If you have been dismissed, you may be entitled to significant compensation. This can include severance pay, outstanding bonus, compensation for bonus during the severance period, benefits, pension contributions and other amounts. You might be able to get outplacement assistance paid for by the employer and some employers may even pay for your reasonable legal fees to get everything worked out. If you have been given a severance package or a termination letter, here are a few points to keep in mind:

1. Don’t Sign Anything!

Some employers will ask you to sign a severance proposal on the spot, possibly even while also making some threats about what might happen if you don’t sign. Fortunately, most employers are not that unreasonable and would prefer to allow you some time to consider an offer. Take the offer, say very little and let the employer know you will get back to them. Even if you are in a difficult economic position, you will rarely benefit from signing something on the spot at the time of dismissal.

2. Be Professional

Resist the urge to attack the employer, launch an email missive directed at company personnel or say things you might later regret. Such statements or emails are rarely helpful or productive. If you are being investigated for cause and you are being asked about certain allegations, you may have an obligation to respond. But once you have already been dismissed, there is rarely anything that you might say at a termination meeting that will help with your severance negotiations or with your future references.

3. Find Your Original Employment Contract

One of the first things you should do is find a copy of your original employment contract or offer letter. There may be a “notice clause” or a “severance clause” in the document. If your employment contract or offer letter does have this kind of clause, it may limit your entitlement to severance or notice. You might be stuck with a very limited severance payout. There are some ways around these types of agreements, but not always. This can be very technical and will almost always require professional assistance.

4. Gather Information

For the best assessment of your employment situation and potential severance, you should gather key documents and information. Your compensation information for the past three years will be crucial including a breakdown of your base salary, bonus (if any), RRSP or pension contributions, car allowance, stock options or share purchase plan amounts, and other components of your compensation. As well, it will be helpful to try to put together a narrative of what occurred that you believe led to your dismissal. If this is a complete surprise and is really just a “restructuring,” there may be no need for an accompanying narrative. You should also try to make sure that you have any relevant emails, memos, performance assessments or other documents that relate to your performance or the reasons for your dismissal. If you are being dismissed for cause, it may be important to get witness statements about what took

5. Get Expert Legal Advice

If you have been provided with a severance package or you have been dismissed “for cause,” you should get specialized legal advice as soon as possible from an employment lawyer. You may be entitled to far more than the amount that the employer has offered. The employer may be willing to pay reasonable legal fees. You might be able to get certain clauses deleted or modified. Proper legal advice in this situation will usually involve a consultation fee. But you are entitled to objective advice about the best way of dealing with your situation and sound professional advice is almost always going to involve a fee. If the advice is “free,” you should check carefully what kind of retainer you will be expected to provide afterwards or what percentage of the settlement your lawyer will take. You should also find out whether the percentage is related to the whole package or only the improvement. You should feel comfortable with the overall fee arrangements not just the initial consultation itself. You should also feel comfortable that you will get the lawyer’s full attention at the initial meeting without an artificial time constraint so that you have enough time to go over everything that may be relevant.

6. Hit the Ground Running

In most cases, the best way of dealing with a dismissal is to begin the process of finding new employment fairly quickly. You should ask your employer for a reference letter or confirmation that you will be given a positive reference if the employer is phoned. Brush off your resume and consider getting professional assistance in developing a new version of it. Start using internet sources ranging from LinkedIn and Workopolis to Facebook and Monster as you put together your job search strategy. Keep track of all of your efforts, informal and formal contacts and applications. Try to set up “informational meetings” as well as interviews. Try to take care of yourself, which might include getting some exercise, making sure to get out and staying in contact with people important to you. Having a strong support network can help you feel positive about your transition and can also produce employment

Kenneth Krupat, Barrister
2000-393 University Avenue
Toronto, ON M5G 1E6
Phone: 416-593-0400
Fax: 416-593-0668
e: kkrupat@joblaw.ca
www.joblaw.ca

At the very easy end of the constructive dismissal spectrum are cases where employers unilaterally reduce an employee’s pay, with little or no notice.  Similarly, a significant demotion for an employee, even where the overall compensation is kept intact will usually be grounds for a constructive dismissal claim.  But there are many other cases that are in a much greyer area.  The reduction of some responsibilities, a change in reporting structure and sometimes, a change to the terms of a bonus plan, are all the types of changes that may not lead to clear results.

