Author: barryfisher

In a CLC unjust dismissal case ” Nieminen v FedEx” ( # YM2707-11440 or 2019 CarswellNat 3722) Adjudicator Skratek had a situation where a courier was accused of stealing money from a delivery. The Adjudicator found that he was not guilty of the theft and that the that FedEx had conducted a unfair investigation. He was reinstated with full back pay and full legal fees.

His spouse was on maternity leave at the time of the termination, and as a result of her husband’s termination, she was required to return to her job much earlier than she planned . This caused great disruption to the family, including the mother’s breast feeding plans.

This is what the adjudicator said on this issue :

78      Consideration was also given to the fact that the flawed and inherently unfair investigation that led to Mr. Nieminen’s termination had the direct result of forcing his wife to prematurely end her maternity leave. The Respondent claims that the decision was a choice made by Mr. Nieminen and his wife and that their decision was of no consequence other than to serve as a reason to consider the time that Mr. Nieminen spent on parental leave as a period in which he did not fulfill his obligation to mitigate his lost wages. That claim is without merit. Mr. Nieminen and his wife were suddenly placed in a very difficult position. He had lost his job. His wife was on maternity leave bringing home considerably less income than she would have received from her regular job. The family was disrupted and had to make decisions quickly to ensure that they could financially survive the disruption. The decision to have his wife end her maternity leave several months early disrupted the planned care for their newborn. As he testified, his wife had to return home daily to breastfeed their newborn. He further testified that his wife’s mother had recently passed away compounding the stress on his wife. There were also discussions regarding whether or not they should keep their house. Money was borrowed from his parents to help with child care. The efforts of Mr. Nieminen and his family must not be dismissed as being a choice that they made. It was a choice that was forced on them by the unjust dismissal that resulted from a flawed and unfair investigation into the alleged misconduct by Mr. Nieminen.

My Comment:

Note that this issue arose in part because the Employer said that the Plaintiff’s  decision to stay home with the newborn baby was a failure to mitigate his damages.

Boy did that argument backfire!

As tempting as it may well be to make every legal argument possible ( because that is what they taught us in law school ) this case shows that what we learnt in school often does not play out well in the real world. Judgement and discretion are also attributes that matter.

In Virk v Satnam Educational Society of BC (2020 BCSC 149) Norell J. found that a Vice Principal in Vancouver who only applied for 4 teaching jobs after termination had inadequately mitigated..

However, the judge refused to reduce the 12 month notice period because the employer led no evidence ” as to the number and types of teaching jobs available in 2009/2010 and when they we’re available ” . The Judge held that without this evidence the defendant could not prove that even if the Plaintiff had look harder, this would have likely resulted in him finding a job within the notice period.

My Comment:

With the advent of Internet job searches, it is now quite easy for employers to present this type of evidence to the Court. Smart defence counsel send this information on a regular basis to Plaintiff counsel on a with prejudice basis. If the Plaintiff uses the information and gets a job earlier, then the damages are reduced. If the Plaintiff ignores the leads, the Defendant has vastly improved their chances of getting a failure to mitigate reduction. However, if the Plaintiff applies for every lead and still does not get a job, this becomes evidence of the unavailability of comparable employment, a key Bardal Factor in assessing what the reasonable notice should be. After all, if the purpose of reasonable notice is for the Court to ascertain how long it should take a reasonable person to find a job, what better evidence that it took this Plaintiff, acting reasonably, X months to get a comparable job.

Right now employment lawyers are talking , debating and especially ZOOMING about various employment issues that have arisen since this pandemic started.

I want to look down the road a few months when hopefully the pandemic will be  on the decline. I think that the following legal issues and trends  will arise and will need to be resolved :

1. The longer these temporary layoffs continue the more employees will seriously look at the temporary  layoff = termination argument.
2. After 13 weeks, many employers will not have recalled employees and either don’t have benefits they could continue or fail to do so, thereby triggering the deemed termination provisions of the ESA.
3. Even if they are recalled and return to work, could the employee  still sue for the lost wages on the basis that there was no express or implied term of employment regarding layoff ?
4. Will the frustration defence apply to only those business that were forced to close due to Government edict?
5. Would class actions apply for both termination cases and unpaid wages during layoff cases?
6. Does a refusal to accept a recall bar the employee from still suing for the lost wages up until the time of the recall?
7. If an employee accepted a recall but still sued for lost wages, could they be terminated for just cause ?
8. Is there any realistic duty to mitigate during the pandemic or do Plaintiffs get a mitigation holiday ?
9. We all know that EI is not a deduction from wrongful dismissal damages ( because the employee ultimately has to repay their EI ), but what about the new Canadian Emergency Relief Benefit ? Each worker could receive up to about $7,500. I have not looked at the CERB legislation, but assuming it has no offset provision like EI, could the employer in a wrongful dismissal case claim a setoff for the CERB amount ?
10. Will notice periods go up because it will more difficult to find a job or will they go down because employers are seen to be truly suffering and need a break?

