Sucessor Employer under ESA not the Same as under the Common Law:

In Carpenter v Brains II ( 2015 CarswellOnt 15542) the Employer went through a CCAA reorganization in which a new company bought some of the assets and employed some of the employees of the previous company. Even though under the ESA the new company was a successor to the old ( and thus she had 17 years service ) under the common law test in Sorel v Tomenson Saunders, [1987] 15 BCLR ( 2d) 38 (CA), the implied term of continuous service was offset by the facts in the case, so she only got credit for 6.5 years. Her notice period was 8 months.

Stinson J listed the following factors in deciding that the implied term of continuous service after a asset sale did not apply :

1) the insolvency of the former employer.

2) the application under the CCAA

3) the termination of her employment by the former employer

4) her hiring on a temporary basis by the CRO ( like a trustee in bankruptcy)

5) the termination of her employment by the CRO

6) the purchase of some but not all of the assets of the former employer by the new employer

7) the provisions of a contract with the new employer which purported to limit her termination entitlements to the ESA, even though the judge found that the clause was illegal as it did not provide for benefits upon termination.

8) Even though the plaintiff continued to perform her same functions despite the change of employer, it was obvious that it was not “business as usual”

My only concern with the judges’ reasoning is that, having found that the ESA only termination clause is unenforceable as it violated the ESA by not including benefits, he then resurrects the same clause for another purpose.

The leading case in this area is Machtinger v HOJ ( 1992 1 SCR 986) in which it clearly states a provision that tries to contract out of the ESA is ” null and void”. If something is” null and void “it is as it it did not exist . How then can something that legally does not exist still affect the legal relationship of the parties?

Unfortunately this is not the first  time that judges have taken into account the existence of an null and void provision and drawn from that document some meaning about the true intention of the parties. This is exactly what the SCC told us not to do in Machtinger. In that case the employer was trying to say that even though the contract was illegal, we could still use it as a guide to determine the true intent of the parties. The SCC soundly rejected that theory and said that the illegal clause could have no effect on ousting the implied term of reasonable notice or implying that the notice period should be a modest one.


Cold Pee Leads to Termination:

In Morin v Gulf Operations ( 2015 CarswellNB 433) the Plaintiff gave a urine sample to a nurse  as part of a random  drug test. When he handed the sample to the nurse she noticed it was cold so he was asked to retake the test, which he did and passed. The Company took the position that the plaintiff had attempted to alter the first test by adding a foreign substance to the sample and without asking his side, fired him. At trial, the Plaintiff testified that he had snow on his clothes, which may have fallen into the sample and lowered the temperate of his urine sample. Just cause was not upheld,  in part because of the failure of the employer to ask the Plaintiff his side of the story and because he had previously passed about 8 drug tests.

Although this was not mentioned in the judgement, if his second urine sample was clean, why would he try to falsify his first sample when he would have known that he had no illegal drugs in his system?

8 Months Service = 6 Months Notice :

In Bahrami v AGS Flexitallic ( 2015 CarswellAlb 1554 ) a 46 year old VP Finance with only 8.5 months service got 6 months notice. Following the case of Bramble v Medis ( 214 NBR (2D) 111, the Court said:

” I do not see on what grounds I can take judicial notice of the difference made by a distinction between an executive-level employee and a non-executive senior manager in Alberta at the time of Mr Bahrami’s termination. ”

This case again refers to the lesser importance of character of employment in determining the notice period  and the wide range of possible notice periods for short service employees.

How to Waste 3 Trial Days on a Simple Notice Case:

In McLeod v Lifelabs ( 2015 CarswellBC 2937) the BC Supreme Court awarded 18 months notice to a 50 year old Process Improvement Manager with 25.5 years service. The defendant put forward an “expert” on job availability who duplicated job listings and included jobs that paid $14 an hour when the plaintiff’s job paid $126K. The Employer had provided the Plaintiff with the services of a a well respected relocation counsellor ( Right Associates ) but did not call them to trial, presumably because the plaintiff did everything in looking for a job that she was supposed to.

This case should have taken a half day, a full day at best, The use of “experts” in respect to mitigation is usually a waste of time and effort.  The threshold for what is a reasonable mitigation effort is quite low, so unless there is somewhat dramatic in the plaintiff’s lack of effort, this issue usually goes to the Plaintiff.