What about geographic relocation?  Can employees be asked to move as part of their employment?  Intuitively, one might have thought the answer would usually be “no.”  Although this might often be the case, the legal answer can depend on the context and the particular background.  Has the employee moved around before as part of the position?  Is the industry one in which employees are routinely expected to relocate?  Is the employer paying for moving expenses?  Is the employer offering any other alternatives?  These are all factors to consider.

In a recent case, the Alberta Court of Appeal (Robin Brown v. Pronghorn Controls Ltd.) held that a transfer from Red Deer, Alberta to Sedgwick, Alberta, approximately two hours away, was not a constructive dismissal.  The Court held the employee would be a branch manager in both places and would be entitled to the same terms and benefits, despite the disruption to his family life.

The Court of Appeal’s view was probably influenced by the fact that the employee had also refused another alternate position with the company in Red Deer and went on to find new employment, at a higher rate of pay elsewhere, quite quickly.  The Court looked at the background and history of Brown’s employment and applied those facts to conclude that this would have been a reasonable move.  In making its decision, the Court relied on a 1989 decision of the Ontario Court of Appeal (Smith v. Viking Helicopter) in which the Court had held that it was not a constructive dismissal to require an employee to move from Ontario to Quebec in the particular facts of that case.

This recent ruling from Alberta is not necessarily a definitive statement of Canadian law.  Other courts in other jurisdictions across Canada have taken and may well continue to take different approaches.  However, in determining whether a proposed transfer is a constructive dismissal, Canadian courts are likely to look at a number of factors including the following:

1. Is there an employment contract in place?  If so, does it permit the employer to relocate the employee?
2. Has the employee moved for work purposes while working for this employer?  Has the employee moved for professional purposes in the past, with other employers?
3. Is the proposed position equivalent in compensation, benefits and opportunity?
4. Will the employer be paying for all moving costs?
5. Is there a reasonable business purpose to the proposed transfer (i.e. as opposed to some type of vindictive relocation proposal).
6. Is the employer offering an alternative?

These are some of the questions that should be considered carefully when evaluating the likely success of a constructive dismissal claim as a result of a proposed relocation.  The legal answer may not always be as predictable as one might have expected.  Setting up a proper paper trail and asking the right questions can certainly help.  But ultimately, taking the wrong steps can be risky and costly, particularly, as with many other constructive dismissal claims, if there are other reasonable alternatives.

But although some of us would love to do what Greg Smith did on March 14, 2012 (NY Times Op Ed “Why I am Leaving Goldman Sachs”), is this useful from a Canadian employment law perspective?  Usually, the answer is no.

For starters, many departing employees leave as a result of a restructuring, downsizing or lay-off.  Others leave with a reasonable case for constructive dismissal and are hoping to get a decent severance package.   In either of these situations, the severance negotiations have often not yet been completed by the date of departure.  Not surprisingly, angry and upset employers often become less interested in providing generous financial compensation.   A departing employee who sends this type of letter or memo only to a handful of very senior company officials may well have significant leverage.  Particularly if the complaints are perceived as meritorious.  But once the letter has been publicized, the leverage is often diminished.

This type of action is also not likely to ingratiate many potential employers.  If an 11 year, senior employee, is willing to attack his former employer so vigorously and so publicly, what will he do to us, might be the line of thinking.  The world is often smaller than we might have thought.  Many employers are not interested in hiring a perceived trouble maker who is so willing to attack his or her former teammates.

Of course there may well be competitors interested in someone who is so willing to help damage a rival organization.  That new organization may even be willing to indemnify the new hire against any potential lawsuits whether for defamation, slander or other tortuous conduct.  Maybe they will also pay a signing bonus to make up for lost severance.  But in my experience, very few departing employees are so sought after that this type of letter would assist their post-employment career.

Perhaps, for Greg Smith, his self-described lofty integrity may well facilitate the success of his next position, if it is perceived as believable.  But in Canada, far too often, widespread attacks on employers by departing employees tend to harm the employee as much, if not more, than the employer.

There are clearly circumstances in which people should act and might even have a responsibility to do so. For example, if a person has been the victim of harassing or discriminatory conduct; or has witnessed or been asked to participate in illegal or inappropriate conduct; or is being subjected to treatment that would constitute constructive dismissal.  In all of these cases, it would make sense to make vigorous legal demands, which could even lead to a public lawsuit and other legal proceedings.  But complaints about a company’s leadership, direction and culture are of a different nature and might lead readers to question the real motives for the complaint.

