Author: barryfisher

In Oriotakis v Pennisula Employment Services Ltd ( 2021 ONSC 998) Justice Dumphy had reason to comment on a number of topics relating to both the calculation of reasonable notice and how to calculate damages regarding commissions over a notice period.

1. Assessing Notice:  : Although the plaintiff had the fancy title of Business Development Manager , he did not supervise anyone and was actually a salesman. This is what the  judge said about the issue of how important is was to determine if this was a senior position .[8] The entire debate regarding the relative seniority or degree of responsibility of the employee’s position is, in my view, a product of an overly literal approach to the application of the so-called “Bardal factors” examined by our courts in considering the question of reasonable notice. These factors that are better understood as guidelines to approach the consideration of a problem rather than an exhaustive and mathematically determinative formula. For better or for worse, the determination of the level of reasonable notice at common law is a highly fact-specific exercise permitting few precise comparisons from case to case, an observation that does not preclude deriving helpful guidance as to appropriate ranges in particular. 

   [14] There are few questions more vexing than that of determining reasonable notice under the common law of the employment contract as it has evolved over the years. Difficulty is not a reason not to undertake the task nor does conflict in the jurisprudence render subjective a task that is intended to be undertaken objectively and on a principled basis. The fact of the matter is that the Legislature has had any number of opportunities to wrestle with the problem and lay down clear rules to be followed in all cases. They have not done so or, perhaps more accurately, they have consistently mandated only minimum standards leaving contract and the common law to fill in the remaining blanks. This indicates to me an implicit acceptance by the Legislature that the fact-specific analysis demanded by the common law remains a viable and even desirable means of approaching the question. 

   The Judge then undertakes a painstaking analysis of the various cases presented to him by counsel and comments on how they are similar or different from the case before him.

   This approach is a common judicial approach and has always troubled me. Howard Levitt years ago in his book counted 107 separate factors considered by the Courts in assessing reasonable notice. If there are that so many factors to consider, then there is simply no certainty or ability to predict an outcome. If every case of wrongful dismissal requires this intense examination, then how could any employer or employee reasonably determine what reasonable notice is  when the most important factor would seem to be the identity of the judge.

This is why, back in the 1980’s,  I started the Wrongful Dismissal Database so that the profession and the judiciary would have access to aggregate information that would give some guidance to determining reasonable notice and therefore over time would hopefully create more certainty over notice periods.

I suspect that lawyers use the WDD to find cases that support their position without showing the judge the full range of the report. This may result in the judge picking one extreme position over the other whereas the data would actually show that the average and or the mean of the cases would produce a less extreme result.

I would respectfully suggest that judges, on their own initiative , could ask counsel to produce a report such as the WDD in their submissions. I acknowledge that there may be other such programs but I admit to my personal bias. This would at least give the judiciary a broader and fairer picture of what comparable  cases have done in the past .

2. Importance of Age as a Bardal Factor: In this case  the Plaintiff was 56 but only employed for 2 years and 4 months. This is what the judge had to say on the relevance of the Plaintiff’s age.

In my view, it would be an error to make age the dominant consideration in arriving at a determination of reasonable notice in a case such as the present one. Such a reliance would create needless obstacles in the way of employees securing fresh employment at Mr. Iriotakis’ age and would be quite counterproductive in the long run. Age and the prospects of securing alternate employment are factors but these must be considered along with others and with a proper degree of balance. 

It seems the Judge was concerned that emphasizing age could have an adverse effect on the willingness of other employers to  hire other employees in the future. It does not seem that either parties led any evidence on this issue . What was in evidence is that no one questioned the plaintiff’s mitigation efforts and that it actually took him considerably more than the notice period to actually find a job. Perhaps age was a factor in that employers are often reluctant to hire older workers.

