Category: Uncategorized
Failure to Interview Plaintiff Before Terminating for Just Cause Problematic:
In Czerniawski v Corma ( 2021 ONSC 1514) Justice Backhouse dealt with an allegation of just cause involving a a 54 year old assembler with 19 years service.
The Plaintiff got in a shouting match with a co-worker over a work related issue. That worker complained to the supervisor who told the HR manager who told the supervisor to send the Plaintiff home because he was involved in two incidents .
The Plaintiff was not pleased and asked what he was being accused of. No answer was given other than the company was going to investigate. The Plaintiff refused to leave the premises. The Company called the police. Once the police arrived the Plaintiff left without incident.
Having been told to remain home until called, after four days of hearing nothing the Plaintiff returned to the workplace to deliver a letter stating that he had not threatened anyone and demanding a formal apology.
The next day he was fired for engaging in threatening behaviour and insubordination by refusing to go home when ordered and for returning to the workplace without permission.
What concerned Justice Backhouse the most was the Defendant’s failure to interview the Plaintiff about the allegations, in fact to even tell the Plaintiff exactly what the allegations against him were. Instead their ” investigation” consisted of getting statements from other workers and supervisors. They then simply chose to believe those witnesses.
The Defendants’ case seemed to rest on the theory that the other workers were intimidated by the Plaintiff and feared he would be violent. However the Judge found that this evidence was ” overstated ” and that there was no objective evidence which would lead one to believe that the Plaintiff would use or threaten violence in the workplace especially as there was no history of such behaviour.
In finding that the Plaintiff’s conduct was worthy of discipline but not summary discharge, Justice Backhouse said as follows:
[34] Had the plaintiff been allowed to respond to the allegations as he requested on March 7, 2019 or as part of the investigation, the employer’s decision may have been more proportional to the misconduct which occurred. While having to call the police when he refused to leave the workplace was undoubtedly upsetting to co-workers and caused a disruption of the workplace, the plaintiff returned to his own work station after the meeting with Mr. Sandras and Mr. Beliski. He cooperated with the police when they arrived, left peaceably and there were no threats, intimidation or violence.
[38] In this case, the plaintiff was a conscientious employee and there were no prior incidents of violence. Any prior negative interactions with co-workers had not previously been brought to the plaintiff’s attention or been the subject of discipline.1 Progressive discipline for this incident such as a disciplinary letter or suspension would have sent the message that his behavior was unacceptable and given him a warning that a continuation could result in his dismissal.
[39] In Geluch v. Rosedale Golf Assn. Ltd., [2004] O.J.NO.2740, the Court held:
1 On November 30, 2016, a warning letter was placed on the plaintiff’s file in regard to an outburst in the presence of his supervisor but no discipline was imposed. Before an employee is terminated for cause, he or she should be advised that the misconduct is a matter of serious significance and its continuation could place his or her employment in jeopardy.
[40] A number of cases have held that it was wrong for an employer to refrain from interviewing the plaintiff to obtain his version of events. (Peoples v. Ontario, 173 A.C.W.S. (3d) 165 at para 18; Poulos v. Toronto & Region Conservation For The Living City, [2009] OJ NO 6066; Ludchen v. Stelcrete Industries Ltd., 2013 ONSC 74945 at paras 68 and 79).
[41] The defence relies upon Render v. ThyssenKrupp Elevator (Canada) Limited, 2019 ONSC 7460 as support for the proposition that a single act of disobedience can justify dismissal. Render is a decision involving sexual harassment in the workplace and does not assist on the facts of this case.
[42] In accordance with the principle set out in McKinley, supra, the plaintiff’s misconduct was not so egregious that it can be said that he abandoned the intention to remain part of the employment relationship. The plaintiff should have been advised that his misconduct was serious and that a repetition would result in termination of this employment.
[43] Considering all the circumstances including the lack of an apology, the misconduct in this case does not justify dismissal without notice.
The Plaintiff was awarded 19 months notice.
My Comments :
In my opinion it is crucial and smart to interview any employee before discipling or discharging then for cause for the following reasons:
- You might actually learn something that will change your mind.
- Even if you have already made up your mind , you can tell the Court or the arbitrator that you considered the employee’s evidence and then arrived at your own carefully considered decision.
- The employee in question may admit to the conduct in the interview.
- The employee may commit him or herself to a certain story which later on he or she will not be able to change after getting legal or a friends’ advice.
- If you openly record the interview, there can be little dispute later on about who said what .
- Interviewing is a skill that not everyone has. These interviews should be conducted by someone who knows how to do it, which is probably not the local supervisor.
If you have trouble locating this case, just send me a email at barryfisher@rogers.com and I will send you a copy.
