Category: Uncategorized

Another Ontario Case Decides CERB Does Not Reduce Wrongful Dismissal Damages:

In  Henderson v. Slavkin et al., 2022 ONSC 2964 Justice Carole Brown again dealt with the CERB issue .

She held that in this particular case, CERB did not reduce the wrongful dismissal damages for the following reasons:

First, the Plaintiff had not ceased working for reasons related to COVID-19 ( as required by Section 6 (1) (a) of the CERB act , rather she was let go because her employer was retiring and shutting down his dental practice. Therefore the Judge concluded that the plaintiff might have to repay the CERB.

Second, the Judge somehow determined that CERB was intended ” as an indemnity for wage loss related to COVID-19, not for wage loss arising from an employer’s breach of an employment contract. ”

Third, justice dictated that the allocation of risk of repayment should not fall upon the Plaintiff as she was a older and long serving employee.

My Comments :

All of the cases which have said that CERB is not to be deducted from wrongful dismissal damages point to the fact that the plaintiff may have to repay CERB.

I am personally unaware of this ever happening nor am I aware of any section of the CERB Act which would even be grounds for a repayment in these circumstances.

If anyone knows of a repayment obligation arising from a wrongful dismissal payment, please contact me.

If you would like a copy of this case, email me at barry@barryfisher.ca

Court Nixes Valid Termination Clause Because of Illegal Conflict of Interest and Confidentiality Clause

In Henderson v. Slavkin et al., 2022 ONSC 2964 Justice Carole Brown dealt with the legality of an ESA Termination  Clause.

The actual termination clause itself was found to be OK but both the confidentiality clause and the conflict of interest clause had the following sentence

A failure to comply with this clause above constitutes both a breach of this agreement and cause for termination without notice or compensation in lieu of notice. 

The trouble was that in both of these clauses the list of items that would constitute a breach was so broad that it vastly exceeded the concept of wilful misconduct under the ESA. For instance, the confidentiality clause defined confidential information as including any information about the assets of the employer. Presumably if the employee told a relative that her employer owned the building they worked out of, that this would constitute a breach.

Here is the funny part. This agreement was between a 63 year old receptionist and two 70+ year old dentists who were shutting down the dental practice and retiring. The employment agreement should have just covered the employer’s liability for termination costs, but instead the author of the agreement threw in these extra and completely unneeded clauses. Had they not included the one sentence referred to above, the ESA termination provisions would have been upheld, and because the plaintiff received 6 months working notice, this Plaintiff would have received zilch additional monies.

This case teaches us that defects in a termination clause can be found not only in the termination clause itself but also in any employment agreement that deals with termination. Thus lawyers should carefully review all agreements and policies to make sure that they do not offend the ESA.

This can include:

All parts of the employment agreement

Confidentiality Agreements

Solicitation Agreements

Stock Options and Bonus Plans

Policy manuals and statements

Ownership of intellectual Rights and inventions.

In essence, any  agreement or policy that refers to the fact that a breach of that policy will lead to termination without compensation could invalidate any otherwise enforceable termination clause.

This issue really only affects employees under the Ontario Employment Standards Act as, unlike other jurisdictions, it does not use the concept of just cause but rather the much more limited concept of wilful misconduct.

If you like a copy of this case email me at barry@barryfisher.ca

 

Court Reduces Notice by 2 Months Due to Poor Mitigation.:

In Toy v. 0954516 BC Ltd.,( 2022 BCSC 1161) Justice Walkem intially awarded 5.5 months notice to a 61 years old Fuel Attendant with 5 years service making $40k.

However when she found out that over a 12 month period he only applied to 3 jobs by looking on his computer and by driving around and looking for Help Wanted signs the Judge determined that this was not reasonable and therefore she cut 2 months off the notice period.

If you like a copy of this decision, please email me at barry@barryfisher.ca

CIRB Determines How to Calculate damages in Lieu of Reinstatement:

In Szabo v CP Rail ( 2202 CIRB 1019) Adjudicator Asbell determined that the Complainant , who was a Train Master, was terminated without just cause as the penalty of termination was too severe and because CPR did not follow the principles of progressive discipline .

