February 27, 2014 By: Christopher C. Rootham
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A recent Court of Appeal for Ontario decision, Bernier v. Nygard International Partnership, which was released in late 2013, was an unsuccessful appeal of a summary judgment on a wrongful dismissal claim. Diane Bernier was a 54 year old management level employee with a high salary who had worked for Nygard for 13 years. She was dismissed by her employer, Nygard International Partnership, in December 2012 without cause. Ms. Bernier received the minimum statutory salary and benefits required under the Employment Standards Act, 2000 (the "Act"), and after some delay was also paid her 2012 bonus.

Ms. Bernier moved for summary judgment under Rule 20 of the Ontario Rules of Civil Procedure. She claimed that the statutory amounts Nygard had paid her fell far below the amounts she was entitled to at common law, and sought the difference between the amount paid to her and her reasonable notice, as well as her 2013 bonus. The motion judge found that that there was no genuine issue requiring a trial, and that she was entitled to 18 months of reasonable notice as well as her 2013 bonus. Since the motion was decided before the end of Ms. Bernier's notice period, the motion judge impressed the amount owing with a trust that required Ms. Bernier to repay a portion of it if she mitigated her losses. On appeal, Nygard claimed that Ms. Bernier's severance and notice entitlements were modified by contract; were reasonable at common law; should not include any bonus; and that reasonable mitigation efforts had not been made. The Court of Appeal dismissed the appeal with costs, finding that the motion judge had made no error in finding that there was no genuine issue requiring a trial.

Ms. Bernier signed a written employment agreement with Nygard in August 1999, which provided that her employment could be terminated with 30 days' notice by either party. While both parties agreed that this termination provision was unenforceable, Nygard claimed that the original termination provision was replaced in February 2007, when the employment contract was amended in a meeting between Ms. Bernier and Nygard's president. During the course of the meeting, Nygard alleged that Ms. Bernier was told she would receive an increase in salary and bonus in return for her agreement to a modification of the termination provision, under which she would be provided with the minimum statutory entitlements upon termination without cause. The amendments were also alleged by Nygard to have been confirmed in a letter, signed by the president, and delivered to Ms. Bernier following the meeting. Ms. Bernier however, swore in her affidavit that the meeting had never occurred, and that she had never received the letter. The copy of the letter produced by Nygard was not signed by Ms. Bernier. Nygard claimed that the factual dispute over the amendment required a full trial. The motion judge however, found that the employer had failed to lead any evidence that the employment agreement was actually amended, noting that "a party is no longer entitled to sit back and rely on the possibility that more favourable facts may develop at trial."

The Court found that the award of 18 months' notice was appropriate given the facts of this case, including Ms. Bernier's relative seniority and specialized industry employment experience. The Court also found that there had been no error in the finding that Ms. Bernier was entitled to her 2013 bonus, which was an integral part of her total compensation package. Had she been given proper notice, she would have been employed when the bonus was paid out in November, 2013. The Court made an excellent point in relation to this issue, noting that the question of whether a terminated employee who is no longer "actively employed" was entitled to a bonus turned on whether the bonus had become an integral part of the employee's annual salary, which the Court found that it had in this case. If there had been an agreement in place that no bonus was payable on termination, it would have been enforceable, but there was no such agreement in this case.

Finally, the Court found that the imposition of a trust with respect to mitigation income was within the discretion of the motion judge. The motion judge had rejected Nygard's claim that Ms. Bernier had failed to make sufficient efforts to mitigate. While Ms. Bernier had not located a new position at the time of the motion, she had produced a large mitigation brief demonstrating her best efforts at engaging in a reasonable and appropriate job search given her circumstances. The Court noted that a large evidentiary record did not prevent the court from achieving a full appreciation of the evidence, and that in the right circumstances it could allow the court to dispense of the need to conduct a trial with oral evidence. The court found that the motion judge's decision to impose a trust on Ms. Bernier's award was sound. There were 11 months remaining in Ms. Bernier's notice period at the time of the hearing, and the conditions of the trust would require her to account for and reimburse Nygard for any new employment income she received during that period.

This outcome was a positive result for Ms. Bernier and a good use of a summary judgment under Rule 20 in the employment context. It reflects the principles outlined in the recent Supreme Court of Canada, Hryniak v. Mauldin, which are aimed at increasing timely and affordable access to justice through simplified procedures without the need for a full trial in appropriate 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