Category: Uncategorized

New Provider under the ESA Building Services Provider Also Responsible for Common Law Notice :

In  Kondaj v. Crossbridge Condominium Services Ltd., 2025 ONSC 3905,  Justice Koehnen had a situation where a 42 year old Condo Manager of 3.5 years service was terminated by the new provider when they took over the management contract.

The Plaintiff sued both the previous provider and the new provider. The Court had to figure out which employer was responsible for common law notice as it is clear from the ESA that the new provider was solely responsible for  statutory termination pay and severance pay based on the employees total years of service. The new provider had in fact paid those ESA amounts.

The Judge found the new provider was also on the hook for common law notice.

This is what the Judge said

[32] In my view, interpreting the Act to impose common law notice obligations on the new service provider is more consistent with the legislator’s intention to stabilize employment than an interpretation that places the obligation on the former provider. 

[33] Assigning common law notice to the new service provider creates a stronger incentive for the new provider to retain the existing on-site employees because failing to do so would expose the new provider to significant financial liability. Retaining those employees would not impose any immediate additional cost on the new provider. 

[34] Conversely, placing the burden on the former provider offers little incentive for the new provider to retain staff. If anything, it may incentivize the new provider to terminate existing employees. If the new provider takes on existing employees and terminates them at some later point, there is no doubt that the new provider would be liable for common law notice. Subsection 10(2) of the Act requires notice be calculated in a way which includes the employee’s service with the old provider. If Duka were correct, the new provider could avoid that risk by simply paying statutory termination and severance, amounts that are typically much lower than common law notice, thereby avoiding the risk of common law notice if it had to terminate those employees at a later point in time.

[35] Moreover, such an arrangement could be exploited to harm competitors: a new provider could force the former provider to bear the cost of common law notice, even when the contract was lost through no fault of the old provider. This would undermine employment stability in the building services sector, an outcome clearly at odds with the legislator’s intention. 

[36] Dividing liability between old and new service providers would also lead to unnecessary complexity. It would require employees to pursue the new service provider for statutory benefits and the old service provider for common law benefits. Forcing workers to assert their legal rights in multiple, deliberately complex legal regimes is inconsistent with the legislator’s intention of protecting vulnerable employees. 

In a assessing a notice period of 10 months the judge took into account not only the usual Bardal factors of age, length of service and character of employment, but also relied heavily upon two other factors :

a) the poor economic market for condos in the Toronto area.

b) the fact that the Plaintiff took 11 months to find a job after applying for 170 jobs.

My Comments:

I have often wondered why if the purpose of determining reasonable notice is to determine how long a  person in similar circumstances should take to get a new comparable job, and that person has diligently looked for a job,  we simply don’t look at long its actually took for the Plaintiff to get a comparable job and award the notice period accordingly.

Instead we first come up with this notional notice period and only then look at. what actually happened. If the Plaintiff was unemployed longer than the notional notice period, he or she is simply out of luck. But if the Plaintiff finds a job in less time than the notional notice period, then their damages are reduced by the mitigated earnings.

This is how this Judge dealt with that issue :

[92] In my view, the cases the Plaintiff relies on more accurately reflect the factors at play in this case, especially the downturn in the condominium market in Toronto. As noted, it took the Plaintiff 11 months to find new employment. Although the amount of time it takes a plaintiff to find re-employment is not the determining factor because it would place excessive weight on the plaintiff’s subjective circumstances, at the same time, the underlying purpose of common law notice is to give the terminated employee financial support during the period that it takes to find a new position. The particular circumstances of the of the job market a plaintiff faces cannot therefore be ignored. There was no suggestion that the Plaintiff was “taking time off” after his termination. As noted earlier, I find that the Plaintiff made diligent efforts to find new employment by applying for a significant number of jobs, across a wide geographical area and at varying levels of responsibility. In my view the 10 months notice awarded in Frederiks and James is equally appropriate to award here. 

I find the comments about the ” particular circumstances of the job market a plaintiff faces” particularly interesting.

Rarely do I see either lawyer lead actual relevant evidence on this issue, even something as basic as the rate of unemployment in the locality of the plaintiff at the relevant time. Perhaps there are even more detailed studies or stats on particular industries. For instance,  now that we are facing the Trump tariffs in particular sectors of our economy, it would seem logical that someone is probably collecting stats on the rate of unemployment and layoffs  in the car parts sector. Surely this would be helpful evidence to lead in a wrongful dismissal case as opposed to some 10 year old case when the economy may have been quite different.