Recognizing that tye employment relationship was unlikely to be reestablished , the Adjudicator assessed damages in lieu of reinstatement  as follows:

  1. He was awarded all of his back pay from date of termination to the date of the award ( approximately 24.5 months) less a one month suspension.
  2. He was also awarded damages for the loss of  secure employment in the future. This is based on the theory that had the employee not been unjustly dismissed he would have kept the job for a long time, perhaps even to retirement and therefore should be compensated for this future loss. There are course various contingencies to be taken into account, such as the employee may have quit this job for another job, he might have had to stop working due to poor health or death.
  3. However, if he  were reinstated there is a strong likelihood that he would have been terminated for just cause in the future. This is what the  adjudicator  said :
  4.  First and foremost, the parties here both agreed—without the need for determination—that the employment relationship was irreconcilably fractured. Mr. Szabo did not agree with the attitude exhibited by senior management within CP, and senior management within CP did not agree with Mr. Szabo’s attitude, both prior to the events leading to his dismissal and at the hearing itself. The Board accepts that both parties’ very negative attitudes towards each other would have likely persisted to the detriment of the employment relationship had Mr. Szabo been returned to work. At the hearing itself, Mr. Szabo conducted himself with the utmost confidence and was unafraid to attack, and accuse, the senior CP witnesses. Whether right or not, and whether overly aggressive or not, the style of questioning exhibited by Mr. Szabo appeared to leave at least a couple of the members of the senior team less than enthralled with him. If there was any possibility of an amicable return prior to the cross-examinations, such possibilities were quickly squelched. While admittedly speculative, the Board has little doubt that CP would have issued further letters addressing Mr. Szabo’s attitude and that his bonus would have continued to receive deductions as a consequence. The Board also has little doubt that CP would have learned a lesson about progressive discipline in relation to Mr. Szabo and at the first hint of conduct it viewed as problematic would have begun a series of performance management measures likely leading Mr. Szabo into a just dismissal situation, as it would be highly unlikely that Mr. Szabo would change his approach or attitude toward any of CP’s senior management. Alternatively, and more likely, Mr. Szabo would have told the senior CP management he had “had enough of their BS,” as the Board quoted him during the hearing, and either negotiated his own departure or simply found another job in the interim. Just as Arbitrator Surdykowski found in Lakehead University, the Board finds it is a virtual certainty that Mr. Szabo would very soon have been in workplace hot water again, one way or the other, and that CP would have successfully terminated his employment, or he would have voluntarily left long before he reached retirement age. 
  5. He was awarded 16 months pay for this part of the loss for a total of about 39 months .

My Comments :

There are a few important lessons to be be learnt here.

  1. The Complainant was self represented. No competent  lawyer would let him rant on about how horrible senior management at CPR was. He would instead have testified that he admits he made a serious  error of judgment, that he has  learnt his lesson , that he loves his job and desperately wants a second chance. Judges and adjudicators love remorse.
  2. It is amazing how the adjudicator  can predict the future with such precision.
  3. How a party acts at a hearing can have a profound effect on the decision maker. The better the actor, the better the outcome. When I was counsel I always had to remember that the judge only sees my client for a short period of time whereas I have known him to be a not so truthful person for years. First impressions matter very much in Court.
  4. The other method of determining damages for loss of job security is the Notice Method which in the words of the Adjudicator :” The Notice Model provides a “gross up” for the value of collective agreement benefits from that typically given by the courts in wrongful dismissal cases. In this sense, and as noted by Arbitrator Hornung in Teamsters Canada Rail Conference v. Canadian Pacific Railway Company, 2021 CanLII 30674 (CA LA) (Hornung), this model “provides a more exact and measurable tool in order to assess the variables at play and avoids the need for clairvoyance” (see paragraph 25). 

If you would like a copy iof this case, email me at barry@barryfisher.ca

Refusing to Wear a Mask and Then Being Put on Leave Without Pay is NOT a Constructive Dismissal :

In Benke v Loblaw Companies Limited, 2022 ABQB 461 Justice Feasby had a situation where an employee who was required to routinely visit stores refused to wear a mask or a face shield and did not provide medical evidence to back up his claim.

Instead of terminating him, the Defendant put him an unpaid leave of absence and continued up to the date of the trial to maintain that he was still an employee and could return to work now that the mask mandate was lifted.

