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Short-Term Employee Gets Two and a Half Months’ Severance

Tuesday, May 31st, 2011

It is often difficult for employment lawyers to assess the severance entitlement of someone who has been dismissed after only a few months of service.  Is the individual limited to his statutory entitlement under the Employment Standards Act, or does the common law call for a longer notice period? The “rule of thumb” that allows between one and two months’ severance per year of service, depending on the seniority and responsibilities of the job, is of no real assistance in a case in which the employee has less than one year of service.  There are very few reported cases to provide guidance on this question. 

A recent decision of Mr. Justice Stinson in the Ontario Superior Court of Justice may shed some light on the issue.  The plaintiff Daniel Harvey had more than 20 years experience in the hospitality industry. He lived in Québec, where he was employed as president of a food services company that was in bankruptcy protection. 

The defendant Shoeless Joe’s Limited is the franchisor of a chain of restaurants in Ontario.  It is a small company, employing only 20 people.  In late 2008, Shoeless Joe’s was looking for someone to fill the role of Vice-President, Operations.  It was introduced to Daniel Harvey by an executive recruiting firm.  Shoeless Joe’s offered Mr. Harvey the Vice-President’s job at an annual salary of $130,000, with a car allowance, health benefits, and a bonus of up to 15% of base salary depending on the number of store openings he achieved. 

Both the offer and Mr. Harvey’s acceptance were by e-mail.  Mr. Harvey relocated to Toronto and started his new job at the beginning of February, 2009.  He was never asked to sign a formal employment contract.  Shoeless Joe’s dismissed him without cause five and half months after his job began. 

The case came before Mr. Justice Stinson by means of a motion for summary judgment.  The plaintiff claimed six months’ severance based on his income level, the responsibilities of his job, and his performance.  According to the defendant, the plaintiff was employed for such a short period of time that his Employment Standards Act entitlement of one week was equivalent to his common-law entitlement. 

Stinson, J. referred to the well-established principle that in determining the length of notice required, the court is to consider the character of the employment, the length of service, the employee’s age, and the availability of similar employment given the experience, training, and qualifications of the employee.  He noted that fixing an appropriate severance period is not a mathematical exercise, but rather involves weighing numerous factors.  It is “more art than science”.  It is not appropriate to apply a “rule of thumb” that would award one month of notice for every year of work as the process of determining notice has to be flexible. 

Mr. Justice Stinson agreed with the defendant that, given the relatively short length of service, a relatively short notice period was appropriate.  He was referred to a couple of cases in which a notice period of roughly one month was awarded to employees who had served less than a year, but found those cases distinguishable in that the employees in question were working in lower echelon positions at lesser salaries. 

The judge referred to the fact that the plaintiff’s employment was at a senior level, that he reported to the president, that his managerial responsibilities were considerable, and that he was paid a salary of $130,000 a year with a potential 15% bonus.  These factors supported a longer notice period.  Mr. Harvey was 41 years old at the time he was hired, something that the judge categorized as “a neutral factor”.  It took Mr. Harvey 10 months to obtain similar employment, indicating that such employment was not readily available, and this was a factor militating in favour of longer notice.  The plaintiff’s relocation to Toronto from Québec to take up employment with the defendant was another factor favouring a longer notice period. 

After weighing all of these factors, Mr. Justice Stinson concluded that a notice period of two and half months was reasonable and appropriate.  The case indicates that, at least for a senior, highly paid executive, a fairly substantial severance will be required even in a case involving less than one year of service. 

Link: Harvey v. Shoeless Joe’s, CanLII – 2011 ONSC 3242 (CanLII) 

Richard Hayles, B.A., J.D.

 

Brief informational summaries about commercial litigation matters in the courts of Ontario and other developments are periodically published on this website. They are intended to be a general comment or general discussion, not legal advice and should not be relied upon as legal advice. Should you require legal advice, please contact info@heydary.com or 416 972 9001.