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Pregnancy a Factor in Extending Notice Period : 1)
In Nahum v Honeycomb Hospitality, Akbarali J. ( 2021 ONSC 1455) had to determine the notice period for a 28 year old middle manager ( HR) with 4.5 months employment who at the time of termination was 5 months pregnant.
In a extensive 20 paragraph analysis , the Judge determined that the fact that she was 4 months away from giving birth would likely have negative impact on her job prospects and because of this the notice period should be extended.
Here is the entire section on the issue from the judgement:
Pregnancy
[34] To the knowledge of Honeycomb, Ms. Nahum was about five months pregnant when she was terminated. The most contentious issue between the parties is whether Ms. Nahum’s pregnancy ought to be considered in determining the reasonable notice period.
[35] In Harris v. Yorkville Sound Ltd., 2005 CanLII 46394 (Ont. S.C.), Dambrot J. considered the reasonable notice period where a woman was terminated very early in her pregnancy. The parties in that case differed on whether the plaintiff’s pregnancy should be a factor in determining reasonable notice. In concluding it should be, Dambrot J. held:
It seems to me that if part of the concern in the exercise of setting reasonable notice is the availability of other work, and the possibility of the dismissed employee being hired for it, then pregnancy has to be a consideration.
[36] Dambrot J. found that he did not require evidence to find that the plaintiff’s pregnancy did not enhance her immediate employability. Without the pregnancy, he would have found that ten months’ notice was appropriate. In view of the pregnancy, he added two months’ notice, for a total of a twelve-month reasonable notice period.
[37] In reaching his conclusions, Dambrot J. relied on the decision of Hoilett J. in Tremblette v. Aardvark Pest Control Limited, [1987] O.J. No. 2380, 16 C.C.E.L. 306 (Ont. Dist. Ct.). In that case, in determining the period of reasonable notice, Hoilett J. considered a number of factors, including that the plaintiff was pregnant at the time of her dismissal, “a fact which, fairly or not, did not enhance her immediate employability.”
[38] Dambrot J. also relied on a 2002 decision of the Divisional Court, Ivens v. Automodular Assemblies Inc., [2002] O.J. No. 3129, 162 O.A.C. 124 (Div. Ct.). There, the Divisional Court was asked to consider whether the trial judge erred in law when she concluded that she was “not satisfied that [the appellant’s pregnancy] [was] a factor which the law should recognize in circumstances like those in this case.” The trial judge noted the plaintiff’s argument that her pregnancy and the complications she was experiencing would make it more difficult for her to find employment.
[39] The Divisional Court noted that the trial judge found as a fact that the pregnancy would impact on the appellant’s employability. However, the trial judge concluded that it did not seem to be sound policy to distinguish the notice that employees of otherwise identical backgrounds would receive, “solely on the ground that one had a disability that would affect employment opportunities,” finding that to do so it would be unfair to employers, and speculative.
[40] The Divisional Court noted that the purpose of reasonable notice is to give the employee an opportunity to find other employment. As a result, it found that the appellant’s pregnancy complications were a “Bardal-type factor” that should have been considered in determining what constituted reasonable notice to the plaintiff, along with the other relevant factors.
[41] In contrast, a 2001 decision of the Ontario Superior Court of Justice, Colburn v. Unity Savings and Credit Union Limited, [2001] O.J. No. 2920, 106 A.C.W.S. (3d) 856, found that the plaintiff’s pregnancy was not a factor in her termination, and on the facts of that case, should not be a factor in determining the amount of notice, or pay in lieu of notice. In Colburn, the court noted the trial decision in Ivens, which was overturned after Colburn was released. The court also noted the decision in Tremblette, but it did not explain why it did not accept the reasoning set out by Hoilett J. in that case.
[42] Honeycomb argues that it is problematic to find that pregnant people are less likely to find employment, for several reasons. First, it argues that concluding that pregnant people are less likely to become employed implies that prospective employers will violate human rights legislation in their hiring decisions, and the dismissing employer will be held responsible for the wrongs of others.
[43] I do not accept this submission. There is no certainty that an employer who prefers a candidate who is not pregnant is violating human rights legislation. An employer seeking to fill a position is likely to have an immediate need for someone in the role. The prospect of a new employee who will shortly require a lengthy leave will be unappealing to many employers and may not meet bona fide needs of their organization. It is not possible to conclude that the disadvantage to pregnant person in the hiring process will necessarily be a human rights violation.
[44] Second, Honeycomb argues that in order to reach the conclusion that pregnancy is often a disadvantage in a job search, I require evidence, because I am not able to take judicial notice of that fact. In support of its argument, it states (without evidence) that there are websites dedicated to assisting pregnant people in undertaking a job search, indicating that pregnant people look for work all the time.
