Category: Uncategorized

Employer Cannot Change a No Cause Dismissal into Just Cause Dismissal After Being Sued:

In Alayew v The Council for the Advancement of African Canadians in Alberta, 2023 ABKB 113 Justice Lema started off his judgement in the following fashion :

I. Introduction
[1] Can a without-cause dismissal be recharacterized later as for cause when the material circumstances were known to the employer before the dismissal?
[2] The answer is no.

I wish all judgements could so clear.

The relevant factors in this case were as follows:

1. The Defendants’ Board of Directors in their resolution terminating the Plaintiff ( who was the Executive Director ) said the termination was without cause.
2. The termination letter said it was without cause.
3. They paid him his minimum entitlement under the ESA which would not be payable if the was terminated was for just cause.
4. They never alleged any misconduct.

But here is the real backstory.

* A bunch of employees filed a harassment complaint against the Plaintiff .
* The Defendant hired an indépendant investigator to conduct a harassment investigation.
*The investigator did its job, interviewed the relevant parties and issued an interim report which said that the Plaintiff did not harass anyone.
* Having knowledge of this report, but apparently not relying on the report, the Board then made the decision to terminate and not allege cause .
* When the final report came out ( after the termination ) it confirmed the investigator’s conclusion that no harassment had occurred.
*The Defendant offered no evidence about why they decided to terminate the employment of the Plaintiff.
* The Defendant did not acquire any new information after the dismissal that they didn’t already have before the dismissal .
* In other words, they just thought they could change their mind, like changing your clothes.
* One of the the Board members was a lawyer but he stated that he did not know employment law. He advised the Board to hire an employment lawyer before the termination. The Board did eventually hire an employment lawyer( who presumably told them they did have just cause) but only after the actual termination.

My Comments:

This reminds me of when I practised as an advocate. Every single time one of my plaintiff clients was under investigation for alleged harassment , the result was always a dismissal. If the investigation found that the plaintiff was at fault the employer alleged just cause. If the finding of the investigator was no harassment the employer would say that they lost confidence in the employee and they would terminate without just cause.

Either way the employee lost his or her job.

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

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ONCA Makes Rulings About Post Dismissal Bonus Entitlements :

In Celestini v. Shoplogix Inc., 2023 ONCA 131 Justice Zarnett made the following rulings about the Plaintiff’s entitlement to a bonus payment over the 18 month notice period :

1. The clauses in the bonus agreements repeatably used the words ” employment terminates ” and ” termination of employment ” . The Defendant said that means if we we terminate your employment on March 1st then that ends your bonus entitlement. However the Court of Appeal goes right back to their 1999 decision in Veer v Dover ( and quoted in the SCC in Matthews v. Ocean Nutrition Canada Ltd., 2020 SCC 26) when it says :

” 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.”

In other words, when a bonus plan says termination it must mean a lawful termination and a lawful termination only takes place at the END, not the BEGINNING, of the reasonable notice period.

2) As there was no evidence as to what the bonus would have been had the Plaintiff been able to work out his notice period, the judges’ use of a three year average was a proper method of calculating the bonus over the notice period. Had there been actual evidence of what the bonus would have been, the result would likely be different.

3) The time period between the end of the last bonus period and the termination is what I call the ” stub bonus “. If the bonus year ended on December 31 2020 and the person is terminated on March 31, 2021 then he is entitled to a bonus both for the stub period and the reasonable notice period. Lawyers sometimes miss this issue as they tend to focus on notice period payment and forget about the stub period. In this case the Plaintiff was paid about $50,000 for the stub period which the trial judge deducted from the wrongful dismissal damages. The Court of Appeal corrected that mistake and said that the amount properly allocated to the stub period ( about $37,000 based on the three year average ) was not to be counted as a payment towards the damage award.

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

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You Don’t Get Two Kicks on the Same Facts Says the HRTO:

In Almseideen v. McKesson Canada, 2023 HRTO 255 , Adjudicator Cherniak had a situation where an applicant had filed a HRTO complaint claiming that he was terminated in breach of the Code and also filed a civil wrongful dismissal action which claimed wrongful dismissal damages due to the the failure to receive proper notice .

The Tribunal noted that the civil action did not contain any allegations of a Code violation, although they could have added such a claim to the civil action but choose not to do so .