Posted in Civil Litigation, Employment & Wrongful Dismissal, Employment Law, Litigation Law, Wrongful Dismissal | Add Comment »

Court Sets a High Bar for the Issuance of a Worldwide Mareva Injunction

Friday, April 15th, 2011

Atlas Copco Canada Inc. is the Canadian division of a multinational corporation that supplies mining and construction equipment.  Dirk Johannes Plate worked for Atlas for nearly 40 years, starting in his home country of the Netherlands.  In 1993 he transferred to Atlas Canada, where he served as general manager. 

As an expatriate employee, Mr. Plate was entitled to various benefits that were not available to Canadian employees, including an annual housing allowance of $60,000, plus fully paid trips to his home in the Netherlands.  Under company rules, however, he could not enrol in Atlas’s Canadian pension plan.  He remained a member of the Dutch pension plan, the terms of which were not as favourable as the provisions of the Canadian plan. 

Mr. Plate was unhappy with the benefits provided by the Dutch pension plan, and began to complain about this as early as one year after he started work with the Canadian subsidiary.  According to Atlas, this dissatisfaction led Mr. Plate to conspire with the company’s controller, its director of human resources, and it’s outside pension benefits insurer to divert company funds to purchase annuities and other assets for himself and other executives.  Atlas dismissed Mr. Plate and the others, then commenced legal proceedings seeking a Mareva injunction to freeze the conspirators’ assets until the dispute could be determined at trial. 

Although Atlas Canada claimed that the executives had defrauded it of over $20 million, the Mareva motion focused on some $1.44 million in annuities registered in the names of Mr. Plate and his wife Maria Plate. 

Atlas Canada obtained an interim order freezing the assets of Mr. Plate and his wife, and of the defendant Leo Caron, the Atlas Canada director of human resources, as well as Mr. Caron’s former wife Jeannette Bourque, pending a hearing of the Mareva motion on a full evidentiary record.  After various adjournments and amendments to the timetable for the motion, the motion came on for a determination before Madam Justice Mesbur, who delivered her decision on April 11, 2011. 

Neither Mr. Caron on nor his ex-wife Jeannette Bourque filed any material on the motion, nor did Maria Plate.  In the end, only Dirk Plate opposed the Mareva injunction.  He took the position that Atlas Canada had failed to meet the test for granting a Mareva against him, and asked that the existing order be dissolved.  The plaintiff Atlas Copco asked the court to continue that order, and to extend the asset freeze so that it would cover all of Mr. Plate’s assets anywhere in the world. 

Mesbur, J. granted an order freezing Mr. Plate’s Ontario assets (including the annuities) until trial, but declined the request for a worldwide Mareva.  She stated that injunctions are an extraordinary remedy, meaning that they are granted when the moving party can satisfy the following requirements: 

  1. has the moving party established that there is a serious case to be tried? 
  2. if the injunction is denied, would damages be an adequate remedy in the event that the plaintiff later succeeds at trial?
  3. is the plaintiff’s undertaking to pay damages in the event that an injunction is granted and the plaintiff loses at trial adequate compensation for the defendants?
  4. does the balance of convenience favour an injunction? 
  5. is an injunction justified after consideration of the strength of the plaintiff’s case? 

She took notice of the principle that execution is not available prior to judgment, and that the term “execution” includes orders impounding assets or otherwise restricting the defendant’s right to make use of his property.  Since the Mareva injunction is an exception to this general rule, the test on a Mareva motion is more stringent than the test that applies on an ordinary injunction motion. 

In order to obtain a Mareva injunction, the plaintiff must show that it has a strong prima facie case on liability and that there is a real risk that the defendant will remove assets from the jurisdiction or dissipate them in order to prevent the plaintiff from recovering damages after judgment.  In addition, the balance of convenience must be in the plaintiff’s favour. 

The outcome of the motion turned primarily on the question of whether or not the plaintiff had made out a strong prima facie case of fraud as against the defendant Dirk Plate. 

