In Maximenko v. Zim, 2024 ONSC 5540 Justice Brownstone awarded 24 months notice to an almost 59 year old General Manager with almost 21 years service who was making approximately $160,000 / year .
In determining the appropriate bonus calculation for the notice period, the three year average was $27,725. However in the calendar year in which the Plaintiff was terminated ( March 2023) no one received a bonus.
This case was heard in September of 2024 and therefore the Judge had to deal with a year in which no bonus was paid and another year in which the bonuses had not yet been determined .
This how the Judge dealt with that issue :
[42] There is no evidence regarding 2024 annual bonuses. Zim’s suggestion of a 47 percent reduction presumes no annual bonuses will be payable for 2024. I do not accept that assumption. 2023 is the only year since annual bonuses were instituted that they have not been paid. I find it more likely than not that the annual bonuses will be payable for 2024. If this were not going to be the case, Zim is the only party that could have adduced that evidence. It did not do so. I therefore reduce the average bonus amount by 23.5 percent to reflect the lack of annual bonus in 2023.
My comments :
I would have thought that the better way to determine the bonus over the notice period would be for the remainder of 2023 ( 9 months ) she would receive no bonus, because nobody else did.
Then for the balance of the notice period ( 15 months ) apply either the pre 2023 three year average ($27, 725) or the three year average of 2023, 2022 and 2021 which is $22,663 .
This would have produced a bonus over the notice period of
$22,663 /12 X 15 = $28,328 as opposed to the $42,420 awarded by the Judge
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1) Share Purchase Agreement :
12. CONSULTING AGREEMENT
The principal of the Vendor, [Mr. Bouchard] agrees to enter into an employment contract which shall be for no less than 3 years on terms agreeable to both the parties based on the existing employment of [Mr. Bouchard] by the Vendor. Any probationary periods for [Mr. Bouchard] shall be waived.
2) Employment Agreement :
FCAPX may terminate your employment at any time for cause.
FCAPX may terminate your employment without cause at any time by providing you with notice, or pay in lieu of such notice, and any severance pay required by the Employment Standards Act.
In the event a temporary layoff is ever required, it may be implemented in accordance with the requirements of the Employment Standards Act.
The Judge first determined that on its face this was a 3 year fixed term agreement. However the law allows the parties to provide for an early termination provision, which it did.
However the Employment Agreement also contained this unusual clause :
“Any conditions included in the Share Purchase Agreement between Ally Engineering and FCAPX will supersede any related/relevant clause within this agreement.”
The Judge then simply said ” [58] I find that in the present case, the contract between the parties did not provide for without cause early termination of the three-year fixed-term.
My Comments :
It is unfortunate that the Judge did not articulate how that conclusion was reached. I assume that the the rationale was that because there was a clear contradiction between a 3 year fixed term contract vs an early termination clause, the superseding clause applied and the early termination clause was ignored.
If there was no superseding clause, would the result have been different?
Another way to invalidate this early termination clause was that it offended the Waksdale case, insofar as the agreement referred to just cause which is not the standard in the Ontario ESA. Furthermore the clause did not provide for the continuation of benefits during the statutory notice period and that too is fatal in Ontario. Although this was a BC case, the parties agreed that Ontario law applied.
If would like a copy of this case, email me at barry@barryfisher.ca
To book a mediation, go to www.barryfisher.ca
To access the Wrongful Dismissal Database go to www.wddonline .ca