July 17, 2014
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In the basic wrongful dismissal case, the central issue between the employer and employee generally turns on the question of whether the employer has provided a reasonable termination package, otherwise known as compensation in lieu of ‘reasonable notice’.

The standard (or what we call the ‘boilerplate’) defences to employee claims for reasonable compensation is that the employee’s claim is firstly (1) too high; (2) that the level of employment is overstated; and (3) the employee is sitting on his or her hands and letting damages unreasonably accumulate and not seriously trying to find a new job to reduce the level of damage sustained (it’s the employee’s own fault, not that of the employer).

Some employers have little or no interest in fairness or reasonableness towards employees, and simply disregard their common law obligation to provide employees reasonable compensation. They know full well that when the employee seeks legal redress, despite the fact that the issues in dispute are relatively straightforward and suitable for quick resolution, the legal system has not, until recently, taken proper account of that. They can and do exploit the system in an effort to financially exhaust plaintiffs by delaying, as long as possible, facing up to contractual and legal obligations, and adding another barrier to individuals seeking justice.

Our highest court finally acknowledged that reality openly earlier this year, stating in Hryniak v. Mauldin et al, that ‘ensuring access to Justice is the greatest challenge to the Rule of Law in Canada today.’

This was the Supreme Court’s introductory statement reviewing how the Court’s historical pre-disposition has been to protect a litigant’s right to a trial, and that courts need to be mindful that this approach can actually defeat the aims of justice. A culture shift is required in applying the summary judgment rules. The traditional measure of whether a judge can gain a ‘full appreciation’ of the case has been rejected as too high a standard. The test now is whether the judge can gain a ‘sufficient’ appreciation to rule fairly and justly without the full forensic machinery of the complete trial process, and ultimately a trial.

In the wake of this decision, two recent decisions in Ottawa, have positively embraced the ‘culture shift’ granting summary judgment for reasonable notice damages to terminated employees.  Interestingly, the two cases, decided by different judges, are against the same defendant employer. They were released within weeks of each other. The first is Beatty v. Best Theratronics, issued June 24, 2014 and the second, Arnone v. Best Theratronics, released July 14, 2014.

In both cases, the defendant argued unsuccessfully that a trial was necessary. In both cases the judges disagreed with the employer and closely followed the Supreme Court’s instruction in Hryniak, responding to the employer’s argument and concluding it had no merit. Both employees were provided the statutory minimums under the Canada Labour Code. The minimums in this statute are lower even than the Employment Standards Act for termination and severance pay.

Mr. Beatty, who was 58 years old when terminated and had 15 years’ service was paid a paltry  12 weeks and Mr. Arnone who was 53 years of age and had 31 years’ service (more than twice that of Mr. Beatty) received a mere 4 weeks more, or 16 weeks.

As Mr. Arnone’s counsel, I can plainly state that the employer’s position in its factum, and before the Judge, was that 16 weeks was reasonable at common law for this employee with 31 years’ service. Further, it rather astoundingly maintained that Mr. Arnone, who applied for 800 jobs in 17 months between his termination and the date of cross-examination on his mitigation efforts, was not diligent enough in his mitigation efforts (at the time of writing this blog at latest count he has now made over 1,000 applications). Further, in that time, Mr. Arnone accepted unrelated work at the retail level, although not legally obligated to do so.

In Beatty, Justice Hackland commented on the employer’s tactic of paying only the statutory minimum to be ‘remarkable’ and having no ‘real rationale’, and that cases cited by the defendant were irrelevant and did not assist the defendant.

In Arnone, Justice James, bluntly stated that the employer’s suggestion that there was similar employment available to Mr. Arnone based on a list of jobs compiled by an articling student that had no relation to what Mr. Arnone was doing for the last 31 years was ‘plainly without merit.’

Arguably, the employer’s best chance of defeating the summary judgment motion was in the Beatty case, arising from the fact the employee is asserting claims for aggravated and punitive damages.

Justice Hackland was not satisfied he could deal with these issues on a summary judgment motion. So, following the directive in Hryniak, he summarily dealt with what he could and granted partial summary judgment on the notice part of the claim. He then ordered a mini-trial relating only to the punitive and aggravated damages. He remains seized of the case and will deal with it himself rather than having a judge unfamiliar with the case needing to get up to speed.

The appeal period has not yet run on either of these decisions. Unfortunately, neither of these employees can likely expect bank deposits any time soon. The employer has an automatic right to appeal regardless of merit to such appeal.

This same employer lost another summary judgment motion brought by Wells Fargo Bank enforcing $3 Million in security. It appealed that decision. Recently, the Ontario Court of Appeal found ‘no merit’ in the points made by the appellant relating to alleged bias in the expert called by the plaintiff. The court found that case also appropriate for summary judgment. The appeal was dismissed May 14th.

Stay tuned for further developments on these cases and others as we track the ‘culture shift’ in summary judgment and wrongful dismissal cases.

This content is not intended to provide legal advice or opinion as neither can be given without reference to specific events and situations. © 2017 Nelligan O’Brien Payne LLP.

Service: Employment Law