Mr. Plate took the position that the annuities were purchased with the approval of the director of human resources (the defendant Leo Caron), as part of an agreement to top up his pension so as to make it equivalent to the Canadian plan.  He claimed that this was done with the knowledge of the Atlas Copco pension committee, as well as the company’s outside pension plan actuary.  As evidence to support his position, he pointed to a February 2001 e-mail from Mr. Caron to himself confirming an agreement to include Mr. Plate in the Canadian pension system, retroactive to January of 1983.  He claimed that this e-mail was copied to the secretary of the pension committee, who forwarded it to the outside actuaries. 

Mr. Plate also relied on a July, 2001 e-mail from Mr. Caron to the company’s actuary confirming that Mr. Plate was enrolled in the Canadian plan.  In addition, the actuary sent a letter in March of 2002 providing Mr. Caron with an estimate of Mr. Plate’s retirement income from “the two registered Company pensions [sic] plans”. 

Mr. Plate’s position was undermined by evidence provided by the company showing that Mr. Plate’s contract always classified him as an expatriate employee, and thus not entitled to participate in the Canadian pension plan.  The minutes of the company’s pension committee and of the Board of Directors contained no reference to enrolling Mr. Plate in the Canadian plan, or to buying annuities to compensate him for the supposed pension plan shortfall.  This course of action was never authorized in writing by Mr. Plate’s superiors, but only in the e-mail from Mr. Caron to Mr. Plate.  No copy of that e-mail could be found in any Atlas file. 

In addition, there was a discrepancy between the actuarial calculation of the cost of an annuity to top up Mr. Plate’s Dutch pension, which came in at just over $450,000, and the actual annuities purchased for a total of $1.44 million.  Further, Mr. Plate began to draw on the annuities in 2007, four years prior to his planned retirement date. 

The most damning evidence against Mr. Plate, however, was the fact that Mr. Caron confessed to participating in the fraudulent scheme, and gave sworn testimony that it was Mr. Plate himself who told him to buy the annuities.  In addition, the defendant David Hillier, the company controller, had confessed to participating in the scheme and had paid back some of the stolen funds to the company. 

When Atlas Copco Canada learned of the fraudulent scheme, it terminated Mr. Plate’s employment.  Some two weeks following termination, Mr. Plate transferred ownership of a jointly owned Dutch property into his wife’s name alone.  Not long after that, he did the same thing with two jointly held Québec properties.  He also tried to dispose of the annuities after his dismissal. 

Based on this evidence, Madam Justice Mesbur concluded that the plaintiff had made out a strong prima facie case of fraud. 

The judge concluded that Mr. Plate’s dealings with his properties immediately after his termination were highly suspicious, and led to an inference that he was attempting to insulate himself against judgment.  Mr. and Mrs. Plate provided inconsistent explanations for the property transfers, leading to the conclusion that a Mareva injunction was an appropriate remedy as against Mr. Plate. 

Since Atlas Copco had produced evidence from a bookkeeper with the company’s pension benefits insurer establishing that the Plates’ annuities had been purchased with company funds, the annuities constituted assets forming the subject matter of the litigation, and they could be preserved pending trial under rule 45 of the Rules of Civil Procedure.  The Québec assets were now in Maria Plate’s name, and she had not opposed the plaintiff’s motion to continue the injunction freezing those assets until trial.  The question to be determined, then, was whether a Mareva injunction could be issued restraining Mr. Plate from dealing with assets located outside of Canada. 

Mesbur, J. described the Mareva injunction as an “order in personam.”  Since Ontario was the proper forum for the case, the Ontario court had personal jurisdiction over Mr. Plate and was thus in a position to issue a Mareva injunction with worldwide application.  The judge concluded, however, that the injunction should not be expanded beyond the property in Ontario. 

Although the company alleged that the defendants were responsible for defalcations totalling as much as $20 million, as of the date of the motion they had put forward a compelling case with respect to some $1.8 million, most of which could be traced to the annuities preserved under Rule 45.  There was thus no evidentiary basis for issuing a Mareva injunction to cover all of Mr. Plate’s assets, wherever situated. 