For Canadians who are financially independent and are not at all concerned about what they might do next or whether they even need to work, this kind of letter can be fun to write and very cathartic.  But for the vast majority who are not in that position, the downside of this type of approach will often outweigh the fleeting sense of satisfaction.  As an employment lawyer, I would have to suggest that departing employees think very carefully and perhaps even get legal advice before hitting the send button on that scathing email, memo or letter.

The GasTOPS case took seven years until it was completed.  There were 295 days of evidence spread over 3 years, with 70,000 pages of exhibits and 3,000 pages of written submissions.  It took the Court two years to produce the trial reasons, which were 668 pages in length.  The Court of Appeal heard the appeal in the matter over a period of four days and issued a 32 page decision.  One aspect of breach of fiduciary duty cases is that they can be very expensive and time consuming, regardless of who eventually wins.

The Trial Court had held that the four defendants were the designers of the core program of the GasTOPs products.  They were part of the senior management.  They all left to start up a new competing business together and took additional employees with them.  They then pursued “virtually every existing and potential GasTOPS’ customer, used the confidential information that they had obtained while at GasTOPS and also used GasTOPS’ technical information.  In short, they took virtually the whole of the business from GasTOPS and used it in their new venture.  In their first three years of business, nearly 80% of their business came from GasTOPS’ clients.  The Court ordered 10 years of lost profits against these four defendants and their new company.   The Court of Appeal had little difficulty upholding the finding that all four employees were fiduciaries, that 10 years was a reasonable time period for measuring damages and that the four defendants were jointly and severally liable.

The other decision issued by the Court of Appeal very different.  Mr. Brulé had been the acting CEO of Veolia ES Industrial Services Inc., a company that he had originally founded and then later sold.  He had an employment contract with Veolia that contained a non-competition provision.  The clause was poorly designed and did not wind up providing the protection that Veolia thought it had.  Mr. Brulé resigned from Veolia and provided notice of resignation as he was required to do.  On his way out the door, he made copies of company binders which contained various tenders and bids for public projects.  A few months later, he successfully bid on a project with the City of Ottawa with his new company.  Veolia sued for breach of fiduciary duty.

At trial, Veolia was awarded $465,000 plus costs against Mr. Brulé.  The Trial Court held that the poorly worded employment contract should be “blue-penciled” and fixed in a way that seemed to reflect the parties’ intention.  It ruled that Mr. Brulé was subject to a two year non-competition agreement and that he had breached it.  On appeal of this issue, the Ontario Court of Appeal overturned this finding.  It referred to the Supreme Court of Canada decision in KRG Insurance v. Shafron and underscored the fact that Canadian courts will rarely “blue-pencil” non-competition agreements.  Since the agreement could not be “fixed,” Mr. Brulé had not breached any agreement.

The Trial Court also held that Mr. Brulé breached his fiduciary duties.  Since he took the binder and since he bid on the City of Ottawa project without telling his former employer, the Trial Court found him liable.  The Court of Appeal overturned both of these findings.  It held that the binders were filled with public documents and there was no proof that Mr. Brulé had taken or used anything that was confidential.  Moreover, it emphatically stated that he had no duty to his former employer to tell them that he was bidding on a project against them.  In short. unlike in the GasTOPS case, Mr. Brulé did not take a big chunk of his former employer’s business.  He entered into a bidding competition and won it fairly, without breaching any duties.  The Court of Appeal fully overturned the award of damages and ordered that Veolia pay Mr. Brulé’s legal costs.

Either or both of these cases may yet be appealed to the Supreme Court of Canada.  But they each provide different information about the nature of fiduciary duty claims and non-competition issues.  Where an employee or group of employees takes confidential information, uses it and competes unfairly against a former employee, significant damages may be awarded.  But where an employee, even a very senior employee, leaves and winds up competing against his or her former employer, that is not a breach of fiduciary duty on its own.  There must be some proof that the employee has misused confidential information that belonged to the former employer.

Here are some of the key things to look for as part of a “reasonable” severance package.

