26 Month Notice Period Explains Special Circumstances:

In Currie v Nylene Canada ( 2021 ONSC 1922) Justice Smith had a situation where it was found that there were special circumstances which justified going over the general rule that 24 months notice was the maximum that a Plaintiff could recover.

This is what the Judge said about why this case had exceptional circumstances :

84      The Ontario Court of Appeal has recently held in Dawe that exceptional circumstances will be required in order to support a notice period that exceeds 24 months. I acknowledge that the cases relied upon Ms. Currie predate Dawe but there are worthy of consideration because they share some similarities to the case at bar. When combining and applying all of the factors to Ms. Currie’s unique situation, I am of the opinion that taken as a whole, it supports the conclusion that there are exceptional circumstances:
a. Ms. Currie left high school to start working at BASF as a temporary twisting operator, earning $4.50 per hour. She secured this job through her father who had worked there for over 30 years until his retirement in 1999. She was eventually promoted to a supervisory position and she has faithfully remained with one employer (Nylene and its successor employers) for 39 years. Her entire working life has been dedicated to working at the Arnprior plant. She has known nothing else.
b. At the time of termination, Ms. Currie was 58 years old. She was in her twilight working years, closing in on the end of her career.
c. She has worked and developed skills in a very specialized field (fiber production operation). Finding similar employment, as described later in this decision, has not been easy. Ms. Currie has made diligent efforts to mitigate and attempt to gain basic computer skills. That said, I am not convinced that she will succeed in securing alternative employment, by no fault of her own.
d. Since Ms. Currie entered the workforce in 1979, the work landscape has evolved and changed significantly. Ms. Currie’s experience has been limited to one employer (Nylene and its predecessors), in one type of environment (specialized manufacturing job), which makes it very difficult to transfer her skills to a new employer.
e. Given Ms. Currie’s age, limited education and skills set, the termination was equivalent to a forced retirement. She must compete with people that are much younger than her and that have a different set of skills that may be required such as advanced computer knowledge. She is not well equipped to effectively compete in today’s market or secure comparable employment.
85      Considering Ms. Currie’s unique situation and combining all of the factors set out in Bardal, I conclude that Ms. Currie has demonstrated the existence of exceptional circumstances.


My Comments :

The Court of Appeal in Dawe was well aware of the previous cases involving notice periods of over 24 months. By setting the ceiling at 24 months except for exceptional circumstances, they were implicitly overruling those same cases that the Plaintiff was relying upon in this case.

Moreover every one of the factors that this judge sees as exceptional is already taken into account in the Bardal Factors. How can a factor that goes into the Bardal analysis be seen also as an exceptional circumstance? Should not these exceptional circumstances be limited something else that affected the Plaintiff’s ability to obtain employment ? For instance, if an employer alleged just cause without reasonable grounds or where the employer took active steps to obstruct the Plaintiff’s re-employment.

I have been observing the issue of how to determine notice periods all my entire professional career. I had the naive hope that over time the issue of predicting notice periods would become more  certain to both employers and  employees and therefore avoid unnecessary lawsuits over notice. This case puts us back to the pre Dawe days where there was  even less certainty in a already uncertain world.

I feel that judges often do not have a sense on what goes on in the world outside their courtrooms. We all know that 99% of these cases are settled. Settlements are easier to achieve when there is more predictability in the outcome. Since Dawe, both employers and employees knew that 24 months was the realistic maximum and that it was quite easy to hit that  mark. These two factors has made long service cases easier to settle. Now we will be  back to Plaintiffs claiming 30 months  notice and Defendants responding with 16 months.

This is not a good thing.

20% Reduction in Compensation in Response To COVID Pandemic = Constructive Dismissal :

In Kosteckyj v Paramount Resources Ltd, 2021 ABQB 225, Justice Sidell found that a 20% reduction in the total compensation of a 6 year Engineer constituted a constructive dismissal even though it was. company wide compensation initiative because of the COVID situation and its affect on the company . This 47 year old Plaintiff was awarded 9 months notice.