This is what the Adjudicator said :

17]     The Tribunal addressed the application of subsection 34(11) of the Code in Zheng v. G4S Secure Solutions (Canada) Ltd., 2019 HRTO 407 (affirmed by 2022 ONSC 93, leave to appeal to the Court of Appeal refused). In that case, the Tribunal found that although the applicant removed any mention of Code-based allegations from their civil claim, the allegations set out in the application and the civil claim were virtually identical in their substance. The Tribunal then dismissed the application for that reason. As the Divisional Court stated at paragraph 37:

This is not a question of shaping the civil action so as to avoid reference to the allegation of discrimination. The facts are the same. A self-represented party would not be aware of our courts’ general antipathy to a multiplicity of proceedings. Having decided to go to court, relying on the same impugned actions as those alleged to have been discriminatory in a complaint to the Human Rights Tribunal of Ontario means that the Court is in a position to deal with the matter fully, including any allegation of discrimination. In short, you do not get two kicks at the same set of facts.

My Comments :

This should put an end to at the plaintiff practice of starting a clean wrongful dismissal action and also bringing a HRTO application claiming that there was discrimination at play. This tactic was developed for several reasons.

First it forced the Defendant to fight in two places which would increase their sunk legal costs in so far as there is no costs awards at the HRTO.

Secondly if the Plaintiff lost the civil action they could still try the Tribunal route, again with no risk of an adverse cost award.

This tactic was intended to put extra pressure on the Defendant to settle .

I suspect one of the reasons for the Tribunal decision is to try to lessen their outrageous backlog.

A more recent decision of the HRTO confirmed the same position. See Koufis v. James Campbell Inc. o/a McDonald’s Restaurant, 2023 HRTO 475 (CanLII)

Quere: If the civil courts can easily handle Code based cases, then why do we even need the HRTO?

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Two Cases Award Modest Damages for Manner of Dismissal :

In Teljeur v Aurora Hotel Group , 2023 ONSC 1324, Justice Mckelvey awarded moral damages of $15,000 to a dismissed GM of a resort for the following reasons:

  1. They did not pay him his ESA minimums within the 7 days set out in the ESA.
  2. They promised him 8 weeks severance but then paid only the ESA minimums of 2 weeks.
  3. The Plaintiff repeatably asked for a termination letter in writing ( as required by the ESA ) but the defendant failed to do so .
  4. The Defendants acknowledged at the termination meeting that the plaintiff was owed over $16,000 in expenses but failed to pay it, even as of the time of trial. This constituted 23% of the plaintiffs annual income.

In Starling v Independent Living Resource Centre of Calgary, 2023 ABPC 31, Judge Argento of the Provincial Court awarded $2,000 as aggravated damages for the following reasons

•         The Defendant terminated the Plaintiff while she was on sick leave and without having received any updated medical evidence indicating she was well enough to return to work.

•         The Defendant made no effort to call the Plaintiff to check on her health before it threatened to terminate, and eventually terminated, her employment.

•         The Defendant initially told the Plaintiff that she could not come to the office while on sick leave and that she would need medical clearance to return to work.  On September 26, the Defendant indicated, for the first time and without warning, that her employment could be terminated.

•         On September 26, the Defendant also advised the Plaintiff she would be dismissed for cause if she did not provide further information in two days. The two-day deadline was inadequate given the absence of any prior warning. It was also unreasonable to expect the Plaintiff to be able to obtain updated medical information in that time frame.

•         The Defendant advised the Plaintiff she had no sick leave or vacation days left even though Mr. Hagel’s May 3 email stated otherwise.  The Defendant did not check its files properly and failed to identify Mr. Hagel’s earlier email before placing the Plaintiff on unpaid, rather than paid, sick leave.

 

My Comments :

Courts seem to be increasingly willing to punish employers who do not conduct terminations in a sensitive and reasonable manner.

Playing hardball with a Plaintiff at their time of extreme vulnerability can be a costly affair.

For a copy of either of these cases, email me at barry@barryfisher.ca

For my mediation date availability, go to www.barryfisher .ca

 

Zero Mitigation Efforts Reduces Notice Period by 20%

In Zoehner v. Algo Communication Products Ltd.,2023 BCSC 224
Justice Verhoevan had this to say about a 63 year old employee ( and part owner of a family business ) regarding his mitigation efforts :1) He found that the employee had done nothing to find a comparable job as he was in full retirement mode.