3. COVID Effect. The plaintiff was terminated in late March 2020 after the first COVID shutdown. This is what the judge said :

[19] I was asked to make findings about the job market and the possible impact of Covid-19 on Mr. Iriotakis. I have little doubt that the pandemic has had some influence upon Mr. Iriotakis’ job search and would have been reasonably expected to do so at the time his employment was terminated in late March 2020. However, it must also be borne in mind that the impact of the pandemic on the economy in general and on the job market, in particular, was highly speculative and uncertain both as to degree and to duration at the time Mr. Iriotakis’ employment was terminated. The principle of reasonable notice is not a guaranteed bridge to alternative employment in all cases however long it may take even if an assessment of the time reasonably anticipated to be necessary to secure alternative employment is a significant factor in its determination. I must be alert to the dangers of applying hindsight to the measuring of reasonable notice at the time when the decision was made to part ways with the plaintiff. 

Presumably this mean that if the termination had taken place later in the year when we all realized that COVID shutdowns were the new normal, that Justice Dunphy would have awarded a longer notice period. Will lawyers have to present evidence as to what people were thinking at the time of the termination a s to how long this COVID nightmare would continue ? How does even collect such evidence?

4. CERB : It is clear that CERB is not repayable to the government like EI is. Does the receipt  of CERB reduce the amount of wrongful dismissal damages ? This is what Dunphy J. said on this point :

[21] I agree with the defendant that CERB cannot be considered in precisely the same light as Employment Insurance benefits when it comes to calculating damages for wrongful dismissal. CERB was an ad hoc programme and neither employer nor employee can be said to have paid into the program or “earned” an entitlement over time beyond their general status as taxpayers of Canada. The level of benefit paid (approximately $2,000 per month) was considerably below the base salary previously earned by the plaintiff to say nothing of his lost commission income. On balance and on these facts, I am of the view that it would not be equitable to reduce Mr. Iriotakis’ entitlements to damages from his former employer by the amount of CERB given his limited entitlements from the employer post-termination relative to his actual pre-termination earnings. I decline to do so. ( emphasis in the original) 

Thus it seems that if the Plaintiff had made less money and thus the CERB would have been closer to his actual loss, this Judge may have reduced the damages in part because of the receipt of CERB.

Again, why make these unnessary distinctions that further complicate these cases? At what income level is CERB to be taken into account ? Will it vary from judge to Judge? Either it is or is not a deduction from the damage claim.

5. Commission over the Notice Period;

The plaintiff sold a service which produced monthly income, however in accordance with his commission agreement, commissions were only paid after the service had been provided for 8 months . So what happens to those commissions that would have been received within the notice period and what about those commissions that would have come in after the notice period?

The Commission Plan had the following language :

To qualify for any commission or bonus payment you must be actively employed by Peninsula Employment Services Ltd. Entitlement to qualify for any commission or bonus payment will cease immediately upon termination of your employment with Peninsula Employment Services Limited. 

Dunphy J.  determined that this clause was illegal as it violated the ESA.

[39] The plaintiff takes the position that to the extent the plaintiff’s contract of employment with the defendant purports to deprive him of commissions on sales made prior to the termination of his employment that are payable afterwards, such provisions are void as contrary to s. 1(1) and s. 11(1) of the ESA that require the payment of all “earned” “wages” and s. 5(1) of the ESA that prohibits contracting out of its minimum standards. In this regard, I agree with the plaintiff in part. 

He then determined that the Plaintiff was making a claim for three types of commissions :

A) Commissions that would have been paid to the Plaintiff had he been given reasonable working notice on sales he completed before termination.

B) Commissions that would have been paid to the Plaintiff after the reasonable working notice period  on sales he completed before termination.

C) Commissions he may have made on deals that he might have done had he been permitted to work out his notice period.

The Judge applied the simple principal of putting the Plaintiff in the same situation as if he had worked out his notice period . Therefore the results were as follows:

A) Plaintiff wins :

[41] While the Rules purport to exclude the payment of commission becoming payable during a common law notice period, such exclusion in my view violates s. 1(1), s. 5(1) and s. 11(1) of the ESA and is of no force or effect. 

