Uncertain Notice of Termination is Not Notice
May 31, 2017
On a Summary Judgment motion, the Ontario Superior Court of Justice awarded an Employee $7,500 in damages for mental distress together with damages of $17,076 in lieu of lost income for the Employer’s failure to provide the Employee with a revised notice of termination.
The Employee, a 72 year old man, worked as a security guard for 12 years. The Employer provided the Employee with written notice on November 24, 2014 that his employment would end in January or February, 2015 and that a firm date would be provided as soon as it was known. However, the Employee continued to work for the Employer until July, 2015 without a fixed end date until the day he was asked to leave.
The Employee was not provided with any statutory notice, severance pay or vacation pay pursuant to the Employment Standards Act, 2000 (the “ESA“) or common law notice as the Employer relied upon the November 24, 2014 written notice. The Employee was able to locate another position in April 2016 at the same salary.
Due to the Employee’s mitigation, which occurred after the Action was commenced, the Action was within the Small Claims Court jurisdiction (up to $25,000). Notwithstanding that, the Court denied the Employer’s request that the Action be transferred to Small Claims Court and stated that the damage claim in the Action, after mitigation, was “about $25,000” and therefore within the Simplified Procedure Rules jurisdiction ($100,000 or less, exclusive of costs).
The Court allowed the matter to proceed by way of a Summary Judgment motion concluding that it would be unfair to send the Action to Small Claims Court. Transferring the action would deprive the Plaintiff of costs beyond the Small Claims Court Tariff and it would be “disproportionate to the potential outcome and contrary to the interests of justice” to permit the Action to go to trial. The Judge also noted it would penalize the Employee for mitigating his damages and act as a deterrent for other terminated Employees.
In finding a Summary Judgment motion appropriate, the Court noted that there was only one credibility issue involved in the matter which did not affect the damages awarded.
The Judge ultimately found the written notice of termination to be unclear and ambiguous and that the Employee had no means of ascertaining when his employment would come to an end. Further, the Employer had exceeded the 13 week period stipulated in section 6(1), Regulation 288/01 to the ESA which allows an Employer who has provided notice of termination in accordance with the ESA to provide temporary work to an employee without providing further notice if the final termination date is not later than 13 weeks from the termination date specified in the original notice.
Interestingly, in addition to awarding damages for breach of contract (wrongful dismissal), the Judge also ordered damages for mental distress; stating that an “independent actionable wrong” was not required where awarding damages for an Employer’s breach of the obligation of “good faith and fair dealing” as discussed in the Supreme Court of Canada decisions Wallace v. United Grain Growers Limited  3 S.C.R. 701 at para. 95 and Keays v. Honda Canada Inc.  2 S.C.R. 263 at paras. 55 and 59. As such, the Judge ordered “moral damages” for mental distress based on a finding that the Employer’s actions were “unfair” due to it continually extending the Employee’s employment without providing a fresh notice and keeping him “hanging in the wind” for seven months before abruptly letting him go.
This case is an example of the flexibility of “moral damages” being used in a case where the Court took a very dim view of the Employer’s conduct, notwithstanding that there was seemingly no medical or other evidence filed to suggest any undue emotional upset experienced by the Employee. In fact, arguably, the Employee benefited from the continued employment and once fully compensated by the Court with damages in lieu of notice (and presumably costs), would not appear to be worse off.