cell phone amounts to just cause for dismissal in this case. The plaintiff’s misconduct, as noted above, was relied upon by the defendant at the time of dismissal, and in my view, that provides just cause for dismissal in the circumstances of this case.
I have always had concerns about the issue of secretly recording meetings or telephone discussions with coworkers or bosses. This is the first case that I am aware of in which the Courts have dealt with this issue.
This case should serve as a warning to those parties and their lawyers who think that secretly recording an employer or a co-worker is a good idea.
Ironically in this case it does not seem that the actual recordings in any way helped the Plaintiff’s case.

Case Provides Useful Analysis of Difference Between Independent vs Dependent Contractor:

In Glimhagen v GWR Resources ( 2017 BCSC 761) Justice Rogers was faced with a plaintiff who during the course of his 23 years association with the defendant had been an independent contractor, then a dependant contractor and finally an employee.

However in order to determine the amount of reasonable notice, the judge had to determine the period of time in which the Plaintiff was either an employee or a dependant contractor, as his time as an independent contractor did not count towards reasonable notice.

Most of the reported cases deal with the difference between an employee and an independent contractor whereas this case deals with more exacting differences between two different types of contractors.

This distinction is becoming more important as the rights given to dependant contractors are increasing. Under the common law, dependant contractors are entitled to reasonable notice of termination ( see Keenan v Canac Kitchens 2016 ONCA 79) . Under the Canada Labour Code, dependant contractors are deemed to be employees for the purpose of the Code. One of the key recommendations of the just released Changing Workplace Review by the Ontario Ministry of Labour had this to say about the issue :

We identify the issue of employees who are misclassified – intentionally or unintentionally – as independent contractors not covered by the ESA as a significant one and recommend that the Ministry make misclassification a priority enforcement issue. We further recommend that the term “dependent contractor” be added to the definition of “employee” in the ESA Finally, we recommend that where there is a dispute about whether a worker is an employee, the person receiving the worker’s services has the burden of proving the worker is not an employee and an obligation to provide all relevant evidence.

The Judge in this case went over all the relevant factors and determined whether each factor favoured either the dependant or the independent contractor status .

I will quote extensively from the judgement as it best shows the judges’ reasoning .

