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In Yates v. Langley Motor Sport Centre Ltd ( 2021 BCSC 2175) Justice Mayer determined that the reasonable notice period for a 30 year old Marketing Manager and Events Co-ordinator making $60,000 with only 8.5 months service was 5 months.

However he deducted $10,000 of CERB payment from the award for the following reasons:

Deduction of CERB Benefits

[35] The evidence establishes that after her temporary layoff commenced, Ms. Yates obtained CERB from the Government of Canada in the amount of $12,000. Langley Hyundai submits that the portion of these benefits paid during the reasonable notice period determined by this Court should be deducted. It is my understanding that the maximum CERB payable to Ms. Yates per month was $2,000. Accordingly, in my view the amount at issue is $10,000 which is the amount. I conclude Ms. Yates obtained in CERB payments during the five-month notice period I have found she was entitled to

[36] My understanding of the basis of Langley Hyundai’s submission is that it is appropriate to deduct CERB payments as there is no requirement for Ms. Yates to return such benefits and therefore an award against it for payment in lieu of benefits, for the same period that she received CERB benefits, without deduction, would constitute impermissible double recovery.

[37] Langley Hyundai refers to the Government of Canada website which indicates that “[a] severance payment does not impact an individual’s eligibility for the CanadaEmergency Response Benefit”: https://www.canada/ca/en/services/benefits/ei/cerbapplications/ questions.html, at page 3/7. Further, Langley Hyundai submits that under the common law severance pay constitutes damages arising from wrongful dismissal and not employment income. For these reasons they submit that severance pay does not disqualify an individual from receiving, or in this case retaining, CERB payments pursuant to the Canada Emergency Response BenefitAct, S.C. 2020, c. 5, s. 8. That is, in Langley Hyundai’s submission, payment in lieuof notice to Ms. Yates will not result in her having to repay CERB benefits.

[38] Langley Hyundai relies upon the decision of the Supreme Court of Canada inIBM Canada Limited v. Waterman, 2013 SCC 70 [IBM], as binding authority on how courts are to approach the question of whether a collateral benefit should bededuced from payment in lieu of notice.

[39] In IBM the Supreme Court considered whether pension benefits received by a dismissed employee should be deducted from damages for wrongful dismissal. The Supreme Court concluded that pension benefits were a type of deferred compensation for the employee’s service and constitute a type of retirement savings and were not intended to be an indemnity for wage loss resulting from unemployment. For these reasons the Supreme Court agreed with the decisions of the courts below that pension benefits were not deductible from an award for wrongful dismissal: IBM, at para. 4.

[40] The Supreme Court stated that a collateral benefit (being a benefit flowing to a plaintiff and connected to the defendant’s breach), would be considered compensating advantage justifying a deduction from a damages award for wrongful dismissal when the advantage is one that (a) would not have accrued to the plaintiff if the breach had not occurred, or (b) was intended to indemnify the plaintiff for the sort of loss resulting from the breach: IBM, at paras. 27-2

[42] I agree with the finding of Justice Gerow in a recent decision of this Court,Hogan v. 1187938 B.C. Ltd., 2021 BCSC 1021 [Hogan], in which Gerow J. stated as follows:

[100] The plaintiff received $14,000 in CERB payments in 2020. The CERB payments raise a compensating advantage issue. If the CERB payments are not deducted the plaintiff would be in a better position that he would have been if there had been no breach of the employment contract. 

[101] But for his dismissal, the plaintiff would not have received the benefit. The nature of the benefit is an indemnity for the wage loss caused by the employer’s breach of contract. There is no evidence that the plaintiff contributed to obtain the benefit by paying for it directly or indirectly.

[43] In this case I find that CERB payments would not have been payable to Ms. Yates if she had not been terminated from her employment with Langley Hyundai – which termination constitutes a breach of her employment contract justifying payment in lieu of notice. Further, I find that CERB payments are a benefit intended by the Government of Canada to be an indemnity for the loss of regular salary arising from Langley Hyundai’s breach of Ms. Yates’ employment contract. Unlike an employee funded pension or a private disability insurance policy Ms. Yates did not contribute to the benefit.