[45] I have difficulty with this argument as well. The jurisprudence I have referred to makes clear that the purpose of reasonable notice is to provide a reasonable period of time for a person dismissed from their employment to obtain a new position. Objectively, a person’s pregnancy is likely to increase the amount of time it will take them to find new employment in most cases, because most employers want to fill a need in their organization with someone who will be present to fill that need.
[46] As I have noted, other courts have concluded, without evidence, that pregnancy creates difficulties for a person searching for employment. Justice Dambrot specifically found that he did not need evidence to reach that conclusion. This past judicial consideration supports the conclusion that it is open to me to take judicial notice that pregnant people face additional challenges when looking for work. Judicial notice may be taken of this conclusion because it is a fact so notorious or generally accepted as not to be the subject of debate among reasonable persons.
[47] I also note that there would be no reason for websites advising pregnant people on how to conduct a job search if pregnancy were not a disadvantage in the job search process.
[48] Third, Honeycomb argues that considering pregnancy when determining the reasonable notice period is problematic because it opens the door to the inclusion of other factors that may impact an individual’s professional success. By way of example, it argues (without evidence) that “tall people are generally more successful according to several studies than others.” It suggests that if pregnancy is relevant to the notice period, shorter people could also make an argument in support of a longer notice period.
[49] Nothing in this argument recognizes the inherent barrier that pregnancy poses to most job searches – the impending absence of the prospective employee from a position for which they are not yet trained, in which they have not yet proven themselves, and in respect of which the employer is most likely seeking to fill an existing need. There is no reason to suppose short people are going to need to take an imminent and possibly lengthy leave of absence shortly after being hired.
[50] However, I do agree with Honeycomb that pregnancy should not function to automatically lengthen the notice period in every case. Like all factors relevant to the notice period, pregnancy is one of the factors to be considered in the circumstances of the case.
[51] Much like a person’s advanced age will often be a factor tending to increase the notice period, it will not always be; a 28-year-old can hardly expect to be hired for a job that demands 30 years of experience, for example.
[52] Similarly, a pregnant person may not always be impeded in their job search due to pregnancy, where, for example, they are searching for a job to commence in the future (for instance, a second-year law student looking for an articling position). A pregnant person with very specific skills that are in demand may reasonably expect to find an employer willing to accommodate their upcoming need for a maternity leave. However, there is no principled reason why, when determining the damages of a wrongfully dismissed employee, their pregnancy at the date of dismissal should not factor into the reasonable notice period when their pregnancy is reasonably likely to negatively impact their ability to find alternative employment.
[53] In this case, as I have noted, Ms. Nahum applied to at least 36 positions after her dismissal and before her baby was born. Only one resulted in an interview. Ms. Nahum agreed on cross-examination that, apart from the prospective employer who interviewed her, Ms. Nahum did not disclose her pregnancy to other employers. She indicated that prospective employers could have learned of her pregnancy if they had looked her up on Instagram, but there is no evidence to suggest that any did, or that they did not.
[54] In any event, the question of the reasonable notice period must be answered at the time of Ms. Nahum’s dismissal: Holland v. Hostopia.com Inc., 2015 ONCA 762, at para. 61. To the extent hindsight clarifies the impact her pregnancy had on her job search, it is as irrelevant as the COVID-19 pandemic.
[55] At the time of her dismissal, Ms. Nahum was five months pregnant. In my view, it is unreasonable to expect she would be able to obtain new employment in the two month period proposed by Honeycomb given the point in her pregnancy at which she was terminated, and the competitive job market in which she was seeking work.
Without saying what the notice period would have been but for the pregnancy, the Judge awarded the Plaintiff 5 months notice, which was 2 weeks longer than her actual period of employment.
It would have been more useful if the Judge had said how much of that notice period extension was related to the pregnancy.
Another Just Cause Clause Bites the Dust:
In Ojo v Crystal Claire Cosmetics ( 20121 ONSC 1428) Diamond J. had a situation of a 52 year old Warehouse Manager with only 10 months service.
The Plaintiff had a termination clause in his employment contract which read as follows:
“Termination
Crystal Claire maintains the right to terminate your employment at any time and without notice or payment in lieu of thereof, if you engage in conduct which constitutes just cause for summary dismissal.
In the absence of just cause, Crystal Claire may terminate your employment at any other time and for any reason upon providing you with either advance notice and/or applicable payments equivalent to the minimum applicable entitlements contained within the ESA, as amended. For greater certainty, Crystal Claire’s maximum liability to you for common law notice, termination pay, severance pay, or payment in lieu of notice shall be limited to the payment of the amounts specified in the ESA.”
