Quick Justice? Bring a Summary Judgment Motion

The use of the summary judgment process is becoming more and more widespread in wrongful dismissal cases.

In this post, I look at three recent decisions to show how useful this process can be for plaintiffs.  The conclusion is that it is getting more difficult for employers to drag their feet and lowball their dismissed employees in non-cause wrongful dismissal cases.  Employees faced with low, out of the range offers can use the summary judgment process to get a fairly quick judgment with minimal risk.

In Beatty v. Best Theratronics Ltd., (2015) ONCA 247, the court upheld a 16 month notice period for a radiation safety officer.  Clifford Beatty was 58 years old when he was dismissed.  He had worked for the employer for a period of 16 years.  In a summary judgment motion, he was awarded 16 months’ notice by an Ontario Superior Court judge.  The defendant appealed the decision and tried to argue that the appropriate notice period was only 12 weeks.  Not surprisingly, this seems to have angered the appellate court panel which sided, quite firmly, on behalf of the plaintiff.  The defendant might have attracted a bit more court sympathy if it had put forward a reasonable alternate notice period – perhaps 10 or 12 months.  But there was no basis, on the record, for proposing 12 weeks.  The defendant also argued that the plaintiff had failed to apply for a sufficient number of positions over the course of the notice period.  This submission was also rejected by the court, which upheld the trial court’s decision that the plaintiff had conducted a “reasonable” job search.  The court also, once again, noted that there were no real credibility or factual issues that would have required a trial rather than the use of a summary judgment process.  The appeal was dismissed with a costs award of $16,500.  This certainly looks like a reasonable victory for the dismissed employee.

In Maxwell v. United Rentals of Canada Inc. (2015) ONSC 2580, the summary judgment process was used by a service manager who had worked for his employer for 31 years.  Kevin Maxwell was 51 years old when he was dismissed on a without cause basis.  He was earning an annual salary of approximately $64,700 but with bonuses and other amounts his annual income came to $81,100.  The case went to a summary judgment motion.  The plaintiff asked for 20 months’ compensation.  The defendant proposed that 16 months should be the proper number.  The court awarded 18 months’ compensation.  A key issue seems to have been the annual figure to be used.  The defendant argued that the plaintiff’s base salary should be the appropriate figure.  The court chose to use the plaintiff’s T4 amount, which included bonuses and other amounts.  This represented the plaintiff’s earnings more closely.  The court also rejected the defendant’s arguments that the plaintiff had failed to mitigate damages properly by applying to 120 jobs.  The court specifically noted that the defendant had not provided any assistance and this “is an important factor to be taken into consideration when the employer then accuses the former employee of not taking adequate steps to secure alternate employment.”  While this decision highlights the fact that dismissed employees are entitled to be paid on the basis of their full annual income rather than base pay alone, the notice period awarded to the plaintiff was probably low.

In another recent decision, one of the key issues was how the money should be paid.  In Markoukis v. SNC-Lavalin Inc. (2015) ONSC 1081, the dismissed employee had worked for the defendant for almost 41 years.  Eftihios Markoulakis was 65 at the time of dismissal and was a senior civil engineer.  He was paid out 34 weeks’ pay, based on the Ontario Employment Standards Act minimums for notice and severance pay.  He sued his employer and asked for 30 months’ notice.

The trial court judge agreed that there were exceptional factors here including the almost 41 years of service that the plaintiff had under his belt.  She ordered a notice period of 27 months.  However, the motion was heard only 31 weeks after the plaintiff was dismissed.  It would be unfair to order the defendant to pay the full 27 months’ compensation when the parties were only in month 8.  The defendant would be entitled to credit if the plaintiff were to earn any other money or find alternate employment.  The court held that the defendant would be required to pay the plaintiff monthly until the end of the 27 month notice period.  The court held that the defendant reserved the right, during the notice period, to bring a motion challenging the plaintiff’s mitigation efforts or dealing with other issues that might be arise.  While the plaintiff won an extraordinarily lengthy notice period, he will have to continue to report to the defendant about his mitigation efforts for the balance of the notice period.  So this was not a “no strings attached” victory.

