Plaintiff Wins $114,082 but Pays Costs to the Defendant of $200,000:

In Colistro v Tbaytel ( 2019 ONCA 197) the Ontario Court of Appeal dismissed both the appeal and the cross appeal in the case of a plaintiff who was constructively dismissed when her employer rehired a manager who had sexually harassed her 11 year before.

She was awarded 12 months notice but because she had been on STD and LTD during this same period, her actual damages were only $14,082 . She was also awarded Honda or moral damages of $100,000.

Most plaintiffs’ counsel would have thought that an out come like this was a great win .

Not this plaintiff.

This is what the trial judgement said the Plaintiff was seeking :

  1. For constructive dismissal from employment $100,000.00, being 18 months’ salary,  plus “Wallace” damages of $250,000.00;

2.  For the intentional infliction of mental suffering:

                                i.            general damages of $1,000,000.00;

                              ii.            damages for past economic loss of $401,567.64;

                           iii.            damages for future economic loss of $680,666.25;

                           iv.            damages for past loss of housekeeping value of $64,533.70;

                              v.            damages for future loss of housekeeping value of $85,834.23;

                           vi.            aggravated damages of $500,000.00;

                          vii.            punitive damages of $300,000.00; and,

This totals $3,381,000 and change. As she recovered only $114,082, her recovery was about 3.3 % of what she was seeking.

When it came to costs, the OCA set out what the trial judge said .

      The trial judge held that, given the damages sought at trial by the appellant and the result achieved after trial, it was obvious that Tbaytel and the City were the substantially successful parties to the litigation, and were therefore entitled to an award of costs. While the appellant’s judgment was less favourable on its face than the financial terms of Tbaytel and the City’s 2015 and 2016 offers to settle, the trial judge chose not to invoke the cost consequences of r. 49.10(2) of the Rules of Civil Procedure. Instead, he chose “to fix costs in an amount which partially indemnified the defendants and which [he found] to be fair and reasonable taking into account all parties’ Bills of Costs, the terms of the 2015 and 2016 offers” and other relevant factors: costs endorsement, para. 36.

[63]      By order dated January 26, 2018, the trial judge ordered the appellant to pay costs to Tbaytel in the amount of $150,000 and to the City in the amount of $50,000.

The Court of Appeal, in refusing to overrule the trial judge on costs said as follows:

   The test for leave to appeal an order as to costs is stringent. Leave to appeal will not be granted save in obvious cases where the party seeking leave convinces the court there are strong grounds upon which the court could find that the judge erred in exercising his discretion: Carroll v. McEwan, 2018 ONCA 902 (CanLII), 34 M.V.R. (7th) 1, at paras. 58-59, application for leave to appeal to S.C.C. pending, 38514 (February 4, 2019).

[66]      I am not persuaded that the appellant has met this stringent test and would deny leave to appeal the costs order.

[67]      The appellant’s submissions suggest that the trial judge determined that she was entitled to her costs, subject to the application of r. 49.10(2). But he did not. He proceeded on the basis that Tbaytel and the City were the substantially successful parties and entitled to costs. Further, the record on appeal does not contain the settlement offers. The trial judge’s endorsement on costs suggests that Tbaytel’s second settlement offer did not include a “no admission of liability” clause. Finally, the trial judge acknowledged that the appellant argued that some of the amount of the settlement would have been taxable, but it is not clear that she quantified or substantiated that assertion and she does not do so before us.

My Comments :

In the past, there has rarely been a downside to reaching for the stars when claiming damages. It costs as much to issue a claim for $4,000,000 as it does for $40,000.

This case may stand for the proposition that there is a real risk to  seeking millions when the case is worth only thousands.

I have often thought that there should be a sliding fee scale for issuing a claim based on how much money the claim seeks. This might lessen the effect making million dollar claims in cases worth only thousands.

12 Year Office Manager Gets 24 Months Notice in Default Judgement :

In Saiklay v Akman Construction ( 2019 ONSC 799) Justice Corthorn award 24 months notice to a 60 year old office manager making $69,000 with 12 years service.

Regarding the issue of older workers. the judge said the following :

[27] At para. 11 of the 2006 decision in Lowndes v. Summit Ford Sales Ltd. (2006), 2006 CanLII 14 (ON CA), 206 O.A.C. 55, the Ontario Court of Appeal concluded that (a) there is no upper limit for the number of months that constitute reasonable notice, and (b) generally, only in exceptional circumstances will a reasonable notice period exceed 24 months.