The termination clause was held to be invalid for two reasons:
- The words ” conduct which constitutes just cause for summary dismissal ” was contrary to the ESA which has a higher standard of “guilty of wilful misconduct, disobedience or wilful neglectful duty that is not trivial and has not been condoned by the employer.” This is entirely consistent with the Ontario Court of Appeal’s decision in Waksdale v. Swegon North America Inc. 2020 ONCA 391 (CanLII), “
- The second argument is that because the clause did not refer to benefit continuation during the ESA termination pay period, it was illegal. Here is the defence argument was a little more nuanced.
[22] The defendant relies on the decision of Justice Monahan in Burton v. Aronovitch McCauley Rollo LLP 2018 ONSC 3018 (CanLII) in which the court was faced with the following termination clause:
“AMR may, at its sole discretion, terminate your employment without cause (a ‘Non-Cause Termination”’. In the event of a Non-Cause Termination, AMR shall provide you with severance pay in accordance with the Employment Standards Act, as amended, and any successor legislation, if so required as at the time of a Non-Cause Termination; and
Notwithstanding the foregoing, and for greater certainty, if the amounts which you would receive upon a Non-Cause Termination, as set out above, are less than the amounts to which you would be entitled under the Employment Standards Act, as amended or any successor legislation, then you shall be entitled to notice, severance pay, and any other payment required by the relevant legislation in force as at the time of the termination.”
[23] Justice Monahan held that the chosen wording (“any other payment required by the relevant legislation”) contemplated the continuation of benefits, and thus the termination clause before him complied with the Act.
However, this Judge did not see it the same way .[24] In my view, the Burton decision is distinguishable. I agree with the plaintiff that the termination clause in this proceeding requires the defendant to pay the plaintiff his minimum termination pay, but not the obligation to continue paying the plaintiff the value of his benefits during the minimum notice period required by the Act. The termination clause, at best, allows the defendant to provide the plaintiff with payments equivalent to the minimum applicable entitlements under the Act.
My Comments :
In Ojo, the clause entitled the Plaintiff to receive “applicable payments equivalent to the minimum applicable entitlements contained within the ESA,”.
This was held not to include benefits :
In the Burton case, the Plaintiff was to receive “and any other payment required by the relevant legislation”.
This was held to include benefits .
Both cases used the same term ” payments or payment ” but apparently they mean different things to different judges.
Ain’t the law wonderful?
The Judge awarded 3 months notice. Not bad for a guy with only 10 months service.
As this case is not yet on the CanLII website, if you want a copy just send me an email at barryfisher@rogers.com and I will send you a copy .
Off Sick for 2 Years with No Medical Note is Not Job Abandonment:
In Hettrick v Triple F Paving (2021 ONSC 208) Miller J. had a situation where a 73 year old office manager with 21 years of service went off on a sick leave. Her employer asked for a medical note but did not say that in the absence of a medical note she would deemed to have quit. She obtained a medical note but for some inexplicable reason did not send that note to her employer. Two years later, she wrote to her employer saying that she is OK and ready to come back to work on a graduated basis. The employer refused her request and said that she abandoned her employment and that there was no vacancy.
The Court held that there was insufficient notice by the employer to the employee as to what would happen if she did not deliver a medical note. The Court said as follows
[40] Triple F submits that it is undisputed that Ms Hettrick was advised that they required a copy of her medical certificate in order to authorize her request for medical leave. I find that the evidence does not go that far.
[41] Nowhere in the correspondence to Ms Hettrick did Triple F specifically tell her that a medical certificate was required in order to authorize her request for medical leave. The only email reply to Ms Hettrick’s request for medical leave, in which specifically asked to be advised in writing – at her email address – “what additional information is needed to process this request.” was the response “Sounds great to me, Bev.”
[42] While Triple F did request a doctor’s note by way of a Post-it note, that communication did not indicate that a medical certificate was required for the medical leave to be approved. Neither did the letter of October 15, 2015. In that letter, Triple F simply indicated that if the requested doctor’s note was not received by October 31, 2015 they would have to advise the Canada Revenue Agency that the Record of Employment is “to be cancelled for lack of verification”.
[43] Aside from these communications, there is no evidence to support Triple F’s assertion that they “made continuous attempts to communicate with Hettrick regarding the status of the medical certificate and the status of her medical leave, which went wholly ignored”.
[44] It is not disputed that Ms Hettrick did not take any steps to have the medical certificate delivered to Triple F, nor did she request that her physician deliver the medical certificate on her behalf. Triple F questions Ms Hettrick’s evidence that she was not well enough to send in the doctor’s letter of November 27, 2015.
