Simpson v. Global Warranty, 2014 ONSC 6916

Simpson v. Global Warranty, 2014 ONSC 6916

CITATION: Simpson v. Global Warranty, 2014 ONSC 6916

DIVISIONAL COURT FILE NO.: 2058/14

DATE: 20141128

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

NORDHEIMER, J. HENDERSON & CORBETT JJ.

BETWEEN:

EOIN SIMPSON

Appellant

(Plaintiff)

– and –

GLOBAL WARRANTY MANAGEMENT CORPORATION

Respondent

(Defendant)

J. Pitblado, for the appellant

P. Linley, for the respondent

HEARD at London: November 21, 2014

BY THE COURT:

[1]

Introduction

The appellant appeals from the judgment of Mitrow J. dated February 4, 2014 that dismissed the appellant’s claim for damages for wrongful dismissal. At the conclusion of the hearing, we dismissed the appeal with reasons to follow. We now provide those reasons.

[2]

Background

The appellant had signed an employment agreement at the start of his employment. The letter agreement contained a clause limiting the payment that would have to be made if the appellant’s employment was terminated without cause. The clause reads:

As discussed previously with you, the Employer also has a specific severance policy. In this regard, unless an employee is terminated for cause, an employee’s employment may be terminated at the sole discretion of the Employer and for any reason whatsoever upon providing the employee with one (1) weeks notice or pay in lieu thereof, subject to any additional notice, pay in lieu thereof or severance that may be required to meet the minimum requirements of the Employment Standards Act, R.S.O. 1990, c. E 14, as amended from time to time.

3After almost seven years of employment, the appellant was “laid off” by the respondent. Two or three months later, the respondent paid the appellant the amount that he was entitled to receive under the Employment Standards Act, R.S.O. 1990, c. E.14. At that point, the appellant treated the layoff as a constructive dismissal and commenced this action for damages. There is no issue that the layoff constituted a constructive dismissal, which is a termination without cause. There is also no issue that the appellant was paid the amount that he was entitled to receive under the above termination provision. The appellant, however, says that, because the respondent purported to lay him off as opposed to terminating his employment, the respondent is not now entitled to rely on the termination provision. In the alternative, the appellant says that the respondent, having defended the claim on the basis that it had cause to terminate his employment and having failed in that defence, the respondent also cannot rely on the termination provision.

[4]

Analysis

We do not agree with either of these submissions. With respect to the first submission, the purported layoff amounted to a termination without cause. The employment agreement directly addressed the payment, to which the appellant would be entitled, if he was dismissed without cause. As we shall explain, even if the purported layoff could be seen as a breach of the employment agreement, because the employment agreement did not allow for layoffs, that breach would not necessarily disentitle the respondent to the benefit of the negotiated termination provision. In the same vein, while the respondent was technically in breach of the employment agreement by not immediately paying the appellant what he was owed upon his termination, that breach is not of an order of magnitude, in the circumstances of this case, as to disentitle the respondent from the benefit of the termination provision.

5The appellant relied on a number of cases and texts in support of his position. However, the cases relied upon by the appellant are clearly distinguishable on their facts. For example, in Dixon v. British Columbia Transit, [1995] B.C.J. No. 1892 (S.C.), the employer terminated the contract for cause when the employer knew at the time of the dismissal that there was none, thus repudiating the contract. In the present case, the termination was initially effected not for cause, and consequently there was no repudiation.

6In Carr v. Fama Holdings Ltd. (B.C.C.A.), 1989 240 (BC CA), [1989] B.C.J. No. 1888 (C.A.) the employee had a one year term contract. The contract provided that the employee could not be dismissed before the end of the term unless the employee’s work was “not satisfactory” to the employer – a condition precedent to the severance provision in that contract. The court found that the condition precedent was not fulfilled and, consequently, the employer could not avail itself of the contractual severance provision. In the case at bar, there was no fixed term contract, and no condition precedent to the termination provision as to when it would take effect if there was a termination of the employment without cause.

7Describing the termination as a layoff led to two impacts that would not have been present, if the appellant had been terminated without cause from the outset. First, the appellant was delayed in receiving his severance for two to three months. Second, the appellant may have delayed his efforts to secure new employment, under the belief that he might resume his employment with his employer. Neither is material in the circumstances of this case and neither was pursued as a basis for seeking a remedy for breach of contract.

8In terms of the second submission, the appellant complains that, after he commenced this action, the respondent alleged that his dismissal had been for cause. The trial judge rejected that defence. The appellant submits that, having made an unsustained allegation of cause, the respondent is precluded from relying on the termination provision. We do not agree. All that the failed defence of just cause resulted in was a finding that the termination of employment was without cause. The provision in the employment agreement directly addresses what payments the appellant will be entitled to, if the employment is terminated without cause. The fact that the respondent alleged cause, and failed, does not preclude it from invoking the termination provision: Roden v. The Toronto Humane Society, 2005 33578 (ON CA), [2005] O.J. No. 3995 (C.A.)

9In the end result, we agree with the result reached by the trial judge. As a consequence of that conclusion, we do not reach the issue whether the trial judge was correct when he reduced the damage assessment by two months for what he found was the appellant’s failure to mitigate his damages.

[10]

Conclusion and Costs

It is for these reasons that the appeal was dismissed. The appellant shall pay to the respondent its costs of the appeal fixed in the amount of $5000, inclusive of disbursements and HST.