I invite from you both your comments as well as other topics that you think will arise .

Stay Healthy

Decision Tree Analysis is simply a process of analyzing an issue on the basis of a step by step basis while applying the principles of probability.

In its simplest terms think of a coin flip. Every time you flip a coin, there is a 50% probability that it will come up heads.

But if you are trying to predict the probability of two consecutive coin flips coming up heads, then you multiply the two probabilities. Thus 50% X 50% = 25%. In other words, there is a 25% chance of a coin flip coming up heads two times in a row or a 75% chance that that will not happen.

Many lawsuits can be analyzed using this same methodology.

Imagine the following fact situation:

The plaintiff was fired, and the employer is alleging just cause.

The Plaintiff’s lawyer believes that she has a good chance of beating the just cause issue and puts her chances at 75%.

Of course, that means that there is a 25% chance that just cause is upheld and the case is therefore worth zilch.

Assuming that just cause is upheld, an additional issue is that there is an employment contract which if enforceable, would limit the plaintiff’s recovery to $10,000. Given the uncertainty of the law on this issue, the Plaintiff’s lawyer thinks that her chances of defeating the contract are only 50%.

If she can both beat the just cause argument and get around the contract, the next issue is whether or not the $25,000 bonus will be included in the award. If the bonus is included, the case is worth $100,000. If the bonus is excluded, the case is only worth $75,000. Again, given the uncertainty in the law, the lawyer estimates a 50 % risk factor to this issue.

So, what are the chances that the Plaintiff will recover $100,000 at trial?

Step One : $100,000 X 75% = $75,000 ( Just cause risk )

Step Two: $75,000 X 50% = $37,500 (Termination clause risk)

Step Three: $37,500 X 50% = $18,750 (Bonus inclusion risk)

Another way is to simply multiply the probabilities as follows:

75% X 50% X 50% X $100,000 = $18,750

Thus, the chances of winning $100,000 are only  18.75%.

However, there are also the following probabilities to consider:

1. There is a 25% chance of getting nothing if just cause is upheld.
2. There is a 37.5 % chance of getting only $10,000 if just cause is not upheld but the termination provision is found to be valid.
3. The probability that the outcome will be $75,000 is the same as it is for $100,000

Thus :

The chances of getting nothing                25%

The chances of getting $10,0000               37.5%

The chances of getting $75,000                 18.75%

The chances of getting $100,000               18.75%

Total                                                               100%

Now assume that the mediation hits an impasse and the defendant’s last offer is $66,000. The plaintiff’s last offer is $82,500.

Assume that the plaintiff’s lawyer is on a contingency fee and that the plaintiff does not have adverse cost insurance. Also assume that the plaintiff owns a house with plenty of equity.

Note that neither of the offers actually reflect a possible court outcome. This is good because it shows that each side is already evaluating risk, however they just disagree on how to do it.

As a mediator I would have this discussion with the plaintiff.

“Well, we have certainly come a long way today, considering that before we started the mediation, the employer had offered you only $5,000, which is what we call in the trade “nuisance money”.  Whether you like their number or not, $66,000 is not nuisance money.

Your ex-employer has said that the most they will pay you today is $66,000.

We know that if you are successful on all counts you will get $100,000 and if you don’t succeed on all counts, you could get either $75,000 or $10,000 or zilch.

At $66,000 you are $34,000 short of your objective. But not really. First of all, because of your contingency fee arrangement, that $33,000 difference is really only $24,750 because of the 25% fee arrangement. Moreover, that $24,750 is subject to tax withholding of 30%, which means the real difference to you of not getting an extra $33,000 is only $17,325.

Let’s take a closer look at the 25% nightmare scenario, in which you get zilch. Now, I know that with that outcome you will not owe your own lawyer anything. But I also know that your lawyer has explained to you that if you lose, the Court will in all likelihood order you to pay part of the costs of your former employer. She has told you that this would likely be around $50,000. As you have a house with real equity, your ex-employer could ultimately collect the costs award.

So here we have it. You a decent chance of getting $17,325 more money in your pocket if you win in Court. But if you lose in Court and get zilch, you have lost two amounts, the $50,000 you have to pay to the defendant and the $66,000 you could have had if you accepted their offer.