Dependent or Independent Contractor
48      The point of departure in this case is to determine whether the plaintiff was a dependent contractor and if he was, when he acquired that status. The relevant factors are:
Whether the agent was largely limited exclusively to the service of the principal
49      The defendant never required the plaintiff to provide services exclusively to it. In fact, even after he went on the defendant’s payroll the plaintiff continued to be free to provide accounting and consulting services to other parties.
50      The factor militates against a dependent relationship at any time prior to August 2012.
Whether the agent was subject to the control of the principal, not only as to the product sold but also as to when, where and how it was sold
51      The evidence demonstrates that at the outset, the plaintiff provided computer consulting services to the defendant. The defendant had no expertise in computer based accounting systems. The plaintiff controlled the advice he gave to the defendant about what kind of accounting system to install and how to operate it. Further, the plaintiff testified that he designed and set up the digital accounts and control systems for the defendant. The plaintiff also designed and implemented an on-line system for tracking the defendant’s accounts receivable and accounts payable. The evidence was quite clear that the defendant did not direct the plaintiff in those tasks.
52      The physical bookkeeping that the plaintiff performed for the defendant was done at the defendant’s direction.
53      The accounting processes that the plaintiff carried out were the kinds of processes required of any in-house accountant. He was directed to prepare quarterly financial statements and to put together the information necessary for the defendant’s auditors. The defendant made it clear to the plaintiff that these were among the things he was expected to do. The defendant did not, however, provide the plaintiff with a set of instructions on how to do those tasks — the defendant left it to the plaintiff to apply his own expertise.
54      The defendant also required the plaintiff to ensure that its corporate filings and account keeping complied with the policies and regulations of the TSX. Again, the defendant did not provide the plaintiff with an instruction manual to carry out his responsibilities. The defendant relied on the plaintiff to educate himself as to the relevant elements of TSX operations and to comply with those strictures.
55      This factor militates somewhat against the plaintiff being a dependent contractor.
Whether the agent had an investment in or interest in the tools necessary to perform his service for the principal
56      The plaintiff always used equipment and software supplied by the defendant. He carried out his tasks at the defendant’s places of business. Only occasionally did the plaintiff do the defendant’s work from his home office.
57      The factors argue in favor of the plaintiff being a dependent contractor.
Whether by performing his duties the agent undertook risk of loss or possibility of profit apart from his fixed rate remuneration
58      The plaintiff was not required to show up at the defendant’s office at any particular time of day, nor was he required to put in a given number of hours of work in a day. The defendant did not control the plaintiff’s hours of work; the defendant only required that the plaintiff properly perform the tasks assigned to him. To the extent, then, that the plaintiff performed his work efficiently more hours of the day were available for him to devote to promoting his other business interests. On the other hand, the plaintiff might have to forego other remuneration if his work for the defendant increased in a given month due to, say, the need to prepare accounts for a quarterly or annual report.
59      Further, the plaintiff regularly accepted shares issued by the defendant in lieu of cash for his work. In so doing, the plaintiff took a risk that he would not be fully paid, as would be the case if the value of the stocks fell, or make a profit over his monthly stipend, as would happen if the shares increased in value.
60      The factor argues against the plaintiff being a dependent contractor.
Whether the agent’s activity was part of the principal’s business organization — in other words ‘whose business was it?’
61      The plaintiff’s work for the defendant was an integral part of the defendant’s operation. It would not have been possible for the defendant to have carried on its business without a set of properly functioning books of account. The same is true of the document management that the plaintiff performed for some years ahead of his appointment as corporate secretary. It cannot be said that the plaintiff’s duties were peripheral to the defendant’s business.
62      Further, the plaintiff carried out some degree of financial control over the defendant’s operations. He usually assessed whether an account ought to be paid and determined when to pay it. While the plaintiff was not wholly in charge of the firm’s finances, he did act as a watchdog over inappropriate use of the defendant’s money. To that extent, then, the plaintiff was looking out for the defendant’s business, not his own.
63      The evidence relevant to this factor argues in favor of the plaintiff being a dependent contractor.
Whether the relationship was long standing — the more permanent the term of service the more dependent the contractor
64      The relationship between the plaintiff and the defendant started in 1989 and persisted through to 2012 — a span of 23 years. It may be important to note that the plaintiff’s tenure with the defendant was not punctuated by his coming and going. The plaintiff provided services to the defendant steadily and without interruption throughout that period.
65      Significantly, the plaintiff’s ‘job description’ changed considerably when his sister Margret passed away. With her passing he began to take over the things that Margret had been doing for the defendant. Those things included some office management and financial control.
66      The evidence establishes that not only was this a long-standing relationship, it was an evolving one as well. Over time there was an increase in the plaintiff’s tasks and responsibilities for the defendant.
67      This factor militates for a dependent contractor relationship.
Whether the parties relied on one another and closely coordinated their conduct
68      There can be no doubt that prior to his becoming an employee in August 2010, the defendant relied heavily on the plaintiff. Although there was no direct evidence on the point, I find that it is more likely than not that by the late 1990’s the plaintiff was the only person in the defendant’s organization who thoroughly understood the systems managing the defendant’s finances. And again, while there was no direct evidence on the point, I find that it is more likely than not that the plaintiff relied on the defendant’s monthly stipend to tide him over droughts in his other business enterprises. Both parties relied on each other.
69      Additionally, they coordinated their interaction, especially when it came to the preparation of quarterly and annual financial reports. For those reports to make sense and be delivered on time, the plaintiff and other members of the defendant’s management had to work together to gather, collate and process the relevant data. Mr. Shives testified to an example of that coordination when he described how and why the plaintiff would regularly visit his field office in Lac La Hache, B.C.
70      This factor argues in favor of a dependent contract relationship.
71      Taking all of the evidence into account, I have concluded that prior to the late 1990’s the parties were not so tightly bound together and their efforts were not so integrated with one another as to have made the plaintiff a dependent contractor.
72      I find that when the plaintiff took on his late sister’s role with defendant, that status began to evolve. By the year 2000, the plaintiff was an integral part of the defendant’s operation — it would have been very difficult for the defendant to have carried on efficiently in the plaintiff’s absence. By the same token, although the plaintiff was free to pursue other business interests and he did in fact pursue those interests, his relationship with the defendant was, by the year 2000, well ingrained and established.
73      For these reasons, I find that as of the year 2000 the plaintiff was a dependent contractor for the defendant. It is from that year that the plaintiff’s entitlement to notice credits starts to accumulate.
As the Plaintiff  was found to be either an employee or a dependant contractor for 12 of the 23 years and the judge found that the proper notice was 12 months.

Arbitrator That Finds Employer’s ” Generous” Actions at Termination are Grounds for Not Upholding Just Cause:

In an adjudication under the Unjust Dismissal section of the Canada Labour Code, Arbitrator Allan Kaufman decided in Navaneethakrishnan v Bell Mobility ( YM2707-10699) ( 2017 CarswellNat 1825) as whether a single act of insolence constituted just cause.

