Author: barryfisher

In  Jimmy How Tein Fat v. PRGX Canada Corp., 2023 ONSC 6374, Justice Callaghan ruled on many issues that commonly  arise in wrongful dismissal actions and therefore provides a useful guide to the leading cases and what they stand for.

Summary Judgement :

I find this case is appropriately resolved by summary judgement. There are no factual issues that would be assisted by a trial and there were no submissions by either counsel that a trial would assist in my fact finding. The parties state that they have called all the evidence they intend to call. As can be seen from the decision below, there were no credibility issues that were required to be resolved. The dispute here is largely how the law is to be applied to the facts and any inferences drawn from those facts. I am satisfied that I am able to apply the facts to the law. As a result, there is no genuine issue that requires a trial and there is no benefit to requiring the parties to endure the delays and costs of a trial. I am satisfied that I can reach a fair and just resolution of the matters in dispute based on the record before me.

 

Reasonable Notice :

[20] Based on the factors above and having reviewed the multitude of case law that has been presented to me, I find that a 24 month notice period is warranted. Mr. How was a loyal employee for 29 years. He is (as one judge referred to it) “in the twilight of his career” at the age of 63 which makes finding replacement employment harder. He was a senior executive in a niche industry who was paid a significant sum. At his age, his prospects of obtaining another employment opportunity commensurate with the seniority and remuneration with what he had at PGRX is understandably dim. As articulated to by Chief Justice McRuer, setting any notice period is inherently a fact driven exercise. Nonetheless the bulk of the case law presented to me, particularly in the appended charts filed with the plaintiff’s factum, support my conclusion of a 24 months notice period. 

Calculation of Base Salary:

[26] Mr. How received merit increases most years. In his 2021 notice, he was advised that his base salary was $413,753.60. This salary number does not require any deductions, in contrast to the method proposed by the defendant. I am satisfied that in calculating the salary over the 24 months, that $413,753.60 per annum is the correct amount. 

[27] In addition, I disagree with the defendant’s calculation of a four-year average. Historically, in most years, Mr. How’s base salary increased. There is no evidence to suggest that his salary would go down during the notice period. In such circumstances, taking a four-year average would unnecessarily reduce the salary component of his damages for the notice period. As a result, I accept that the proper calculation of damages for Mr. How’s loss of salary over the 24 months is $827,507.20. 

Bonus:

[38] In looking at the entitlement of a bonus, Matthews requires me to answer two questions: (1) would the employee have been entitled to the bonus or benefit as part of their compensation during the reasonable notice period? and (2) if so, do the terms of the employment contract or bonus plan unambiguously take away or limit that common law right?

[40] The Supreme Court held that this provision was not sufficient to oust the common law right to damages. Phrases requiring an employee to be “full-time” or “active” were also not sufficient to remove an employee’s common law right to damages. The reason for this was stated by Justice Kaiser as follows: 

Yet, it bears repeating that, for the purpose of calculating wrongful dismissal damages, the employment contract is not treated as “terminated” until after the reasonable notice period expires. So, even if the clause had expressly referred to an unlawful termination, in my view, this too would not unambiguously alter the employee’s common law entitlement. 

[41] The terms of the PGRX’s plan do not, in my view, exclude Mr. How’s entitlement to a bonus during the notice period. For purposes of compensation in lieu of notice he “is employed” and his employment is not at an “end”. Rather, he is to be treated as an employee during the notice period and that includes payment of the bonus. 

Mitigation:

[45] However, the onus is on the defendant to establish that the dismissed employee both failed i) to take reasonable steps to search for a job and ii) that a job comparable to the job lost by the employee could have been found. As stated by the Supreme Court of Canada in Evans v. Teamsters Local Union No. 31, 2008 SCC 20 (CanLII), [2008] 1 SCR 661, at para 30: 

This Court has held that the employer bears the onus of demonstrating both that an employee has failed to make reasonable efforts to find work and that work could have been found (Red Deer College v. Michaels, 1975 CanLII 15 (SCC), [1976] 2 S.C.R. 324).

[56] Ultimately, mitigation is a two-part test. The second part of the test requires PGRX to establish that Mr. How could have found comparable employment. As stated in Lake the issue is “whether the [the employer ] had proven that, if reasonable steps in mitigation had been taken by the [employee], she would have found a comparable position during the reasonable notice period” (at para 34). PGRX has led no evidence that a comparable job was available with any of the competitors at any time since Mr. How’s termination. PGRX clearly knows the players in the industry and, if comparable jobs were available in the industry, that evidence could have been called. Moreover, there was no evidence adduced by PGRX of any comparable jobs suitable for Mr. How since his termination. The onus was on PGRX to establish both prongs of the test. Regardless of whether Mr. How acted reasonably or not at the outset of his search, the defendant has failed to establish that he could have obtained a comparable job had he conducted the search as proposed by PGRX. 