Here is what the judge said :

[41] Paramount relies on Doran v Ontario Power Generation Inc, [2007] OJ No 4476, for the proposition that a compensation reduction of 14% to 17% is a not a breach that would give rise to a finding of constructive dismissal. Here the salary reduction and RRSP contribution nsuspension were collectively a 16% reduction. In addition, the 2019 Bonus Program was subject to “delay/cancelation”. In the previous two years, Ms. Kosteckyj had earned a cash bonus $1,000 and $6,267, plus restricted share units benefits (“RSUs”) which Paramount says were “worth a nominal value of $2,000 and $12,333” because at the vesting date the value was substantiallymreduced. Using her pre-April 1, 2020 salary of $154,800, the 16% reduction, together with the loss of a cash bonus of $1,000, would result in a 16.65% compensation reduction. The 16% reduction, together with the loss of a cash bonus of $6,267, would result in a total reduction of 20%. The effect of the Cost Reduction Program significantly affected Ms. Kosteckyj’s compensation in the range of 16.65% to 20%, without considering any value for the RSUs. I find that the implementation of the Cost Reduction Program resulted in the constructive dismissal of Ms. Kosteckyj.


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Improper to Plead Settlement Offers in Pleadings :

In Kosteckyj v Paramount Resources Ltd, (2021 ABQB 225) Justice Sidnell had this to say about a defendant’s Statement of Defence which plead that the Plaintiff wrongfully turned down their reasonable offer to settle :

[10] Disclosing a settlement offer in a pleading undermines judicial impartially and can encroach on the fair and just system of judicial determination that we rely upon. While it may be appropriate to raise the existence of a settlement offer after a decision has been made, and in the context of the costs to be awarded, it cannot be disclosed in the pleadings or else where in the litigation before a decision has been rendered. When the defendant intentionally discloses it rebuffed settlement offer, it must be presumed that the defendant proposes an inference that the plaintiff, in not accepting the settlement offer, did not act reasonably. This type of inference has no place in our adversarial system.

[11] After termination of employment, an employee is not required to accept an employer’s settlement offer to mitigate the employee’s damages when that offer requires a release of the claim against the employee, as it did in this case. A defendant cannot argue that a rejection of a settlement offer was unreasonable until after the court makes its determination as to what are reasonable damages in lieu of notice. That is why, in relation to formal offers to settle, Rule 4.2 is clear that the formal offer to settle is to be “to be kept confidential and not disclosed to the Court” until accepted or “the remedy for the claim has been decided”.

[12] It is important for the proper functioning of our independent and impartial legal system to maintain the confidentiality of all settlement offers in litigation until the merits of the case are determined. Disclosing a rejected settlement offer may be appropriate on an application for costs.

Indeed, Rule 10.33(2)(h) contemplates that the court may consider “any offer of settlement made”, regardless of whether or not the offer of settlement is a formal offer of settlement under the Alberta Rules of Court. Disclosing a settlement agreed to may also be appropriate where a party seeks to enforce the terms of that agreement or relies on other exceptions to settlement privilege: Bellatrix Exploration Ltd v Penn West Petroleum Ltd, 2013 ABCA 10, para 29.

My Comments:

This restatement of a basic principle is welcomed. The Courts’ job is to assess what the reasonable notice period is , not whether the employer or the employee made reasonable offers. Similarly their is a line of “Ballpark Justice ” cases from long ago that also stated the Courts job is to assess the proper notice period , not whether the notice provided by the Employer was reasonable .

This often arises in my mediations when I have to explain to a defendant that the only thing a Court will see is that you only paid the ESA minimums and not that you offered 18 months if the Plaintiff signed a release. If the Employer wants to get credit for their reasonable offer, then they must unilaterally pay out that amount without the requirement of a release. If this is done upfront, then any Plaintiff’s lawyer who is on a contingency fee will think twice before taking on a case with little uphill potential .

If you wish a copy of this case, contact me at barryfisher@rogers.com


Non Lawyers in Manitoba Cannot Represent Parties in a CLC Unjust Dismissal Proceeding:

In Tacan v Sioux Valley Dakota Nation ( 2021 CarswellNat 507) Adjudicator Palamar held that in Manitoba only lawyers can represent parties in Unjust Dismissal hearings. He found that to allow non lawyers to do so would amount to the unauthorized practice of law. This is so even though the booklet put out by the Ministry says that a party may be represented by an ” agent”.