Looking at all three cases together, it is quite evident that summary judgment motions are one of the most appropriate ways of dealing with wrongful dismissal cases, where no cause is alleged.  They are relatively inexpensive, relatively quick and quite difficult to defeat.

The best approach for employers defending these motions is to take a reasonable approach to damages.  Employers that show up in court and put forward extremely low suggested notice periods are likely to find that the plaintiff has won everything that he or she requested.  On the other hand, where the defendant puts forward a reasonable notice period, as in the Maxwell case, the court might be more inclined to view the employer more favourably.

For dismissed employees, as in all wrongful dismissal cases, it is very important to prepare a detailed and reasonable record of job search and other mitigation efforts.  Although the standard is not an extremely onerous one, employees must be able to show that they have made reasonable efforts to try and find alternate employment or an alternate comparable income source.  If the dismissal was “without cause” and the dismissed employee is making reasonable efforts to find new employment, the summary judgment process can be invaluable.

 

 

 

Just Cause for Dismissal: Is One Incident Enough?

Is one incident of dishonesty just cause for dismissal?  What if it involves a long-serving employee?  This was the issue that was decided recently by the B.C. Court of Appeal in  Steel v. Coast Capital Savings Credit Union.  

The plaintiff, Susan Steel, was a help desk analyst.  She had been employed by the Credit Union for 21 years.  In 2008, the plaintiff accessed the personal folder of a manager.  The manager kept a folder for assigning parking spaces and the plaintiff wanted to check her status.  She was caught because the manager was accessing the folder at the very same time.  She was confronted and admitted her misconduct.  She also acknowledged that she did not have authorization.

At trial, the judge reviewed the case law, focusing on the Supreme Court of Canada’s landmark decision in McKinley v. B.C. Tel (2001) SCC 38. The court dismissed the case and found that Ms Steel had been dismissed for just cause.  The plaintiff appealed to the B.C. Court of Appeal.

By a 2-1 majority decision, the B.C. Court of Appeal upheld the trial court decision and dismissed the appeal.  As the Court of Appeal put it, “McKinley requires courts to apply a contextual analysis to determine whether employee misconduct amounts to just cause for dismissal….Following McKinley, a single act of dishonesty as a matter of law no longer gives an employer an absolute right to dismissal its employee.”

However, the Court of Appeal also noted that “a single act of misconduct can justify dismissal if the misconduct is of a sufficient character to cause the irreparable breakdown of the employment relationship.”

The majority of the court held that a breach of privacy was such a fundamental obligation in this type of employment position that the plaintiff’s action could be seen as causing a “fundamental breakdown of the employment relationship.”

In dissenting reasons, Justice Donald included this sentence:  “What is absent from the trial judge’s reasons is an explanation why a single instance of a breach of the privacy rules should end a 21 year career….The record does not show deceit, fraud, theft or stealth.  The misconduct was serious, as the judge found, but her analysis of the proportionality of the penalty left out a vital factor.”  Justice Donald would have allowed the appeal and remitted the case to the trial judge for an assessment of damages.

The McKinley decision has been cited many times and has been interpreted in different ways.  In some cases, it has been used to help dismissed plaintiffs obtain damages where many people might find the results to be puzzling and overly sympathetic.  In other cases, courts have limited the application of McKinley to minor or more limited instances of dishonesty or misconduct.

Ultimately, each judge applies his or own sense of “proportion” and reasonableness.  Here two appellate court judges held that one instance of this type of dishonesty was cause for dismissal, whereas one judge disagreed.

For plaintiffs and for employers these are risky cases.  They are fact driven.  But they also depend on sensibilities of the particular judge hearing the case as well as the appellate court panel that might hear the case if it is appealed.