[57] I do not find that PGRX has met the onus of establishing that Mr. How failed to mitigate his losses. 

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In Chalmers v Airways Transit Service and Bladder Capital Group, 2023 ONSC 57825 Justice MacNeil first awarded 24 months notice to a 53 year old VP with 28 years service and then  added a one month COVID bump because he was terminated in June 2020 at a time when the airline industry was in the dumps.

The Defendant tried to rely on the old IDEL defence, which had been knocked down already in a string of Ontario cases. It was defeated again.

The Defendant also tried to get the CEWS deduction, another defence that had been previously knocked down . Again they failed.

Some people never give up.

Then the Defendant got whacked for $30,000 in punitive damages. This is what the Judge said on that issue :

159]           In my view, by the manner in which it treated Mr. Chalmers, Airways Transit engaged in sufficiently harsh and outrageous conduct that it merits a punitive damages award, including the following grounds:

(a)     When initially laid off, Mr. Chalmers was asked to work without pay.

(b)     In or about June 2020, Airways Transit had recalled several senior managers but not Mr. Chalmers.

(c)     Airways Transit contacted Mr. Chalmers in the months subsequent to his layoff to ask questions regarding operations, procedures, contacts and staffing matters. He was also asked to provide passwords. I find that this conduct was an obvious attempt by Airways Transit to phase Mr. Chalmers out of his role as Vice-President.

(d)     Mr. Chalmers followed up with Airways Transit multiple times about returning to work and Airways Transit failed to respond to his inquiries.

(e)     Airways Transit refused to pay Mr. Chalmers his outstanding vacation pay in contravention of the ESA.

(f)      Airways Transit failed to make contribution to Mr. Chalmers’ RRSP plan.

(g)     As of the motion hearing date, Airways Transit had not paid Mr. Chalmers his statutory entitlements pursuant to the ESA.

(h)     Despite attempts by Mr. Chalmers to return Airways Transit’s property, Airways Transit pled that he had failed to return said property and threatened “recovery” of damages for same.

(i)      Airways Transit’s conduct, including its silence and failure to provide relevant information in a timely manner, severely harmed Mr. Chalmers’ ability to make informed decisions concerning his employment and career.

(j)      By its actions, Airways Transit also failed to assist Mr. Chalmers with a new job search or to give him a letter of reference.

[160]           Employees depend on employment not only for their financial survival but also for a sense of self-worth. Conduct of the employer that negatively impacts on those two essential elements warrants condemnation and punishment.

My Comments :

The ability of Courts to punish employers who act unfairly when terminating employees has had many names over my career ( Mental Distress, Honda Damages , Moral Damages, Aggravated Damages, Punitive Damages) but they all have the same theme.

If you treat people like dirt when terminating them, we will punish you.

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In Giduturi v LG Electronics Canada Inc., ( No citation yet) Justice Dineen had a situation where the Plaintiff made three valid Rule 49 offers , all of which the Defendant rejected.

The Judge then awarded the Plaintiff 12 months notice ( $45,000) and substantial costs of $45,000 plus HST and disbursements, which came to $54,687.

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In Giacomodonato v. PearTree Securities Inc., 2023 ONSC 5628, Justice Centra issued a costs decision after the Plaintiff was awarded $718,103.

The Judge was quite upset that the Defendant brought a bogus counterclaim which they abandoned on day 3 of the trial : This is what he said :

[28] Fifth, this is an appropriate case to award costs to discourage frivolous and strategic claims. In my view, PearTree’s counterclaim, including its claim for punitive damages, was obviously meritless. Employers who owe money to employees should be discouraged from engaging in tactical litigation designed to discourage employees from pursuing their rights and entitlements.

[33] Having presided over this ten-day trial, however, certain things are crystal clear to me. PearTree invited this litigation. PearTree conducted this litigation in an unforgiving, scorched earth, and bare-knuckle manner. It missed no opportunity to malign Mr. Donato. PearTree’s decision to pursue a counterclaim and punitive damages of so little merit leaves me to infer that those claims were advanced only for tactical reasons and in an attempt to dissuade Mr. Donato from pursuing the money PearTree owed to him. PearTree’s attempt to now claim that this action “was an unexceptional employment action” is entirely inconsistent with its own approach to this litigation. In my view, and in light of the choices it made in the conduct of this litigation, it should have reasonably expected to face a costs order of this magnitude.