The Employee was called into a meeting to be told that she was being promoted, but not to the job that she had hoped for. The employee was not a happy camper.

In the course of that meeting with her boss she said the following things:

7      This meeting of May 11, 2016 then went downhill. According to an e-mail that Luca sent to Tomassina in HR later that same day, the employee stated during that meeting with Luca that:
• “Marco and Luca do not know how to lead”;
• “Luca’s group have the absolute worst reputation”;
• “Luca does not have a clue when it comes to budgeting”;
• “I have zero respect for you(Luca) and Marco – zero.”
• “Luca never stood up for the team and gave her zero support”;
• “I’m way too smart for this, I studied Finance, I did my CFA, I’m way too smart.” At which point she unilaterally walked out and ended the meeting with her boss, Luca.
Luca was her boss and Marco was the boss of Luca.
The Adjudicator was not impressed with the Employee’s conduct :
18      I regard this conduct on the part of the employee, if true, as being very serious, since was accusing her immediate boss, and his boss, of not knowing how to lead, and of basically being incompetent. After all, there are not too many worse comments that an employee can hurl at her boss’ face than what this particular employee was alleged to have said. Fortunately for the employee, there was nobody else in the meeting room who heard her comments, except Luca. Yet he was her immediate boss and she is alleged to have said these things directly to his face.
19      At the Hearing, the employee denied making most of the above quoted statements during the May 11th meeting. Whereas Luca testified that all of those quotes were accurate. I tended to believe Luca’s version of those events…
However the Adjudicator found that the employee was entitled to a warning before a termination for just cause could be upheld. I have no problem with that finding.
However, the Adjudicator went on to find that two of the Employer’s actions also contributed to his finding that the employment relationship was not totally severed.
1. Before termination, Bell wrote the employee a letter.
5. However, the main problem for the employer is that the employer’s own letter of termination dated May 17, 2016 suggests that the employment relationship had not been totally severed between the parties. This is evidenced by the fact that the employer took the highly unusual but very generous step of writing in its letter of termination to her dated May 17, 2016 that if she could come forward and advise the employer of any adverse medical condition or other personal issues in her life that might have explained her outburst during the May 11th meeting, the employer would consider re-hiring her. I believe this to have been a most generous gesture on the part of the employer. However, it served at the same time to undermine the employer’s legal argument that the employment relationship between the employee and the employer could not subsist. If the relationship was completely irreparable, as the employer contended before me at the Hearing, how could the employer have offered in its letter of termination to even consider the possibility of taking her back to work? Yet the employer did so.
The answer to the adjudicator’s question is obvious. If in fact  her outburst had a medical basis then this would trigger a duty by Bell to accommodate her under human rights legislation. Surely the Employer’s legitimate and arguably legally required inquiry should not be held as evidence against the employer.
2. The Employer paid the employee three weeks termination pay .
6. The employer’s own letter of termination dated May 17, 2016 also contained the unusual step of paying the employee the statutory two week notice of termination pay under the Canada Labour Code, plus two weeks of continuing coverage under the employer’s medical plan. In addition, not only did the employer pay to her that two weeks’ pay, but it also paid her a third week of pay following her termination – up to June 5, 2016. I view all of this as “unusual”, since if the employer was taking the position in its letter of termination that it was terminating the employee for cause, I would not have expected the employer to have paid her three weeks’ pay thereafter – or any other amount for severance pay. It was almost as if the employer – while asserting at the Hearing before me that it had cause to terminate the employee – did not fully believe it, as reflected by its conduct at the time of the dismissal.
The effect of this thinking is to reward employers who treat dismissed employees cheaply ( paying then nothing by way of termination pay ) and to punish those employers who chose to pay a dismissed employee some minimal termination pay, even when they have alleged just cause.
Moreover the issue of whether the employer believes they have or do not have cause should be irrelevant.
Just cause is a matter of law. It is not based the opinion of the parties.
In almost every mediation I have regarding the issue of just cause, one party feels strongly that there is just cause and the other that there is not.
That’s nice.
I only care about predicting the opinion of one person. The judge.

Employee Who Went to Welder School Instead of Accepting General Labourer Job Failed to Mitigate :

In Benjamin v Cascades Canada ULC ( 21017 ONSC 2583) Justice Glustein was faced with assessing the correct notice period for a unskilled general labourer with 28 years service who upon termination was only given his ESA minimum payment of 34 weeks.

The major issue was whether or not the Plaintiff had reasonably mitigated his damages.

