Thursday, July 21, 2011

Ontario Court of Appeal: No Hard Cap on Notice Entitlement of Non-Managerial or Unskilled Employees

In Di Tomaso v. Crown Metal Packaging Canada LP, 2011 ONCA 469, a decision of the Ontario Court of Appeal released June 22, 2011, the appellant, Crown Metal Packaging ("CMP") appealed from an October, 2010 decision of the Superior Court Judge, Justice Beth A. Allen, granting the respondent, Mr. Di Tomaso summary judgement in a wrongful dismissal action under rule 20.

Background:

Mr. Di Tomaso was an employee of CMP for over 33 years as a mechanic and press maintainer. On September 23 2009, Mr. Di Tomaso was informed that his services were no longer required at CMP. However, just before Mr. Di Tomaso had left, he was notified that his employment would be extended by several weeks. In fact, CMP in total issued 5 different termination dates, which in effect extended Mr. Di Tomaso's employment just before each previous termination date. Extension letters were delivered by CMP, as follows:
  • 1. September 9, 2009, with a termination date of November 6, 2009;
  • 2. November 4, 2009, with a termination date of December 18, 2009;
  • 3. December 15, 2009, with a termination date of February 19, 2010;
  • 4. February 18, 2010, with a termination date of February 26, 2010; and
  • 5. February 24, 2010, confirming the termination date of February 26, 2010
Claims by Mr. Di Tomaso:

Mr. Di Tomaso's action claimed that CMP failed to provide reasonable notice or termination pay as required by the Employment Standards Act, 2000 ("ESA"). He also sought common law damages for wrongful dismissal equivalent to 24 months pay.

CMP's Position:

The employer claimed that its first notice of termination (September 9, 2009) was valid, and alleged that Mr. Di Tomaso's subsequent employment constituted "working notice".

Concerning the Plaintiff's common law claim, CMP's position was that at most, Mr. Di Tomaso was entitled to 12 months notice, based on the character of his employment. CMP emphasized that Mr. Di Tomaso was an "unskilled" and "low level worker".

Motion Judge's Reasoning:

On the issue of working notice, the motion judge reviewed the ESA regulation that authorizes an employer to count a period of work commenced after the termination is served but before the termination date (temporary employment)- compared to an employee's statutory notice of entitlement: Termination and Severance of Employment, O. Reg. 288/01, s. 6 ("Regulation"). For instance, the Regulation states:

6. (1) An employer who has given an employee notice of termination in accordance with the Act and the regulations may provide temporary work to the employee without providing a further notice of termination in respect of the day on which the employee’s employment is finally terminated if that day occurs not later than 13 weeks after the termination date specified in the original notice.

(2) The provision of temporary work to an employee in the circumstances described in subsection (1) does not affect the termination date as specified in the notice of the employee's period of employment.
CMP was of the view that all of its extensions was valid, as each was for a period of less than 13 weeks. Therefore, it claimed, Mr. Di Tomaso was provided with working notice up until the last notice of termination dated February 24, 2010. Mr. Di Tomaso argued to the contrary, stating that various period of extensions should be viewed cumulatively which would exceed the 13 week period set out in s. 6(1) of the Regulation.

In agreeing with Mr. Di Tomaso's position, the motion judge stated:
... The legislation clearly allows for notices temporarily extending termination if the final date of termination in respect of the extension is not more than 13 weeks after the date of the initial termination notice. That interpretation makes practical sense since there would be no certainty for an employee as to when his employment would finally end if the employer was not limited in the length of extensions of employment. (para 19).
Furthermore, the motion judge stated that there is a requirement that the notice of termination be "clear and unequivocal".

The motion judge also rejected CMP's position that Mr. Di Tomaso's entitlement to notice was capped at 12 months due to the non-managerial and unskilled nature of his position.. The motion judge referred to factors in Bardal v. Globe & Mail Ltd. (1960), 24 D.L.R. (2d) 140 (Ont. H.C.J.) ("Bardal"), to determine the appropriate notice period. The Bardal factors include: the character of the employment, the employee's length of service, the employee's age, and the availability of comparable employment in the market.

In order to support its position concerning a capped limit of entitlement to notice at 12 months, CMP relied on the court's ruling in Cronk v. Canadian General Insurance Co. 1995 CanLii 814 (ON CAN), (1995), 128 D.L.R. (4th) 147 (“Cronk”). The employer contended that the Cronk ruling establishes a capped limit of 12 months notice for clerical and unskilled workers.

Mr. Di Tomaso relied on the more recent case of Minott v. O’Shanter Development Company Ltd. 1999 CanLII 3836 (ON CA), (1999), 168 D.L.R. (4th) 270 (“Minott”) to counter the argument that there is a cap of 12 months. Specifically, Laskin J.A. stated in Minott:
I do not regard this court's decision in Cronk as establishing an upper limit of 12 months notice for all non- managerial or non-supervisory employees. At most it deals with one occupational category, clerical employees. Moreover, the imposition of an arbitrary 12 months ceiling for all non-managerial employees detracts from the flexibility of the Bardal test and restricts the ability of courts to take account of all factors relevant to each case and of changing social and economic conditions.
Motion Judge's Findings on Notice:

The motion judge agreed that there is not a hard cap of 12 months notice. Additionally, after considering the Bardal factors, the judge held that Mr. Di Tomaso was entitled to 22 months of notice.

Mr. Di Tomaso was 62 years old on the date of his termination and had served 33 years with CMP. He also made efforts to mitigate his damages by looking for other employment in the work force.

Issues on Appeal:

The employer argued on appeal that the motion judge erred in finding that Mr. Di Tomaso did not have clear and unequivocal notice of termination until February 24, 2010; and that Mr. Di Tomaso received reasonable working notice of termination in light of his status as a non-managerial employee.

MacPherson J.A. did not accept either argument for the following reasons:

Termination Date

MacPherson J.A agreed with the motion judge that the Regulation takes into account a single period of temporary work that cannot exceed 13 weeks.

In addition, he added that "clear and unambiguous" notice of termination must incorporate the final termination date. The first four termination dates came and passed. It was not until the final termination notice on February 24, 2010 that Mr. Di Tomaso's termination was carried out as stated in the letter.

Bardal Factors

MacPherson J.A. agreed that there is not a hard cap of 12 months notice for unskilled low level workers. He also agreed with the motion judge's application of the Bardal factors to the instant case.

The appeal judge also stated that giving more weight to the particular factor of character of employment was unwarranted. MacPherson cited Bastarache J in the Supreme Court decision of Honda Canada Inc. v. Keays, 2008 SCC 39 (CanLII), [2008] 2 S.C.R. 362, where he asserted that "no one Bardal factor should be given disproportionate weight".

MacPherson J.A. noted that the proposition that junior lower skilled workers deserve less notice because they have an easier time finding employment has not been empirically proven.

Disposition:

The appeal was dismissed with costs to the employee/Respondent..

- Alim Ramji, Toronto
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