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In Lynch v. Avaya Canada Corporation, 2023 ONCA 696, the Court held that exceptional circumstances involving a 64 year old Professional Engineer with 38.5 years service entitled him to a 30 month notice period.

Even though the trial judge did not set out these exceptional circumstances, the Court of Appeal did so themselves, as can be seen in the following extract:

[13]      Although the motion judge in the present case did not craft her reasons in that fashion, it is possible to discern the “exceptional circumstances” factors she relied on by comparing her listed factors with those this court in Currie held justified an award in excess of 24 months. Those factors were: (i) Mr. Lynch specialised in the design of software to control unique hardware manufactured by Avaya at its Belleville facility; (ii) it was uncontested that Mr. Lynch’s job was unique and specialized, and that his skills were tailored to and limited by his very specific workplace experience at Avaya; (iii) during his lengthy employment of 38.5 years, Mr. Lynch developed one or two patents each year for his employer; (iv) Avaya identified Mr. Lynch as a “key performer” in one of his last performance reviews; and (v) although similar and comparable employment would be available in cities such as Ottawa or Toronto, such jobs would be scarce in Belleville where Mr. Lynch – who was approaching his 64th birthday – had lived throughout his employment.

My Comments :

How could it possibly be relevant to determining the notice period that :

a) Mr. Lynch developed one or two patents each year for his employer;

b) Avaya identified Mr. Lynch as a “key performer” in one of his last performance reviews.

So, if he did not develop any patents, would his notice period would be less?

So, if he was not a key performer, would his notice period would be less?

Since when is how good an employee is at their job been a factor in determining notice? Logically a lousy employee should have a harder time getting a job than a key performer.

In my respected opinion, this case sets the law of reasonable notice back to being a crap shoot rather than a somewhat predictable outcome that lawyers can have confidence in when advising clients.

First of all, any concept of a notice cap seems to be out the window.

Second, by looking at a never ending list of factors and considering previously irrelevant factors, this simply makes the determination of reasonable notice more uncertain. This will cause confusion and uncertainity among both dismissed employees and their former employers, which in turn will lead to more litigation.

As a mediator, that’s good news for me .

As a keen observer of employment terminations for over 40 years, it stinks.

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

In  Milwid v. IBM Canada Ltd., 2023 ONCA 702 the Court upheld this notice period above the usual cap of 24 months as they found that the following were exceptional circumstances .

[5] In this case – similar to the situation in Currie – the evidence established that the respondent’s skills were not transferrable because they related, almost exclusively, to the appellant’s products. This is an exceptional circumstance not covered by the Bardal factors, which could warrant a notice period exceeding 24 months. Therefore, we see no error in the motion judge’s decision to fix reasonable notice at 26 months.

[6] The appellant also submits that the motion judge erred in finding that an additional month of notice, bringing the total to 27 months’ notice, was appropriate to reflect the circumstances of the COVID-19 pandemic. This finding is entitled to deference by this court and was well supported by the evidence in this case. The pandemic was a truly exceptional circumstance, and the respondent lost his position right at the time the global economy was shutting down. There is no basis to interfere with the motion judge’s decision in this regard.

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In Scott v. Fresh Tracks (Canada) Inc., 2023 BCSC 1724 ( Master Bilawich) both the parties and defence counsel were based in BC but Plaintiff’s counsel was based in Toronto. Defence counsel wanted to exam the Plaintiff in person in BC while Plaintiffs’ counsel wanted to do it on ZOOM, just like it had been done when the Defendant was examined.

The Master looked the the following issues :

1. The extra cost of having Plaintiff counsel attend in person.
2. The extra cost of hiring a local agent.
3. The success of virtual proceedings since COVID.
4. The fact that there is no longer a health reason for virtual proceedings.
5. The possibility of cheating.
6. The assessment of credibility.

In the end the Master ordered the examination to proceed on ZOOM.

[46]      I am satisfied that a virtual examination is appropriate, as this will allow the plaintiff to avoid substantial out of pocket expenses which he would have to incur if there is an in person examination. The defendant has not persuaded me that a virtual examination of the plaintiff would be materially less effective than an in-person examination, or otherwise prejudice its ability to defend this action. I exercise my discretion to direct that the plaintiff be examined for discovery virtually (by Zoom or other mutually agreeable videoconferencing service), on a mutually convenient date to be agreed between counsel.

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In Maalouf v. Bayer Inc., 2023 ONSC 4875, Associate Justice Robinson allowed the Defendants questions on discovery regarding various aspects of the Plaintiffs’ attitude towards vaccinations.