[42] I have found that the plaintiff was entitled to reasonable notice of the termination of his employment and, in the absence of such notice, to damages in lieu of that notice. Had the plaintiff been given three months working notice – as he was entitled to receive – commissions on sales made by him between six and nine months prior to the termination of his employment would have been both earned and payable by the terms of the Rules whether or not he made a single incremental sale subject only to the passage of time and a determination of the actual payment history of the relevant clients during that period of working notice. Having deprived the employee of the notice to which he was entitled, the employer must put the employee in the same position – as far as money can do – as the employee would have been in at the end of the working notice he or she failed to receive: Paquette v. TeraGo Networks Inc., 2016 ONCA 618 (CanLII) at para. 16. The amount so determined is not commission under the Rules per se but damages calculated as the amount of money that the plaintiff would have received under the Rules but for the breach of contract by the employer. Had he been working as he was entitled to so, he would have been providing services to the employer and the exclusion in the Rules would have had no application. 

B) Plaintiff loses:

At the end of the notice period, the plaintiff had no right to be employed and no eligibility to receive commissions under the Rules that governed his ability to earn them. The commissions on prior sales were not fully earned while the plaintiff was still an employee because they remained contingent on the future payment history of each client pursuant to the Rules that created his entitlement in the first place. Such amounts do not fall within the definition of “wages” that have been “earned” under s. 1(1) and s. 11(1) of the ESA. The terms of the Rules are clear and unambiguous on this point. 

Crucial to his finding is that these commissions were not “earned ” until the 9 months was up. What if however, the agreement simply stated that commissions were not payable until 9 months after the transaction closed. Could not one say that the commission was “earned” once the deal was confirmed but payment was deferred until a later date. If the commission was earned but not yet payable, certainly that would constitute ” wages ” under the ESA and thus could never be forfeited, as this would be a contracting out of the EA, which is illegal .

C) Plaintiff loses :

[44] The same reasoning applies with greater force in the case of putative earnings during working notice not given. Had reasonable working notice been given, the plaintiff would have been entitled to his base salary and the portion of commissions on prior sales that became earned and payable during that notice period. Any new sales made would have generated no commissions earned during the period of his active service under the Rules that governed his entitlements. Whether he is assumed to have made new sales at, below or above the rate he was making them before his termination would have no impact on his earnings during that period. To the extent it is relevant, it is hard to imagine how he could have had much in the way of imputed sales during the three-month notice period at all events given that this time frame in fact coincided with the period of hardest pandemic lock-down. 

Conflict Note : Winning Plaintiff’s counsel was Kimberley Sebag , an associate at Lecker & Associates at which my brilliant son, Matthew Fisher, is a partner.

In Barrett v Bragg Communications ( CLC Adjudication , no cite available ) Adjudicator Starkman upheld the discharge of mobile tech who did the following misdeeds:

1. Used the company vehicle for personal use, contrary to policy.
2. Over a 4 week period used the company cellphone on company time for over 60 hours, many of which were personal calls.
3. Took may extra long lunch breaks.
4. Created false entries in his time log tp cover up his extended lunch breaks outside of his service area.

But for the false logs, it appears that the adjudicator might have found that the penalty of discharge was too severe and would have substituted a lesser penalty, which unlike a judge, he had the power to do. But the false logs put his behaviour over the top and the discharge was upheld.

Of note the worker had a previous discipline record of a one day suspension which contained a final warning. He was a 7 year employee.

In Hunsley v Canadian Energy Services ( 2020 ABQB 724 ) Poelman J. dealt with an supervisor in the old and gas industry, which the Court noted that the parties agreed that at the time of termination the industry was facing ” challenging financial circumstances”.

This is what the Court said :

[26] Adverse economic conditions tend to increase the notice period because they usually contribute directly to the estimated time required to find replacement employment.

A depressed economy or sector tends to lengthen the notice. But is only one factor and should not be given disproportionate effect: ibid,

[28] The amount of reasonable notice must be determined based on circumstances at the time of dismissal, not subsequent events or length of actual unemployment.

The court went to award a supervisor / lower manager with 7 years and 7 months service and 34 years of age an eight month notice period .

