In Jimmy How Tein Fat v. PRGX Canada Corp., 2023 ONSC 6374, Justice Callaghan ruled on many issues that commonly arise in wrongful dismissal actions and therefore provides a useful guide to the leading cases and what they stand for.
Summary Judgement :
I find this case is appropriately resolved by summary judgement. There are no factual issues that would be assisted by a trial and there were no submissions by either counsel that a trial would assist in my fact finding. The parties state that they have called all the evidence they intend to call. As can be seen from the decision below, there were no credibility issues that were required to be resolved. The dispute here is largely how the law is to be applied to the facts and any inferences drawn from those facts. I am satisfied that I am able to apply the facts to the law. As a result, there is no genuine issue that requires a trial and there is no benefit to requiring the parties to endure the delays and costs of a trial. I am satisfied that I can reach a fair and just resolution of the matters in dispute based on the record before me.
Reasonable Notice :
[20] Based on the factors above and having reviewed the multitude of case law that has been presented to me, I find that a 24 month notice period is warranted. Mr. How was a loyal employee for 29 years. He is (as one judge referred to it) “in the twilight of his career” at the age of 63 which makes finding replacement employment harder. He was a senior executive in a niche industry who was paid a significant sum. At his age, his prospects of obtaining another employment opportunity commensurate with the seniority and remuneration with what he had at PGRX is understandably dim. As articulated to by Chief Justice McRuer, setting any notice period is inherently a fact driven exercise. Nonetheless the bulk of the case law presented to me, particularly in the appended charts filed with the plaintiff’s factum, support my conclusion of a 24 months notice period.
Calculation of Base Salary:
[26] Mr. How received merit increases most years. In his 2021 notice, he was advised that his base salary was $413,753.60. This salary number does not require any deductions, in contrast to the method proposed by the defendant. I am satisfied that in calculating the salary over the 24 months, that $413,753.60 per annum is the correct amount.
[27] In addition, I disagree with the defendant’s calculation of a four-year average. Historically, in most years, Mr. How’s base salary increased. There is no evidence to suggest that his salary would go down during the notice period. In such circumstances, taking a four-year average would unnecessarily reduce the salary component of his damages for the notice period. As a result, I accept that the proper calculation of damages for Mr. How’s loss of salary over the 24 months is $827,507.20.
Bonus:
[38] In looking at the entitlement of a bonus, Matthews requires me to answer two questions: (1) would the employee have been entitled to the bonus or benefit as part of their compensation during the reasonable notice period? and (2) if so, do the terms of the employment contract or bonus plan unambiguously take away or limit that common law right?
[40] The Supreme Court held that this provision was not sufficient to oust the common law right to damages. Phrases requiring an employee to be “full-time” or “active” were also not sufficient to remove an employee’s common law right to damages. The reason for this was stated by Justice Kaiser as follows:
Yet, it bears repeating that, for the purpose of calculating wrongful dismissal damages, the employment contract is not treated as “terminated” until after the reasonable notice period expires. So, even if the clause had expressly referred to an unlawful termination, in my view, this too would not unambiguously alter the employee’s common law entitlement.
[41] The terms of the PGRX’s plan do not, in my view, exclude Mr. How’s entitlement to a bonus during the notice period. For purposes of compensation in lieu of notice he “is employed” and his employment is not at an “end”. Rather, he is to be treated as an employee during the notice period and that includes payment of the bonus.
Mitigation:
[45] However, the onus is on the defendant to establish that the dismissed employee both failed i) to take reasonable steps to search for a job and ii) that a job comparable to the job lost by the employee could have been found. As stated by the Supreme Court of Canada in Evans v. Teamsters Local Union No. 31, 2008 SCC 20 (CanLII), [2008] 1 SCR 661, at para 30:
This Court has held that the employer bears the onus of demonstrating both that an employee has failed to make reasonable efforts to find work and that work could have been found (Red Deer College v. Michaels, 1975 CanLII 15 (SCC), [1976] 2 S.C.R. 324).
[56] Ultimately, mitigation is a two-part test. The second part of the test requires PGRX to establish that Mr. How could have found comparable employment. As stated in Lake the issue is “whether the [the employer ] had proven that, if reasonable steps in mitigation had been taken by the [employee], she would have found a comparable position during the reasonable notice period” (at para 34). PGRX has led no evidence that a comparable job was available with any of the competitors at any time since Mr. How’s termination. PGRX clearly knows the players in the industry and, if comparable jobs were available in the industry, that evidence could have been called. Moreover, there was no evidence adduced by PGRX of any comparable jobs suitable for Mr. How since his termination. The onus was on PGRX to establish both prongs of the test. Regardless of whether Mr. How acted reasonably or not at the outset of his search, the defendant has failed to establish that he could have obtained a comparable job had he conducted the search as proposed by PGRX.
[57] I do not find that PGRX has met the onus of establishing that Mr. How failed to mitigate his losses.
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