Employer Mislead GM as to Whether His Employment Would Continue after Sale and Pays Dearly For It:

In Gascon v. Newmont Goldcorp 2022 ONSC 2511 Justice Fregeau had a situation where a General Manager of a large mine was told that the mine was being sold but that his employment would continue with the new employer.

The trouble was that two months before the deal closed the employer decided that if the new owner would not hire the Plaintiff  then he would be terminated. They failed to tell him this. In fact even when they knew one week before closing that the new owners were not going to hire the Plaintiff, they failed to tell him .

The Court did not like this and made two rulings as a consequence of this:

1) He was awarded $50,000 for moral damages because their conduct was ” untruthful, misleading and unduly sensitive “.

2) The Plaintiff had regularly received a very significant discretionary Long Term Incentive ( LTI) every year around March of every year, part of which vested immediately. However in the year in which the deal closed ( on March 30th) they decided not to grant him a LTI because they knew they were going to fire him. This was found to be a unfair and discriminatory exercise of discretion as the bonus was intended to compensate him for his efforts in the past year.

This is what the Judge said :

[90] However, as noted by Wilton-Siegel J. in Chann v. RBC Dominion Securities Inc., 2004 CanLII 66310 (ONSC), at para. 79, the fact that the decision to terminate the employee’s employment had been made “did not remove the need to approach the process of decision making in the same manner as in past years. The [employee] was contractually entitled to have his remuneration determined on the same basis as in prior years and for other employees in the same year”.

[91] As this decision explains, Mr. Gascon was contractually entitled to have Newmont Goldcorp consider an LTI award in his favour at the usual time (the beginning of March according to Mr. Thornton) using the usual criteria that were applied to all other employees. It follows that Mr. Gascon may have been contractually entitled, despite the wording of the May 2019 Employment Agreement and his imminent termination, to an LTI award from Newmont Goldcorp in March 2020.

However, given the lack of evidence on this issue the Judge ordered a mini trial on the issue of both entitlement and quantum of the Plaintiff’s entitlement to the LTI award  for the year the Plaintiff had just completed.

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