The decision imposes a very high evidentiary standard on a plaintiff seeking to restrain the disposal of assets by means of a Mareva injunction.  The evidence indicating that Mr. Plate had defrauded the company was extremely strong.  There was also evidence indicating that further monies had gone missing during Mr. Plate’s tenure with the company.  Even so, it appears that the court was not prepared to expand the scope of the Mareva in the absence of evidence showing that Mr. Plate himself was responsible for the disappearance of the additional funds, or that those funds could be traced to a specific asset under his ownership.  

Richard Hayles, B.A., J.D. 

Link: Atlas Copco Canada Inc. v. Hillier, Plate, et al., CanLII – 2011 ONSC 2277 (CanLII)

 

Brief informational summaries about commercial litigation matters in the courts of Ontario and other developments are periodically published on this website. They are intended to be a general comment or general discussion, not legal advice and should not be relied upon as legal advice. Should you require legal advice, please contact info@heydary.com or 416 972 9001.

Posted in Civil Litigation, Employment & Wrongful Dismissal, Employment Law, Fraud, Injunction & Specific Performance, Litigation Law, Wrongful Dismissal | 1 Comment »

“Dependent Contractor” Gets Six Months Notice of Termination

Wednesday, April 13th, 2011

When an employer terminates an employment contract without cause, the employee is entitled to reasonable notice.  Where the worker is an independent contractor rather than an employee, however, the work relationship can be terminated without notice once the work of the independent contractor has been completed.

The law also recognizes an intermediate category of work relationships which falls short of the degree of direction and control needed to establish an employment contract, but which involves a level of exclusivity that is inconsistent with an independent contractor relationship.  In this situation, the worker is called a “dependent” contractor because his livelihood depends on the company that provides the work.  A dependent contractor, like an employee, is entitled to reasonable notice of termination.

Carmen Sarnelli was a locksmith for 17 years.  He trained with his father, and then took over his father’s business in the year 2000.  About two thirds of Sarnelli’s business came from the defendant Effort Trust Company.  When Effort terminated the relationship at the end of August, 2005, the plaintiff’s business was no longer viable.  He continued to work for a short period of time, but in 2006 he closed his business and sold the inventory.

In a recently released trial decision, Mr. Justice Matheson referred to a series of Canadian cases that recognize the existence of an intermediate situation where an employment relationship does not exist, but where an agreement to terminate the relationship on reasonable notice is nevertheless implied. The permanency of the working relationship between the parties is an important factor in establishing this intermediate category.  A finding of a dependent contractor relationship is more likely where the contractor works exclusively, or with a high level of exclusivity, for a single company.  This element of exclusivity tends to make the contractor economically dependent on the company that provides the work.

Mr. Justice Matheson also referred to five principles that the courts can look to in determining whether or not a dependent contractor relationship exists:

  1. Does the contractor work exclusively for one organization?
  2. Is the contractor subject to the control of a single employer, not only as to the product or services supplied, but also as to when, where, and how products and services are supplied?
  3. Does the contractor have an investment or interest in the tools or equipment required in order to provide his work?
  4. Does the contractor undertake any risk in association with his business, and does he have a corresponding expectation of profit associated with the delivery of his work (as opposed to working for a fixed hourly rate or commission)?
  5. Is the activity of the contractor an integral part of the business organization for which he primarily works?

The judge concluded that Mr. Sarnelli was a dependent contractor.  In making this determination, the judge took note of the fact that Sarnelli was on call at all times, day or night.  Two thirds of his annual billings were for the defendant, so the plaintiff was highly reliant on the defendant.

Another factor that influenced the decision was the fact that Sarnelli had an exclusive distribution contract with the supplier of a particular “high security” lock that Effort Trust preferred to use in some of its buildings.  The witnesses called at trial established that the defendant had no complaints about the plaintiff’s work.  The defendant had seven telephone numbers with which it could reach Sarnelli, indicating a high degree of reliance on him.  Other locksmiths that worked for Effort Trust provided only one or two numbers.

There was also an Effort Trust tradesman list, in which Sarnelli was the only locksmith listed.

The plaintiff had asked for nine months notice.  Since the plaintiff did not seek other customers after the termination, the court concluded that there had been a failure to mitigate, and that six months notice was sufficient.