Query : In Ontario, paralegals are a regulated profession under the jurisdiction of the Law Society of Ontario. Can a licensed paralegal represent a client in these proceedings? If anyone has the answer, please post it and provide the explanation.

Restrictive Covenant Fails in Part Because of a Too Broad Definition of Customer :

In Labrador Recycling v Folino ( 2120 ONSC 2195) Akbarali J. commented on the a restrictive covenant clause in the metal industry. In finding that one clause in particular was unreasonable , the Judge stated as follows:

It purports to prohibit Mr. Folino from soliciting and accepting business from any of the plaintiff’s current or prospective customers. It defines a “current or prospective customer of the company” as “an individual or entity with which [Mr. Folino] personally had direct or indirect contact, or access to conduct confidential information about, during the last two years of [his employment].” Notably, the definition of customer or potential customer of the company includes no relationship between the customer or potential customer and the plaintiff. For example, it does not say that a customer or potential customer is someone with whom Mr. Folino had contact in connection with his employment duties. The only limitation on who is customer or potential customer when it comes to someone with whom Mr. Folino had contact is that the contact take place within the last two years of his employment. As drafted, his drycleaner would qualify.

I love that comment. But there was more. Here the Judge lists in clear terms why this clause is unenforceable :

[25]In my view, the plaintiff has not established a strong prima faciecase that the clause is reasonable:

a.Given the evidence that deals come together in the aluminum scrap industry within hours, a one-year temporal limit is unreasonably long. The plaintiffagrees the point of a non-solicitation or non-competition period is to allow the employer to  solidify its relationships with its customers after the departure of the employee. Here, the plaintiff will have frequent contact with its vendors and purchasers due to the nature of the industry and so would not require a year to solidify any relationships that require solidifying.

b.There is no geographic limit set out in the clause. On its own, in a non-solicitation clause, no geographic limit may be reasonable if the customers are reasonably defined and identifiable. In this case, the definition current or prospective customers that the restrictive covenant purports to preventMr. Folino from accepting work from casts a very broad net and is imprecise.

c.The terms ofthe clause are not clear and unambiguous.For example, the clause restricts Mr. Folino from accepting work from a person he may never have had contact with but in respect of whom he had access to confidential information.It is not clear how he would identify such people.The clause also purports to restrictMr. Folino from soliciting or accepting work from someone with whom hehas hadindirect contact over the past two years. It is not clear what“indirect contact”means.

d.Moreover, in prohibiting Mr. Folino from soliciting or accepting work from anyone with whom he personally had direct contact during the last two years of his employment, the clause purports to restrict him from accepting work from his personal contacts who may have had nothing to do with the plaintiff at any time.The plaintiff says this is ridiculous but asI have noted, the definition in the agreement of customer or potential customer of the company does link that person in any way to the company or Mr. Folino’s employment duties.

My Comments:

In the olden days when I was a litigating lawyer, if I represented a client who was faced with one of these clauses, I would have the client send a letter to his former employer as follows:

” Dear Sir:

In your recent letter you reminded me that under the terms of my employment contract I am to have no contact with any of the Company’s customers for 12 months following my departure. Without admitting the enforceability of such a provision, I want to make sure that I do not breach this provision. I would therefore appreciate it if you could send me a complete list of all of the Company’s customers so that I may know exactly whom I may and whom I may not approach in the next 12 months . ”

Of course the former employer would refuse to give this information and therefore my client would approach whoever he or she wanted.

Another thing to remember, since injunctive relief is an equitable concept, the person requesting the injunction must come to Court with ” clean hands”.

If the ex-employee was terminated, then he or she presumably has a wrongful dismissal action against the ex employer seeking the relief. It seems clear that an employer who has breached their obligation to provide reasonable notice of termination does not come with ” clean hands “.

Third point. There is case law to say that the existence of a clause like this has an effect on the notice period. The reason for this is that if the purpose of the notice period is to allow the plaintiff to find employment in their chosen field , then disallowing a person from going after some or all  jobs in his or her chosen field, means that  they will need more time to get such a job.  Thus the notice period should be extended to take into account this additional barrier to employment.

