Dissection of ESA Clause Voids only part of Clause:

In Riskie v Sony ( 2015 ONSC 5859 ) a long service employee  signed a fixed term contract after 25 years of employment which expired in 8 months but also had a early escape clause allowing either party to terminate upon 30 days notice. Dunphy J. found the 30 day escape clause to be contrary to the ESA as the employee was entitled to 8 weeks termination pay but held that the defect did not invalidate the balance on the clause, and since there was nothing wrong with a 8 month fixed term contract , the doctrine of reasonable notice did not apply.

The Employer also paid the employee his ESA  severance pay after the contract had expired. The employment agreement was silent on the issue of severance pay, which the plaintiff tried to use as further ground to invalidate the fixed expiry date in the contract. However the Court held since the contract did not seek to actively exclude severance pay, a mere absence of reference to it did not invalidate the whole clause.

At para 68 the Judge said ” A provision which seeks to contract out of the law is unenforceable ; a provision which merely promises to obey is superfluous.”

It is important to note however that what was at stake was not a normal ESA only termination clause, rather this was a fixed term contract which expired on its own volition. The statutory consequence of terminating a fixed term contract of an employee with more than 5 years service is that the person  is entitled to payment of his severance pay, as severance pay cannot be paid by way of working notice.

If this had been a termination clause which only referenced having to give the employee termination pay and was silent on the issue of severance pay and/or benefits,  I do not think that this case would apply as many cases have held that a failure to mention all of the statutory payments on termination can be fatal to the clause.

Senior Pastor with two years service gets 12 months notice :

In Kong v Vancouver Chinese Baptist Church ( 2015 CarswellBC 2150) the BC Supreme Court  awarded a older Senior Pastor with just over 2 years service a notice period of 12 months and also the sum of $30,000 for mental distress caused by the manner of the dismissal. The Court seemed to be influenced in awarding 12 months notice that the written employment contract indicated that after a 12 month adjustment period the employment would become “permanent” and that ” generally speaking , for a senior position, one would expect the notice period to be at least as long as the adjustment period”.

The ” adjustment period ” would seem to be akin to a probationary period. Does this mean that an employee with a 6 month probationary period should get at least a notice period of at least 6 months if he is terminated after the probationary period? That proposition would come as a huge surprise to most employers and employees in Canada.

This case is just another example of the difficulty in assessing notice periods for short service employees, especially those whom the Courts view as holding senior positions as this generosity towards short service employees is not generally found when dealing with middle and lower ranked employees.


Deaf Clerical Employee Awarded over $100,000 for Various Breaches

In Strudwick v Applied Consumer ( 2015 CarswellOnt 12137 ) Dow J. awarded a 57 year old clerk of 12.5 years a notice period of 24 months, $20K for human rights , $19K for intentional infliction of mental distress, and $15K for punitive damages. The Court reviewed the conduct of the employer once the employee became deaf which then lead to her dismissal. There was a complete refusal to accommodate her deafness, including refusing to assign a person to notify her when a fire alarm went off or even allowing her to reverse the direction of  her desk so that she could see people entering the office.

The total judgement came to $109,940. The Plaintiff indicated that her full indemnity costs were $179,625. The Court awarded only $40,000 in costs as the Plaintiff spent too much time on the motion itself, which was actually a  motion for default judgement. Thus the total amount awarded to the Plaintiff was $149,940. If her lawyer actually charged her what he said he had incurred as time, then the plaintiff would owe her lawyers an the sum of $29,686. Hard to see how this case benefitted the plaintiff.

Perhaps this occurred because the Plaintiff’s position before the Court was that she should receive a notice period of 8 years and 5 months, because that is when she would  turn 65 and with her disability it is highly unlikely that she will ever obtain alternative work . The Court awarded her the highest end of the notice period, namely 24 months.

The Plaintiff may have more success had she applied the human rights measure of damages rather than the wrongful dismissal analysis. In the human rights analysis , you put the person in the same position they would have been had the discrimination not occurred. In this case had the employer properly accommodated her and not fired her because of her disability, she would presumably still be working there. The OHRT certainly has the power to reinstate an employee with full back pay and since the Court can enforce human rights just like the Tribunal , this would have been a great time to see if the Court would have exercised that power. Even if the Court  would not have reinstated her they still could have awarded damages equal to what reinstatement would have achieved. This type of future damage award is routinely given in personal injury cases to compensate for future income loss.  There is no rational reason why the same approach could not be applied in human rights cases.

The Ontario Court of Appeal later increased the damages substantially from a total of $109,940 ( excluding costs ) to $246,049 ( excluding costs) on the basis that the amounts awarded, other than notice, were inadequate given the outrageous conduct of the employer. However the Court did not increase the trial judges award for costs of $40,000 and awarded a further $20,000 for costs of the appeal.