For Susan Steel, this was a very costly and time consuming ordeal.  The Court of Appeal decision was released in 2015, some seven years after Ms Steel was dismissed.  Ultimately, she has been awarded nothing after 21 years of employment and may well have incurred significant legal fees.  The case is a reminder of the high stakes of pursuing just cause litigation where an undisputed instance of improper conduct is involved.

 

Use of Summary Judgment Motions in Dismissal Cases

What are summary judgment motions?  Are they effective in wrongful dismissal cases?  A recent decision of the Ontario Court of Appeal in Arnone v. Best Theratronics Ltd. has provided some helpful guidance for those who would like to use this process.

A summary judgment is a motion for judgment that bypasses the need for a trial.  It can be used where there is no “genuine issue” that requires a trial.  It can often allow parties to save time and legal costs and has been used quite often in Ontario more recently in non-cause wrongful dismissal cases.

The case involved a 53 year old employee who was dismissed without cause after 31 years.  After the parties could not come to a mutually agreeable severance arrangement, the employee sued for wrongful dismissal.  Rather than proceed to a trial, he brought a summary judgment motion in the Ontario Superior Court.  Although this process allows parties to bypass some of the more expensive procedures in other litigation cases, including extensive examinations for discovery, motions and a trial, it can still be a costly process.  Here there were cross examinations on affidavits filed in preparation for the summary judgment.

The motions judge hearing the case initially made a number of findings and awards that were challenged on appeal to the Court of Appeal.  For purposes of this note, I wanted to highlight some key findings of the Court of Appeal, which are relevant and helpful to future litigants.

1.  Summary Judgment is a Great Process for Without Cause Wrongful Dismissal Cases

The Court of Appeal had little trouble concluding that there were no “genuine issues requiring a trial.”  It noted that “a straight-forward claim for wrongful dismissal without cause, such as the present one, strikes me as the type of case usually amenable to a Rule 20 summary judgment motion.”  The defendant tried to resist the motion by arguing that it was unclear whether the plaintiff was a customer service specialist or a manager.  The defendant argued that this issue required a trial.  The Court of Appeal held that there was no issue requiring a trial.  It also noted that, in any event, “character of employment” is a “factor of declining importance.”  In other words, the factors that are far more important to consider include a dismissed employee’s age and length of service rather than the actual position that the person held.

2. Reasonable Notice

The motions judge awarded the plaintiff a notice period of 16.8 months since that was the amount of time that the plaintiff needed to bridge his pension.  The Court held that this was an incorrect approach.  However, the Court increased the notice period to 22 months, upholding the alternate finding that the motions judge had made.  The defendant argued at the Court of Appeal that the notice period should have been 14.4 weeks.  This position was roundly rejected and the Court of Appeal held that 22 months was “within the acceptable range of notice periods for employees in circumstances similar to the plaintiff.”

3.  What About Mitigation?

The Court of Appeal confirmed that any money earned by a dismissed employee during the applicable notice period is to be deducted from the amount that the employer is ordered to pay for the applicable notice period.  There is little new here as this is a statement of well settled law.   If the plaintiff starts earning a higher income during the applicable notice period, this decision suggests that the plaintiff could actually lose money by having a longer notice period.  However, the notice period in this case ensured a full pension for the plaintiff.

4.  Pension Benefits

Dismissed employees are entitled to the “present value of the loss of pension benefits during the notice period.”  This calculations should be performed by an actuary.  In this case, the assessment of $65,000 as the pension loss by an expert actuary was not challenged.

There were two other issues in this case that are less commonly contested.  The plaintiff was awarded a “retiring allowance of 30 weeks’ pay” based on a company policy that provided a retiring allowance of one week’s pay per year to retiring employees.  The court held that the “retiring allowance” policy did not clearly exempt dismissed employees from receiving the retiring allowance.  This allowance was payable in addition to the other wrongful dismissal damages.