[45] Triple F points out that the letter from the physician dated July 5, 2018, is not contemporaneous with Ms Hettrick’s purported inability to send in the November 27, 2015 letter. Triple F submits that the contents of the letter of July 5, 2018 is not in affidavit form nor has the doctor been qualified as an expert. Triple F relies on Betts at paragraph 62 which indicates:
Employees on medical leave will not be immune to abandonment where they have failed to follow employee policies and where there is no medical evidence available to support that the employee could not comply with these policies.
[46] Ms Hettrick relies on Lemesani v. Lowerys Inc., 2017 ONSC 1808 at para. 134 in support of her position that an employer must demonstrate that an employee’s words or conduct clearly and unequivocally indicated an intention to abandon their employment.
[47] Ms Hettrick relies on Nagpal at paragraph 39 in support of her position that an employee’s failure to communicate during a medical absence is not an unequivocal indication of an intention to abandon one’s position. Further, the Ontario Divisional Court held, in Sutherland v. Messengers International, 2018 ONSC 2703 at para. 25 that where there is confusion or uncertainty over whether an employee abandoned his engagement, the onus is on the employer to clarify with the employee whether he or she quit.
[48] Ms Hettrick relies on evidence that at no point prior to November 6, 2017 did Triple F: attempt to clarify the status of her medical leave; inquire whether her intention to return to work had changed; suggest that she had “abandoned” her position; or warn that her position would be considered “abandoned” by the company.
[49] Further, Ms Hettrick’s request for leave, made September 29, 2015 clearly communicated her desire to return to work when able and her expectation that that “all duties and responsibilities” associated with her job “will be fully reinstated”. At no time did Ms Hettrick resile from this position, nor did Triple F at any point, before November 7, 2016 warn Ms Hettrick that her expectation that she would be able to return to her former position would or could not be met.
[50] I find on the evidence, that Ms Hettrick never abandoned her position. To the contrary, at the time she requested leave, she specifically communicated to Triple F her desire to return to her position once well. I find that Triple F has not established that Ms Hettricks’s words or conduct clearly and unequivocally indicated an intention to abandon her employment.
He went on to find that reasonable notice was 18 months and that at age 73 she had no duty to mitigate.
My Comments :
This case sets a very high standard to prove job abandonment. In essence the employer must make it very clear that if the employee does not do something within a specific time frame ( i.e. get a medical note, appeal an insurer’s denial, suggest accommodation or return to work) then they will probably lose this argument.
Had the employer done a proper follow up on the medical note and had the doctor continued to say that she could not predict when the employee would recover, then after some period of time the employer may have been able to rely on the doctrine of frustration. This would wipe out the employee’s entitlement to reasonable notice and the employee would only her ESA minimums. As this defendant was a small family business, it seems likely that they did not have a payroll in excess of $2.5 million and thus all the plaintiff would receive is 8 weeks termination pay.
The Judge’s comments on having no duty to mitigate at age 73 is refreshingly honest. I often have employers at mediation who claim that age is not a barrier to finding a job as they proclaim that they employ many older workers. I then ask them ” How many 73 year old employees did you hire in the last year?” Silence is the usual response.
I suspect that this employer simply assumed that at age 73 the plaintiff was simply going to drift into retirement and they would never have to hear from her again.
They were wrong.
Lesson : Don’t underestimate the older worker.
New Decision on Bardal Factors , COVID, CERB, and Commissions During Notice Period :
In Oriotakis v Pennisula Employment Services Ltd ( 2021 ONSC 998) Justice Dumphy had reason to comment on a number of topics relating to both the calculation of reasonable notice and how to calculate damages regarding commissions over a notice period.
- Assessing Notice: : Although the plaintiff had the fancy title of Business Development Manager , he did not supervise anyone and was actually a salesman. This is what the judge said about the issue of how important is was to determine if this was a senior position .[8] The entire debate regarding the relative seniority or degree of responsibility of the employee’s position is, in my view, a product of an overly literal approach to the application of the so-called “Bardal factors” examined by our courts in considering the question of reasonable notice. These factors that are better understood as guidelines to approach the consideration of a problem rather than an exhaustive and mathematically determinative formula. For better or for worse, the determination of the level of reasonable notice at common law is a highly fact-specific exercise permitting few precise comparisons from case to case, an observation that does not preclude deriving helpful guidance as to appropriate ranges in particular.
[14] There are few questions more vexing than that of determining reasonable notice under the common law of the employment contract as it has evolved over the years. Difficulty is not a reason not to undertake the task nor does conflict in the jurisprudence render subjective a task that is intended to be undertaken objectively and on a principled basis. The fact of the matter is that the Legislature has had any number of opportunities to wrestle with the problem and lay down clear rules to be followed in all cases. They have not done so or, perhaps more accurately, they have consistently mandated only minimum standards leaving contract and the common law to fill in the remaining blanks. This indicates to me an implicit acceptance by the Legislature that the fact-specific analysis demanded by the common law remains a viable and even desirable means of approaching the question.
