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Motions for judgment in wrongful dismissal − the Court of Appeal’s latest statement

One of the difficulties faced by plaintiffs’ counsel in wrongful dismissal litigation is the length of time it can require to get a case to trial and obtain monetary compensation for the dismissed employee. Obviously, a plaintiff without a job is sensitive to the costs and delay which may result. This issue can often be addresses by way of a Motion for Summary Judgment.

goldgavelThe rules for summary judgment have been in place for decades. However, over the last 10 years, amendments to the summary judgment procedure have significantly broadened the courts’ powers to grant judgment without a trial. Until 2010, it was still the law that the judge on a summary judgment motion could not make findings of credibility or draw inferences from evidence presented. This resulted in many motions for summary judgment in wrongful dismissal actions being dismissed. However, in 2010, based on a review of the rules, amendments were put in place, which expressly empower the judge hearing such a motion to weigh the evidence, evaluate the credibility of deponents, and draw any reasonable inferences from that evidence. While the new rule has only been in place for a short time, there have been numerous motions before the Ontario Superior Court which seek to rely on it. In particular, the plaintiffs in wrongful dismissal actions have brought motions for the determination of their notice entitlement, asking the court to weigh the evidence and reject the allegations of cause.

There has long been a provision in the rules to short-circuit the process where the plaintiff’s counsel can convince the court that there is no genuine issue of fact or law for trial. Since the rules were substantially amended in 1985, the courts have broadened the circumstances in which a motion for judgment will be granted. However, there has always been the sticking point of the need to assess credibility or resolve disputed facts.

The most recent interpretation of these broadened rights to summary judgment came from the Ontario Court of Appeal on June 22, 2011, in the decision of Di Tommaso v. Crown Metal Packaging Canada LP. In this case, the plaintiff was a mechanic and press maintainer who had worked for Crown Metal for 33 years. Crown Metal decided to close the facility where the plaintiff worked and terminated the plaintiff’s employment. However, a few days prior to his stated termination date, the employer advised the employee that it would extend his employment for a few weeks. In fact, these extensions continued to be granted for a period of five months, each extension coming just shortly before the agreed-upon termination date. When the plaintiff’s employment finally terminated on February 26, 2010, the employer provided him with his 26 weeks’ statutory entitlement under the Employment Standards Act (ESA), together with his accrued vacation pay. The employee sued.

As the employee had been working for Crown Metal for 33 years and was 62 years old at the time of his dismissal, he sued for 24 months’ notice, the maximum amount available under the case law. The defendant took the position that it had first given the plaintiff notice when it first advised him of the closing of the plant, and that the entire period under which he was working pursuant to the temporary extensions constituted working notice to be credited against any notice period imposed by the court.

As the only issue between the parties was the length of notice, and whether or not the temporary employment should be credited, the plaintiff brought a motion under Rule 20 of the Rules of Civil Procedure for summary judgment. In granting judgment, the motion judge referred to the Regulations under the Employment Standards Act, in particular, the Regulation that provides:

… an employer who has given an employee notice of termination in accordance with the Act and the Regulations may provide temporary work to the employee without providing a further notice of termination in respect to the day on which the employee’s employment is finally terminated if that day occurs not later than thirteen weeks after the termination date specified in the original notice.

The employer argued that, as each of the extensions of employment was less than 13 weeks, notice of termination remained valid and the employee had therefore received five months working notice. The employee responded that the proper interpretation of the Regulation required that the extensions be viewed cumulatively and that therefore he had only received notice of termination on February 24, 2010. The motion judge agreed with the employee’s position, finding that the Regulation clearly provided for extending termination for no more than 13 weeks, regardless of how many extensions were given.

The Court of Appeal agreed with the motions judge as to interpretation of the Regulation. The Court found that to accept the employer’s interpretation that it could issue repeated extensions of 13 weeks as long as it was less than 13 months would be “inconsistent with the ESA status as remedial benefit conferring legislation designed to protect the interests of employees.” The Court of Appeal therefore held that a notice of termination must include a final termination date so that the employee can determine his entitlement. The Court agreed with the motions judge that it was not until the final notice letter terminating the plaintiff’s employment that he was certain as to when that unemployment would commence. It also accepted the motions judge’s findings of credibility as the facts surrounding the timing and terms of the termination notice.

The Court of Appeal’s reasoning is instructive for many employers that, in these uncertain times, seek to avoid final layoffs by short-term extensions of employment. If it is the employer’s intention that such extensions be counted in any eventual notice period, a clear agreement with the employee showing this understanding should be implemented. As in all cases, entering agreements with existing employees is fraught with legal challenges and should be prepared with proper legal advice.

The other issue faced by the Court was the question of the upper end of wrongful dismissal damages for so called non-managerial employees.

The determination of appropriate notice is always more of an art than a science. The often referred to Bardal Factors, as set out in the Supreme Court of Canada in the 1960 decision in Bardal v. The Globe & Mail, and the consideration of those factors in subsequent Supreme Court of Canada decisions, have listed a number of “non exclusive” factors, including the employee’s age, length of service, qualifications, and conditions in the industry. However, employers have frequently argued that the upper limit established by the Supreme Court of twenty four months applies only in the case of senior managerial employees, and that there is a cap of 12 months for so called unskilled or non managerial positions. The motion judge rejected the employer’s argument of a 12-month cap and, in consideration of the employee’s age and years of service, imposed a notice requirement of 22 months.

The Court of Appeal rejected the employer’s argument that there was a 12-month cap for clerical and unskilled employees. The Court of Appeal referred to earlier Court of Appeal decisions which rejected this upper limit. In this case, the Court of Appeal focused on the so-called Bardal Factors in the plaintiff’s case and held that the twenty two months awarded for the motions judge, while in the upper range of what is reasonable, was supportable. The Court found that it would be “unwarranted tinkering” to interfere with the motion judge’s decision.

This is one of a series of cases which has held that the character of the employee’s employment is but one of a number of factors which should not be given disproportionate weight. The court looked to some recent decisions in other provinces which found that, in fact, junior employees might have a more difficult time finding employment and be entitled to a longer period of notice. The courts decision on the notice issue highlights the uncertainty of determining appropriate notice. Attempting to negotiate a final figure at the time of termination is often an exercise for both parties of rolling the dice. It is therefore often preferable to arrive at a structured settlement which involves salary continuance for a pre-determined period of time in the hope the employee will secure alternate employment prior to the end of the notice period.

Earl Altman
Garfinkle, Biderman LLP

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Earl Altman

Legal consultant at EA Consulting
Earl Altman was a partner at Garfinkle, Biderman and now heads his own consulting firm. Earl has practiced commercial and employment litigation. Earl’s practice focuses on employment disputes, including acting for employees and employers in wrongful dismissal claims, and in breach of contract and breach of fiduciary duty claims. Read more
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