I should note that the Plaintiff’s  lawyer in this case was Kimberly Sebag of Lecker and Associates. My son, Matthew Fisher, is a partner in that firm.

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

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Nova Scotia Judge Finds Termination Clause Ambiguous Because It Refers To Severance Pay :

In Brocklehurst v Micro Companies Limited( 2025 NSSC 192) Judge Chipman had to deal with this termination clause:

Termination Without Cause:

Your employment may be terminated by Micco without cause, upon provision to you of the following payments:

(i) any portion of the annual salary and accrued vacation pay, if any, that has been earned by your [sic you] prior to the date of termination by [sic, but] not yet paid;

(ii) continued participation in Micco group health plan for such time as may be required under Nova Scotia Labour Standards legislation; and

(iii) only such minimum notice of termination, or pay in lieu thereof, and severance pay (if applicable) to which you are entitled under the Nova Scotia Labour Standards legislation.

The Judge found that this close was unenforceable due to ambiguity for the following reasons :

  1. “the qualifier, “to which you are entitled under the Nova Scotia Labour Standards legislation”, may be read such that it does not apply to the notice of termination. This qualifier may be read to only apply to the severance pay.  Accordingly, the termination provision does not clearly limit the Applicant’s entitlement to common law notice.”
  2. There is no “severance pay ”  under the Nova Scotia Labour Standards Code, therefore the reference to that could be referring to common law notice  as the term “severance pay” is a colloquial way of referring to common law notice.

My Comments :

The first reason given by the Judge I understand on an intellectual basis but even to me it seems a bit of a stretch.

However the second reason is fascinating because that is common language used in Ontario where the ESA refers to both termination pay and severance pay as they are two distinct statutory entitlements.

This case again reminds us that it always risky to try to adopt termination clauses that are not specific to one jurisdiction.

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

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Demotion and Pay Cut Upon Return From Mat Leave Costs Employer Big Bucks :

In McFarlane v. King Ursa Inc., 2025 ONSC 3553 , Justice Akazaki had a situation where an Exec VP with 4 years service making $317,000 before her maternity leave was offered upon her return a demotion to her previous position of Associate Partner & VP with a reduced salary of $210,000.

The Judge found this constituted a constructive dismissal . This aspect is not surprising given that the wage reduction was almost 30% and the failure to reinstate her to her former position was a violation of the ESA.

What is surprising is that she was awarded 12 months notice . This is what the Judge said

What struck me as the determining factor, aside from her age, length of tenure, and executive position, was the availability of comparable positions. King Ursa promoted the plaintiff rapidly into the senior position. Evidently, Ms. McFarlane acquitted herself both in terms of hard work and entrepreneurial energy. The fact that she could only secure contract work despite being an expert in marketing analytics meant she knew how to look for a comparable job but was unable to secure one. I appreciate there is a strong ex post logic to this reasoning, but I cannot ignore her inability to find comparable employment as a factor tipping the scales in favour of a longer term. I would therefore award damages based on a twelve-month notice period. 

The second surprising aspect of this case was that the Judge awarded punitive damages of $40,000. This is what  the Judge said :

The circumstances of her isolation from the company during the extended maternity leave contributed to a need for heightened sensitivity and professionalism in the negotiation or renegotiation of her compensation or severance, based on the company’s undeniably poor financial performance. These facts lead the analysis away from a discrimination claim and into the handling of the employee, for the purposes of the punitive and moral damages inquiry.

I appreciate the attempt to impose a salary cut was not to push her out but to implement a cost reduction scheme. However, there was no justification of imposing a demotion. The fact that the demotion may have arisen from a word processing error does not excuse the employer from the impact on the employee. Any employee, especially one whose executive status is closely tied to her identity and self-esteem, would react negatively to a document containing a demotion.

As to the quantum of moral damages, Doyle provides some guidance in that the range in employment law has been quite wide. In the circumstances where the demotion appears to have resulted more from carelessness than malice, I would assess the quantum in the middle of the range, in the amount of $40,000.00. 