[28] For an individual at or over the age of 60, a notice period in excess of 30 months might be reasonable (Abrahim v. Sliwin, 2012 ONSC 6295 (CanLII), 2013 C.L.L.C. 210-004, at para. 25). It is not uncommon for individuals over the age of 62 and/or terminated from senior level positions to be entitled to 24 months’ notice. (See: Dawe v. Equitable Life Insurance Company, 2018 ONSC 3130 (CanLII); and Bovin et al v. Over the Rainbow Packaging Services Inc., 2017 ONSC 1143 (CanLII).)

[29] As the Office Manager of a construction company, Mr. Saikaly did not hold as high a level of position as did some of the plaintiffs in either of the two cases cited immediately above. Mr. Saikaly does not have the length of service that some of the plaintiffs in the cases cited above had. The plaintiff in Dawe was a Senior Vice President with 37 years of service. He was 62 years old when his employment was terminated. In Bovin, one of the plaintiffs was the General Manager-Controller with 20 years of service. She was in her mid-forties when her employment was terminated.

[30] I am satisfied that the nature and longevity of Mr. Saikaly’s employment with the defendant, his dedication to the defendant’s financial well-being, his age, and his lack of formal training support a 24-month notice period.

My Comments :

This is another high water mark in notice periods. However it should be emphasized that the case was undefended and thus maybe of less precedent value than it it had been  defended.

Misleading an Employee Regarding a LOA is Bad Faith:

In Jonasson v Nexen Energy ( 2018 ( ABQB 598 ) Justice Antonio had a case where the plaintiff with 22 years service requested a leave of absence. He signed an agreement which indicated that there was no guarantee that when he came back there would be a job waiting for him, only that the employer would make reasonable efforts to find him one. If a new job could not be found then he was deemed to have resigned.
However management knew at the time that there was no prospect of a job at the end of leave as the plaintiff was already on a potential layoff list. While he was on leave his position was eliminated. The employer declared that he had quit pursuant to the LOA agreement.
The Court found that the actions of the employer amounted to bad faith. He was awarded 22 months notice for wrongful dismissal and awarded $20,000 in punitive damages because they ” displayed an outrageous degree of negligence towards him ” by taking the position that he resigned when they essentially lied to him about his prospects of reemployment after the leave was over.

Cannot Contract Out Of Continuous Service Provision in the ESA:

The Ontario Court of Appeal in Kerzner v American Iron & Metal Co. ( 2018 ONCA 989) had a situation where an employee (who was also a 1/3 owner of the vendor ) sold his shares to a new owner and signed a release in favour of the new owner. He went onto to be employed under a new written contract of employment for 7 more years.

The new employment contract had a termination clause requiring 26 weeks notice. The Court held that under the ESA his seniority goes back to 1980 when he joined the vendor and that the parties could not agree otherwise as this would be an illegal attempt to contract out of the Act. As under the Act his entitlement to both termination and severance pay was 34 weeks, the 26 week termination clause was illegal.

However because the release was still valid, in considering his common law entitlement to reasonable notice, his service was from the time of the sale, a mere 7 years. He was awarded 7 months notice, even though he was age 58 and held a senior position. The Court noted that he got a new job within 2 months.

Slap Across the Face Gets Plaintiff $65,000

In Bassanese v German Canadian News Company ( 2019 ONSC 1343) Justice Soosin, in a motion for default judgement, had the following fact situation:

The Plaintiff, a 73 year old female clerk with 19 years service, was verbally harassed by a male co-worker on a number of occasions. Twice she complained to her employer, who did zilch.

One day the co-worker slapped the plaintiff in the face three times. The Plaintiff complained to her employer an filed a police report.

The employers’ response?

She was fired the same day and given no notice.

The judge awarded $15,000 for the assault under the doctrine of vicarious liability.

The judge went on to award $50,000 aggravated  damages because the employer ignored her prior complaints, failed to investigate the assault or take steps to discipline her abusive co-worker.

Interestingly, the judge did not seem to rely on what I see as the most obnoxious behaviour of the employer, which was to fire her, rather than her abuser.

The plaintiff was also awarded notice of 19 months.

The total award, with costs,  came to $204,433.