In Yee v Hudson’s Bay ( 2021 ONSC 387) Justice Dow was considering the proper notice period for a 62 year old Director of Product Development with 11.65 years service.

The plaintiff was laid off in August of 2019 ( pre COVID). When asked by the Plaintiff to award a longer period of notice because of the difficulty of getting a job in retail in the midst of a pandemic, the Court distinguished those cases where the employee was let go before COVID but his notice period was during COVID and those who were terminated during COVID. This is because ” Notice is to be determined by the circumstances existing at the time of termination and not by the amount of time that it takes the employee to find employment”

The Court awarded the Plaintiff 16 months notice.

At first blush this distinction seems illogical because. whether you were fired a day before the pandemic or the day after would have no effect on how long it may take you to get another job. However this decision is consistent with previous decisions where Courts have ignored post termination events in assessing the proper notice period. The policy reason behind this is the theory that the parties should be able to both assess the issue of notice at the time of termination. This is intended to promote certainty because if post termination events affected the notice period , then presumably you could never ascertain the correct notice period until it was over.

However there are certain exceptions to this rule because the notice period can be less than the reasonable  notice period in at least three cases:

1. The employee fails to properly mitigate his or her damages.
2. The employee succeeds in finding a new job before the end of the notice period.
3. The employee dies within the notice period.

Q: Do you notice any themes to these exceptions ?

A: They all benefit the employer.

In Wilson v John Howard Society ( 2020 ONSC 5531) Bondy J. ruled that the defendants’ Rule 49 offer which was accepted by the plaintiff was enforceable even though there were some minor issues not covered in the offer as follows:
1)The plaintiff wanted the $2,221.50 characterized as retiring allowance whereas the defendant wanted to treat it as wages. This made a tax withholding difference of about $363.
2) The plaintiff wanted the entire amount allocated to legal fees. The defendant refused because that is not what the Rule 49 offer said.
3) The offer was not clear as to would pay for the dismissal order.

The Judge rejected al these arguments.

1) The characterization was agreed to in the Rule 49.
2) The amounts were properly characterized in the Rule 49 offer and thus could not be changed unilaterally.
3) The implication from the Rule 49 offer was that the defendant would take out and pay for the dismissal order.

The Plaintiff got a judgement for $4,037. The Defendant was awarded costs to be determined.

Question : At the end who won?

What this case was really about was a plaintiff who wanted to back out of a deal that she had originally agreed to. This case reinforces the idea that ” settlements are sacred” and any attempt to weasel out of a deal made when both parties are represented by lawyers is basically a fools’ game.

This case reminds us of the importance of making sure that settlements should be fully documented and signed on the spot. In my mediations, I strongly encourage   the parties execute full settlement agreements, including releases, at the end of the mediation. To do otherwise allows either  one reluctant party to try to back out or the realization that the parties had not really agreed on important issues like allocation, confidentiality, non disparagement clauses and the like.

Experienced counsel come to a mediation with draft settlement documents that can serve as a basis for the finalized documents.

In Hrynkiw v. Central City Brewers & Distillers Ltd. ( 2020 BCSC 1640) Horsman J. had a situation where a CFO was accused of intentionally paying himself excess vacation and shares without the consent of the owner. The Court found that this accusation was unfounded and found that there was no just cause. The Plaintiff was awarded 12 months notice after 6.3 years of service. He was 56 years old.

The plaintiff was also awarded $35,000 in aggravated damages for the mental distress caused by the unfounded allegations and the failure of the employer to conduct a proper investigation before termination .

It is interesting that the Judge awards damages under the three concepts of Bad Faith,  Aggravated Damages and Mental Distress. This proves a point that I have been saying for many years, which is , call it anything you want , but when a Court finds that the employer acted in a manner outside the pale, they will find a way to punish the employer.

Here are some  extracts for the judgement on this issue: ( Note : Mr. Frost is the owner of the Defendant )

In Murphy v Factors Labs ( 2020 BCPC 163) Burnett J. upheld the termination of a long service factory employee who refused to wear a ” Bump Cap” (which is a form of hard hat) because she claimed it aggravated her migraine headaches. She provided a short medical note from her doctor. The Company asked for a more detailed medical report and the plaintiff refused, without giving a valid reason .