Interestingly, the contracts with the longest non compete or non solicitation periods also tend to have the shortest notice periods for termination.


$120,000 in Partial Indemnity Costs for a 2.5 Day Trial :

In Battiston v Microsoft ( 2021 ONSC 1341) Faieta J. awarded wrongful dismissal damages of $567,000 after a trial lasting 2.5 days.

In the course of the award, the following interesting  points were made:

1) The fact that the Plaintiff did not win on every disputed issue was not relevant in determining the quantum of costs.

This is what the judge said:

Who was the Successful Party?

[8]               A successful party is presumed to be entitled to their costs.

[9]               The defendant submits that costs awarded to the plaintiff should be reduced by 20% as it was successful on some of the issues – namely, the issue of the plaintiff’s bonus, merit increase and performance incentives issued in the final year of his employment as well as the valuation of the plaintiff’s bonus and merit increase during the notice period.   

[10]           In my view, it makes little sense to find that success was divided when the amount awarded by this court exceeded the offers to settle made by the plaintiff.

2) For the losing party to not submit their own Bill of Costs when attacking the winners is a dangerous technique. This what the Judge said :

  Similarly, although there is no obligation to do so, the defendant did not file its own Bill of Costs to illustrate what amount of costs it would have reasonably expected to have been incurred by the plaintiff: as necessary to incur to respond to this claim: Smith Estate v. Rotstein, 2011 ONCA 491 (Ont. C.A.), para. 50. Given its failure to deliver its own bill of costs, the Applicant’s challenge regarding the amount of costs claimed by the Respondent is “no more than an attack in the air”, as former Chief Justice Winkler stated in Risorto, at para. 10.

When I was in that situation as the winning lawyer and the loser said that he spent less time on the file  than me , I would respond ” Well maybe that is why I won and you lost.”

2) Where the Plaintiff tenders a Rule 49 Offer to Settle, but upon inquiry by the Defendant, refuses to set out a number for costs , the Court may exercise its jurisdiction to not award substantial indemnity costs even though the Plaintiff beat their own Rule 49 offer.

This is what the Judge said:

[18]           The defendant submits that the Rule 49 offers to settle were “rendered improper” as a result of the plaintiff’s refusal to provide an estimate of its costs.  On November 28, 2019, Ms. Lucifora advied Mr. Gorsky that their Rule 49 was still open for acceptance and offered to provide a quote for their legal fees.  Mr. Gorsky requested that information.  On the following day, Mr. Monkhouse responded that both parties exchange their current partial indemnity costs.  Mr. Gorsky refused to provide such information.  The plaintiff did not provide its costs to Mr. Gorsky.

[19]           In Rooney (Litigation Guardian) v. Graham (2001), 2001 CanLII 24064 (ON CA), 53 O.R. (3d) 685 the Ontario Court of Appeal concluded that an offer to settle was a valid Rule 49 offer even though its terms included a provision for ongoing partial indemnity costs that introduced “some measure” of uncertainty.  However, the court stated, at para. 51, that:

A party to whom an offer is made must be able to evaluate the offer at any time after it is made in order to decide whether to accept it. Thus, the party making the offer must be forthright and candid in disclosing the amount of solicitor- and-client costs incurred. A failure to cooperate may be dealt with by the trial judge’s overall discretion on costs.

[20]           I find that the plaintiff failed to be forthright when asked to disclose the amount of costs requested under the plaintiff’s Rule 49 offer.  Such conduct does not promote settlement and thus is inconsistent with the purpose of a Rule 49 offer.  In the circumstances, it would not be advancing the interests of justice to award substantial indemnity costs to the plaintiff in respect of either Rule 49 offer.

My Comments :

What the Judge maybe did not appreciate is that if the Plaintiff had put forward a number for costs before the Defendant had accepted the Rule 49 offer , then the Defendant would have been in position to try to negotiate a total settlement without deciding whether or not to accept the offer. Rule 49 offers can be accepted without agreeing on costs because you can accept the offer and if you cannot later agree on costs then the Court will decide.

This is the type of bargaining and negotiation that goes on the the real world.