Severance Pay or Salary Continuation:  It goes without saying that the most important component is usually the severance itself.  Employers can choose to pay over time, with or without some kind of claw back (or “mitigation”) clause, or in one or more lump sums.  In most cases, this is the most important part of the severance package and in many cases, different components are negotiable.  The severance must, at a minimum, include compensation for the relevant provincial employment standards amount.  For example, in Ontario, the severance package must provide for notice pay under the Ontario Employment Standards Act and severance pay, if applicable.   If you are Federally regulated employee (someone who works in a bank, telecommunications company, tv network etc.,) the Canada Labour Code would apply instead of the provincial legislation.  Beyond the employment standards amount, employees can negotiate the length of time, the trigger for mitigation, the payment schedule or other terms.  This is all aimed at ensuring that the employee is compensated as required by Ontario common law, which itself, can vary wildly for each employee.  This is the area on which appropriate legal advice should generally be obtained.  The period of time for which the employee is being compensated is generally called the notice period or severance period.  

Bonus:  Dismissed employees should usually be compensated for accrued bonus for the current year (if there has usually been an annual bonus), as well as bonus for the severance period.  Many employers are quite reluctant to include the prospective bonus as part of the severance package.  If the employee has been getting the bonus every year and can show that he or she would have continued to get a bonus if employment had continued over the severance period, the bonus should be payable.  There may be wording in the original employment contract that overrides this entitlement, but it is often worth trying.  If there is wording in an employment contract or agreement that deals with the bonus, this will be something that needs to be properly assessed and considered. Commissions and Variable Pay:  For dismissed employees with fluctuating pay, the test is what the employee would have reasonably earned over the severance period.  Of course all accrued amounts are owed to the employee, subject to the terms of the employer compensation plan.  Going forward, most dismissed employees should be paid severance on the basis of overall estimated earnings, not just base salary for the entire notice period.

Benefits, RRSP and Pension Contributions:  Severance packages should include arrangements that compensate employees for all components of their compensation.  Generally, all benefits, including extended health benefits, STD and LTD insurance, RRSP contributions, pension contributions, and other perquisites should be continue during the notice period – or the employee should be compensated for the value of any items that are not being compensated.  For example, most insurers will not allow employers to continue LTD insurance plans.  Employees should request compensation for the loss of this employment benefit.  Many employers will agree to include that compensation in the severance package.  Pension losses can be a huge component of a severance package, particularly if the employer had a defined benefit pension plan.

Car or Mileage Allowance:  If the employee had the use of a company vehicle, the general rule is that the employee is entitled to be compensated for the personal use component of the vehicle.  In other words, if the employee used the vehicle for personal use 30% of the time (and showed that on his or her taxes), employers can be required to provide compensation for this loss during the notice period.  Some employers will be more flexible in this area and will either provide employees with the use of a vehicle over the notice period or pay a reasonable estimate of the real costs of the vehicle.

Outplacement or Retraining:  Strictly speaking, an employer is not necessarily required to provide outplacement or retraining as part of a severance package.  However, an employer can be required to pay for the employee’s reasonable costs of “mitigation” if the employee incurs costs in trying to find other work.  As a result, many employers will provide direct outplacement arrangements at their expense.  Dismissed employees may be able to negotiate the type of arrangements that are being provided, the organization, location, and value of such services.  As well, dismissed employees can often arrange to have an employer pay for some upgrade or retraining courses if that will help the employee find new employment.  Though some of this may sound expensive for employers, overall, providing these arrangements may help the employer reduce the time period that it will take the employee to find new work and that might save the employer some money.

References:  Employers are not strictly required to provide helpful references though some judges may look at this down the road and award extra damages for an employer’s failure to do, even if the judge does not state that expressly.  Employees should ask for a mutually agreeable reference and an agreement that any reference requests will be answered in a manner that is consistent with the reference letter or summary provided.

Legal and/or Accounting Fees:  Most employers should be prepared to make some kind of reasonable contribution towards the legal fees of a dismissed employee.  Once a lawsuit has been commenced, the employer can be required to make these contributions if the lawsuit had merit.  Employers will often try to avoid a lawsuit by including payment for some of the legal fees in a negotiated severance package.

