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.