My Comments:

It seems what upset the Judge in this case was the demotion from Executive Vice President Media & Analytics to Associate Partner and Vice President .

In the opening paragraphs of the decision the Judge said:

Nevertheless, the attempt to demote her, separate from a reduction of her salary, had no economic basis and therefore could be construed as callous and unduly insensitive. The attempt to demote her struck the employee’s vulnerability as a person who had built her professional identity and status through thought and industry. I will therefore award Ms. McFarlane moral damages. 

This employer would have been better off cutting her salary ( which is what the other working executives lived with) but not touching her title.

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COVID Layoff Case Covers Many Issues:

In Richard Turcotte v. Grenville Management Inc., 2025 ONSC 3087,  Justice Akazaki had a situation where a 14 year Service Tech was given a temporary layoff notice as a result of the CVOID pandemic.

Here is the relevant chronology ;

March 5, 2021: Temporary Layoff Notice up to 35 weeks

November 5, 2021 : As a result of a medical condition, the Plaintiff is no longer able to work

January 14, 2022: Employer advises Plaintiff that he is now on Infectious  Disease Emergency Leave (IDEL)

July 30, 2022 : IDEL Expires, Plaintiff not recalled

February 22, 2023 : Plaintiff issues lawsuit claiming termination as of March 5, 2021

March 9, 2023: Discoveries held where Employer learns that the Plaintiff cannot work due to illness.

March 22, 2023: Employee issues a Notice of Recall . Plaintiff does not return.

These are the issues the Judge decided:

  1. Frustration: As the evidence did not reveal that the Plaintiff was totally disabled on March 5, 2021 when the layoff took place,  there was no frustration. The fact that the Plaintiff became disabled after the layoff is not relevant.
  2. Constructive Dismissal at Common Law: The Judge recognized that a temporary layoff is a termination unless it is part of the employment agreement that  a temporary layoff would not constitute a termination. In this case the Plaintiff’s employment contract contained an unusual cause, as follows 

    It is agreed that the Company reserves the right to ask you … to accept a temporary layoff, during which time you may be eligible for Employment Insurance in accordance with the relevant statutes.

    However, when the layoff occurred, they did not ask him to accept a temporary layoff, rather they told him that he was being laid off. He did however sign a document which stated ” I have read this notice and agree that my period of temporary layoff may continue for up to 35 weeks of layoff in 52 weeks .

    The Judge went on about how this was not really consent as for a number of reasons, however the facts reveal that the Company did not recall him for almost 25 months, so it hard to see how this issue was even relevant.

  3. Impact of IDEL Regulation on the Common Law : Simply put the IDEL regulation provided that putting someone on an IDEL layoff was not a constructive dismissal but Section 8(1) of the ESA also provides that no civil remedy of an employee is affected by the ESA. There was a series of cases back in the day that consistently held that the IDEL Reg did not overrule the common law and therefore a common law claim for contructive dismissal based on a temporary layoff is still valid. Th Judge in a lengthy and extremely erudite rendition of the law ( including a reference to BNA Act and a 1931 case involving fish)  agreed with the established line of cases that upheld the fact that the IDEL Reg has no effect on the common law .
  4. Length of Notice : It seems that the Judge thought that the normal notice period would be 10 months but because of the pandemic and the resultant difficulty in getting a job in his field, the Judge awarded anther 6 months notice for total of 16 months. This bump of 50% on the notice period because of the pandemic is much larger than previous cases have awarded.
  5. Mitigation: The Plaintiff did nothing to look for a job. However the Judge accepted the Plaintiff’s evidence that until he saw his lawyer about 12 months later, he actually believed that he would be recalled so why should he look for another job? After his illness in November, he was medically unable to work. The found that there would be no reduction in the notice period because of a failure to mitigate.

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

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Employer Cannot Rely on Hearsay Evidence to Prove Just Cause:

In William Williamson v Brandt Tractor Inc,  2025 ONSC  2571 Justice Akazaki had a situation where the employer was trying to prove just cause on the  basis of the cumulative misconduct principle. In order win such an argument, the employer must not only prove a history of disciplinary conduct but the the final incident ( the culminating incident ) was itself worthy of some discipline .