Under the “dependent contractor” concept, workers who are not employees can still claim compensation if an ongoing contract is terminated without notice or cause.

Richard Hayles, B.A., J.D.

Link: Sarnelli v. Effort Trust Company, CanLII – 2011 ONSC 1080 (CanLII)

 

Brief informational summaries about commercial litigation matters in the courts of Ontario and other developments are periodically published on this website. They are intended to be a general comment or general discussion, not legal advice and should not be relied upon as legal advice. Should you require legal advice, please contact info@heydary.com or 416 972 9001.

Posted in Civil Litigation, Construction Disputes, Contract Disputes, Employment & Wrongful Dismissal, Employment Law, Litigation Law, Wrongful Dismissal | Add Comment »

Employee Keeps Working After He’s “Dismissed”

Tuesday, November 16th, 2010

You’ve been working for the same company for decades.  Business is bad lately.  Your employer asks everybody to take a big pay cut.  It will be hard to make ends meet on what the boss is now willing to pay, but after all these years with the same company, there aren’t many jobs out there for you.  What do you do?

Lorenzo Russo took a part-time summer job with the Kerr Brothers candy company in 1972, when he was still in high school.  In November of 1972, at the age of 16, he quit school so that he could begin full-time employment as a shipping clerk in the Kerr Brothers warehouse.  He became warehouse manager in 1977, and he had worked continuously for Kerr Brothers for 37 years when, at the age of 53, his lifetime employer asked him to accept radically different terms of employment.  He refused, and took the company to court.

In 2009, Kerr Brothers hired a new president, Fayez Zakaria, who was given the task of cutting costs in order to save the company.  Kerr Brothers had been in business for more than 100 years, but had run into financial difficulty in the last decade.  The company reported losses totaling $7.4 million over the previous nine fiscal years.

After examining employee salaries, Mr. Zakaria concluded that all employees, including Mr. Russo, were being paid salaries that were in excess of what Mr. Zakaria regarded as competitive in the marketplace.  In April of 2009, he asked everyone to accept a 10% reduction in compensation.  He also dissolved the pension plan.

At that time, Mr. Russo was employed as warehouse manager, earning approximately $115,000 a year.  His base salary was $85,000 annually, but he also received an annual bonus of $30,000.  In addition, he was entitled to participate in the Kerr Brother’s defined benefit pension plan, under which Kerr Brothers matched employee contributions up to a maximum of 4% of annual salary.  In Mr. Rizzo’s case this particular benefit was worth about $4,500 a year.

After implementing the initial 10% cut, Mr. Zakaria determined that additional cuts had to be made if the company was to survive.  He decided that four employees, including the plaintiff Russo, were paid excessive remuneration in light of their skill level and the market rates for similar positions with other organizations.  He approached the four employees and asked them to accept a decrease in pay.

On July 16, 2009, Mr. Zakaria reduced Mr. Russo’s salary to $60,000 a year. The bonus was discontinued, although the plaintiff was offered a prorated bonus from January to April of 2009.

Mr. Russo retained a lawyer.  On July 27, 2009, his lawyer wrote Kerr Brothers stating that Mr. Russo did not accept any of the employer’s unilateral changes to the terms of his employment contract.  In the letter, Mr. Russo’s lawyer said that Kerr Brothers’ fundamental modifications to the employment agreement constituted a “constructive dismissal”.  Although Mr. Russo, through his lawyer, rejected the idea that the employer was entitled to force him to accept the 45% reduction in his compensation, Mr. Russo remained an employee of Kerr Brothers, and continued to perform his duties as warehouse manager at the lower rate of pay.

In court, Mr. Russo took the position that he had been constructively dismissed by Kerr Brothers, but that he continued in his employment at the lower salary level in order to mitigate or reduce his damages.  He claimed that he was entitled to reasonable notice of any fundamental changes in the terms of his employment.  Given that he was 53 years of age, and had worked for the same employer for 37 years, and that he held a managerial position, he claimed he was entitled to 28 months notice of the changes in his remuneration.