2) However as the law also requires the defendant to show that if he had looked for a job he likely would have found one within the notice period, the Court found that the likelihood of this happening was basically zero for the following reasons :

[113] However, there was little likelihood that the plaintiff could have actually found reasonable alternative employment. As he noted, he was on the brink of retirement, and his professional skills were of limited scope, in that he had worked for a single employer for his entire career.

[114] An employee who has devoted a large part of his working life to one employer and whose knowledge and experience is tailored to the needs of that employer may be less marketable as an employee and may have more difficulty in obtaining alternative employment: Carey v. F. Drexel Co., [1974] 4 W.W.R. 492, 1974 CanLII 733 (B.C.S.C.).

[115] The plaintiff had health issues which limited his employability. He suffers from chronic low back pain with sciatica, caused by compressed discs in his lower back. He has limited tolerance for standing and walking. He is scheduled for vascular surgery. He takes medication, gabapentin, for his medical conditions. The medication causes fatigue and affects his mental alertness.

[116] It is quite unlikely that any employer would hire the plaintiff for a senior executive position paying anything like the salary he previously earned. Such jobs generally involve highly specialized services, with heavy demands and responsibilities. An older employee on the brink of retirement with significant health issues is not likely to obtain such employment.

Why then did the Judge reduce the notice period by 20%?

[117] However, given his retirement plans, it would have been reasonable for him to seek work at a lower salary, perhaps for a limited term. He might have been able to obtain some reasonable work, perhaps similar to the consulting work that he did, that might have brought in at least some income.

My Comments:

This is a BC case. In Ontario the law of mitigation is different on two points.

First, the employee is only obligated to look for comparable employment. They are never required to look for or accept lesser employment.

Second, even if they accept employment of a much lesser salary, that minimal income will not count as mitigation income that reduces the damage claim.

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

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Judgement = $35,743. Cost Award = $25,000

In Summers v. OZ Optics Limited, 2023 ONSC 723 Justice Hackland determined that the Plaintiff had beat their Rule 49 offer and was entitled to substantial indemnity cots for the bulk of the time .

Th judge made the following interesting comments about why he thought the Defendant’s actions increased the costs:

(b) Refusal to admit anything that should have been admitted – Rule 57.01(1)(g). The Respondent flatly refused and continues to refuse to acknowledge the application of the Court of Appeal judgement in Waksdale v. Swegon North America Inc. 2020 ONCA 391 (and subsequent appellate and trial decisions discussed in the court’s reasons herein), to the issue of the validity of the termination clause in its employment agreement. The Respondent continues to insist its’termination clause is valid and enforceable.

(c) Unnecessarily lengthening the duration of the proceedings – Rule 57.01(1)(e) and any step in the proceeding that was improper, vexatious or unnecessary – Rule 57.01(1)(f). The Respondent’s argument that the Applicant had failed to mitigate his damages by taking reasonable steps to secure new employment, an issue on which the Respondent had the burden of proof, was raised gratuitously and without any evidentiary basis. This was in the face of the Respondent doing nothing to assist the Applicant’s re-employment efforts-no letter of reference, no career transition counselling, and a summary dismissal in front of other employees. Then mitigation issue served to unnecessarily lengthen and complicate the proceedings and led to the Respondent improperly late serving affidavits on this issue, after the cross-examinations had
concluded.

My Comments;

1. Don’t make stupid legal arguments.

2. Don’t attack the Plaintiff’s mitigation efforts if the Defendant has done zilch to help him get a new job or taken active steps to impair it.

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

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Q: Want to Schedule a Motion for Summary Judgement in Toronto? A: You Will Get a Date 12 Months From Now :

I just heard from a very reliable source that he finally got a date for a summary judgement motion ( after a failed CPC attendance and 2 Case Conferences) and that date is in early 2024.

A system that was supposed to simplify and speed up straight forward cases has simply failed.

There are two simple solutions to this problem:

1. Take your mandatory mediation seriously. It is definitely your best opportunity to settle the case early and at less cost. I did a study a few years ago and found that of cases that did not settle at mediation, 95% of these cases eventually settled. So, when your mediation seems to be failing and you think, well we are going to a trial, remember that there is a 95% likelihood that it will not go to trial and will settle at some other time. In that case, why not try a little harder to get a deal at the mediation.