It is also worth noting that the motions court made a cost award of $52,280 on this summary judgment motion.  The cost award was challenged by the plaintiff, who had apparently made an official “Offer to Settle” before the motion that was not seen by the motions court judge after the issue of liability was determined.  The plaintiff wanted to argue that he would be entitled to costs on a higher scale as a result of having submitted valid offers to settle before the motion.  Moreover, there would still be further costs to be awarded as a result of this appeal.  The Court of Appeal agreed that the issue of costs should be reexamined in light of the offers.

The end result is that this was certainly not an inexpensive summary judgment motion.  While it is true that the parties avoided many days of trial, there were still affidavits, cross examinations and submissions.  Nevertheless, the process seems to have worked out quite well for the plaintiff, on paper at least, who was ultimately awarded 22 months’ pay less any amounts earned during that period, a retiring allowance equal to 30 weeks’ pay, pension damages of $65,000 and a significant costs award.

Plaintiffs who have been dismissed without cause and provided with a low ball offer may be well advised to consider a summary judgment motion as the best way to advance a wrongful dismissal claim through the legal process.

 

 

Whiplash: Great Film. But Does it Promote Bullying?

On a recent plane trip, I was fortunate to find that Air Canada had enhanced its collection of films and added several new releases.  Since this was a lengthy day time flight, I actually managed to watch four new releases, all of which were reasonably good.

But the film that has really resonated with me is one of the Oscar nominated films for 2015 – Whiplash.  This is an extremely powerful movie that addresses some topics that I have written and spoken about on this site and elsewhere.  The film is riveting but it is also quite disturbing.  Its music is outstanding and its direction and acting are both tremendous.

But here is the issue.  How is human excellence produced?  What causes people to become truly great at a particular activity, whether it is sports, music, art or some other discipline?  Of course, most of us can agree that hard work, drive, motivation and some natural talent are all part of the mix.  But the disturbing suggestion of this film is that being subjected to abuse is almost a prerequisite for being able to achieve greatness.  And that is portrayed as a good thing.

The movie is the story of Andrew Neyman, an aspiring young jazz drummer who has been admitted to one of the best music schools in the United States.  There, he is recruited to play under the tutelage of Terence Fletcher, a highly accomplished jazz musician.  Fletcher, whose role is played by J.K. Simmons, is a maniacal, abusive, foul mouthed bully.  Fletcher’s justification is that he knows how to produce great musicians.  He constantly repeats a story about how Charlie Parker only became great after a cymbal was thrown at his head when he made a mistake.  It is abuse and fear, runs the suggestion, that causes people to become inspired and to work hard enough to become great.

As a result, nothing is below Terence Fletcher.  The movie covers the gamut of abuse.  Fletcher publicly berates and humiliates his students.  His repertoire includes obscenities, repeated graphic sexual references, belittling, and even physical abuse.  All for the good of the students, runs the suggestion, even if the weaker musicians will be driven to failure, mental illness or even thoughts of suicide.

Sadly, the movie is a reasonably accurate representation of many bullies who can be found in workplaces, schools, sports teams and in other places, even churches and synagogues.  I can attest to having worked professionally with two of these character types and having seen, in real life, some scenes that could have been included in this movie.  As an employment lawyer, I have met with many people who have conveyed stories of similar incidents, even while working with public or charitable organizations.  I note that in a review that I wrote of Steve Jobs’ book, this type of bullying was one of the central themes – the way that Steve Jobs treated other employees and many other people.

Is this really the path to greatness?  I have a hard time believing that.  I can certainly accept that people need to be pushed to their limits to be able to accomplish the unexpected.  Keeping a music class for hours beyond the scheduled ending time or giving people enormously challenging goals and tasks is not abuse, in my view, even though it might be tough to handle for some.  In some disciplines, people might need to be challenged to their limits in a very physical way.  I can readily accept that in training for ice hockey, football or in military training the physical and emotional demands to which individuals are subjected could be excruciatingly high.  Even in other disciplines, the mental demands that are made, the time lines, the pressure all might be extreme.   And when that happens, particularly for those on the receiving end, it may seem hard to draw the line between demanding requirements and abuse.