Mr. Russo’s claim, then, was for the difference between his earlier earnings of $115,000 a year, and his new compensation of $60,000 a year, over the entire 28 month notice period.

The employer admitted that the changes in the terms of Mr. Russo’s employment were so fundamental that they amounted to a constructive dismissal.  According to the employer, however, an employee has who has been constructively dismissed has a choice: if he leaves this employment, he can sue his employer and recover whatever income he has lost during the reasonable notice period.  In this case, Kerr Brothers suggested that Mr. Russo would be entitled to 18 months notice, and if he had chosen to leave his employment, he would get 18 months’ severance, subject to whatever amount he was able to earn during that time by making reasonable efforts to obtain alternative employment.

According to the employer, when Mr. Russo elected instead to remain in his position, he impliedly accepted employment under the new contract terms, including the reduction in salary.  Since Mr. Russo had elected to remain in Kerr Brothers’ employ at the lower compensation level, he was not entitled to any damages for the breach of his employment contract.

Mr. Justice Gray concluded that the issue was to be determined by applying general principals of contract law.  To be effective, a repudiation of contract must be accepted by the innocent party, and the acceptance must be communicated: Lebovic Enterprises Ltd. v. Dixie Lee of Canada Inc., [2010] O.J. No. 4530 (S.C.J.).  In the Lebovic case (which was the subject of the writer’s October 28, 2010 blog post Landlord Must Give Credit for Higher Rent Obtained Following Lease Termination), the Ontario Superior Court of Justice cited long-standing English authority (Howard v. Pickford Tool, [1951] 1 K.B. 419 (C.A.)), to the effect that “an unaccepted repudiation is a thing writ in water and is of no value to anybody: it confers no legal rights of any sort or kind.”

In the employment context, Kerr Brothers’ unilateral decision to reduce Mr. Russo’s rate of pay from $115,000 to $60,000 a year constituted a repudiation of the employment contract.  Mr. Russo did not accept that repudiation, however, and put Kerr Brothers on notice that he insisted on full performance of the existing contract terms.

Mr. Justice Gray identified three options that are available when the employer makes unilateral changes to the fundamental terms of the contract of employment:

(1)          The employee can accept the changes in the terms of employment, either expressly, or implicitly through acquiescence, in which case the employment will continue under the altered terms.

(2)          The employee can reject the changes, and sue for damages if the employer persists in treating the relationship as being subject to the new terms.  This situation is what is referred to as a                “constructive dismissal”.

(3)          The employee can make it clear to the employer that he or she rejects the new terms of employment.  The employer can respond to this rejection by terminating the employment contract on proper notice, and offering re-employment on the new terms.  If the employer does not take that course of action, and                permits the employee to continue to work at his existing job, the employee can insist on adherence to the terms of the original contract.

In the first situation, the employee is regarded as acquiescing to the employer’s new terms, and the legal effect is that the parties have entered into a new employment contract on the employer’s terms.  Under the scenario outlined in number (3) above, however, the employer is to be regarded as acquiescing to the employee’s position.  The employer does not have a unilateral right to change the employment contract, and cannot force the employee to either accept the new terms or quit.

At the end of the day, the court determined that the 28 month notice period proposed by the employee Russo was too long, notwithstanding the employee’s long-standing service.  He was not a senior executive, and the fact that the employer was faced with difficult economic circumstances had to be taken into consideration.

The 18 month notice period proposed by the employer was also rejected, and the Judge concluded that 22 months would constitute reasonable notice for Mr. Russo.  Since the full 22 month period had not run as of the date of the summary judgment motion, the Court granted Mr. Russo summary judgment for the difference between his original rate of pay and the amount he had received from the employer since July of 2009, up to the date of the Court’s decision on the summary judgment motion.

The balance of the motion was adjourned to be brought on again and determined after the expiration of the full 22 month notice period, when it would be possible to determine how much Mr. Russo was able to earn during those additional months after making reasonable efforts to obtain alternative employment.