The Court found that the Plaintiff was not constructively dismissed as the Defendants action in putting him on a leave of absence without pay was reasonable as it was the Plaintiff’s voluntary decision not to comply with the policy.

The Court held that the Plaintiff had resigned.

Many employers have chosen this technique of using a leave of absences without pay instead of termination with just cause to deal with person who refused to vaccinate contrary to a policy. This case gives support to that position .

If you wish a copy of this case email me at barry@barryfisher.ca .

Court Confirms That Under the Unjust Dismissal Section of the Canada Labour Code the Arbitrator Can Order Reinstatement or Compensation in Lieu:

In Hussey v Bell Mobility ( 2022 FCA 95) Justice Pelletier was reviewing the decision of a Unjust Dismissal Adjudicator who, having found that the employee was unjustly dismissed, refused to reinstate her as he was not satisfied that given the employee’s past actions and her lack of remorse and self reflection, that there existed the grounds for a viable continuing employment relationship.

In lieu of reinstatement, he ordered compensation of 8 months notice ( she had 7 years employment ) plus another 4 months compensation for losing the protection of secure employment.

The Federal Court of Appeal upheld the decision of the adjudicator in spite of the employee’s argument that she should have been reinstated as set out by the SCC in Wilson v Atomic Energy.

My Comments:

As a labour arbitrator ( I am not just a mediator) this approach has been around forever in the unionized context. Reinstatement is the default remedy but there are situations where although the employer did not have just cause, the evidence is clear that to put the grievor back into the workplace would be a disaster because of issues relating to the grievor. If the difficulty of returning the employee is the fault of the employer or other employees, then that is not a reason to deny reinstatement as otherwise you would be rewarding the wrongdoer.

The other interesting part of this decision is the math on how the adjudicator calculated the compensation. The adjudicator found that reasonable notice was 8 months and then added 4 more months for the loss of job security.

So it seems that the formula for compensation in lieu of reinstatement could be expressed as follows:

Reasonable Notice X 1.5 = Compensation in Lieu of Reinstatement.

If you like a copy of this case, email me at barry@barryfisher.ca

OCA Rules on Notice Periods for Employees Who are Rehired After a CCAA Reorganization.

In Antchipalovskaia v. Guestlogix Inc., 2022 ONCA 454 Justice Favreau had a fact situation as follows:

The plaintiff worked for the Defendant from 2011 to 2019 at which time the Defendant obtained creditor protection under the Companies’ Creditors Arrangement Act. As a result of the CCAA proceeding the Plaintiffs employment was terminated and she became a creditor with regards to her severance entitlement. She ended up receiving 72% of her ESA entitlement. The court order under the CCAA contained a release of all claims upon payment to the creditor.

She was immediately rehired by the same Defendant. There was no share or asset sale as the owners simply worked their way out under the CCAA order. The new contract did make it clear that for all employment related purposes her new start date was 2019 and not 2011.

About 2.75 years later she was terminated without cause and was entitled to reasonable notice.

The trial judge considered her employment continuous both under the ESA and the common law. and awarded her 12 months.

The Court of Appeal said even though under the ESA this is true this is not the same under the common law. Her employment came to an end in 2016. She received some termination pay and most importantly she released all her claims by virtue of the CCAA court order.

However, in assessing the common law notice period the Court indicated that they can take into account the prior years of service as this provided a benefit to the Defendant that they would not have had if they had hired a new person off the street.

The Court of Appeal awarded 7 months notice for a 2.5 year Senior Business Analyst.