In this case the Plaintiff was a salesperson of tractors. The Plaintiff was dealing with a Customer who later complained to the Mr Clark, the Sales Manager that the Plaintiff had acted in an unethical and unprofessional manner. The Sales Manager made extensive notes of that conversation and testified about at the trial.

The Plaintiff admitted at trial that he and the Customer had a disagreement but denied any of his conduct was unethical or unprofessional.

The Defendant chose not to call the Customer as a witness.

This is what the Judge said :

Nevertheless, the evidence regarding the customer’s version and the grounds for being upset was entirely hearsay. The customer did not testify. Brandt could have summoned him. A negative credibility assessment of Mr. Williamson’s evidence and version of events does not amount to proof that the encounter went precisely as the customer claimed it did. The court had no means of testing the credibility of the customer’s account as related to Mr. Clark. Mr. Clark’s note satisfied neither of the requirements of necessity and reliability for admissibility of hearsay for truth of serious allegations: R. v. Khan, 1990 CanLII 77 (SCC), [1990] 2 S.C.R. 531, at pp. 546-48. The defence could have summoned the customer but did not do so.

[13]           What does the evidence of Mr. Clark’s email as a contemporaneous record of his telephone call with the customer reveal? At most, it proved the customer was upset and took his business to another branch. The court does not know whether the customer in fact went to another branch. It would have been easy enough to prove. The attempt to sell a unit that was still in production is not in itself wrong. In commerce, it is called pre-ordering. It would also have been reasonable to secure the customer’s signature on the purchase agreement, as a condition of holding his place in line. Sales personnel operate with varying degrees of pushiness. The customer may have found this annoying, but the employment status of a long-time employee cannot hang in the balance of a customer’s subjective interpretation of his conduct.

[14]           I did not believe much of Mr. Williamson’s evidence. I can accept Mr. Clark’s email for the purpose of establishing that Mr. Williamson had an encounter with the customer. He admitted that much. However, the court cannot rely on a record of an occurrence as proof that Mr. Williamson was in the wrong. The email and Mr. Clark’s telephone call with the customer do not rise to the prima facieproof of facts in the statement. Although Mr. Clark could have been under a duty to record what the customer said, the customer was under no duty to provide an objective account. This differentiates the evidence here from those of duty-bound record-keepers: Ares v. Venner, 1970 CanLII 5 (SCC), [1970] SCR 608, at p. 626.

[15]           The defendant therefore did not prove termination for just cause. Consequently, Mr. Williamson is entitled to damages commensurate with reasonable notice at common law.

My Comment;

In the olden days when I went to law school ( 1977 Grad of Osgoode) taking Evidence was mandatory. My understanding is that is no longer the case. I find that in my career as an arbitrator, there is an insufficient understanding both of the rules and the reasoning behind the rules of evidence. Lawyers are not the only ones who suffer from this lack of understanding. I have seen both judges and adjudicators let in evidence that should never be admitted under the guise that they will “give it the appropriate weight “.

Admissibility of evidence is fundamentally different from weighing the evidence. If the evidence is inadmissible, then it cannot be considered for any purpose whatsoever. It does not even make it to the scale to see if it has some weight.

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

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Employer Response to Vaccine Refusenik Must Be Proportionate:

In Paul v. Sensient Colors, 2025 ONSC 3127  Justice De Sa had a situation of a 10 year Sales Rep who, contrary to the Employer Policy, refused to provide proof of her COVID status. She did not claim any human rights exemption. The Policy clearly stated that refusal to follow the policy would result in dismissal for just cause, which is what the Employer did.

Having concluded that the Employer’s mandatory vaccination policy was reasonable, the Court went on to say this :

[68] When an employer terminates with cause for non-compliance with a vaccination policy, there must be a sufficient connection between the employee’s job responsibilities and the requirement to be vaccinated so as to justify imposing the ultimate penalty of ending the employment relationship.

[69] Clearly, in certain cases, a refusal to vaccinate may sufficiently undermine an employee’s ability to carry out their duties so as to justify dismissal with cause. However, this will not be true in every case.

[70] In this case, I am not satisfied that the termination of Ms. Paul was a necessary or proportionate response to her refusal to disclose her vaccination status.

The Judge then went on to consider the following factors in determining that discharge for just cause was a disproportionate  response to the Plaintiff’s refusal to comply with the Policy.