Richard Hayles

Link: Russo v. Kerr Bros. Limited, CanLII – 2010 ONSC 6053 (CanLII)


Brief informational summaries about commercial litigation matters in the courts of Ontario and other developments are periodically published on this website. They are intended to be a general comment or general discussion, not legal advice and should not be relied upon as legal advice. Should you require legal advice, please contact info@heydary.com or 416 972 9001.


Posted in Civil Litigation, Employment & Wrongful Dismissal, Employment Law | Add Comment »

Dismissed Employee Demands Shorter Notice Period

Friday, November 12th, 2010

Why would an employee insist that he was entitled to only four months notice of dismissal when the employer suggested five? In an unusual reversal of roles, an employee who had sued for six months notice argued at trial that four months would be sufficient, while the employer, who had offered five weeks pay in lieu of notice at the time of dismissal, changed its position at trial, and urged the court to award five months.

The plaintiff was an electrical engineer who had worked for the defendant for a little more than three years when he was laid off as of November 27, 2008.  The reason for dismissal was a downturn in the electronics industry, and there was no allegation of cause.  His salary as of the date of dismissal was $55,000 a year.

The plaintiff began his job search with alacrity, and was hired by RIM starting March 30, 2009 at a salary of $70,000.  When the case got to trial, he tried to convince the court that the appropriate notice period was four months, the time that it actually took him to find a new job.  Why? Since his new salary was significantly higher than his earnings with the defendant, each additional month of notice beyond his March 30, 2009 start date with RIM would result in a lower award of damages.  This is because the Court would have to count his increased earnings as money that he obtained in mitigation of damages.

The employer argued that the appropriate test for notice should consist of the usual factors, including the age of the plaintiff, the nature of his work, his salary, training, and education, the labor market in the industry, and a general assessment as to the amount of time it would usually take someone in a similar situation to find comparable employment.

The trial judge agreed with the employer, who cited authorities stating that where a dismissed employee successfully mitigates his losses, the employer is entitled to the benefit of the employee’s diligent job search efforts.  Case law also establishes that the notice period is to be determined on the facts that exist at the moment of dismissal, and not by hindsight as of the date of trial.

In the end, the judge sided with the employer and concluded that a reasonable period of notice would be five months, the time it would normally take a person in the same situation to find comparable employment.  This resulted in a somewhat lower award of damages than would have been the case if the employee had convinced the court that the shorter four-month notice period was reasonable.

Link: Serbanescu v. Span Manufacturing Ltd., CanLII – 2010 ONSC 6087 (CanLII)

Richard Hayles


Brief informational summaries about commercial litigation matters in the courts of Ontario and other developments are periodically published on this website. They are intended to be a general comment or general discussion, not legal advice and should not be relied upon as legal advice. Should you require legal advice, please contact info@heydary.com or 416 972 9001.

Posted in Civil Litigation, Employment & Wrongful Dismissal, Employment Law | Add Comment »

Court Grants Summary Judgment for Wrongful Dismissal

Wednesday, September 29th, 2010

In reasons released on September 21, 2010 the Ontario Superior Court of Justice granted summary judgment in a wrongful dismissal action since there were no issues that required a trial and since the only issues to be determined were the length of reasonable notice; the calculation of damages; the adequacy of mitigation; deductions, if any; and the method of paying damages and interest.

The Superior Court of Justice found that core facts were not in dispute such as, the nature of the business; the plaintiff’s length of employment and position; the plaintiff’s age and wages at the time of dismissal; and whether the employee worked overtime and / or received benefits.  Thus, summary judgment was appropriate in the circumstances.

Citation: Camaganacan v. St. Joseph’s Printing Ltd., 2010 ONSC 5184

Olanyi Parsons LL.B


Brief informational summaries about commercial litigation matters in the courts of Ontario and other developments are periodically published on this website. They are intended to be a general comment or general discussion, not legal advice and should not be relied upon as legal advice. Should you require legal advice, please contact info@heydary.com or 416 972 9001.

Posted in Employment & Wrongful Dismissal, Litigation Law | Add Comment »