In another movie that I happened to watch on this flight as well, Stephen Hawking was also pushed to his limits.  At an early age, the suggestion is that he and other students were given nearly impossible physics problems to solve in a short period of time and pushed to fight extremely difficult challenges.  But there is no suggestion that the professors felt the need to humiliate or abuse Mr. Hawking to bring out his greatness.

I can’t accept that in order to succeed, young musicians, athletes, artists or employees must be humiliated yelled at, sworn at and otherwise abused in order to become great.  Moreover, I can’t even accept the suggestion that these coaches, teachers, bosses and others behave this way because they are personally motivated to create greatness.  More often than not, one finds that the bully is employing this tactic because of his or her own inadequacies, real or perceived.  It may be an issue in the person’s personal life, a professional failing, or something else.  In workplaces, it may be the response to the perceived threat posed by a young up and coming individual.  I am not a psychologist so I can’t explain how bullies are created.  But I would think that these types of tactics are much more likely to be harmful and counterproductive in most scenarios.

I can certainly say that some of the best teachers and bosses that I have had, who pushed people to their limits, were demanding, strict and detailed.  But not abusive.  If anything, the opposite.  They generated respect because those with whom they worked really had the sense that the teachers or bosses were looking out for their well-being while trying to push them to their limits or beyond.  I have often read that type of summary about great sports coaches, military and political leaders or others.  That they inspired people to push themselves to the limit but that they also attracted tremendous respect and displayed empathy and compassion.

Fortunately, in workplaces, in some jurisdictions, like ours in the Province of Ontario, legislation has been passed to try to prevent and ban workplace bullying.  In today’s day and age, parent and student vigilance and changing attitudes help to diminish the likelihood of this type of behaviour in schools, churches and synagogues and other organizations.  But there is still a great deal of it out there.  And there are still many people who accept Terence Fletcher’s mantra – that abuse and fear creates greatness.  That is the very disturbing message of this film.

While the music in the film was excellent, the acting was very strong and the story was riveting, I was left wrestling with the film’s premise as the movie came to its conclusion.  I don’t feel that it was very much of a struggle.  I reject the premise even though I accept that this movie presents the argument as well as anyone might make it.

Fixed Term Employment Contract? Better Prove It!

When is a fixed term employment contract not enforceable?  A recent decision of the Ontario Superior Court in Tossonian v. Cynphany Diamonds Inc. addressed this issue.  The court held that the fixed term guarantee was not part of the original deal between the parties and threw out that part of the contract.  The plaintiff was still awarded wrongful dismissal damages but they were much lower than they would have been if the employment contract had been enforceable.

The plaintiff, Razmig Tossanian, moved from Vancouver, B.C. to accept a position at Cynphany Diamonds in Toronto.  According the trial decision, the plaintiff was looking for an opportunity to move his family to Toronto.  After lengthy negotiations, he accepted an email offer of employment that purported to be based on an oral agreement.  The email set out the various terms that had been agreed upon, but made no mention of a five year fixed term.  The plaintiff did not respond in writing, though he indicated that he had called the owner of Cynphany to confirm the five year guarantee.

The plaintiff moved from Vancouver to Toronto without anything further in writing.  He began working for the defendant in late August 2011.

Some weeks later, the parties signed an “Employment Contract.”  This document did not reference the five year term.  A further document, for mortgage purposes was prepared, and signed by the defendant.  The second document stated that the plaintiff had a “guaranteed five year position.”

There was yet another document that also referenced a five year period, which was also prepared for mortgage confirmation purposes.  When the bank called to confirm, the owner of the defendant confirmed the five year term.

Mr. Tossanian worked for a total of approximately 8 months for the defendant.  At some point, according to the evidence, the plaintiff began having discussions with another potential employer and he shared information with these discussions with at least one co-worker.  He apparently suggested to his co-worker that he had a guaranteed job if he was fired by Cynphany Diamonds.  The owner of the defendant found out about these discussions and became quite upset.  There was a factual dispute about whether or not the plaintiff resigned or was fired but the evidence seems to be fairly clear in this regard that he was fired.  He was not fired for just cause as it is not cause to fire an employee for looking for other work.  Just cause was not argued at trial.