[45] Ms. Yates relies upon Jack Cewe Ltd. v. Jorgensen, [1980] 1 S.C.R. 812, inwhich the Supreme Court of Canada found that damages for wrongful dismissal are earnings for unemployment insurance purposes, on the basis that such earnings arise out of employment. In that case the Supreme Court found “… the payment of unemployment insurance contributions by the employer was an obligation incurred by reason of respondent’s employment. Therefore, to the extent that the payment of those contributions resulted in the provision of unemployment benefits, these are a consequence of the contract of employment and, consequently, cannot be deducted from damages for wrongful dismissal.” (at p. 813). The same cannot be said with respect to CERB benefits in that the source of these benefits does not originate from contributions made by either Ms. Yates or Langley Hyundai as a result of her employment. Rather, the government funds used to pay CERB are likely from all sources of government revenue

[47] I do not find, on the available evidence, that Ms. Yates’ will be required to repay CERB benefits if she obtains an award of damages for wrongful dismissal. I conclude that CERB benefits of $10,000 which were received by Ms. Yates should be deducted from the award of damages.

My Comments :

This issue keeps on coming up in various trial  decisions in different provinces  with different outcomes but has not yet been ruled upon by any Court of Appeal .

Following September 2020 and until September 2021 , EI is also no longer repayable from wrongful dismissal damages according to Order 8.

Will the same result flow as with CERB ?

However there is one very important difference between non repayable CERB and non repayable EI. The employee, or that matter the employer, did not contribute to CERB but both parties contribute to EI, therefore the SCC comments in Jack Cewe Ltd. v. Jorgensen will probably result in that the Plaintiff will not have to repay EI but the Defendant will not get credit for these payments in calculating wrongful dismissal damages.

Whoever thinks that employment law is easy is very ill informed.

If you want a copy of this case, email me at barry@barryfisher.ca

In Read v. Rimex Supply Ltd.( 20121 BCSC 2157) Justice Lamb had a case where the Plaintiff was fired for what the employer thought was just cause. The Plaintiff filed an ESA complaint and the Defendant filed an appeal with Service Canada ( re EI). Both organizations found there was no just cause.

The Plaintiff then started a civil action for wrongful dismissal.

Note that this could not occur under the ESA in Ontario. because under section 97(2) of that Act once you file an ESA complaint for termination and or severance pay you are barred from bringing a wrongful dismissal action unless the complaint is withdrawn in two weeks. 

The Defendant sought to allege just cause in the civil action so the Plaintiff brought a motion for summary judgement to which the Defendant sought a ruling whether the issue of just cause was barred by the principle of issue estoppal.

First of all,  with respect to the ruling by Service Canada on the EI issue, the Plaintiff did not even claim that issue estoppal applied to that ruling . This is what the Court said:

The plaintiff does not seek to apply  issue estoppel to the  Service Canada decisions. The plaintiff acknowledges . and  I agree . that  the Service Canada decisions are not procedurally  robust enough  to justify  the application of issue estoppel. As noted above, there  is no justification  for the conclusions  reached in the Service Canada decisions, and there was limited direct evidence before me about  the procedural steps leading to either decision.   

Anyone who has ever appeared before an  EI Board of Referees ( at least that is what is was called when I appeared before them ) would agree with this assessment.

With respect to the Employment Standards Branch ruling , the Court went through a detailed analysis of the factors leading to the application of issue estoppal. In the end it found that the doctrine of issue estoppal did not apply. This is what was said :