In other words, if you go to trial and lose completely (of which there is a 25% chance) you will be out $116,000.

Next, what are the consequences of losing $116,000 to you? In many cases, it would involve losing your home or a large portion of your retirement fund.

Let’s assume that odds of you getting $17,325 more in your pocket are the same as you losing $116,000.

In Vegas, only a high-risk poker player would take that bet.

So, what are my instructions?”

Using the same data, this is the conversation I would have the owner of the defendant.

“Well, we have certainly come a long way today, considering that before we started the mediation, the employee had offered to settle $250,000, which is what we call in the trade “crazy money”.  Whether you like their number or not, $82,500 is not crazy money.

I fully appreciate that this settlement is real money to you as you own this company. I appreciate that you got to where you are today because in part you are a good businessman.

Let’s analyze this issue the same way you would analyze any other business problem, because that is exactly what this litigation is.

As this case stands, your lawyer has said that largely because of the issue of just cause, this trial will probably take 5 days. Since we are at the beginning of a long litigation process, your lawyer has told you that to take this case to the end of a 5-day trial will cost you around $115,000.

Now I know that if you were to win on the issue of just cause (which we agree you have a 75% chance of not achieving) then the Court would probably award you about 60% of your legal fees or $69,600. That means, that assuming you could collect that from the plaintiff, the cost of winning would be around $46,400.

Let’s look at the cost of losing. Lets even assume that it is not a complete loss and you win on the issue of excluding the bonus. That means you would pay as follows:

Judgement                                                                  $75,000

Costs to your lawyer                                                $115,000

Partial costs to plaintiff’s lawyer                           $69,600

Total:                                                              $259,600

Even if you only lost on the issue of just cause and won everything else and the Court awarded the Plaintiff no costs, this would still cost you:

Judgement                                                                    $10,000

Costs to your lawyer                                                $115,000

Total                                                                            $125,000

So, a complete win will cost you                           $46,400

Losing partly will cost you                                     $125,000 to $259,600

Settling today could cost you at most                     $82,500

The only way you can do better than $82,500 is to win outright, which your lawyer has told you has a 75% chance of not happening.

What are my instructions?”

In Villa v Association of Professional Engineers of Ontario ( 2020 CarswellOnt 1042) Master Jolley had this to say about the Plaintiff’s request to dispense with mandatory mediation .

D. Motion to Dispense with Mandatory Mediation

45 The plaintiff wishes to avoid the cost of mediation as, in his view, the defendant is committed to its position and mediation will not be successful. It is these very situations where mediation often proves to be the most helpful. With the history of this matter and the slow progress being made by the parties left to their own devices, I find that mediation may assist the parties in framing the issues and discussing settlement. This request is denied.

The plaintiff was self-represented.

In Gibb v Pallieter Regional School Division # 26 ( 2020 ABQB 113) Justice Kubik dismissed the plaintiff’s constructive dismissal and harassment claim.

1. The trial was 7 years after the event.

2. The trial took 11 days.

3. The Plaintiff amended her claim at trial to increase her  claim  for punitive and aggravated damages to $700,000.

4. The Plaintiff found alternative employment almost immediately after she left this employer.

5. If the Plaintiff had been found to be constructively dismissed, her employment contract would have required the employer to pay her $35,750

In Samuel v Benson Kearley ( 2020 CarswellOnt 1125) Justice Charney awarded the plaintiff a 6 month notice period . Then he reduced the notice period to 4 months as a result of two pieces of evidence :

One, she did not even start looking a job until 4 months after her termination. The judge didn’t buy her ” shock and distress” argument.

Second, the defendant led evidence that a specialzed insurance website ( which the Plaintiff had used to get her the job in the first place ) had 38 comparable  jobs posted in the four months that the plaintiff did nothing to look for a job.

In light of this work, the Judge said that the ” the defendants have met their onus of proving that the plaintiff failed to mitigate her damages”.

In Slipp v Woodstock First Nation Economic Development Corp ( 2020 NBQB 020) Justice Petrie had to assess the notice period for a 56 year old Bingo Caller making $39,000 with 17 years service.

In deciding age quantum of reasonable notice, the judge said the following

In Rice v Shell Global Solutions ( 2019 ABQB) Eamon J. had a situation where an employee who had already worked for the defendant for about 8 years under a number of different fixed term and indefinite term agreements, was offered a new position which had the following language :

Your Assignment Length will be : 4 years.

She was let go without cause 10 months later and was provided with working notice and termination pay for another 3 months. She found new employment 7 months after her notice of termination.

The Judge had to decide what meaning to put to the reference to 4 years. This is how the Judge sets out the alternative interpretations