Barry Fisher's Employment Law Blog

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

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

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

My Comments :

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

For mediation dates, go to www.barryfisher.ca

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

The Master looked the the following issues :

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

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

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

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

For my mediation dates, go to www.barryfisher.ca

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

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

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

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

The Court allowed these questions as set out below.:

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

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

My Comments :

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

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

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

For mediation dates, go to www.barryfisher.ca

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

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

This is what the Court ruled:

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

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

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

My Comments:

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

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

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

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

If you would like to book a mediation, go to www.barryfisher.ca

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ever since Howard Levitt’s article came out a week ago I have been swamped with enquiries from employment law lawyers on this issue .

I would like to state the following:

1. I AM NOT A TAX LAWYER. I thought I wanted to be when I articled at Stikeman Elliot but they convinced me I was not cut out for it .

2. The source material on this issue is next to impossible for the average non tax lawyer to understand.

3. I have relied on learned blogs from other people who actually can talk tax ( which is not English )

4. The first thing I learnt is that before you even get into this issue , you have to determine if this is an ” Avoidance Transaction” which is defined as” a transaction if it may reasonably be considered that one of the main purposes of the transaction, or of a series of transactions of which the transaction is a part, is to obtain a tax benefit.”

So is the main purpose of a wrongful dismissal action to obtain a tax benefit ?

Answer: NO. The main purpose of a wrongful dismissal action is to move money from the employer’s pocket to the ex employees’ pocket.

It looks like the purpose of this section of the ITA to to catch those transactions which have no real commercial value other than the tax benefit. In other words, absent the tax benefit, would anyone reasonably go through with this transaction ?

Clearly wrongful dismissal actions would and have existed regardless of the use of general damages. Therefore obtaining a tax benefit by using general damages may not always be in strict compliance with the ITA, but it does not appear to be an Avoidance Transaction that is required to be reported.

Remember, I am not a tax lawyer. This could be wrong.

I welcome any comments or new material on this important issue.

In Tan v Storstac ( no citation provided ) Justice Dinnen had a situation where the Plaintiff received a judgement for $35,886 which was considerably better than the Plaintiff’s Rule 49 offer of $23,000 made back in March of 2021.

The Judge then awarded costs of $35,000.

Lets do some math :

If they accepted the Plaintiff’s Rule 49 offer it would have cost them only $23,000 plus their own costs to date, say $5,000 for a total of $28,000

Instead they will have to pay :

$35,886 for the claim
$35,000 for the costs award
$23,761 for their own lawyer

Total : $94,647

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

If you wish a mediation, consult my calendar at www.barryfisher.ca

In Cumberland v Maritime College of Forest Technology ( 2023 NBKB 065) Justice DeWare awarded a 7 year, 52 year old, Academic Instructor, a 7 month notice period .

This  case, which went on for 9 trial days, focused largely on the various grounds of  just cause. In the end this is what the Judge had to say on the issue:

CONCLUSION ON JUST CAUSE DISMISSAL

[72] In the event Mr. Marshall or Mr. Davies had provided clear warnings regardingnhis conduct to Mr. Cumberland throughout 2018 and 2019, they would have been successful in convincing this Court that Mr. Cumberland was dismissed for just cause.

Mr. Cumberland’s communications with several students are completely inappropriate regardless of the culture of the academic institution. Mr. Cumberland’s interactions with several of his colleagues are equally unacceptable. Mr. Cumberland’s insubordination demonstrated towards both Mr. Davies and Mr. Marshall is simply untenable. All these issues, if properly brought to Mr. Cumberland’s attention, and if likely ignored by Mr. Cumberland, would have easily paved the way for a just cause dismissal. However, Mr. Marshall and Mr. Davies did not take that approach and in so doing deprived Mr. Cumberland of the ability to curb his behaviour and address their concerns. Given the rigidity of Mr. Cumberland’s mindset, I find it unlikely that he could have adequately addressed their concerns if properly advised; however, he was never given the chance, and he is therefore entitled to the benefit of the doubt. For these reasons alone, I do not accept the College has met the burden upon them to establish just cause for the dismissal.

My Comments:

If there was ever a case which showed the importance of due process in proving just cause, this is the one.

In the olden days when I actually practiced law like a real lawyer, I would be asked by my employer client what it would take to build a case for just cause for a particular employee who they were having problems with.

I would ask them a simple question. Is the employee a keeper?

In other words, is this an employee who you think can improve and that you want  to improve?

If yes, then you do not need me as I know zilch about how to manage employees.

If the answer is no, then let’s look at what it will cost to terminate without alleging cause. Otherwise you will have to :

1. Continue to pay this employee for the period it will take for you  to document sufficient warning letters. This could take months. In the meantime this incompetent employee will likely cause you to lose money, clients and have other employees quit.
2. Assuming that you  may have just cause but not wilful misconduct , you will still have to pay out the ESA amounts.
3. You will probably be sued. You will have to pay me and we will probably settle and you will then pay out more money.

In this case the award was $48,644 for the claim and $6,700 for costs.

The cost to the Defendant of this action would likely be as follows :

Paid to Plaintiff and his counsel                          $55,344

Paid to Defence counsel for 9 day trial             $45,000

( I am assuming $5000 per  day of trial )

Total                                                                        $100,344

 

The Recovery for the Plaintiff may be as follows:

Received from Defendant                                  $55,344

Less Lawyers Contingency Fee of 25%.          $13,836

Then Less tax withholding of 30%                   $12, 452

Net Received by Plaintiff                                    $29,056

If the Plaintiff received any EI during this period, the net recovery would even be less.

If the termination had been without just cause, a likely settlement would be around 6 months lump sum. That would have cost the Employer $45,500 and the the Employee would have received  after tax around $31,850.

Instead the Employer probably  paid $100,000 and the employee probably got $29,000.

Does this make sense to anyone ?

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

If you like to book a mediation or an arbitration, go to www.barryfisher.ca