[83]  I am satisfied that  there are significant differences between  the purposes, processes and stakes between  the ESB proceeding and this wrongful  dismissal action. The purpose of the ESB proceeding was to provide basic compensation  for length  of service whereas the purpose of the civil  lawsuit  is to provide compensation for breach of the employment  contract. As outlined above,  the ESB processes are intentionally  more streamlined and efficient  than  the procedures available in a civil lawsuit. Clearly,  the stakes are different between  the two processes. In  the ESB proceeding, the plaintiff sought an award for compensation of $13,220.77 for  length of service. In  the  civil action,  the plaintiff seeks damages of $178,262.17 for wrongful dismissal and an award of $30,000 for aggravated damages, more than  15 times the amount  of the ESB claim. As the court noted in Danyluk, .[i]t would be unfair toan employee who sought out  immediate and  limited relief of $4,000, forsaking discovery and representation  in doing so, to then  say that he is bound  to the  result as it affects a claim for ten times that amount. (at para. 71, citing to Rasanen v. Rosemount Instruments Ltd., 1994 CanLII  608 (ONCA),  [1994] O.J. No. 200 at 290, per Carthy J.A.). The same considerations apply  to the defence of such  claims. 

[84]  This factor weighs decisively  in favour  of the defendant.  In my view,  there  is a potential  injustice  in applying  issue estoppel to the ESB decision in circumstances where  the defendant has not had an opportunity  to fully  defend  the wrongful dismissal claim.  In  these  circumstances, where  the best and perhaps only  evidence regarding the timing of the plaintiff.s wife.s involvement rests with someone other than  the plaintiff,  it would  be unjust  to deprive the defendant of an opportunity  to try to prove just  cause.  

[85]  While there were other steps the defendant may have been able to take within  the ESB process to secure such  evidence,  I am satisfied that  the defendant should  not be penalized  for not taking such steps when  the  stakes were lower and the available processes less robust. As a majority of the Supreme Court of Canada observed at para. 45 of Penner, .where  little  is at stake for a litigant  in the prior proceeding, there may be little incentive to participate in it with full vigour.. Justice Arbour made a similar observation at para. 53 of Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, writing for a majority of the court:   

If, for instance, the stakes in the original proceeding were too minor to generate a full and robust response, while the subsequent stakes were considerable, fairness would dictate that the administration of justice would be better served by permitting the second proceeding to go forward than by insisting that finality should prevail. 

If yo wish a copy of the case email me at barry@barryfisher.ca the Defendant

 

 

In Pavlov v. The New Zealand and Australian Lamb Company Limited,
(2021 ONSC 7362) Justice Stewart determined that the proper notice period for a 47 year old Director of Marketing and Communication with just under 3 years service was 10 months. He was terminated on May 20, 2020, a few months into the pandemic.

In considering the Bardal Factor of availability of alternative employment, the Court said :

[16] At the time of Pavlov’s dismissal, the initial effects of the global pandemic were being experienced by industries of all sorts, including those associated with international importing and distribution. It is a reasonable inference to draw from the evidence and the timing of the dismissal that the effects and uncertainties of the pandemic were obstacles to Pavlov’s efforts to obtain alternate employment. These obstacles would, or should, have been known to NZAL Co. at the time of Pavlov’s dismissal.

[19] Although Pavlov had been employed for a comparatively short time his position, duties, responsibility, age and level of remuneration entitled him to a period of notice greater than that suggested
on behalf of NZAL Co. and one which must be determined with reference to the prevailing economic uncertainties which had a negative impact on Pavlov’s ability to secure similar alternative employment.

Justice Stewart also did something unique about the yet undetermined 2021 bonus entitlement. She ruled :

If any bonus was paid to other employees related to the time frame in late 2020 or 2021 over which the applicable notice period is operative, Pavlov is entitled to such payment on pro rata basis.

[25] If there is any dispute as to the calculation of such bonus component of Pavlov’s damages, this may be the subject of written submissions by the parties or I may be spoken to in that regard.

Plaintiff counsel was my brilliant eldest son, Matthew Fisher of Lecker & Associates. ( My other two lawyer sons are also brilliant )

On December 6, 2021 the Defendant filed an appeal claiming that the trial judge erred in awarding 10 months notice.

If you want a copy of this case, email the proud father at barry@barryfisher.ca

In McGraw v Southgate ( Township) 2021 ONSC 7000, Justice Chown had a situation where a female fire captain and admin assistant to the Chief for a volunteer fire department was terminated without cause because of many rumours in the workplace that she, among other things, sent nude photos of herself to various male firefighters, was having affairs with various male firefighters, including the Chief, was texting excessively with a male firefighter, was causing other firefighters to quit, caused morale problems in the workplace, gave passing grades to male firefighters in a course she taught if they had sex with her, helped  a firefighter cheat on a test, and was the subject of rumours from other fire departments.