Waiver of Non-Competition Clauses:  Some employers may be prepared to waive or modify certain non-competition terms or clauses that were contained in a dismissed employee’s employment contract.  This can often be a tricky conversation.  It is usually more likely that employers will agree to modify a non-competition clause (that might have been unenforceable anyways) than to modify a non-solicitation clause, that may actually protect the employer’s business.  Telling an employer that you would like to go and take their clients’ business is not usually the best way to get a great severance package.  But telling an employer that you won’t be able to find any work because of an overly broad non-competition clause may be viewed as reasonable.

Other Perquisites:  Employers will sometimes provide for items like health club memberships, personal cell phone costs, professional memberships, private annual physical examinations, employer discounts and other items.  These items should be reviewed and considered individually.  Employees will also need to weigh the value of pursuing an item that may not be significant in comparison to the other items.

General Damages:  Most wrongful dismissal damages are fully taxable as if they were income.  The withholding rate may be lower (i.e. 30% if the amount is over $15,000) but at the end of the year, the employee will have to pay tax on the full annual marginal tax rate.  An exception is if there is a basis for some of the damages to be paid as “general damages,” which are non-taxable.  This, fortunately, is not applicable for most dismissals. I say fortunately because it would be a harsh world indeed if every employer who dismissed someone had also acted in a way that would warrant general damages.  Nevertheless, conduct that violates human rights legislation or  other “bad faith” conduct can warrant payment of general damages. It is very rare that employers will actually negotiate and pay these damages without an actual lawsuit or human rights complaint but it does sometimes occur.

These are some of the items to look for in a severance package, though entitlements to these items will really depend on the terms of the person’s employment, the length of service, the type of position, the existence of any employment contract or offer letter and a range of other factors.  A key factor is the likelihood of the dismissed employee finding new employment since all of these items are only really payable if they are arranged initially, or if the employee is actively looking for work and unsuccessful.  Dismissed employees who find new employment quickly may only be entitled to the applicable employment standards minimums.

There is no set formula for exact severance pay calculation.  Despite the fact that some lawyers might claim there is a very exact number if you plug a few variables into a “severance pay calculator,” that only produces a rough average, which may not even be statistically significant.  In most cases, there is a range, sometimes a fairly wide range.  Employees need to consider all of the different aspects of the proposed severance including which items are being paid and which are not, whether the severance is being paid as a continuance or a lump sum, and other related factors.

This list of items is provided only as a guideline for things that employees should consider when looking at a severance package that has been proposed.  In most cases, particularly when a number of different items are listed, employees should make the tax-deductible investment of obtaining proper legal advice from a qualified employment lawyer.

The decision in Adrian Chandran v. National Bank of Canada helps clarify these issues.  The Ontario Court of Appeal has ruled that where the workplace might be perceived as humiliating or embarrassing, employees are not required to remain with the employer to mitigate their damages after being demoted.

Mr. Chandran was a senior manager at the National Bank for 18 years.  He was a supervisor with 11 reports.  The Bank decided to conduct a survey of employees about Mr. Chandran.  From comments in the survey, it concluded that Chandran’s behaviour was, at times, condescending, embarrassing and bullying.  The Bank accepted these allegations and told Mr. Chandran that it was removing all of his supervisory responsibilities.  It proposed two alternate positions, at a similar rate of pay and level, but without the supervisory role.  Mr. Chandran did not accept either of these positions and instead sued for constructive dismissal, arguing that he had been demoted.

From a Canadian legal perspective, the Bank should have conducted a better investigation and then warned Chandran if it came to the conclusion that there had been misconduct.  It should have taken steps to address the concerns that had been raised.  Removing Chandran’s supervisory responsibilities was not an acceptable response by the Bank was viewed as a demotion, triggering a claim for constructive dismissal.

At trial, Mr. Chandran was successful.  He was awarded 14 months’ pay, totalling more than $130,000 along with legal costs of more than $65,000.

The National Bank appealed to the Ontario Court of Appeal.  It argued that even though Mr. Chandran may have been constructively dismissed, he was still required to accept one of the positions offered by the Bank and to continue working as a way of mitigating his damages.  The Bank based its argument on the Supreme Court of Canada’s decision in Evans v. Teamsters Local 31 (2008), a case in which the Supreme Court had held that employees may be required to return to work to mitigate their damages, even after they have actually been dismissed.

The Court of Appeal roundly rejected this argument.  It held that Mr. Chandran was not required to remain with the Bank.  Serious misconduct had been found and serious discipline had been imposed on Mr. Chandran.  The atmosphere would have been embarrassing and humiliating.  It upheld the full award from the trial court and added a further costs award of more than $20,000.