Thus at the end  of the day , the Court awarded the plaintiff the sum of $304,049 for which her lawyer said he will charge her , for  the trial only, the sum of $179, 625. This means that before paying for the appeal, the plaintiff is up $124,424. Even if she was only charged say $25,000 for the appeal, this means that she will net maybe $100,000.

The cost to the employer ? The judgement of $304,049 plus their own lawyer ( maybe $150,000) for a total cost of around $450,000.

Employee did not Fail to Mitigate by Refusing Defendants’ Offer to  Re-employ;

In Fredrickson v Newtech Dental Labs ( 2015 BCCA 357) the Court of Appeal  found that an employee in a small four  person company was not required to accept the offer of re-employment after she was laid off because :

a)  The offer of re-emeployment did not fully compensate her for the time that she was laid off ( it was short a months pay )

b) The trust between the parties was broken in that the employer had secretly taped conversations that he had had with the plaintiff on two occasions and when the owner told a co-worker that he thought that the plaintiff would be too embarrassed to accept his re-employment offer.

The Court emphasized that trust was a two way street.

“29.  Independent of the above, I am of the view that the trial judge was clearly wrong in failing to reflect the mutuality of trust, in the context of this employment, inherent in the relationship between employer and employee. The pertinent question when mitigation is in issue was described by Justice Bastarache as whether “a reasonable person in the employee’s position would have accepted the employer’s offer”. To determine whether this is so, in my view requires a judge to consider the full nature of the employment relationship. This includes the obligations of good faith or fidelity on the part of both the employer and employee, consistent with the nature of the work and the workplace. Most frequently questions of good faith, fidelity and fair dealing are questions that arise in the context of allegations of cause for the employee’s dismissal. The integrity of the employment relationship goes further, however. Just as trust of an employee, in the circumstances of the employment, is an important aspect for the employer, so too trust of the employer is important.” 

Court Upholds Repayment of Training Fees Provision:

In Langford v Carson Air ( 2015 BCSC 1458) the BC Supreme Court awarded the employer $23,000 as a result of the employee agreeing at the time of hire to reimburse the employer for training costs if she were terminated in the first 2 years. The plaintiff underwent intensive pilot training in the USA but then failed to pass her probationary period. The plaintiff sued for wrongful dismissal and lost while the defendant counterclaimed for the training costs and won.

Three Family Companies Found to be Common Employers:

In Dear v Glamour Designs ( 2015 ONSC 5094)  the Ontario Superior  Court found that the fact that the ” family business was split into three segments should not be the cause of injustice to Dear who was continuously employed by that common employer ” The Court noted that the father was heavily involved in all of the companies  and  all the companies operated out of the same physical space.  The Plaintiff salesman was 66 years old and  had 9.7 years service . He was awarded 12 months reasonable notice.

This trend of the Court to see through corporate structures and find common employer status for employment purposes was also recently discussed by the OCA in King v Danbury Sales ( 2015 CarswellOnt 6310).

Employee Abandons Employment by not Following STD rules :

In Betts v IBM ( 2015 CarswellOnt 12779) the employee went off on sick leave for depression. Despite repeated warnings and actions by the insurer and the defendant , the plaintiff did not follow the STD rules, failed to follow through on appeals and required medical reports and left the province he worked ( NB ) and moved to Ontario to live with his girlfriend. The Court found that he had abandoned his employment after 8 months of not being at work.

Court awards bonus over notice period even when it is discretionary :

In Lederhouse v Vermilion Energy ( 2015 CarswellAlb 1102 ) the Court awarded the bonus over the notice period even when it was expressly discretionary as the ” the discretion must be similarly exercised reasonably , on the basis of objective criteria allowing for positive and negative contingencies ” . The plaintiff was awarded  a $49,906 payment, which was the average over the last 3 years.

Supreme Court of Canada agrees to hear appeal in Wilson v AECL

The SCC  gave leave to the Plaintiff’s to appeal the Federal  Court of  Appeal in this ground breaking case regarding unjust dismissal under the Canada Labour Code.  In the lower Courts it was held that a dismissal without just cause   was not unjust if the proper severance was paid, which was contrary to decades of  Canada Labour Code adjudicator jurisprudence which held that only a dismissal for just cause could avoid the section’s remedies, including reinstatement. This decision will be of keen interest for all those in the employment law bar as the Federal Court decision has made this unjust dismissal legislation a  less useful remedy as in most cases the employee would be better off with a civil action for wrongful dismissal if the reinstatement option is not realistically available under the Code.

Court Upholds 3 Year Fixed Term Contract

In Alsip v Top Rollshutteers Inc. the BC SC upheld the following language as constituting a fixed term contract:

” The position is full time and permanent. Your compensation will be as follows: A three year employment contract”.

The Employer argued that this meant a maximum of three years of employment and could be terminated sooner on reasonable notice. The  Plaintiff was  terminated after 1 year. The Court  awarded damages for the the remaining 2 years in the contract.

As the Employer had drafted the contract, the Court applied the legal doctrine that read any ambiguity against the author of the document.