This was the explanation that the CAO gave to Council on why he  had decided to terminate the Plaintiff’s employment. This evidence came in because the Council routinely recored its closed sessions and the Judge ruled that the part of the transcipt that related to the resons for her dismissal were not privileged.

None of these “rumours ” turned out to be factually correct.

In a scathing decision the Court went on to award the Plaintiff (in addition to 6 months notice) the following sums equalling $190,000:

Moral Damages : $75,000
Discrimination: $35,000
Defamation: $20,000
Punitive Damages $60,000

In Campbell-Givons v. Humber River Hospital, 2021 ONSC 6317, Justice Black had an illegal “just cause” provision in a contract which also contained the following clause just below the “without cause ” portion:

“At all times the Employee will receive all employment standards entitlements owing to her in accordance with the Ontario Employment Standards Act, 2000. ”

Citing Wood v. Fred Deeley Imports Ltd., 2017 ONCA 158 , the Court found that this clause could not validate a provision which was itself void because it violated the ESA. This is waht the Judge said:

[34] Implicit in that guidance, and brought to bear in the numerous cases that have refused to enforce termination clauses that contain any provision that violates the ESA, is the notion that, given the power and knowledge imbalance between employers and employees, there is a risk that an employer might “slip in” to an employment agreement a provision or provisions known to be beyond the narrow parameters of O. Reg. 288/01 of the ESA. That employer might hope or even expect that the employee will not be aware of the contents of that regulation. As others have noted, the mischief of a “saving” clause is that in the face of such a clause an employee might conclude that the offending provisions must be in keeping with the ESA requirements.

The Judge went on to distinguish those cases where such clauses were upheld (Amberber v. IBM Canada Ltd., 2018 ONCA 571, and Nemeth v. Hatch Ltd., 2018 ONCA 7) , because in those cases the issue was whether there was an ambiguity as to whether  common law damages were available or not, as opposed to whether the language of the clause offended the ESA.

If you want acopy of this case email me at barry@barryfisher.ca

In  Campbell-Givons v. Humber River Hospital, ( 2021 ONSC 6317) Justice Black again faced the issue of the enforceability of a illegal just cause clause on a without cause termination.

In this case the Plaintiff was a Senior Labour Relations Specialist, who presumably would have a much better understanding of employment law that the average person.

In direct response to the recent decision in Rahman v. Cannon Design Architecture Inc., 2021 ONSC 5961. in which Dunphy J. did consider the sophistication of the Plaintiff in upholding a contract which violated the ESA, the Judge said :

[45] The fundamental determination, in my view, is whether or not the clause or clauses in issue violate the ESA. If it does, then the clause(s) is void, and cannot be used as evidence of the parties’ intention. 

[46] It is also problematic, in my opinion, to engage in a detailed analysis about the level of sophistication of an employee and whether or not they had time and opportunity to obtain legal advice. A termination clause cannot comply with the ESA for some employees but violate the ESA for others. It either violates the ESA or does not, and it either enforceable or not. It is a straightforward matter for an employer to incorporate clauses in an employment agreement that comply with ESA standards, and when that is not done the court should not be asked to rewrite the language of the termination provisions to achieve compliance.

For a copy of this case email me at barry@barryfisher.ca

This is then latest release from Service Canada :

COVID-19 vaccination

When the employee doesn’t report to work because they refuse to comply with your mandatory COVID-19 vaccination policy, use code E (quit) or code N (leave of absence). 

When you suspend or terminate an employee for not complying with your mandatory COVID-19 vaccination policy, use code M (dismissal).

If you use these codes, we may contact you to determine:
if you had adopted and clearly communicated to all employees a mandatory COVID-19 vaccination policy
if the employees were informed that failure to comply with the policy would result in loss of employment
if the application of the policy to the employee was reasonable within the workplace context
if there were any exemptions for refusing to comply with the policy

My Comment : This most likely means that if the ROE is filled out this way, the claimant will be denied EI.