This decision will help to limit the Supreme Court’s bizarre ruling in Evans.  Employees who intend to bring forward a constructive dismissal claim will still need to demonstrate that it would be “embarrassing and humiliating” to remain with an employer after being constructively dismissed.  That is not always easy or straightforward and can be quite risky.  But the Chandran v. National Bank of Canada case will make it more difficult for employers to simply rely on mitigation arguments when they constructively dismiss employees.

For employees, despite the positive result obtained by Mr. Chandran, constructive dismissal cases are still extremely risky.  Employees need to ensure that they obtain proper advice before making their final decision about whether and when to leave the workplace.  They need to ensure that they manoeuvre themselves into the best possible position by carefully exploring and clarifying the employer’s position.   If this is handled properly, at least some of the risk can be minimized.

Linda Fraser had worked for UBS for more than 20 years.  She became ill after a holiday and was off work for six months on short term disability leave.  She tried to return to work but was unable to do so due to her illness, which had become more severe.  She went off again on short term disability leave for another six months.  After her second leave, Ms Fraser was off for a two year period on long term disability leave.

Most LTD policies change after two years.  For the first two years, Ms Fraser was required to show that she could not perform the duties of her employment, meaning the specific job that she had with UBS.  After two years, she was required to show that she could not perform the duties of any gainful occupation.  The insurer cut Ms Fraser off benefits when the definition changed and Ms Fraser sued the insurer to challenge that decision.  The lawsuit was totally separate from her wrongful dismissal case.

From UBS’ perspective, Ms Fraser’s disability coverage ended even though she was suing the insurer.  She was off work and no longer in receipt of benefits for a period of five months.  She did not keep UBS informed about her status.  After five months, UBS wrote to Ms Fraser and stated that her employment was being terminated.  It paid her out 8 weeks’ notice pay and 22 weeks’ severance pay under the Ontario Employment Standards Act and continued her extended health benefits for three more months.  Ms Fraser did not accept this decision and sued for wrongful dismissal.

At trial Justice Wein of the Ontario Superior Court reviewed the law of “frustration” and concluded that it applied in this case.  Ms Fraser was found to be “permanently disabled.”  The Court held that she is “totally disabled and her disability is permanent such that she will never be able to work again.”  As a result, the employment contract had ended and UBS was not required to provide any further payments.  The wrongful dismissal lawsuit was dismissed.

For employees in Ontario, the case is a reminder that employees have an obligation to keep their employers updated as to their status when they are off on a sick leave.  If disability benefits are cut off, they must provide information to their employers about their proposed actions.  If it becomes clear that the employee will not be able to return to work again, the employer may be able to conclude that the employment relationship has ended.  This will not necessarily lead to a viable wrongful dismissal lawsuit.

For employers, this type of decision is rare.  If the employee can show that he or she simply required more time to recover and kept the employer informed, the employer will not necessarily be able to rely on “frustration.”  The situation may also be different where the employee continues to receive LTD benefits.  Employers looking to rely on “frustration” will need to be reasonably sure that the employee will not be able to return to work for the foreseeable future.

The dismissed employee, Syed Hussain, was an assistant warehouse supervisor.  He had worked for the defendant Suzuki Canada for almost 36 years.  This had been his only full time job after immigrating to Canada from India in 1974.  Hussain was almost 65 at the time he was dismissed in February 2011, due to corporate restructuring.

After losing his job, Mr. Hussain took a period of time to get over the shock and to organize his efforts to find new employment.  He then applied to some 27 positions by July 2011, though his efforts were unsuccessful.

Justice Roberts, writing on behalf of the Court, noted that 24 months is usually the high end of  wrongful dismissal awards.  However, the Court held that Mr. Hussain was entitled to 26 months’ compensation due to the particular factors of his situation including his lengthy service, his age and other related factors.  The Court held that Mr. Hussain was entitled to benefits, RRSP contributions, and a discretionary bonus throughout the entire 26 month period.

Even though this wrongful dismissal case was decided only 10 months after Mr. Hussain was dismissed, the Court still awarded Mr. Hussain 25.5 months’ compensation and reduced the total notice period by only 1% for the contingent possibility that Mr. Hussain could find new employment over the remaining 16 months.

