Month: September 2015

In Ross v IBM ( 2015 ABQB 563 ) A well paid full time sales executive  who worked independently based out of his home was terminated for just cause as he admitted that he spent 3 to 4 hours a week , during normal working hours, on his family business, which was unrelated to his work at IBM. He was not given any warning which the Court found was OK due to the seriousness and repetition of the conduct. He was an employee for approximately 6 months. He had falsely told his employer that the business belonged to his wife and that his involvement was minimal. IBM discovered his misconduct when the plaintiff accidentally “butt dialled” his IBM boss who then overheard him talking with a client in the family business. He had earlier told his IBM boss that he would be at a IBM client when in fact he was meeting with his family business client.

One lesson to be learnt from this case is to put a password on your phone, so that your chances of butt dialling your boss are minimized.

In Lau v RBC ( 2015 CarswellBC 1639) the Court found that the 30 year old Account Manager with 5 years service was entitled to 9 months notice plus $30,000 in  aggravated damages due to the unfair investigation. Problems with the investigation included: relying upon hearsay upon hearsay, not interviewing the complainant, not retaining video evidence, and filing a false and misleading report with the Securities Commission regarding the reason for termination. the Court also ordered the employer to file a new report with the Securities Commission withdrawing the false allegations.

Gordon v Altus Group ( 2015 ONSC 5663 ) the Court awarded punitive damages against an employer whose conduct was ” “outrageous’ and “mean and cheap”. The allegations of cause were found to have no merit but the Employer’s position the was that even so the termination provisions and the non compete provisions were still in force. The Court agreed with this analysis . However, because the Employer did not pay the severance required in the contract ( 9 months) but insisted on compliance with the non compete, the judge awarded $100K in punitives as ” Now, there is no free lunch in this world and Altus cannot expect to have one.”

The Defendant had also counterclaimed for breach of fiduciary duty and claimed actual damages of 1 million dollars plus punitive damages of $100,000. The Court found that the counterclaim had no merit but interestingly awarded the same quantum of punitive damages against the defendant as the defendant had claimed against the plaintiff . I guess that the judge considered what was good for the goose was good for the gander.

In Zoldowski v Strongco,( 2015 CarswellOnt 5485) Hood J. determined that a 39 yr old clerical employee with 17 years service was awarded 14 months notice. The judge agreed that the character of employment is less important ( quoting OCA in DiTomaso v Crown Metal 2011 ONCA 469). Hood said ” If anything, employees with a particular marketable skill are more valuable to employers and should have a easier time finding employment. The plaintiff herself is a case in point. Her skills were vulnerable to automation and she was replaced with a computer. ”

Query, on the assumption that a lousy employee would probably have a harder getting a job than an excellent employee, shouldn’t the lousy employee get a longer notice period than the great employee. Or , in other words, should not the schmuck get a longer notice period than the star?

 

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.

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.

 

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.

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.” 

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.

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).