In Attzs v Saputo ( 2020 )NSC 5512) Kimmel J. had a short term warehouse worker who was caught vaping in the workplace which was against the no smoking policy. The Judge found that it was plausible that the worker did not know that vaping was included in that ban as the company had not made that clear. Moreover two other employees who were also vaping were only given warnings. The Judge held that the misconduct should have been dealt with in a proportionate manner with discipline but not termination.

In a unanimous decision, the Supreme Court of Canada in Matthews v Ocean Nutrition Canada ( 2020-SCC 26 ) made the following statements of law.

1. The issue of good faith and bad faith in contractual relations is distinct from the issue of calculating damages due to the failure of the employer to provide reasonable notice of termination. There was no need in this case to determine whether or not the employer acted in bad faith as the same  outcome can be determined without the need to determine the bad faith issue.

The Court made the following comments about the issue of the duty of good faith in employment contracts:

[84]                         Further, I note that Mr. Matthews and several interveners argue that the general organizing principle of good faith described in Bhasin manifests itself in various ways throughout the whole of the contractual performance. Ocean answers that any extension of good faith would be an unwieldy precedent.

[85]                         Mr. Matthews’ argument is a serious one. Not all mistreatment by an employer will result in a constructive dismissal — some employees, for financial or other reasons, might choose not to leave their job. It might be that, as argued by various parties in this appeal, a duty of good faith will one day bind the employer based on a mutual obligation of loyalty in a non-fiduciary sense during the life of the employment contract, owed reciprocally by both the employer and employee. I recognize, however, that whether the law should recognize this is a matter of fair debate.

[86]                         This is a dismissal case. In light of the comment in Bhasin (at para. 40) that the common law should develop in an incremental fashion, I would decline to decide whether a broader duty exists during the life of the employment contract in the absence of an appropriate factual record.

2. Courts should ask two questions when determining whether the appropriate quantum of damages for breach of an implied term to provide reasonable notice includes bonus payments. First, courts should consider the employee’s common law rights and examine whether, but for the termination, the employee would have been entitled to the bonus or benefit as part of their compensation during the reasonable notice period. Second, if so, courts should determine whether the terms of the employment contract or bonus plan unambiguously take away or limit that common law right.

The actual clause purporting to limit the plaintiff’s entitlement to the bonus was as follows:

2.03 CONDITIONS PRECEDENT:

ONC shall have no obligation under this Agreement to the Employee unless on the date of a Realization Event the Employee is a full-time employee of ONC. For greater certainty, this Agreement shall be of no force and effect if the employee ceases to be an employee of ONC, regardless of whether the Employee resigns or is terminated, with or without cause.

2.05 GENERAL:

The Long Term Value Creation Bonus Plan does not have any current or future value other than on the date of a Realization Event and shall not be calculated as part of the Employee’s compensation for any purpose, including in connection with the Employee’s resignation or in any severance calculation.

This is what the Court said about why this limiting clause did not apply :

[65]                         To this end, the provisions of the agreement must be absolutely clear and unambiguous. So, language requiring an employee to be “full-time” or “active”, such as clause 2.03, will not suffice to remove an employee’s common law right to damages. After all, had Mr. Matthews been given proper notice, he would have been “full-time” or “actively employed” throughout the reasonable notice period (Paquette, at para. 33, citing Schumacher v. Toronto-Dominion Bank (1997), 147 D.L.R. (4th) 128 (Ont. C.J. (Gen. Div.)), at p. 184; see also para. 47; Lin, at para. 89). Indeed, the trial judge and the majority of the Court of Appeal agreed that an “active employment” requirement is not sufficient to limit an employee’s damages (trial reasons, at para. 398; C.A. reasons, at para. 66).