Finally, the Court ordered Suzuki Canada to reimburse Mr. Suzuki for almost $20,000 in legal fees.

This decision follows on the heels of the Ontario Court of Appeal decision in Di Tomaso v. Crown Metal Packaging, a case in which a long service mechanic was awarded 22 months’ notice in June 2011.

It is becoming quite evident in Ontario that long service employees are now entitled to notice periods at the higher end of the range, regardless of the type of position that the person held or the salary level that the employee enjoyed.

This trend is good news for Canadian employees, particularly long service employees who are not employeed in upper management positions.  Although for many years, the longest notice periods were usually awarded by courts only to the most senior employees in wrongful dismissal cases, that is now no longer an accurate summary of the law.  Age will still be a relevant consideration.  Employees who are dismissed after 20 years of service but are still in their 40’s may not be awarded the maximum amounts.  But dismissed employees in their 50’s and 60’s with many years of service will now all have a chance to obtain compensation of close to two years’ pay.

I picked up Jan Wong’s latest book Out of the Blue out of professional interest.  As an employment lawyer, I had heard that the book was an interesting assessment of Ms Wong’s fight with the Globe and Mail, her former employer.

Although the dispute with The Globe and Mail plays a significant role, this memoir style offering is much more concerned with Ms Wong’s battle with depression and her struggle to overcome it.

It is a very intimate, personal look at a person struggling to deal with mental illness.  Ms Wong spends of great deal of time dealing with the effect that her depression had on her relationship with her family members, her interactions with family and friends and her own very personal ways of trying to overcome these challenges.

Early in the book, Ms Wong describes the events that she believes triggered her depression.  A well known, accomplished columnist for many years, she wrote a column analyzing the Dawson College shooting in Montreal, Quebec in September 2006.  The column drew a connection between the fact that the only three campus shootings in Canada had been committed by immigrants in Quebec and that the three killers had been marginalized by a society that values pure laine Quebec stock.

As if to partially substantiate her claims, Ms Wong was flooded with angry hate mail, much of it in French. She received mail that attacked her ethnicity, her gender, and her appearance.   She was subjected to outrageous, vulgar email attacks and, ultimately, a death threat.  She was also attacked by mainstream media, including major Quebec newspapers.  The Globe and Mail itself printed numerous articles responding harshly to Ms Wong’s column and there was even a call in the Canadian Parliament for her to “apologize” to the people of Quebec.  Things became worse as caricatures of her were drawn in Quebec newspapers, her father’s restaurant was boycotted and the Globe and Mail eventually printed a column indicating that Ms Wong had erred.

As a result of these incidents and Ms Wong’s feeling that the Globe and Mail had abandoned her, she descended into a medically diagnosed depression.  Much of the book deals with her attempts to treat, self-analyze and overcome her depression. She describes in detail her medical appointments, her trips to her psychiatrist, the types of medication she was prescribed and the ongoing interaction she was having with the Globe’s benefits administrator, Manulife Financial, over the assessment of her disability claim.

Ms Wong relies on the writings of various authors, poets, researchers and others to paint a picture of a much understood illness, from a very personal vantage point.  Chunks of the book are repetitive and tedious.  But she sets out to explain how a person can be “depressed” and not necessarily exhibit common symptoms of other illnesses.  Her aim is to de-stigmatize this type of illness and to urge employers and insurers to treat people who are suffering from depression more compassionately.

Along the way, Ms Wong details her methods of trying to fight off her illness.  One suggested approach is to get away from it all and use the “geographic cure.”  In other words, Ms Wong sets off to travel to China, Scandinavia or New York City, partially as way of self-treating her depression.  She does mention that she was economically fortunate enough to be able to do that, which is not the case for many dismissed employees (like many of my clients) who are off from work with their monthly income benefits cancelled due to a dispute as to whether their illnesses are legitimate.  Another approach is medication and Ms Wong reviews a whole range of depression medication along with the effectiveness of each type, the side effects and other issues.

In the midst of all of this, and while being unable to work for the Globe and Mail (or perhaps in between spates of being unable to work), Ms Wong completed a book, Beijing Confidential, and scheduled a book tour.  She writes about the fact that the Manulife investigators made videos of her smiling during her book tour to show that she was not really depressed.  Sure, the fact that she was caught on camera smiling does not prove that she was depressed.  But for many employers, cynicism would be a natural reaction to a situation in which a star employee was too sick to work but was, instead, crossing the country promoting her new book.  Ms Wong tries to explain this, but even as employee-side counsel, I had a hard time finding it to be convincing.  While I don’t doubt her sincerity or the fact that she was genuinely depressed, I find it harder to accept that she could write a book but could not write anything for the Globe and Mail.