The Plaintiff was terminated for just cause for refusing to follow the Defendants’ COVID vaccination policy.

She agreed to answer the question as to whether she received a COVID vaccination after her termination, as the Defendant had pled that her refusal to vaccinate would amount to a failure to mitigate her damages.

She refused however to answer any questions about whether she had received other vaccinations prior to or since termination.

The Court allowed these questions as set out below.:

[9] Ms. Maalouf has agreed to answer whether she has received a COVID-19 vaccination since termination. Only the questions on other vaccinations remain in dispute. I am satisfied that whether Ms. Maalouf has received other vaccinations both prior to and since termination is relevant to Bayer Inc.’s pleading that she did not have a reasonable basis for declining

vaccination. I accept Bayer Inc.’s argument that Ms. Maalouf’s motives in breaching the company’s vaccination policies are not clearly irrelevant. Notably, although an older case, as held in Doyle v. London Life Ins. Co., 1985 CanLII 301 (BC CA), at para. 28, motive is sometimes plainly relevant in cases where the court assesses dismissal for an employee’s knowing breach of a company policy. As MacDonald J.A. put it, “A corrupt motive may well tip the scales against an employee. A pure motive ought to be weighed in [the employee’s] favour.”

My Comments :

It is not set out in the decision whether the plaintiff was pleading that she had a reasonable basis for not following the policy. In fact, the Plaintiff argued that since the policy had no exemption for reasonable belief, what difference does it make what her reasons were for refusing?

Moreover asking her about non Covid vaccinations would seem to be an unnecessary intrusion into her personal medical history. Remember she did agree to answer whether she got the COVID vaccination after termination, as this would clearly affect her ability to mitigate her damages. Why would it matter if she never got the flu shot?

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In Saarinen  v Rogers Communications ( 2023 ONSC 4328 ) Associate Justice Frank  dealt with a refusal motion in which the defendant refused to answer the following question :

Question: To produce the termination packages of all employees (names of said employees may be redacted to only provide first initials) who had more than 25 years of service and were terminated without cause by the Defendant during the period of January, 2017 to December, 2019.

This is what the Court ruled:

[10] It is well-established that in determining the common law entitlement of a dismissed employee, the Court applies the Bardal factors on a case-by-case basis. Thus, a termination package offered to an employee or termination packages offered to other employees would ordinarily not be relevant to the determination of the applicable reasonable notice period for the plaintiff under the common law, which is based on the Bardal factors. As a result, if the plaintiff’s claim were based solely on a common law entitlement, the requested information and documents would not be relevant.

[11] However, in the circumstances of this action, the plaintiff asserts a claim that goes beyond the common law notice entitlement. Specifically, in the amended statement of claim, including paragraphs 12, 18 and 31, the plaintiff alleges that she was wrongfully dismissed and that, based on the implied terms of her employment contract and the defendant’s policies and/or practices in place, she was entitled to a termination package that included 24 months compensation with no mitigation requirements. The defendant consented to the amendments tonthe statement of claim that include these pleadings and joined issue with the plaintiff on this point. For example, at paragraph 22 of the amended statement of defence, the defendant deniesthe implied term alleged by the plaintiff that she was entitled to 24 months compensation andbthat she had no duty to mitigate.

[12] In light of the pleadings in this action, the disputed questions are relevant. If the court finds that there was no just cause for the plaintiff’s dismissal, the termination packages provided to similarly situated employees and the defendant’s policy and/or practice determining termination packages will be relevant to the determination of the plaintiff’s damages. As there is no evidence that the requested information and documentation would offend the principles of proportionality, the questions should be answered, subject to any privilege considerations, as outlined below.

My Comments:

I am not sure why the Plaintiff would plead that it was a term of her employment that she was entitled to the notice period that the employer normally gave to its employees. In my limited 43 years of experience I have rarely seen an employer termination policy which is better than the common law reasonable notice.

I think that this decision is fundamentally flawed as the assessment as to what is reasonable notice is that of the Court alone and should not be influenced in any way by what the past practice of the employer. In most situations of mass layoffs the overwhelming majority of terminated employees take whatever offer the employer makes. Does this mean that an employer can now lead evidence that since 75% of its employees took the employers’ crappy first offer, that is all this particular employee should get ?

Many years ago some courts initially accepted the concept of ” baseball justice ” which meant that the Court would assess whether the employers offer or payment of notice was within the range of reasonable notice. This approach was soundly rejected by the Court of Appeal which reiterated the principle that the determination of reasonable notice was to be determined by the Court and not to simply judge the reasonableness of the employer’s offers.

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