  1. 90% of her work time since the pandemic started was from home.
  2. During the pandemic her performance exceeded the job requirements.
  3. None of her 10 top clients required her to be vaccinated to do an on site visit.
  4. Prior to her termination and during the pandemic she continued to do on site visits with clients in Ontario with no problems.
  5. None of  her clients outside Ontario asked her to do an on site visit.
  6. She had no US based clients.
  7. She complied with all other safety requirements like masking.
  8. She was an overall satisfactory employee.
  9. Even though her job required that she attend certain meetings in the USA, the Employer could have arranged  much of the training in other ways.

If discharge for just cause was too extreme, what should the Employer have done ?

[78] A more proportionate response here may have been to review and revise Ms. Paul’s customer portfolio to the extent required, temporarily suspend her from customer-facing sales or even possibly put her on a leave of absence

She was awarded 12 months notice.

The Judge also noted that she was the only employee who refused to comply with the Policy.

Comments :

It seems that the farther we get away from the COVID era, the more lenient the Courts are getting in response to these types of cases.

Even though this Employee did not rely any human rights exemption, the Judge seemed to require the Employer to accommodate the Employee by requiring them to change  her job requirements so as to meet her desire not to be vaccinated.

However, the Judge also left open the option that they could have simply suspended her for the duration of the pandemic. This is consistent with a number of other COVID cases. I am not aware of any case where a suspension or a leave of absence in a COVID refusal case was held to be improper.

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

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Rejection of Offer of Alternative Employment Made before But Not After Termination Is Failure to Mitigate

In Brown v General Electric Canada ( 2025 MBCA 37 ) the Court had a situation where, as a result of a merger , the employee was offered a comparable  job with the new company. The Plaintiff refused the offer. The Plaintiff was then terminated. The new company did not renew the offer which was previously rejected.

The Court found that this refusal constituted a failure to mitigate .

This is what they said :

(c)           The judge discounted the significance of the timing of the Wabtec offer occurring before the termination because he drew an inference on the evidence that Wabtec would have re‑extended its offer to the plaintiff after the termination if there was any suggestion the plaintiff changed his mind, as Wabtec wanted the plaintiff to continue in his employment and took no steps to fill the position (see Brown at paras 55-56).

[36]      While the timing of a new offer of employment may be significant in the Evans analysis as to whether an employer can prove a failure by an employee to reasonably mitigate their loss, the factual context of whether reasonable steps have been taken to attempt to mitigate a loss is important (see 2438667 Manitoba Ltd v Husky Oil Limited, 2007 MBCA 77 at 17). Here there is an evidentiary basis to the judge’s finding that the precise timing of the offer of continued employment to the employee was not material to the question of mitigation, unlike the situation in cases such as Farwell v Citair, Inc (General Coach Canada), 2014 ONCA 177 at paras 20‑21 (see also Hickey v Christie & Walther Communications Limited, 2020 ONSC 7214 at para 81).

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Another American Based Termination Clause Bites the Dust :

In Boyle v. Salesforce.com, 2025 ONSC 2580 Justice Brownstone was faced with the following Termination Clause:

6 (b) Cause

The Company has the right, at any time and without notice (or pay in lieu), to terminate your employment under this Agreement for Cause. In the event that you are terminated for Cause, the Company’s obligation shall be limited solely to the payment of any portion of the Base Salary, and vacation pay, if any, that shall have been accrued by you prior to the date of termination.

Cause is defined in schedule A of the agreement as “any act or omission by you that would in law permit the Company to, without notice or payment in lieu of notice, terminate your employment.”

The company is regulated by different local laws where it operates globally. If there is a conflict in these laws, you should consult the Company’s legal department to resolve the conflict appropriately. In general, local laws will apply.

Except for certain non-U.S. jurisdictions, the Company’s employment relationship with all of its employees is one of employment “at will,” which means that employment may be terminated by either the employee or the Company at anytime, with or without cause. If you are located outside of the U.S. and have an employment agreement, the terms of those agreements will prevail if there is any conflict with the policies in this handbook. However, all other policies will apply.

The policies in the Global Employee Handbook are not a contract and that my employment is “at will.” This means that the Company or I can end my employment at any time with or without cause or advance notice.