It seems that the purpose behind this edict maybe twofold:

1. To encourage employees to get vaccinated.
2. To discourage employers from putting unvaccinated employees on layoffs pending their vaccination and expecting EI to lessen the economic effect  of this event. Remember that it is a criminal offence for an employer to lie on a ROE.

In Livshin v The Clinic Network Canada ( 2021 ONSC 6796) Black J. had situation where the termination clause breached the ESA in that they referenced ” just cause ” as a a ground for paying no severance , which following Waksdale v Swegon, ( 2020 ONCA 391) is illegal and voids the entire termination clause, including the “not for cause” provision. In this case the Plaintiff was not only very sophisticated and was represented by counsel throughout the negotiation process, but this employment contract was part of a larger corporate deal. The Judge found that this was not relevant in determining the enforceability of the clause.

The following are some quotes from this case on this point:

[52] In the case before me, the “just cause” provision is difficult to link to anything other than the Employment Agreement itself. There is no evidence to suggest that there were specific commercial imperatives arising in the transaction specifically or the industry more generally that required TCN to be able to dismiss Livshin for just cause without notice and without regard to the provisions of the ESA. 

[53] As such, and notwithstanding the relative sophistication of the plaintiff and his representation by counsel in the Share Purchase, in my view there is no compelling reason why TCN should be permitted to rely on termination provisions that do not comply with the ESA 

[55] While, as noted, I appreciate that these principles start from a presumed power imbalance, they strike me as providing guidance which, generally speaking, is not onerous for employers to follow. 

[56] Looking to Payette, if there is some commercial imperative driving the need for a particular provision, linked to, and necessitated by, a commercial transaction out of which the employment relationship arises, and if the reason for that provision is primarily related to the commercial transaction, then it may be that there is more latitude for a provision that is on its face at odds with protective legislation. However, I expect that this will rarely be the case and, indeed, am hard-pressed to come up with examples which would permit a breach of the ESA. 

[57] In any event, there are no such imperatives here. While Livshin may be more sophisticated than many employees, and notwithstanding that he was represented by counsel, I can see no reason why the clause at issue had to be drafted in a way that on its face contravenes the ESA. Further, in my view the goal that employers be encouraged to draft clauses that comply with the ESA trumps the suggestion that Livshin may have been better able than many or most employees to recognize the potential peril.

TCN’s argument that Livshin’s representation by counsel should result in him being taken to understand the potential pitfalls of the Employment Agreement at issue here might be turned back on TCN to suggest that an employer, represented by counsel, particularly in the period after the Court of Appeal’s decision in Fred Deeley, ought to know better than to draft a termination provision that fails to comply with the ESA.

[68] Ultimately, I come to the same landing as Justice Feldman’s conclusion above in Metaswitch. That is, the employer here was free to make a legal contract that limited the plaintiff’s rights on termination to the standards set by the ESA. The employer failed to do so, and there was no commercial imperative arising from the Share Purchase that would justify such failure. To me, the encouragement of employers to comply with the ESA is the overriding goal, and if compliance is achieved it is not necessary to undertake subjective assessments of sophistication. Accordingly, I find that the termination provisions in the Employment Agreement are void. 

The Judge also found that the savings or severance clause did not work to legalize the illegal clause.

As this was a fixed term contract of three years, and because the termination clause was void , the Judge awarded the Plaintiff the balance of the fixed term , with no duty to mitigate , following the ONCA in Howard v Benson Group. ( 2016 ONCA 256).

Then without any reasons ( which may be because the Plaintiff did not argue the point) the Judge deducted the CERB payments that the plaintiff received during the balance of the term.

My Comments:

This case stands in contradiction to a case from a few weeks back from Justice Dunphy called Rahman v Cannon Design Architecture ( 2021 ONSC 5961) which I blogged about. If both cases are appealed, the Court of Appeal will have to sort this out . Otherwise we will will two cases with two different outcomes. You gotta love the common law.

If you want a copy of this case, email me at barry@barryfisher.ca