I do not think it is necessarily appropriate for the Court to involve themselves in this discussion. Remember that the Defendant also refused to tell the Plaintiff how much he had already billed his client.

The Plaintiff probably wanted to know what the Defendant had been billed, and if that amount was reasonable then the Plaintiff would have agreed with that amount. In that situation it would be hard for the Defendant to argue that the Plaintiff’s bill was excessive .

Note that even before the Judge, the Defendant refused to tell the Court how much they had been billed. Why, you may ask?

If you want a copy of this case, email me at barryfisher@rogers.com .

Plaintiff Awarded $34,000 for Claim and $22,000 in Costs:

In Nahum v. Honeycomb Hospitality Inc., 2021 ONSC 1988 (CanLII)
Justice Akbarali rejected the Defendants claim that because the Plaintiff recovered less than the $35,000 Small Claims Court limit, she should be denied costs for her Superior Court action.
The judge rejected this proposal as she found that it was reasonable for the Plaintiff to start a Superior Court Action. In determining the award of costs she considered the following factors:
1) Neither side beat their own Rule 49 offer.
2) The defendant’s partial indemnity costs were $21,000
3) The Plaintiff did win the case at 5 months notice while the defendant proposed 2 months.
4) There was a moderately complex issue of the plaintiff’s pregnancy and how it affected the notice period and a trial was required to determine the issue.
5) Each side acted reasonably in the litigation.

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Defendant Cannot Plead its Rejected Settlement Offer :

In Renzone v Onyx Homes ( 2020 ONSC 7722) Master Josefo stuck from the Statement of Defence a plea that the defendant had offered a terminated employee the chance to return to work after being dismissed so that she could work out her notice period. The Defendant presumably wanted to rely on this refusal as a basis for arguing that the Plaintiff failed to mitigate her damages, relying on the SCC decision in Evans v Teamsters ( 2008 SCC 20).

The Master ruled that this was clearly an offer to settle, and therefore was not admissible as evidence at a trial and therefore could not be plead.

The Master noted that the offer was labelled ” Without Prejudice “, that it contained a confidentiality clause and required the Plaintiff to sign a release.

My Comment:

If an employer wants to trigger a Evans v Teamsters defence, in my opinion they must set out clearly that the ex employee is free to return to work for the balance of the notice period without conditions. In other words, if the employee does choose to return to work, then they are still free to continue the lawsuit. If the employee refuses to return to work, this may well trigger a valid defence of a failure to mitigate.

This is how the Master said it:

Observations on Mixing Without Prejudice and With Prejudice Communications:

[25] The May 29th letter tried to be, in my view, “all things to all people”. It was, for reasons herein, an offer of compromise. It thus falls squarely within settlement privilege. Yet it also appears to me that defendant was trying to position itself in this within litigation, after it had retained counsel and after it unilaterally imposed new terms on the plaintiff which were to start within a few days but for her commencing sick leave first. This one letter confusingly tried to impart several different messages, including, significantly, I emphasize, that of settlement. Yet if settlement failed, another purpose of the May 29th letter was, as was specifically pleaded at paragraph 51 of the defence, the defendant trying to establish a “failure of mitigation” argument on the part of the plaintiff. Whether such would be viable over three weeks after the planned imposition of new terms of employment is an open question.

[26] Yet where the defendant ran into difficulties, in my observation, was in attempting to combine different elements and messages in the one letter. One take-away may be that, in future, counselshould not mix “with prejudice” and “without prejudice” elements in the same one item of correspondence. Writing separate letters or emails, each with their individual and clear messages, and each either clearly on or off the record, with or without prejudice, may assist to avoid such confusion.

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Persistent Comments to Female Employees About ” How Beautiful You Are ” Leads to Dismissal For Just Cause:

In a CLC Unjust Dismissal Adjudication ( Lawrie v Bell Media, 2020 CarswellNat 504) Adjudicator Novick had a situation where a 22 year service news anchor was terminated because even after receiving a warning letter , he persisted in sending numerous emails and Facebook messages to female co-workers regarding how gorgeous they were or how lucky their husbands or boyfriends were.