The Judge found that this provision was illegal :

25]        In my view, applying the governing principles to this contract clearly results in the unenforceability of the termination provisions. There is no practical way that an employee in Ontario could be aware, when signing the contract, of the terms that would govern his termination. The ambiguity contained in the documentation, all of which Mr. Boyle was required to sign prior to commencing employment, is explained by Salesforce’s choice to use one contract for employees in many jurisdictions. Salesforce repeatedly claims to be able to terminate employment at will. It then says that this provision will not apply in certain jurisdictions outside of the U.S. If the employee is uncertain, he should consult the Company’s legal department. It is impractical to expect a potential employee, who has not yet started employment, to consult the future employer’s lawyer before signing an employment agreement to understand what kind of misconduct, if any, is cause for termination.

26]        I therefore find the provision is not compliant with the ESA, or at least ambiguous as to whether it is complaint, and is therefore unenforceable. Mr. Boyle is entitled to payment in lieu of reasonable notice.

My Comments :

This case illustrates the importance of designing specific termination clauses for each jurisdiction in which an employee resides and works. One size does not fit all. Especially Ontario.

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Settlement Agreement Where Tax Treatment Not Agreed Upon is Not a Binding Settlement:

In Brink v Xos Services (Canada), Inc., 2025 BCSC 658 (CanLII) Justice Hughes had a situation where the parties agreed on the settlement number

(  $441,667.00 USD ) but the defence offer was based on ” less statutory deductions” and the plaintiff accepted the offer on the condition that it be on the basis that it be treated as non employment income.

In Canadian terms this would be asking that the settlement funds be treated as ” general damages” which apparently attracts no taxation.

This is why the Judge ruled that there no settlement :

“However, the tax treatment of the settlement payment was a condition of fundamental importance to both parties. As an employee, the plaintiff was typically taxed at a rate of around 32% which, if applicable to the settlement funds, would result in a tax deduction of up to $143,300. The plaintiff sought the full settlement amount with no source deductions. The defendants offered to pay the settlement amount less applicable deductions, to avoid any negative tax implications for them. This is a significant gap that cannot be overlooked or resolved by resorting to common sense or common practice, as was discussed in Fieguth.”

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Ontario Court of Appeal Confirms Illegality of Termination Provision:

I previously reported on a case called De Castro v. Arista Homes Limited
in which the trial Judge found that the following clause breached the ESA ands therefore unenforceable:

“If you are terminated for Cause or you have been guilty of wilful misconduct, disobedience, breach of Employment Agreement or wilful neglect of duty that is not trivial and has not been condoned by ARISTA, then ARISTA will be under no further obligation to provide you with pay in lieu of reasonable notice or severance pay whether under statute or common law.

For the purposes of this Agreement “Cause” shall include your involvement in any act or omission which would in law permit ARISTA to, without notice or payment in lieu of notice, terminate your employment.”

The Employer had a somewhat convoluted interpretation of how this clause could be read to be consistant with the ESA.

The Court of Appeal said that the judge’s interpretation was correct.

What is interesting is what they said about the methodology of how Courts are to approach these cases.

[14]    Finally, the motion judge’s approach reflects a careful application of established principles governing the interpretation of employment contracts. Courts have recognized that such contracts are generally interpreted differently than other commercial agreements to protect the interests of employees: see Wood v. Fred Deeley Imports Ltd., 2017 ONCA 158, 412 D.L.R. (4th) 261, at paras. 26-28. Employees have less bargaining power than employers. Furthermore, employees are far less likely than employers to be familiar with the standards dictated by the ESA.

[15]    Because the ESA is “remedial legislation, intended to protect the interests of employees”, courts are to adopt an interpretation that best achieves this objective: Wood, at para. 28. That means an interpretation that “encourages employers to comply with the minimum requirements of the Act” and “extends its protections to as many employees as possible”: Machtinger v. HOJ Industries Ltd., 1992 CanLII 102 (SCC), [1992] 1 S.C.R. 986, at p. 1003. The contract is to be read as a whole, with any ambiguity construed in favour of the employee.

The Court of Appeal decision can be found at l(2025 ONCA 260).

In other words, if there are two possible ( presumably reasonable ) interpretations of a termination clause, we are to always favour the one that  favours the employee.

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