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Court again confirms no upper limit with damages for non-management and low-level workers

The Ontario Superior Court case of Olivares v. Canac Kitchens (another in the long list of wrongful dismissal accounts against Canac Kitchens) arose from the termination of Olivares’s employment after 24 years of service. At the time of Olivares’s termination, he was a shipping supervisor who oversaw a team of loaders and coordinators. His salary was approximately $93,000, including overtime pay and benefits. At the time of his termination, he was 48 years old and was not educated. Another interesting fact from this case is that Olivares spoke little English. He was 24 years old when he entered Canada from Chile, and he almost immediately began working for Canac Kitchens. He spent his entire Canadian working life with the company, communicating almost exclusively in Spanish. In May 2008, Canac Kitchens ceased its manufacturing operations and, as a result, Olivares was left looking for work along with other former Canac Kitchen employees.

Mr. Olivares argued that, not only was the availability of similar alternative employment an issue, but he would also have have obvious difficulty re-entering the job market with limited English.

At the time of his termination, Olivares was paid a lump sum payment of 32 weeks of pay pursuant to the termination pay and severance provisions of Ontario’s Employment Standards Act. His benefits were continued for eight weeks.

The plaintiff (Olivares) brought to the Court a summary judgment motion to determine whether or not there was a genuine issue for trial. Both the plaintiff and the defendant (Canac) agreed to have the wrongful dismissal claim determined this way. There were several issues determined on the motion, in particular the appropriate period of reasonable notice, whether or not damages should be calculated on base or overtime pay, whether or not damages should include the cost of lost employee benefits and whether or not mitigation should be deducted from any notice payout.

The plaintiff obviously brought to the judge’s attention numerous cases involving Canac Kitchens which had been subject to litigation since 2008.

With respect to the appropriate reasonable notice period, Justice Lederman determined that 20 months was appropriate.  He referred to two Canac Kitchen cases and Di Tomaso v. Crown Metal Packaging Canada.

The Crown Metal case was important in that it determined that there is no upper limit with respect to the notice period for non-managerial or low-level employees. Di Tomaso was employed for approximately 33 years and was 62 years old at the time of termination. He was a mechanic and press painter. At the time of his termination from Crown Metal, he was provided with a bare minimum statutory 26 weeks severance pay pursuant to the Employment Standards Act. The employer argued that although he had been with the company for 33 years, because of his lower-level position he was only entitled to 12 months notice. The employer relied on previous cases that established that a 12-month upper limit reasonable notice was appropriate for clerical and unskilled workers. Di Tomaso relied on other cases to tell an opposing story. The Court of Appeal set a precedent by rejecting the notion that 12 months was a cap for every clerical and unskilled worker.

Di Tomaso was awarded 22 months of notice and the Court of Appeal declined to interfere with it, arguing that doing so would be “unwarranted tinkering.”

In the case of Olivares, Justice Lederman relied on and agreed that there was no cap with respect to payment in lieu of notice of non-managerial employees. All of the Bardal factors should be put to the circumstances of a case, despite the person being not within the context of management.

So what does this case tell us?  
This case, in confirming Di Tomaso, tells us that the character of employment factor is perhaps not given the greatest weight in determining the appropriate notice period for terminated employees. There is no upper limit of appropriate notice for unskilled employees or non-management employees in particular classes of cases. It again reaffirms what Justice Bastarache noted in the Keays and Honda case, that no Bardal factor should be given disproportionate weight.  The obvious dynamic, (or the Devil’s advocate), tells us that low-level, unskilled or non-management employees perhaps deserve less notice because they will probably have an easier time finding suitable alternative employment. This was simply a matter of common knowledge for years, but without accurate data. Now case law tells us a different story. When retained as counsel for companies to guide them on the issue of termination, these cases caution us to rethink the blueprint for terminating high term of service, but lower-level or unskilled employees.

Although not important for the general intent of this article, damages were bases on Olivares’s annual compensation, he was entitled to a certain amount quantified per month during the entire notice period for benefits compensation, and Canac was not allowed to deduct mitigation income during the period of the ESA time frame, which is an interesting point on its own.

Matt Lalande
Personal injury, disability and employment law
Haber & Associates

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Matt Lalande, Lalande & Company Lawyers

Hamilton Personal Injury Lawyer at Lalande & Company Lawyers
Matt Lalande is a Hamilton lawyer and founder of Lalande & Company Lawyers. Lalande & Company is a Hamilton law firm that specializes in representing victims who have suffered life changing injuries, claimants denied long term disability, families of wrongful death victims and employment law litigation. Read more
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