As the Adjudicator noted that ” The messages were not vulgar or explicitly sexual, but were often flirtatious, coy and containing sexual innuendo.”

The adjudicator noted not only that a number of woman complained, but that the the activity continued even after a final warning was issued.

Ms Novick upheld that the dismissal was not unjust.

This is how the Adjudicator summarized the evidence:

12      Mr. Laurie does not deny making the comments referred to, many of which were in written form and filed at the hearing. While the messages will be outlined in detail below, recurring themes appeared. Mr. Laurie repeatedly referred to his colleagues as being “gorgeous” or “pretty”, sometimes stating “you are ridiculously beautiful” or “you looked perfectly gorgeous yesterday”. Many comments state that the Complainants’ husband or boyfriend is “the luckiest guy around”. There are innumerable messages in which the women were referred to with pet names or nicknames such as “princess” or “bella”. Some exchanges involve Mr. Laurie offering meals out at restaurants, trips to exotic places or bottles of wine. The messages were not vulgar or explicitly sexual, but were often flirtatious, coy and containing sexual innuendo.
13      Most notable was the sheer quantity of messages sent, which varied by the year and the level of work interaction he had with each of the Complainants. They were often sent daily and occasionally several times each day. Many messages were sent late at night, well after the evening team’s shift ended. The messages would often begin with a compliment regarding the womens’ work performance and would then reference their appearance or attractiveness. A typical example of this type of message is – “you did a super job yesterday and you looked gorgeous!”.


This is how she dealt with issue of the issue of the appropriate penalty:

Was dismissal the appropriate penalty?
215      Mr. Fox submitted that while Mr. Laurie’s conduct may have justified some discipline, the Employer failed to take the “proportional approach” set out in the Mckinley case and those that followed. I find that Mr. Laurie’s conduct justified his dismissal from employment with Bell Media. His messages to the women in question were persistent, unwelcome and degrading, and caused them to feel awkward, intimidated and very uncomfortable. While any one or even a series of the messages viewed in isolation may not qualify as serious misconduct that would justify a dismissal for cause, the sheer volume and frequency of flirtatious messages sent to various women, in contravention of the serious written warning he had earlier received, persuades me that the “bond of trust” between Mr. Laurie and the Employer has been broken.
216      Mr. Laurie’s testimony at the hearing made it clear that he understood from the warning letter he had received in 2013, that he should not continue his behaviour of commenting on his colleagues’ appearance and attractiveness. The fact that the complainant on that occasion chose to remain anonymous has no bearing on the seriousness of the warning received. The letter states that failure to “conduct himself professionally at all times” will result in further discipline up to and including termination of employment. If there was any doubt that he was being given “one more chance”, Ms. Freeman made it clear when she met with him personally to discuss the warning that if he repeated the conduct, he would be fired.
217      Mr. Laurie conceded under cross-examination that many of the comments he made, that were filed into evidence at the hearing, contravened the warning that he received. His demeanour at the hearing while under cross-examination was not one of a wrongdoer acknowledging his mistakes and seeking another chance. Instead, he was defensive and sarcastic, and refused to admit facts that the written documents made clear, such as his many apologies to the women for commenting on their appearance and attractiveness. He came across as someone who felt that he had been wronged, and himself deserved an apology. I accept the Employer’s contention that he has not accepted responsibility for his actions.
218      Mr. Fox argued strenuously that “the punishment should fit the crime” and that while the comments made by Mr. Laurie were inappropriate and perhaps unwanted, they do not justify the dismissal of a senior member of the newsroom with twenty-two years of seniority. He cited the following comments by Justice Iacobucci in McKinley, supra –
An effective balance must be struck between the severity of an employees’ misconduct and the sanction imposed. The importance of this balance is better understood by considering the sense of identity and self-worth individuals frequently derive from their employment.
(at para.53)
219      I have no doubt that Mr. Laurie derived a sense of identity and self-worth from his job. He was a valued employee and an important contributor to the organisation. I also understand and agree with the courts’ direction that a “proportional approach” should be taken in assessing whether the sanction imposed by an employer is proportional to the misconduct in question. As instructed by the Ontario Court of Appeal in the Dowling v. Ontario (Workplace Safety & Insurance Board), supra, decision, I have examined the nature and circumstances of the misconduct, and have determined that Mr. Laurie’s actions were “incompatible with the fundamental terms of the employment relationship” and that the “bond of trust has been broken”.
220      I make my findings above based solely on the evidence before me. I do note, however, that the four women who testified also advised that other female colleagues had shared similar experiences with them, and that some had shared inappropriate messages that they had received from Mr. Laurie. The evidence suggested that the feeling around the newsroom was that the Employer was aware of this behaviour, and that “nothing was being done about it”. The legislation and case law cited above make it clear that an employer has an obligation to provide a safe and harassment free workplace for all of its employees. This is a duty that every employer must take seriously. This obligation must clearly be balanced against the notion of progressive discipline and the requirement to treat employees whose actions may threaten this safety fairly. I find that when the evidence clearly supports that an employee has ignored a serious warning and shows no sign that he has taken responsibility for his actions, as is the case here, his dismissal from employment is justified.
221      For the reasons cited above, I conclude that the Employer’s decision to terminate Mr. Laurie’s employment was not unjust. I therefore dismiss this complaint.