[66]                         Similarly, where a clause purports to remove an employee’s common law right to damages upon termination “with or without cause”, such as clause 2.03, this language will not suffice. Here, Mr. Matthews suffered an unlawful termination since he was constructively dismissed without notice. As this Court held in Bauer v. Bank of Montreal, [1980] 2 S.C.R. 102, at p. 108, exclusion clauses “must clearly cover the exact circumstances which have arisen”. So, in Mr. Matthews’ case, the trial judge properly recognized that “[t]ermination without cause does not imply termination without notice” (para. 399; see also Veer v. Dover Corp. (Canada) Ltd. (1999), 120 O.A.C. 394, at para. 14; Lin, at para. 91). 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.

[67]                         I therefore agree with the trial judge that clause 2.03 does not unambiguously limit or remove Mr. Matthews’ common law right. In my respectful view, the majority of the Court of Appeal erred in concluding otherwise.

My Comments :

1. To me this means that bad faith in relation to employment terminations becomes just another way of awarding damages beyond the reasonable notice calculations. This same principle has been called damages for mental distress, moral damages , Wallace damages, aggravated damages, punitive damages and some that I probably have forgotten. I actually watched the oral argument at the SCC and I was immediately struck by how reluctant the Court was to expand or even apply the bad faith analysis.
2. Calculating damages should now be easier. In my first year contracts course at Osgoode Hall Law school ( way back in 1975) Professor Larry Taman taught us how to calculate damages in a breach of contract case. You simply put the innocent party in the same position as if the contract had not been breached. ( Hadley v Baxendale ) In an employment termination the implied term is that to discharge an employee without just cause you must give reasonable WORKING notice. If you fail to give such WORKING notice, then you must pay the employee the same amount that he or she would have earned had they been permitted to work out the notice period. Only then do you look at the bonus or the LTIP plan to see if there is any clear and ambiguous language which would exclude some element of the compensation if the employer fails to give working notice and opts to give pay in lieu of notice.
3. What is clear and unambiguous language sufficient to oust the inclusion of a bonus ? There are many ways to approach this issue , but here are my ideas of the most common ones other than the ” active employment” clause set out in this case .  First of all it cannot breach any statutory requirements like the Employment Standards Act which requires that there can be no change to an employee’s wages ( which normally includes bonus ) during the termination period , which is a maximum of 8 weeks. Many bonus plans breach this provision  by saying ” your entitlement to bonus ends on the day you receive notice of termination.” Secondly, an element of clear and unambiguous that has developed recently in the case law is that this limiting cause must not be buried in a long and complex agreement that no one would actually be expected to read. The limitation should be clearly brought to the attention of the employee both at the time he or she is hired, or brought into the plan and ,even better, every time they are awarded a bonus. Moreover, now that the Waksdale decision tells us that any defect in the termination provisions of a contract voids the entire termination clause, what if the bonus termination language is found to be illegal, does that mean the termination provision in the main employment contract also bites the dust?
4. By downplaying the importance of bad faith and focussing on the core issue of reasonable notice, the Court is repeating what many experienced employment lawyers ( and some mediators ) have known all along, which is , that 99% of the money in a wrongful dismissal case is simply figuring out what a month of notice is worth and then figuring out how many months is in the notice period. Add some costs to that number and amazingly, most of these cases settle. Perhaps now lawyers will spend more of their effort on resolving these basic issues  rather than focussing on the more  exotic issue of extraordinary damages which seems to find its way into almost every lawsuit but rarely results in a meaningful payout in either a settlement or a trial decision.

In Sewell v Provincial Fruit ( 2020 ONSC 4406) Mandhane J. had to determine if the following clause invalidated the termination provision of an employment contract:

“b) Termination by the Company for Just Cause
The Company is entitled to terminate your employment at any time and without any notice or any further compensation for just cause and the Company will not have any further obligations to you whether at contract, under statute, at common law or otherwise.”

In setting out why this made the whole termination clause, including the not for cause provision, illegal, the Judge said :

[19] Second, applying Waksdale, I find that the “Termination for Just Cause” provision of the contract was illegal insofar as it contracted around the ESA requirement to provide notice except in cases where an employee engaged in “willful misconduct.” Based on the Court of Appeal’s reasoning, I must read the contract as a whole and set it aside if one or more of the terms are illegal, even if the offending term is not at issue in the instant case.