The Judge then undertakes a painstaking analysis of the various cases presented to him by counsel and comments on how they are similar or different from the case before him.
This approach is a common judicial approach and has always troubled me. Howard Levitt years ago in his book counted 107 separate factors considered by the Courts in assessing reasonable notice. If there are that so many factors to consider, then there is simply no certainty or ability to predict an outcome. If every case of wrongful dismissal requires this intense examination, then how could any employer or employee reasonably determine what reasonable notice is when the most important factor would seem to be the identity of the judge.
This is why, back in the 1980’s, I started the Wrongful Dismissal Database so that the profession and the judiciary would have access to aggregate information that would give some guidance to determining reasonable notice and therefore over time would hopefully create more certainty over notice periods.
I suspect that lawyers use the WDD to find cases that support their position without showing the judge the full range of the report. This may result in the judge picking one extreme position over the other whereas the data would actually show that the average and or the mean of the cases would produce a less extreme result.
I would respectfully suggest that judges, on their own initiative , could ask counsel to produce a report such as the WDD in their submissions. I acknowledge that there may be other such programs but I admit to my personal bias. This would at least give the judiciary a broader and fairer picture of what comparable cases have done in the past .
2. Importance of Age as a Bardal Factor: In this case the Plaintiff was 56 but only employed for 2 years and 4 months. This is what the judge had to say on the relevance of the Plaintiff’s age.
In my view, it would be an error to make age the dominant consideration in arriving at a determination of reasonable notice in a case such as the present one. Such a reliance would create needless obstacles in the way of employees securing fresh employment at Mr. Iriotakis’ age and would be quite counterproductive in the long run. Age and the prospects of securing alternate employment are factors but these must be considered along with others and with a proper degree of balance.
It seems the Judge was concerned that emphasizing age could have an adverse effect on the willingness of other employers to hire other employees in the future. It does not seem that either parties led any evidence on this issue . What was in evidence is that no one questioned the plaintiff’s mitigation efforts and that it actually took him considerably more than the notice period to actually find a job. Perhaps age was a factor in that employers are often reluctant to hire older workers.
3. COVID Effect. The plaintiff was terminated in late March 2020 after the first COVID shutdown. This is what the judge said :
[19] I was asked to make findings about the job market and the possible impact of Covid-19 on Mr. Iriotakis. I have little doubt that the pandemic has had some influence upon Mr. Iriotakis’ job search and would have been reasonably expected to do so at the time his employment was terminated in late March 2020. However, it must also be borne in mind that the impact of the pandemic on the economy in general and on the job market, in particular, was highly speculative and uncertain both as to degree and to duration at the time Mr. Iriotakis’ employment was terminated. The principle of reasonable notice is not a guaranteed bridge to alternative employment in all cases however long it may take even if an assessment of the time reasonably anticipated to be necessary to secure alternative employment is a significant factor in its determination. I must be alert to the dangers of applying hindsight to the measuring of reasonable notice at the time when the decision was made to part ways with the plaintiff.
Presumably this mean that if the termination had taken place later in the year when we all realized that COVID shutdowns were the new normal, that Justice Dunphy would have awarded a longer notice period. Will lawyers have to present evidence as to what people were thinking at the time of the termination a s to how long this COVID nightmare would continue ? How does even collect such evidence?
4. CERB : It is clear that CERB is not repayable to the government like EI is. Does the receipt of CERB reduce the amount of wrongful dismissal damages ? This is what Dunphy J. said on this point :
[21] I agree with the defendant that CERB cannot be considered in precisely the same light as Employment Insurance benefits when it comes to calculating damages for wrongful dismissal. CERB was an ad hoc programme and neither employer nor employee can be said to have paid into the program or “earned” an entitlement over time beyond their general status as taxpayers of Canada. The level of benefit paid (approximately $2,000 per month) was considerably below the base salary previously earned by the plaintiff to say nothing of his lost commission income. On balance and on these facts, I am of the view that it would not be equitable to reduce Mr. Iriotakis’ entitlements to damages from his former employer by the amount of CERB given his limited entitlements from the employer post-termination relative to his actual pre-termination earnings. I decline to do so. ( emphasis in the original)
Thus it seems that if the Plaintiff had made less money and thus the CERB would have been closer to his actual loss, this Judge may have reduced the damages in part because of the receipt of CERB.
Again, why make these unnessary distinctions that further complicate these cases? At what income level is CERB to be taken into account ? Will it vary from judge to Judge? Either it is or is not a deduction from the damage claim.
