Month: November 2017

Inflating One’s Position on Job Search Results in Reduction of Notice Period:

 

In Skov v G&K Services Canada ( 2017 ONSC 6752) Justice Diamond initially set the reasonable notice period for a 54 year old Customer Development Manager with 21 years service at 18 months.

However the Plaintiff had posted in his LinkedIn profile that he had held the position of Director of Process Improvement and Customer Development, a position which did not even exist. Furthermore the Court found that his actual position was not even managerial   and that by limiting his job search to only real managerial jobs, he had ” overshot” by only applying for jobs that he was not qualified for, therefore  he  had  failed to conduct a reasonable job search.

His notice period was reduced by 2 months to 16 months

Two Plaintiffs Get Only Stub Bonus But Not Notice Bonus :

In Fulmar v Nordstrong Equipment ( 2017  ONSC 5529) Justice Diamond had a plaintiff who was terminated on December 12, 2016 and was awarded 10 months notice. His bonus arrangement called for discretionary bonus for based on the calendar year. The judge had no difficulty awarding him a bonus for 2016 as the ESA termination period alone ( 6 weeks ) would have taken him past the year end. However as the Plaintiff was awarded 10 months notice, his deemed end of employment was October 12, 2017, which was 2.5 months short of the bonus year end.

The judge denied the bonus over the notice period as he found that payment over that period was “not in the reasonable expectation of the plaintiff”.

Then in another case by the same judge and the same defendant (Singer v Nordstrong Equipment 2017 ONSC 5906) the judge awarded a 17 month notice period which covered all of the 2016 bonus year and 5 months of the 2017 bonus year. However the Judge decided against the Plaintiff saying as follows:

Issue #3         Is Singer entitled to payment of a 2017 and 2018 bonus? 

[40]           I have found that Singer is entitled to 17 months’ reasonable notice.  Singer further claims entitlement to a bonus that he would have received over that notice period (i.e. for all of 2017 and the first five months of 2018).  Singer argues that it is reasonable to forecast that his bonus over the 17 month notice period would have been at least equal to his 2016 bonus. 

[41]           As per my comments in Fulmer v. Nordstrong Equipment Limited 2017 ONSC 5529 (CanLII), I believe that Singer’s argument is overreaching.  The purpose of reasonable notice is to provide a terminated employee with sufficient time to locate comparable employment.  Historically, bonuses were earned and calculated at the conclusion of the defendant’s fiscal/calendar year, and no doubt granted on the basis of an employee’s positive efforts and contributions to Nordstrong East’s business. 

[42]           Subject to successful mitigation efforts, Singer’s employment with the defendant would have ended in or around May 2018.  The purpose of the defendant’s incentive plan is to maximize efforts to generate profits.  As in Fulmer, I do not find it to be within Singer’s reasonable expectation to be able to earn a bonus for the 2017 and 2018 fiscal years while he searched for alternative comparable employment. 

[43]           I therefore decline to award Singer any bonus for the 2017 or 2018 fiscal years. 

With the greatest of respect I think that this case is wrongly decided.

Why wouldn’t the Plaintiff believe that he would receive his total compensation during the notice period?

What if 90% of his income came from this bonus scheme, which is very common in the financial industry?

It is the Employer who decided to give pay in lieu of notice and not working notice as is required by law. Why should the employer benefit from their own decision to breach the plaintiff’s contract?

The law of damages is very simple, I learnt it in first year contracts.

In a case of breach of contract, the plaintiff is entitled to be put in the same position had the contract not been breached.

The Employer breached the contract by not giving reasonable notice of termination. The Plaintiff is entitled to every penny that he would have earned had he been given the opportunity to work out his notice period, including the bonus.

I am advised that these cases are being appealed.

 

Notice Only Starts From Filing ESA Form 1:

In Wood v CTS of Canada  Co. ( 2017 ONSC 5695, Justice Sproat held that in a mass termination under the ESA of Ontario that the employer only gets credit for working notice, under both the ESA and the common law of reasonable notice, from the date that the Form 1 is filed with the Ministry of Labour and then is posted in the workplace.

Furthermore, in any week of working notice that the employee works in excess of the maximum overtime ( usually 48 hours ) that week does not count as working notice.   In this case the Employer gave termination letters on April 17, 2014 giving them working notice ending March 27, 2015 , some 11 months. However all that working notice was useless as the Employer did not file the Form 1 until May 12, 2015.

Termination and Disability Interaction in a Fixed Term Contract:

In Schram v Govt of Nunavut ( 2017 NBQB 143 ) the Plaintiff  was terminated 18 months before the end of the fixed term in her contract. However 8 months later she became disabled and remained so until one year after the end of her fixed term contract.

The Court found that she was entitled to her full salary for the 18 months remaining in her contract, even though she would have been unable to work for the last 10 months. Moreover, for the 1 year after her fixed term contract expired and while she was disabled, she was entitled to receive her LTD payments, which was about 66% of her salary.

However she was not entitled to receive overtime pay from the date upon which she became disabled. 

Duty of Good Faith Applied In Interpreting Termination Clause:

In Mohamed v Information Systems Architects (ISA)  ( 2017 ONSC 5708) Judge Perell was faced with a termination clause in an independent contractors’ agreement that included a provision that said ISA could terminate the fixed term agreement if ” ISA determines that it is in ISA’s best interest to replace the Consultant for any reason. ”

As the same clause listed other grounds for termination like substandard performance , cancellation of project and breach of the agreement, the Court held that this clause was not only vague and uncertain but to interpret it to mean that this gives an unfettered right on behalf of ISA to terminate the Consultant was contrary to the general doctrine of good faith as an operative principle of contract . ( Bhasin v Hrynew 2014 SCC 71). As this provision was held to be invalid, he was entitled to be paid out the balance of his fixed term.