My Comments:
This case continues what I think is a unnecessary and unfair distinction between the manner in which companies are bought and sold and its effect on employees.
Simply put, if the company is sold by way of a share purchase, then there is continuity of employment because the employer has not changed ( the same corporation) as only the shareholders have changed.
However if the assets of the company are sold to a different legal entity, then the employee’s employment is terminated and, if done right, the new employer need not recognize the prior service, except for ESA purposes.
This can have a profound effect on an employee’s termination rights.
Imagine this situation.
Employee A and B work for ABC Corp, which has two divisions, Alpha and Beta. They have both been there 20 years and are both managers making the same money. Both employees are in their mid 50’s. A works for the Alpha Division and B works for Beta.
ABC decides to sell Alpha to Newco and, based on tax advice, it is done as a share sale.
ABC decides to also sell Beta to Newco but this  time, again for tax planning purposes, the sale is an asset sale.
Two years later, Newco terminates both A and B without cause.
Result:
A  gets his ESA entitlement of 30 weeks and little or no common law notice above that because he has  been employed by Newco for only 2 years.
Lucky B is now a 22 year employee of Newco and gets around 20 months notice.
Why the difference?
Simply because the two companies decided to arrange the two transactions differently, of course without the input or the knowledge of the employees. In fact the internal announcement to the employees at the time referred to both transactions simply as a “sale”.
Does this strike anyone as fair?

If you wish a copy of this case, email me at barry@barryfisher.ca

Court Uses Oppression Remedy to Get to Successor Employer and Shareholders:

In Wisser v CEM International Management Consultants Ltd, 2022 ABQB 414 Justice Hollins had to determine who was liable to pay the wrongful dismissal damages of 18 months. Here is what happened.

Shortly after terminating the Plaintiff and getting sued by him, the two shareholders stopped taking buisness under the original company. They incorporated a new company , sold the assets of the old company to their new company and carried on essentially the same business as before, using the same directors and shareholders and even using the same trade name.

Using the oppression remedy analysis, the court found that both the successor corporations and the directors/ shareholders were liable to pay the full judgement.

For a copy of this case, email me at barry@barryfisher.ca

” 60 Days or More Written Notice” Means Reasonable Notice with a Floor of 60 Days not a Ceiling of 60 Days:

In Bryant v Parkland School Division, 2022 ABCA 220 ,the Justices considered the meaning of the following termination clause:

“This contract may be terminated by the Employee by giving to the Board thirty (30) days or more prior written notice, and by the Board upon giving the Employee sixty (60) days or more written notice.”

The trial judge said that this gave the Employer a discretion but not an obligation to give more than 60 days notice.

The Court of Appeal thought otherwise. Here is what they said :

[15] The starting point, then, is that there is a presumption of an implied term requiring the employer to provide reasonable common law notice on dismissal. Only where the employment contract unambiguously limits or removes that right will the presumption be rebutted, and the implied term ousted. The chambers judge did not begin his analysis with these principles at the forefront.

[16] When these interpretive principles are properly applied, it is clear the clause does not unambiguously limit the employees’ right to common law reasonable notice. The clause does not clearly fix the employees’ notice entitlement. It does not impose an upper limit on the amount of notice an employee is entitled to receive. It does not suggest that 60 days is the maximum notice to which an employee is entitled. To the contrary, it explicitly provides that an employee can be entitled to more notice. The inclusion of the words “or more” recognizes a longer notice period as a realistic possibility.

[17] The chambers judge noted that “if the contract contained only the words ‘60 days’ it would be abundantly clear that [the employer] had fixed its notice at 60 days”. We agree. Such languagewould have been clear and unambiguous. But that is not what the clause says. The chambers judge concluded the employer had given itself the discretion to decide the amount of notice owing to an employee. That seems a questionable conclusion. If that was intended the employer could have written the contract to clearly say so. Another, and more reasonable, interpretation is that the employer intended the notice period to be in accordance with common law standards, subject to a minimum notice period of 60 days.

[18] The key point is that the clause is not sufficiently clear, unequivocal and unambiguous to remove or limit the presumed common law right of the employees to reasonable notice. Thereading more favourable to the employee must prevail.

If you would like a copy of this case, email me at barry@barryfisher.ca

One Day Summary Judgement Motion Awards $28,000 in Costs to the Winning Plaintiff:

In Sandham v Diamond Estates Wines & Spirits Ltd ( 2022 ONSC 3670 ), Justice MacNeil had previously awarded $208,448 to the plaintiff in a wrongful dismissal action.

The Plaintiff beat their Rule 49 offer and was thus entitled to both partial indemnity costs up the the date of their offer and substantial indemnity costs thereafter.

The Plaintiff asked for $34,000. The Court awarded $28,000 saying there was some duplication of work between the senior lawyer and the two juniors who worked on the file.

If you would like a copy of this case, email me at barry@barryfisher.ca