In my mediation experience, the Employer who attacks the Plaintiff’s job search efforts the most are often the same employers who paid little or no severance, allege weak  just cause, refuse to provide a reference letter, complain that the plaintiff was a incompetent employee and refuse to provide relocation counselling .

On the other hand the bane of every plaintiff lawyer is the client who fails to properly record his or her job search so what looks like a great case in the beginning collapses at the mediation because the client failed to do the one thing they were supposed to, namely , look for and record an exhaustive job search.

Part Time Employee not Required to Look for Full Time Work when Mitigating:

In Nikkel v College of Pharmacists of BC ( 2015 CarswellBC 1720) a part time Inspector of Pharmacies (4 days per week) was found to have mitigated reasonably by only looking for part time jobs after termination, even though the job prospects for full time employment might have been better. She said that the reason she could not work full time was for medical reasons. She was aged 57 and had 15.5 years service. Reasonable notice was held to be  16 months .

Salesman Gets $25,000 punitive damages for post termination conduct:

In Huber v Way, ( 2013 Carswell 10131) the employer was hit with $25,000 in punitive damages for relying on non existent documents, threatening to take away the plaintiff’s house and car,  have his lawyer disbarred, showing up at the Plaintiff’s house at night and traumatizing his wife , laying groundless theft charges with the police and filing a bogus counterclaim.  Judge  Flynn also found him to be employed by the personal defendant, not his corporations as he was the alter ego of the corporations. At par 65 he said ” Just as Mr Way ignored the legal niceties of his individual corporations, so shall we”.

Time Theft = Just Cause

In Ross v IBM ( 2015 ABQB 563 ) A well paid full time sales executive  who worked independently based out of his home was terminated for just cause as he admitted that he spent 3 to 4 hours a week , during normal working hours, on his family business, which was unrelated to his work at IBM. He was not given any warning which the Court found was OK due to the seriousness and repetition of the conduct. He was an employee for approximately 6 months. He had falsely told his employer that the business belonged to his wife and that his involvement was minimal. IBM discovered his misconduct when the plaintiff accidentally “butt dialled” his IBM boss who then overheard him talking with a client in the family business. He had earlier told his IBM boss that he would be at a IBM client when in fact he was meeting with his family business client.

One lesson to be learnt from this case is to put a password on your phone, so that your chances of butt dialling your boss are minimized.

RBC Pays $30,000 for Shoddy Investigation:

In Lau v RBC ( 2015 CarswellBC 1639) the Court found that the 30 year old Account Manager with 5 years service was entitled to 9 months notice plus $30,000 in  aggravated damages due to the unfair investigation. Problems with the investigation included: relying upon hearsay upon hearsay, not interviewing the complainant, not retaining video evidence, and filing a false and misleading report with the Securities Commission regarding the reason for termination. the Court also ordered the employer to file a new report with the Securities Commission withdrawing the false allegations.

$100,000 in Punitive Damage Case:

Gordon v Altus Group ( 2015 ONSC 5663 ) the Court awarded punitive damages against an employer whose conduct was ” “outrageous’ and “mean and cheap”. The allegations of cause were found to have no merit but the Employer’s position the was that even so the termination provisions and the non compete provisions were still in force. The Court agreed with this analysis . However, because the Employer did not pay the severance required in the contract ( 9 months) but insisted on compliance with the non compete, the judge awarded $100K in punitives as ” Now, there is no free lunch in this world and Altus cannot expect to have one.”

The Defendant had also counterclaimed for breach of fiduciary duty and claimed actual damages of 1 million dollars plus punitive damages of $100,000. The Court found that the counterclaim had no merit but interestingly awarded the same quantum of punitive damages against the defendant as the defendant had claimed against the plaintiff . I guess that the judge considered what was good for the goose was good for the gander.

Character of Employment Less Important says Court:

In Zoldowski v Strongco,( 2015 CarswellOnt 5485) Hood J. determined that a 39 yr old clerical employee with 17 years service was awarded 14 months notice. The judge agreed that the character of employment is less important ( quoting OCA in DiTomaso v Crown Metal 2011 ONCA 469). Hood said ” If anything, employees with a particular marketable skill are more valuable to employers and should have a easier time finding employment. The plaintiff herself is a case in point. Her skills were vulnerable to automation and she was replaced with a computer. ”

Query, on the assumption that a lousy employee would probably have a harder getting a job than an excellent employee, shouldn’t the lousy employee get a longer notice period than the great employee. Or , in other words, should not the schmuck get a longer notice period than the star?