5. Commission over the Notice Period;
The plaintiff sold a service which produced monthly income, however in accordance with his commission agreement, commissions were only paid after the service had been provided for 8 months . So what happens to those commissions that would have been received within the notice period and what about those commissions that would have come in after the notice period?
The Commission Plan had the following language :
To qualify for any commission or bonus payment you must be actively employed by Peninsula Employment Services Ltd. Entitlement to qualify for any commission or bonus payment will cease immediately upon termination of your employment with Peninsula Employment Services Limited.
Dunphy J. determined that this clause was illegal as it violated the ESA.
[39] The plaintiff takes the position that to the extent the plaintiff’s contract of employment with the defendant purports to deprive him of commissions on sales made prior to the termination of his employment that are payable afterwards, such provisions are void as contrary to s. 1(1) and s. 11(1) of the ESA that require the payment of all “earned” “wages” and s. 5(1) of the ESA that prohibits contracting out of its minimum standards. In this regard, I agree with the plaintiff in part.
He then determined that the Plaintiff was making a claim for three types of commissions :
A) Commissions that would have been paid to the Plaintiff had he been given reasonable working notice on sales he completed before termination.
B) Commissions that would have been paid to the Plaintiff after the reasonable working notice period on sales he completed before termination.
C) Commissions he may have made on deals that he might have done had he been permitted to work out his notice period.
The Judge applied the simple principal of putting the Plaintiff in the same situation as if he had worked out his notice period . Therefore the results were as follows:
A) Plaintiff wins :
[41] While the Rules purport to exclude the payment of commission becoming payable during a common law notice period, such exclusion in my view violates s. 1(1), s. 5(1) and s. 11(1) of the ESA and is of no force or effect.
[42] I have found that the plaintiff was entitled to reasonable notice of the termination of his employment and, in the absence of such notice, to damages in lieu of that notice. Had the plaintiff been given three months working notice – as he was entitled to receive – commissions on sales made by him between six and nine months prior to the termination of his employment would have been both earned and payable by the terms of the Rules whether or not he made a single incremental sale subject only to the passage of time and a determination of the actual payment history of the relevant clients during that period of working notice. Having deprived the employee of the notice to which he was entitled, the employer must put the employee in the same position – as far as money can do – as the employee would have been in at the end of the working notice he or she failed to receive: Paquette v. TeraGo Networks Inc., 2016 ONCA 618 (CanLII) at para. 16. The amount so determined is not commission under the Rules per se but damages calculated as the amount of money that the plaintiff would have received under the Rules but for the breach of contract by the employer. Had he been working as he was entitled to so, he would have been providing services to the employer and the exclusion in the Rules would have had no application.
B) Plaintiff loses:
At the end of the notice period, the plaintiff had no right to be employed and no eligibility to receive commissions under the Rules that governed his ability to earn them. The commissions on prior sales were not fully earned while the plaintiff was still an employee because they remained contingent on the future payment history of each client pursuant to the Rules that created his entitlement in the first place. Such amounts do not fall within the definition of “wages” that have been “earned” under s. 1(1) and s. 11(1) of the ESA. The terms of the Rules are clear and unambiguous on this point.
Crucial to his finding is that these commissions were not “earned ” until the 9 months was up. What if however, the agreement simply stated that commissions were not payable until 9 months after the transaction closed. Could not one say that the commission was “earned” once the deal was confirmed but payment was deferred until a later date. If the commission was earned but not yet payable, certainly that would constitute ” wages ” under the ESA and thus could never be forfeited, as this would be a contracting out of the EA, which is illegal .
C) Plaintiff loses :
[44] The same reasoning applies with greater force in the case of putative earnings during working notice not given. Had reasonable working notice been given, the plaintiff would have been entitled to his base salary and the portion of commissions on prior sales that became earned and payable during that notice period. Any new sales made would have generated no commissions earned during the period of his active service under the Rules that governed his entitlements. Whether he is assumed to have made new sales at, below or above the rate he was making them before his termination would have no impact on his earnings during that period. To the extent it is relevant, it is hard to imagine how he could have had much in the way of imputed sales during the three-month notice period at all events given that this time frame in fact coincided with the period of hardest pandemic lock-down.
Conflict Note : Winning Plaintiff’s counsel was Kimberley Sebag , an associate at Lecker & Associates at which my brilliant son, Matthew Fisher, is a partner.
Time Theft and False Log Entries = Just Cause :
In Barrett v Bragg Communications ( CLC Adjudication , no cite available ) Adjudicator Starkman upheld the discharge of mobile tech who did the following misdeeds:
1. Used the company vehicle for personal use, contrary to policy.
2. Over a 4 week period used the company cellphone on company time for over 60 hours, many of which were personal calls.
3. Took may extra long lunch breaks.
4. Created false entries in his time log tp cover up his extended lunch breaks outside of his service area.
But for the false logs, it appears that the adjudicator might have found that the penalty of discharge was too severe and would have substituted a lesser penalty, which unlike a judge, he had the power to do. But the false logs put his behaviour over the top and the discharge was upheld.