This case is important because in Waksdale the parties agreed that the for cause termination clause was illegal. That clause was very different from this one as it set all sorts of things as just cause, including breaching any federal or provincial law.

In this case the reference to just cause is in line with most termination clauses which simply reference ” just cause” . More importantly, in this case the Court ruled that the clause was illegal, and thus sets a clear judicial precedent.

This case had a number of other issues :

1. Even though the Plaintiff had been contacted by a head hunter the judge found that that did not constitute inducement:

“Rather, the arrangement was mutually beneficial as the plaintiff had tried to change jobs prior to accepting the defendant’s employment offer and seemed ready for a change.”

2. The not for cause provision read as follows

c) Termination by the Company without Just Cause

(A) The Company will be entitled to terminate your employment at any time without just cause by providing you with the following

(ii) a payment, or at the Company’s sole option, notice or combination of notice and pay in lieu of such notice representing termination pay and, if applicable, severance pay, as may be required under the Employment Standards Act, 2000, as amended from time to time (the “Separation Period”);

It is agreed that upon compliance with the above provisions, the Company will be release from any and all obligations to you, whether statutory, under contract, at common law or otherwise.

When I first read that clause it looked fine to me because it looked like you would get both termination pay and severance pay. The Judge saw it differently :

First, a plain reading of the contract supports the plaintiff’s argument that it combines notice and severance pay entitlements in violation of the ESA requirement to pay both notice and severance. The provision states:

The Company will be entitled to terminate your employment at any time without just cause by providing you with … a payment, or at the Company’s sole option, notice or a combination of notice and pay in lieu of such notice, representing termination pay and, if applicable, severance pay

[17]       Indeed, this provision is substantially similar to the one deemed illegal by the Court of Appeal for Ontario in Wood. The Wood termination clauses stated:

[The  Company]  is  entitled  to terminate your   employment   at   any   time   without cause  by  providing  you  with  2  weeks’ notice of termination or pay in lieu thereof for   each   completed   or   partial   year   of employment… The payments and notice provided for in this paragraph are inclusive of your entitlements to notice, pay in lieu of notice and severance pay

[18]       The only substantial difference between the provisions is that the Wood clause specified a notice and severance period of 2 weeks per year, whereas the contract in this case left the amount of notice and severance open. This difference is not significant in terms of the Court’s reasoning in Wood and I find that the contract at issue in this case is void.

It is not entirely clear to me what it is about this clause that ” combines notice and severance pay requirement “.

It appears that the judge read the clause as saying that the employee would get either :

a) a payment of termination pay and severance pay ( this is OK)

OR

b) working notice of the amount of weeks in the termination pay and severance pay provisions ( which is illegal as you cannot be required to work out the severance pay period, rather it must be paid as a lump sum )

3. The Judge made the following comments about the signing of the agreement when the Plaintiff was hired:[

8]       I accept the plaintiff’s evidence that he signed the contract expecting that it would accurately set out the main terms of his employment as discussed with the defendant, as well as comply with employment standards legislation. I also accept that he did not understand the full implications of the “termination” clauses and that they were never explained to him.

In Hefkey v Blanchfield Roofing ( 2020 ONSC 5094) Bawden J. awarded 7 months notice to a 6.5 year foreman. However because the Defendant had made a payment during litigation of almost $11,000 the extra payment awarded by the Court came to just under $7,500.

Regarding cost submissions the Judge ruled as follows:

1) Even though the recovery was within Small Claims limits , it was reasonable to start the case in the Superior Court because there was a real issue as to whether his seniority was 6 or 13 years.
2) The Defendant’s actions increased the costs, including spending a whole day on whether the action could be heard by way of summary judgement , which they lost. Even though both lawyers were based in Toronto, the defendant insisted that the cross examinations take place in North Bay, where the defendant lived.
3) The motion itself took three days spread out over a year.