Perhaps as in the case with many other dismissed, depressed employees, Ms Wong really begins to emerge from her depression when her case with the Globe and Mail is settled and she is paid a large amount of money.  She does not detail the amount but she does detail the fact that she fought very hard to ensure that she did not have to sign a general confidentiality agreement and that she could write about her battle with her illness, with the Globe and Mail and with Manulife, which is probably portrayed as the most roguish of characters in the book.  She is correct in noting that most employees are not in a strong enough position to be able to refuse this demand and are usually forced into silence when settling their disputes with their former employers.

People who have battled with depression and particularly in an employment or job loss context will find much of this book instructive, comforting and even reassuring.  Ms Wong’s description of the role of the benefits administrator and her battle to prove her entitlement to receive disability benefits in the face of rejected claims is realistic and is a battle that is commonly fought.

On the employment law side, the book has much less to offer.  For one thing, Ms Wong’s battle with The Globe and Mail occurs in a unionized workplace.   This means that Ms Wong was in a position to demand reinstatement or damages that are on a different scale than most other dismissed, non-unionized employees in Canada.  She had the benefit of having union counsel fight for this without any cost to her.  The vast majority of dismissed employees in Canada face a more difficult and costly legal battle when they are wrongfully dismissed.  Most dismissed employees are also much less likely to be able to use the “geographic cure” when they become depressed and travel great distances to cure themselves (or at least, to take their minds off their troubles).  Some readers might not relate to these parts of the book even while they find other parts of the book to be personally relevant and emotionally helpful.

This questions was answered recently by the Ontario Court of Appeal in the case of Bowes v. Goss Power Products Ltd., a decision issues on June 21, 2012.

Peter Bowes had a written employment agreement with his employer.  The contract stated that he would receive six months’ notice or pay in lieu of notice if his employment was terminated without cause “prior to the completion of forty-eight (48) months from commencement.”  The contract said nothing about mitigation or about timing of the payment.

Mr. Bowes was dismissed without cause and he was able to find new employment after only two weeks.  His employer paid him out three weeks’ notice as required under the Ontario Employment Standards Act, but then refused to pay out the rest of the amount specified in the employment agreement.  Mr. Bowes was forced to file a lawsuit.  He was unsuccessful initially and then appealed his case to the Ontario Court of Appeal.

The Court of Appeal reviewed the case law dealing with mitigation of damages in these circumstances.  It emphasized that an employer and employee can fix an enforceable notice period which provides some certainty to both parties.  It may well be a lower amount than the employee would have otherwise been entitled to receive under common law.  However, by doing so, the employer gives up the right to the benefit of mitigation if the employee successfully mitigates damages.

In particular, the Court of Appeal stated the following, quite emphatically:

1.  “A fixed term of notice or payment in lieu is not equivalent to common law damages for reasonable notice.” and

2.  Payment in lieu of a fixed term of notice, being liquidated damages or a contractual amount is not subject to a duty to mitigate;

The Court of Appeal stated that it is unfair of an employer to draft an employment agreement with a set severance term, that is less than the employee might have had under the common law, and then try to get out of it at the point of dismissal by informing the employee “that future earnings will be deducted from the fixed amount.”

The Court decision, written by Chief Justice Winkler, on behalf of a unanimous Court of Appeal, concludes:

“Where an agreement provides for a stipulated sum upon termination without cause and is silent as to the obligation to mitigate, the employee will not be required to mitigate.”

In the present case, Mr. Bowes was awarded the full six months’ pay, as specified in employment contract, despite the fact that he found other work quickly.

This is a very important decision for Ontario employees as it clarifies an area in which there had been mixed case law.  The Ontario Court of Appeal has stated very clearly that employers must pay out fixed contractual severance amounts, even if the dismissed employee finds new employment quickly – unless the employment agreement very clearly states otherwise.

Employers can still use contracts that include mitigation provisions but these provisions must be included in the original employment agreement and must meet all of the other normal conditions of enforceability.