Of note the worker had a previous discipline record of a one day suspension which contained a final warning. He was a 7 year employee.
Poor Economic Conditions Lengthen Notice Period Says Alberta Court:
In Hunsley v Canadian Energy Services ( 2020 ABQB 724 ) Poelman J. dealt with an supervisor in the old and gas industry, which the Court noted that the parties agreed that at the time of termination the industry was facing ” challenging financial circumstances”.
This is what the Court said :
[26] Adverse economic conditions tend to increase the notice period because they usually contribute directly to the estimated time required to find replacement employment.
A depressed economy or sector tends to lengthen the notice. But is only one factor and should not be given disproportionate effect: ibid,
[28] The amount of reasonable notice must be determined based on circumstances at the time of dismissal, not subsequent events or length of actual unemployment.
The court went to award a supervisor / lower manager with 7 years and 7 months service and 34 years of age an eight month notice period .
Court Considers COVID Effect on Notice :
In Yee v Hudson’s Bay ( 2021 ONSC 387) Justice Dow was considering the proper notice period for a 62 year old Director of Product Development with 11.65 years service.
The plaintiff was laid off in August of 2019 ( pre COVID). When asked by the Plaintiff to award a longer period of notice because of the difficulty of getting a job in retail in the midst of a pandemic, the Court distinguished those cases where the employee was let go before COVID but his notice period was during COVID and those who were terminated during COVID. This is because ” Notice is to be determined by the circumstances existing at the time of termination and not by the amount of time that it takes the employee to find employment”
The Court awarded the Plaintiff 16 months notice.
At first blush this distinction seems illogical because. whether you were fired a day before the pandemic or the day after would have no effect on how long it may take you to get another job. However this decision is consistent with previous decisions where Courts have ignored post termination events in assessing the proper notice period. The policy reason behind this is the theory that the parties should be able to both assess the issue of notice at the time of termination. This is intended to promote certainty because if post termination events affected the notice period , then presumably you could never ascertain the correct notice period until it was over.
However there are certain exceptions to this rule because the notice period can be less than the reasonable notice period in at least three cases:
- The employee fails to properly mitigate his or her damages.
- The employee succeeds in finding a new job before the end of the notice period.
- The employee dies within the notice period.
Q: Do you notice any themes to these exceptions ?
A: They all benefit the employer.
Great Ruling on Enforceability of a Rule 49 Settlement:
In Wilson v John Howard Society ( 2020 ONSC 5531) Bondy J. ruled that the defendants’ Rule 49 offer which was accepted by the plaintiff was enforceable even though there were some minor issues not covered in the offer as follows:
1)The plaintiff wanted the $2,221.50 characterized as retiring allowance whereas the defendant wanted to treat it as wages. This made a tax withholding difference of about $363.
2) The plaintiff wanted the entire amount allocated to legal fees. The defendant refused because that is not what the Rule 49 offer said.
3) The offer was not clear as to would pay for the dismissal order.
The Judge rejected al these arguments.
1) The characterization was agreed to in the Rule 49.
2) The amounts were properly characterized in the Rule 49 offer and thus could not be changed unilaterally.
3) The implication from the Rule 49 offer was that the defendant would take out and pay for the dismissal order.
The Plaintiff got a judgement for $4,037. The Defendant was awarded costs to be determined.
Question : At the end who won?
What this case was really about was a plaintiff who wanted to back out of a deal that she had originally agreed to. This case reinforces the idea that ” settlements are sacred” and any attempt to weasel out of a deal made when both parties are represented by lawyers is basically a fools’ game.
This case reminds us of the importance of making sure that settlements should be fully documented and signed on the spot. In my mediations, I strongly encourage the parties execute full settlement agreements, including releases, at the end of the mediation. To do otherwise allows either one reluctant party to try to back out or the realization that the parties had not really agreed on important issues like allocation, confidentiality, non disparagement clauses and the like.
Experienced counsel come to a mediation with draft settlement documents that can serve as a basis for the finalized documents.
He did so in spite of any relevant Rule 49 offers because the Defendant failed to disclose a highly significant document until 11 months after they filed the Defence. The defence relied upon a earlier contract presumably with language that limited the notice period. Only after the late disclosure of the second contract did the first contract become irrelevant.
The Judge relied on section 57.01(1)(f) in finding that higher than partial indemnity costs can be awarded where the ” losing party has engaged in behaviour worthy of sanction”
If you want a copy of this case send me an email at barryfisher@rogers.com.