The relevant facts were as follows:

  1. He was terminated on May 12, 201 as part of a plant closure that involved 41 other employees.
  2. He decided to retrain as a skilled welder and thus attended full time school for 6 months from August 2016 to February 2017. Because of this he did not apply for any job prior to the motion for summary judgement which was held on April 10, 2017. He also did not attend the outplacement counselling or coaching offered by the Defendant.
  3. His reason  for choosing retraining was so that he could improve his skills and so that he could restore himself to his former job security and income.
  4. Cascades brought to his attention  three comparable positions at other plants run by the Defendant. He ignored all of these opportunities. This was part of a program run by the Defendant to bring to the attention of all terminated employees job opportunities both inside and outside Cascades. The Defendant led evidence to the effect that had he applied for any of these positions, he likely would have been accepted .

The Judge then reviewed the law on mitigation:

[88]           The leading case on the duty to mitigate in wrongful dismissal cases is Michaels. In Michaels, Laskin C.J. held that:

(i)                 an employee is required to mitigate damages arising from wrongful dismissal;

(ii)               the onus is on the employer to establish a failure to mitigate; and

(iii)            the onus requires the employer to establish that (a) the employee did not take reasonable steps to seek comparable employment, and (b) if the employee had done so, the employee could have procured such comparable employment.

On the onus issue, the Judge had to decide whether the test required the Employer to prove that  the employee could have obtained alternative  employment or would likely have obtained alternative employment.

[106]      I agree that there are differences between establishing a “could have” onus as compared to a “would likely have” onus. For the reasons that follow, however, I find that the Michaels test sets out a “could have” onus and it is the proper approach to follow.[6]

[107]      The court in Cimpan v. Kolumbia Inn Daycare Society, 2006 BCSC 1828 (CanLII) (“Cimpan”) addressed the submission of the employee in a wrongful dismissal case that that an employer seeking to discharge its onus to establish a failure to reasonably mitigate ought to be required to prove that the dismissed employee “would have” been able to secure a particular job with another employer. Truscott J. rejected that submission. He held (Cimpan, at para. 108):

While the onus is on the defendant to prove the plaintiff has not mitigated, it would be impossible for any employer to prove that the employee would have been able to secure a particular job.

[108]      Counsel for Benjamin agreed that an onus requiring employers to establish that the employee “would have” obtained a comparable position would be logically “impossible” and is not appropriate. I agree for the reasons of Truscott J. in Cimpan.

[109]      However, to increase the onus on an employer to show that the employee “would likely” have obtained an available comparable position, as submitted by Benjamin, raises similar concerns as in Cimpan. Under such a proposed test, employers would somehow have to establish the “likelihood” of a dismissed employee obtaining a comparable job, potentially requiring the employer to lead evidence as to the number of candidates applying for a job with another employer,[7] and knowledge of the particular aspects of a candidate’s resumé that might be attractive to other employers.[8]

[110]      While the “would likely” test is not logically impossible in the same sense as the “would have” test discussed in Cimpan, it is nevertheless inconsistent with Michaels and is unreasonable.

[111]      In essence, the test proposed by Benjamin would require an employer to prove the “odds” of a terminated employee obtaining a comparable position with another employer. That approach is not consistent with the Michaels test that the onus is on the employer to establish that “by the exercise of proper industry in the search, [the employee] could have procured other employment of an approximately similar kind reasonably adapted to his abilities”. [Emphasis added]

[112]      It is not clear in either Fisher or Yiu that the court is attempting to impose a different onus on employers than the “could have” test in Michaels. In Fisher, Perell J. relies on Di Tomaso, which follows the Michaels analysis. In Yiu, D. Brown J. follows the analysis of Echlin J. in Link v. Venture Steel Inc., 2008 CanLII 61389 (QC SAT), [2008] OJ 4849 (SCJ) (“Link”), in which Echlin J. held (Link, at para. 49):

Nevertheless, it remains incumbent upon Venture to lead evidence that Link failed to pursue alternate employment opportunities that were of a comparable nature and that such opportunities were not only available, but that if pursued, Link could have minimized the damages sustained. [Emphasis added][9]

[113]      On appeal (cited as Link v. Venture Steel Inc., 2010 ONCA 144 (CanLII)), the court upheld the decision of Echlin J. on the mitigation issue (and allowed the appeal in part on another issue). The court held that the mitigation defence of the employer could not succeed because the employer had not led any evidence about the availability of comparable employment, a factor consistent with the “could have” onus under Michaels. O’Connor A.C.J.O. held (Link (CA), at para. 73):

Because Venture did not lead any evidence about the availability of suitable employment, the trial judge concluded that Venture had not met the second prong of the test set out above.[10]

[114]      In none of the above cases do the courts suggest that they are seeking to alter the onus as set out in Michaels. If there is any uncertainty as to whether the employer is required to establish that the employee “could have” obtained comparable employment or “would likely” have obtained comparable employment, I would adopt a “could have” test based on the decision in Michaels and my reasons discussed above.[11]


On the issue of choosing to retrain during the notice period, the Judge said :

[116]      A decision by a terminated employee to seek retraining is not, on its own, a basis for an employer to submit that the employee failed to reasonably mitigate damages.