After being dismissed, the plaintiff went to the potential employer but the job opportunity that he had been pursuing fizzled.  Ultimately, he wound up returning to Vancouver and going back to his old position after just more than 4 months.  This position was at a much lower rate of pay.

The plaintiff sued for wrongful dismissal.  He alleged that he had a five year fixed term employment agreement and that it had been breached.  Even though he found work after four months, he claimed that his losses over a period of five years would amount to approximately $175,000.

The court does not seem to have been impressed by the plaintiff or his evidence.  Despite the various written agreements, the court held that the initial email between the parties was the key document and it did not reference a five year term.  Although the employer made “inflated representations about the duration of Mr. Tossanian’s employment contract to help him get a mortgage” the five year term had not formed part of the initial employment contract.  The court held that there was no new consideration for the five year guarantee.  The decision notes that the presiding judge did not feel that a salesperson of fine jewellery would require a five year fixed term employment contract.

Even though the court refused to find that there had been a five year guarantee, it still found that the plaintiff had been wrongfully dismissed. The court then had to turn to the applicable notice period.  The judge was not particularly sympathetic to Mr. Tossonian.  He was awarded a total notice period of two months, amounting to just over $13,500.  This was awarded after a trial that spanned over seven days, not to mention all of the preliminary motions, examinations and other court appearances.  Ouch!

In some respects, the decision is puzzling.  The plaintiff had at least two documents, signed by the defendant, providing for a guaranteed five year period.  Although the owner of the defendant provided evidence that things were not really as they seemed, the court’s explanation of why the five year fixed term employment agreement should not be enforceable is not particularly convincing.  If the defendant signed a document guaranteeing a five year period, provided that document to third parties and answered oral inquiries in a manner consistent with that document, there seems to be ample reason to find that the document was binding.

The court’s decision was likely coloured by the plaintiff and by the court’s assessment of the plaintiff as a witness.  The judge did not seem to like the plaintiff’s explanation as to why the five year fixed term was not included in the original email.  The court was less than impressed by the plaintiff’s efforts to find work for another employer, while still employed by the defendant.  In particular, the court found that the plaintiff had discussed that with at least one other employee and this caused the judge to empathize with the employer. As well, the court noted that the plaintiff returned to his old position reasonably quickly after being dismissed and may have had other opportunities as well.

The judge’s assessment of the plaintiff and that plaintiff’s character was quite damaging.  Not only did the court reject the five year term but it also awarded the plaintiff a very short notice period of only two months.  Courts have a great deal of latitude in selecting the appropriate notice period.  Although judges are supposed to consider the length of service, age, type of position and a variety of factors, decisions are inevitably coloured by the likeability of the plaintiff as a witness.

It may well be that this case is headed for an appeal to the Ontario Court of Appeal for a reassessment.  While the two month notice period is probably not likely to change if the Court of Appeal upholds the court’s findings, the real issue is whether or not the employer was bound by a five year employment contract.  This seems to be a question of law and one which the Court of Appeal may well consider carefully and could even reverse, depending on the particular Court of Appeal panel.

The decision is a reminder of some very key points that apply to many employment law situations:

1.  An enforceable contract must contain all of the terms and must be agreed upon by both sides, in advance, prior to the start date.  Oral representations, side agreements and “confirmation of employment letters” may not be binding if they conflict with the original contract;

2.  Where an employee finds work after being dismissed, courts will be reluctant to award large scale damages unless there is a very compelling reason to do so;

3.  Whether or not a witness makes a favourable impression on the court is crucial.  If a court has concerns about a witness’s honesty, character, motivation or if a court has other concerns, that may well have disastrous consequences for that side.

 

 

 

 

 

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