2. Use Mediation/ Arbitration ( MedArb) instead of litigation. Why keep using a failed litigation system? It is usually ( not always ) in the interests of both parties to get a resolution quickly and at the least cost. Med/Arb can be a useful alternative for the following reasons :

a) You get to choose your own judge.
b) You can contract out of the right to appeal.
c) You set the schedule, not some court clerk or judge.
d) The mediation will have a much higher likelihood of achieving a settlement.
e) Procedural matters and case management issues can be resolved promptly with a joint phone call or a ZOOM meeting.
f) Although you have to pay the Arbitrator’s fees, the actual hearing, if there is one, is usually much shorter than a trial. Moreover, the parties can agree that the winner pays the whole cost of the Arbitrator.

If you like to book either a mediation or an arbitration, go to my calendar at www.barryfisher.ca or call me at 416 999 3785.

Alberta Court of Appeal Follows BCCA by Confirming CERB Not Deductible from Wrongful Dismissal Damages:

In Oostlander v Cervus Equipment Corporation, 2023 ABCA 13 the Court overturned the trial judge’s decision to deduct CERB payments from the wrongful dismissal damages. The Alberta court followed the BCCA decision in Yates v Langley Motor Sport ( 2022 BCCA 398) .

There are now two Court of Appeal decisions confirming this principle and no appeal decisions that go the other way.

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

Foe my mediation dates, go to www.barryfisher.ca

Court Denies Winning Plaintiff Costs Where Judgement was $16,000:

In Chin v. Beauty Express Canada Inc., 2023 ONSC 56, Justice Morgan had awarded the plaintiff $16,000 which represented 7.5 months notice.

When it came to assess costs, the Defendant had made a Rule 49 offer for $10,000. The Plaintiff apparently made no Rule 49 offer.

The plaintiff claimed that her substantial indemnity costs were $54,777.

Much of the trial time was taken up with claims by the Plaintiff of moral damages, all of which were denied .

In deciding to award no costs, the is what the judge said :

“[7] That said, the trial can be objectively characterized as an unfortunate waste of the parties’ resources. Taking into account the pre-trial, trial preparation, and trial time and resources they each invested into the matter, the quantity of damages is far outweighed by the legal fees. And that is to say nothing of the court time consumed by what turned out to be a rather small claim.

[8] Although Plaintiff’s counsel makes an argument about the importance of the case to the Plaintiff, and I have no doubt that it was indeed important to her, this size case is precisely what Small Claims Court is for. Pursing a claim in that court does not diminish its importance, but it does provide a more streamlined procedure appropriate to the monetary value of the case to the parties. Importantly, it also frees up Superior Court of Justice resources for claims that other courts cannot handle, making for a more efficient administration of justice.

But for the Plaintiff’s rather large overreach, the entire litigation would have been far more expeditiously and inexpensively pursued in Small Claims Court.”

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Court Upholds Minutes of Settlement Calling for Increased Payment Upon Default:

In 1504641 Ontario Inc. v. 2225902 Ontario Inc., 2022 ONCA 175
the Court was faced with an issue involving the enforcement of Minutes of Settlement .

The MOS had a clause which said that the defendants was to pay $40,000 in four equal instalments and, if they defaulted on any payment, they consented to a default judgement in the sum of $120,000 less any payments made.

Surprise, the defendants paid only $30,000 and the Plaintiff’s moved for judgement on the remaining $90,000.

The MOS was enforced, despite the Defendants argument that the payment was a penalty. This is what they said.:

[12]     The appellants also argue that the $90,000 award amounts to a penalty. We do not accept that argument. The parties entered into Minutes of Settlement as a compromise to avoid a trial. As part of that compromise, the respondents agreed to reduce their claim to finally resolve the matter without additional costs if the reduced amount was paid in a timely way. In these circumstances, the amount required to be paid under the consent to judgment in the event that all of the instalment payments were not made is not a penalty.
amount was a penalty

My Comments :

This is a common settlement structure where the defendant needs time to pay. It creates a great incentive to honour a MOS. I am pleased that the Court upheld the deal because to do otherwise would eat away at the vital importance of enforcing settlements.

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

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