[117]      However, if the employer meets the Michaels test and establishes that (i) the employee did not take reasonable steps to seek comparable employment “by the exercise of proper industry in the search”, and (ii) if the employee had done so, the employee “could have procured” such comparable employment, then the employee cannot choose to engage on a new career path as a “charge” to the employer.

[118]      Such an approach maintains the onus on the employer to establish (as required in Michaels), that there were comparable positions available for the employee but the employee did not take reasonable steps to pursue those opportunities.

[119]      Further, this approach maintains the Michaels principle that an employee must attempt to reasonably mitigate damages arising from wrongful dismissal.

[120]      If the employer can establish that the dismissed employee (i) chose to retrain instead of seeking comparable positions, and (ii) could have procured that comparable employment, a dismissed employee ought not to have a “free pass” to change careers to enhance job security or obtain better hours, and then collect damages for notice simply because of dismissal. In those circumstances, an employer should not be required to fund retraining (through payment of reasonable notice) when the employee could have obtained comparable employment.relied upon by Cascades. Retraining on its own is not evidence of a failure to reasonably mitigate damages; rather, if an employer can establish that comparable work is available and the employee made a choice to retrain and not to seek comparable employment, retraining would not constitute reasonable mitigation.

 [148]      In the cases relied upon by Benjamin, there was evidence as to efforts to find employment, the unavailability of employment, or other reasons why it was reasonable to make a career change, which allowed the courts in those cases to find that retraining was reasonable mitigation.

[149]      In the present case, by contrast, the evidence is that comparable employment was available, which Benjamin could have procured had he taken reasonable steps to seek employment. In these circumstances, the decision to retrain does not constitute reasonable mitigation.

The next issue was one of timing. Does turning down a job to retrain for 8 months simply mean you deduct 8 months from the notice period or does the notice cutoff occur when the employee turns down the job?

[157]      If a terminated employee chooses not to seek comparable employment that he or she could have procured after termination, the employee chooses to deprive the employer of the opportunity to avoid damages arising from the dismissal. If the plaintiff employee had made reasonable efforts and obtained such comparable alternate employment, the defendant employer would not have been exposed to any damages after that time. If the plaintiff had obtained the comparable position before the amount of months paid by the employer on termination, the plaintiff would not be entitled to damages.

[159]      Consequently, I do not agree with Benjamin’s submission. I find that the applicable law is that the plaintiff is not entitled to recoverable losses as of the date the employer establishes under the Michaels test that the plaintiff fails to reasonably mitigate damages.

The plaintiff got zilch as he turned down the job opportunity, or technically did not pursue it, before the end of the ESA period that he was already paid for.

Does this mean that a dismissed cannot go to school during his notice period? Is he or she stuck in the rut of having to look for another dead end job, just like the one he or she was terminated from?


The Plaintiff simply has to do two things at the same time :

  1. Take the retraining or schooling to improve their future. AND
  2. Look for comparable jobs.

Remember, the easiest thing to do in the whole world is to not get a job offer following a less than great interview for which you unfortunately were 15 minutes late for because your alarm was not working, or the TTC was slow or your dog was sick.

Employer Tries to Avoid 2 Year Termination Clause by Arguing That its Own Contract Violated the ESA

In Roberts v Zoomermedia Limited ( 2017 ONCA 327) the Plaintiff was found to be entitled to be paid two years lump severance pay upon the expiry of the contract as set out in the contract.

Among the arguments made by the Employer, it argued that because the contract disentitled the employee to STD and LTD during the 8 week termination pay period under the ESA, that the entire termination clause should be held to be null and void. The effect of this would be that the Plaintiff would simply get his common law reasonable notice, which would never be as good as his two year lump sum severance entitlement under the contract.

The Court of Appeal first found that the issue was not necessary to decide as the clause in question was really the actual dispute , but in any event , they had  this to say about the Employer’s some what novel argument.

Effectively, the appellant argues that because it did not agree to provide the respondent with all of his statutory entitlements – entitlements that were conditional on an early termination, an event which never occurred – the respondent must therefore forfeit his contractual entitlements: contractual entitlements that are far greater than what either the ESA or the common law would have provided. This would be a perverse application of a statute that is intended to protect the interests of employees, and I would reject it.