In Brake v. PJ-M2R Restaurant Inc., the Ontario Court of Appeal considered what type of income earned during the reasonable notice period should be deducted from damages for wrongful dismissal. After upholding the trial judge’s decision that the employee had been constructively dismissed, the Court in Brake confirmed that the trial judge was also correct in holding that the employee’s income during the reasonable notice period should not be deducted from the award for damages. The employee was awarded a twenty-month reasonable notice period after working for the employer for twenty years. The employee was a 62-year-old long-serving manager of…
Employers must exercise caution when drafting the terms of employment contracts. An improperly drafted provision in an employment contract can have unintended consequences, even if an employer’s application of that provision is valid in the given situation. Contract provisions must fall within the minimum standards set out in provincial legislation, and they must do so under all circumstances throughout their duration. The Ontario Employment Standards Act (“ESA”) provides the minimum standards for most employers and employees in Ontario. The ESA establishes rights and responsibilities for employers and employees, including the minimum standards surrounding reasonable notice of termination or payments in…
In Ruston v Keddco Mfg. (2011) Ltd., the Ontario Court of Appeal considered the consequences of failing to prove an allegation of just cause for terminating an employee. In upholding the trial judge’s decision, the Court affirmed that employers may have to pay a terminated employee additional damages if they falsely or incorrectly allege cause for dismissal. The employee was 54 years old at dismissal and occupied the highest position as President of the company. He received quick promotions from his initial position as a sales representative in 2004. The employee had a grade 12 education and had been unsuccessful…
In order for a termination clause in an employment contract to be considered valid, it must adhere to the minimum standards under the Ontario Employment Standards Act (“ESA”). Many employers include termination clauses to reflect their intention to limit entitlements owed to a dismissed employee to those required by the ESA. In order for courts to consider the termination provisions in an employment contract valid, the clause must be drafted in a manner that clearly reflects the parties’ intentions to abide by the ESA’s statutory minimums. This includes addressing issues such as continued payment of employee benefits, severance, and providing…
An employer’s duty of good faith in the manner of dismissing an employee is a well-established principle of Canadian employment law. When initially established in Wallace v. United Grain Growers Ltd., breach of the duty – that is, bad faith conduct by an employer – became another factor that Courts would consider when determining the reasonable notice period for a terminated employee. Bad faith damages were typically referred to as Wallace damages and allowed Courts to extend the reasonable notice period where bad faith conduct by an employer was found. In Honda Canada Inc. v. Keays, the Supreme Court of…
Absent exceptional circumstances, the maximum notice period is 24 months. It is widely recognized that a 24-month notice period represents the upper limit of an award for reasonable notice for long-term employees. While there is no absolute upper limit, the employee will need to present exceptional circumstances to support a notice period exceeding 24 months. In Dawe v. Equitable Life Insurance Company of Canada, the Ontario Court of Appeal considered an employee’s entitlement to notice and whether the trial Judge’s award of a 30-month notice period was appropriate in the circumstances. At the time of termination, the employee was 62-years-old…
In Bassanese v. German Canadian News Company Limited et al., the Superior Court of Justice considered an employee’s complaints of harassment in the workplace and the requirement that employers take steps to investigate such complaints. The Court not only awarded compensation in lieu of notice for wrongful termination but awarded the employee damages for assault and battery as well as aggravated damages. In total, the employee was awarded compensation totaling $194,433.17 and $10,000.00 in costs. This case provides an example of the consequences that employers face if they fail to take workplace harassment complaints seriously. It also serves as a…
In short: yes. In 2014, in a landmark decision called Bhasin v. Hrynew, the Supreme Court of Canada recognized that acting in good faith is an “organizing principle” underlying all contract law. Acting in good faith may take various forms depending on the context, and will be fact-specific. In the employment context, the Supreme Court of Canada stated that “acting in good faith in relation to contractual dealings means being honest, reasonable, candid and forthright.” Below details Jonasson v. Nexen, a 2018 case where the employer did the exact opposite and was required to pay damages for breaching its duty…
The answer: it depends. Upon dismissal, employees have an ongoing obligation to mitigate their damages. In certain circumstances, such a duty requires employees to return to work. In Gent v. Strone Inc., the Superior Court of Justice determined that the employee failed to appropriately mitigate his damages as he had an obligation to return to work under the circumstances. The employee was a fifty-three-year-old Health and Safety Training Specialist who had worked for the company for more than 22 years. He was temporarily laid off due to a lower work volume. The employee was told he’d be recalled as soon…