Counsel for the Plaintiff was Maria Esmatyar of Lecker & Associates. My son, Matthew Fisher, is a partner at this firm but he had nothing to do with this file.

Frustration of Employment Contract Can be Plead by the Employee or the Employer :

In Hockstra v Rehability Occupational Therapy ( 2019 ONSC 562) Justice Mitchell had a case where the plaintiff had been off on disability for 8 years and had no hope of returning to work. This judgement confirmed that the doctrine of frustration is a matter of law, thus either party can claim that the employment contract has been frustrated.
In most cases the employer wants to rely on frustration, as under the common law, no notice is required. However in this case the plaintiff wanted to rely on the doctrine because upon a finding of frustration he was entitled to both termination and severance pay under the Employment Standards Act of Ontario.

Timing Of Stock Options in Notice Period can Make Huge Difference :

In O’Reilly v Imax Corp ( 2019 ONSC 1239) Justice Faieta found that the plaintiff was entitled to payment for the RSU’s that would have vested over the 24 month notice period. However the issue remained as to when to value those RSUs as presumably the price varied over the period . The Plaintiff said that he would have exercised them as soon as they were vested . The Defendant said that they should replicate what he had done in the past, which was to exercise the RSUs about 13 months after they vested. The judge ruled that the best indicator of what he would have done and he been given reasonable notice was to see what he actually did with the RSU’s that were vested but not sold during the notice period. This led the judge to determine the relevant date as being 5 months from vesting date .

I have two comments:

One : 5 is more or less the midpoint between 0 and 13.

Two: Clearly the value of the RSU’s declined over the notice period. I suspect the legal arguments would have been reversed had the value gone up over the same period.

EI Officer Ruling of No Misconduct Prevents Employer From Alleging Misconduct in CLC Hearing :

In Alexander v Huron Commodities ( 2019 CarswellNat 377) Arbitrator Howard Snow, in a Canada Labour Code Unjust Dismissal case, ruled that the decision of a EI Officer ( which is first level of decsion under the Act) that there was no misconduct acts as an estoppal on that issue in the CLC case. This means that the Employer cannot even  raise the argument of just cause in the CLC proceeding.

Mr Brown found that the three elements of estoppal were proven:

  1. The same question has been decided, that is whether the employee had committed any misconduct.
  2. Whether the decision was judicial and whether it was final.
  3. The  parties were the same in both proceedings.

I have grave concerns about this award:

  1. The decision of the EI officer was made solely on two phone calls, one with the employee and one with the employer. Neither side seemed to know what the other side said to the officer. Of course there was no chance to cross examine the other party or even to refute the other side. How could this ever  be characterized as a ” judicial decision ?
  2. What if it went the other way? What if the employee, acting on his own with no legal knowledge were to fail to tell the EI officer an important fact. Should he or she be denied access to a completely different legal process because of this lay person error? I have actually appeared as counsel on various EI matters and the level of “evidence ” that even the Board of Referees ( the appeal level from the EI Officer ) is well below the level of any court or administrative tribunal. In my experience,  the Board of Referees will consider as “evidence” the notes taken by the EI officer of a conversation with a HR representative of the Employer who is relating what some manager told him or her. This is at best double hearsay. This again shows that this is not a judicial decision .
  3. Prior to this case, rulings of EI Board of Referees have been found to create valid estoppal arguments in civil cases of wrongful dismissal. This led to the common practice of most employers and many employees  to not appeal cases from the officer level so as to avoid being stuck with an adverse ruling . This is especially important for employers because they actually have no financial stake in the outcome of a EI case. Now however, both parties take a huge risk if they even talk to the EI Officer because an adverse ruling could have a huge effect on future legal proceedings.

Therefore employers should be advised not to even talk to EI officers as there is no upside at all to doing this and it can only worsen their position later on. Employers have a statutory duty to fill out an ROE, but I don’t believe that they have such legal duty to even talk to an EI Officer.

Employees are in a much  worse bind. If the employer alleges ” Dismissal” on the ROE and provides some  evidence  to the officer, but the employee refuses to participate in the process to avoid the estoppal argument, the employee will likely  lose their entitlement to EI, creating even more economic pressure on the dismissed employee to settle with the employer on a unfavourable basis.

One can only hope that no court or other adjudicators will follow this non-binding decision.