Termination Clause Violates Canada Labour Code Thus Reasonable Notice Applies :

In Sager v TFI International ( 2020 ONSC 6608) Davies J. reviewed a termination clause which was governed by the Canada Labour Code and found it to be unenforceable. Almost all the previous attacks on termination clauses, at least in Ontario courts, have been under the Employment Standards Act of Ontario.

On its face, the contract provided for more termination and or severance pay than would ever be required under the CLC. Remember that the minimum requirements under the CLC are very minimal, nothing like the ESA .

The Plaintiff’s contract provided for certain benefits in addition to his salary, including a car allowance of $900 per month, participation in a group insurance plan and pension plan, and participation in a bonus program with a value of up to 30% of his base salary.

Section 231(a) of the CLC says that the employer cannot “reduce the wages or alter any other term or conditions of employment” during the notice period.

The notice period under the CLC is only two weeks. The rest of the statutory requirement is severance pay.

The termination clause said that the only payment that the plaintiff would get on termination pay was as set out in the agreement, which meant that he would not receive his car allowance, benefits , bonus or pension for the two week period following his dismissal.

The Court therefore found that the termination clause violated Section  231(a) of the CLC and therefore was null and void.

That section reads as follows:

 Where notice is given by an employer pursuant to subsection 230(1), the employer

  • (a) shall not thereafter reduce the rate of wages or alter any other term or condition of employment of the employee to whom the notice was given except with the written consent of the employee; and

This is what the Judge said :

[19] The termination clause of Mr. Sager’s contract intends to limit TFI’s obligation to. a single lump sum payment. The clause does not say that it is intended to be inclusive of the statutory requirements for severance and termination pay only. It says the lump sum payment is inclusive of all requirements under the CLC. If the lump sum payment is treated as inclusive of all requirements under the CLC, it excludes any payment on termination for Mr. Sager’s pension, car allowance or bonus, which were all the terms and conditions of Mr. Sager’s employment. It would also exclude the continuation of Mr. Sager’s benefits during the notice period. In my view, the meaning of the agreement it clear: Mr. Sager was entitled to a payment equal to three months of his base salary and nothing more during the notice period. This amounts to a change in Mr. Sager’s terms of employment during the notice period, which is inconsistent with s. 231(a) of the CLC.

[20] I, therefore, find that the termination clause in Mr. Sager’s employment contract isvoid and the presumption that Mr. Sager is entitled to reasonable notice on termination has not been rebutted. 

This is, in my opinion, a remarkable decision for the following reasons;

I am not aware of any other case where the CLC has been used to overturn a termination provision.

Even though the cash payment required by this clause greatly exceeded the requirements of the CLC, simply because it left out some relatively minor compensation items, it was found to be null and void.

The ESA has a similar provision in Section 60 (1) (a) which reads as follows:

(1) During a notice period under section 57 or 58, the employer,(a) shall not reduce the employee’s wage rate or alter any other term or condition of employment;

This gives employees another method of setting aside even those termination provisions which, on the surface, seem to exceed the ESA minimums.