Employment lawyers will advise you that a motion for summary judgement can be expensive to lose. Not only does the company have to pay the judgement, the company will have to pay the costs of its own counsel and part of the costs of the employee’s counsel. Therefore, there is pressure on the company to offer a suitable severance package to negotiate a settlement rather than leave it to a court to decide with the cost consequences that follow.
In the recent case of Summerfield v. Staples Canada Inc. 2016 ONSC 3656, Staples terminated Ms. Summerfield’s employment without cause. Ms. Summerfield did not have a termination clause or a written contract. At the time of termination she was 39 years old, held a Sales Role, had 4 years and 10 months of service and earned approximately $83,901.93 in annual salary.
While we don’t know what the quantum of the severance package was because it constituted an offer to settle, the only issue in this matter was the common law notice period which made the case suitable for a motion for summary judgement. Staples argued it should be 3 to 5 months. Ms. Summerfield argued it should be 6 to 9 months. Both sides had ample authority to back their positions.
The court held on a motion for summary judgement that the Plaintiff had applied for 25 jobs and made an exemplary effort to mitigate. The court ruled that the appropriate notice period was 6 months.
Here are some thoughts on this decision:
- This case highlights the fact that common law notice awards fall on a range. In this case it was from 3 to 9 months for a similarly situated employee. Therefore, there is no guarantee that drawing a line in the sand at the lower end will be successful at trial. Courts are unpredictable and Staples likely could have saved a lot of money in a negotiated settlement.
- It appears that Staples tried to argue a failure to mitigate. However, Staples must discharge this onus and there was no evidence Staples provided outplacement services or any jobs for the Ms. Summerfield to apply to. Rather, the court was satisfied that Ms. Summerfield’s efforts were sufficient.
- As I said, we don’t know what the offers to settle were. However, a company in a similar situation could always pay salary continuance subject to obligations on the employee to prove that they were attempting to mitigate their damages with a clawback in the event the employee did mitigate their damages.
- Finally, this case highlights the need for corporations to put in written termination clauses which can limit their liability in the event of a not-for-cause termination.
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