Citation and Court Information
DIVISIONAL COURT FILE NO.: 90/16
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N :
MICHAEL LARKEY Plaintiff (Respondent)
– and –
STATE STREET BANK AND TRUST COMPANY Defendant (Appellant)
Counsel: Hena K. Singh, for the Plaintiff (Respondent) Kristin Taylor and Caitlin Russell, for the Defendant (Appellant)
HEARD: December 7, 2016
ORAL REASONS FOR JUDGMENT
DAMBROT J. (Orally)
1The defendant (“State Street”) appeals from the judgment of Deputy Judge G. Papageorgiou of the Small Claims Court dated January 25, 2016, awarding $12,935.16 in damages to the plaintiff for an unpaid bonus to which he was entitled. On this appeal, State Street argues that the trial judge made palpable and overriding errors of fact in reaching her decision.
2State Street is a custodian bank. Larkey was employed by State Street for approximately fifteen years until his resignation effective January 9, 2015. At the time of his resignation, he had fifteen years of service with State Street and had been an Assistant Vice President for five years. During his employment, Larkey was paid a salary and an annual bonus, known as an incentive compensation award, in the approximate amount of 15% of his salary. State Street’s practice was to pay an incentive compensation award for the past year early in the following year.
3In late 2014, Larkey secured a new position and resigned from State Street by letter dated December 19, 2014, effective January 9, 2015. Although Larkey’s employment agreement was silent on the issue of bonus eligibility in the event of his resignation, State Street’s Bonus Policy provided that:
… an employee must be actively employed by [State Street] at the time incentive compensation awards are paid out in order to be eligible to receive an incentive compensation award.
4This policy came into effect in August 2006, and was posted on State Street’s intranet network. Relying on this policy, State Street declined to pay Larkey the bonus that he otherwise earned in 2015. Larkey commenced this action to recover his bonus.
5The parties agree that the trial judge correctly summarized the law that applies to this case at paras. 6-7 of her judgment, where she stated:
In Poole v. Whirlpool Corporation 2011 ONSC 4100, [2011] O.J. No. 3448 (O.S.C.) affirmed 2011 ONCA 808 (C.A.) the court considered a similar situation. The employer had posted a policy with a bonus eligibility precondition at issue on its intranet, but it was not specifically set out in the employment contract in writing.
The Court of Appeal concluded that to be effective, the bonus eligibility precondition either had to be specifically agreed to by the employee, or drawn to the employee’s attention:
The bonus eligibility precondition relied on by the appellants was not incorporated in the respondent’s 2007 letter of employment; nor was there any evidence that the precondition was otherwise drawn to the respondent’s attention at any time, whether orally, in writing, or by means of the appellant’s internal intranet communication system, or that he ever agreed to it.
The appellant’s failure to lead evidence or otherwise establish through cross-examination of the respondent that they had communicated the bonus eligibility precondition to the respondent or obtained his assent or agreement to it precludes any reliance by the appellants on the precondition to defeat the respondent’s bonus claim.
6Plainly not every communication of a bonus eligibility precondition will meet this test. The communication must be sufficiently drawn to the attention of an employee to be effective. The defendant took the position that it had met its onus of establishing that it had sufficiently communicated its bonus eligibility policy to the plaintiff. The plaintiff took the position that it had not.
7The trial judge concluded that the plaintiff never expressly agreed to the policy, and that the defendant did not sufficiently communicate the bonus eligibility precondition to the plaintiff. With respect to the argument that the plaintiff agreed to the policy, she found that he never agreed to it in writing or orally, and in fact that he never knew about it. With respect to the policy being drawn to the plaintiff’s attention, as she put it, “While there may have been more communication in this case than in Poole, several forms of insufficient communication do not equate to reasonable communication.”
8As I have stated, the defendant says that the trial judge made a palpable and overriding error in reaching these conclusions, in particular the second conclusion. In argument, the defendant canvassed the communications between the parties that it says satisfied the Poole test. I see no value in canvassing them again. The trial judge gave them careful attention in her reasons.
9Without question the annual compensation information statements provided to Larkey and the 2006 e-mails notifying employees of the revised policies of the company, on their own or taken together with other evidence, could have satisfied the trial judge, and might well have satisfied another trial judge, that the bonus eligibility precondition had been sufficiently drawn to the employee’s attention but I am unable to say that the trial judge made a palpable error in not reaching that conclusion. She was not clearly wrong in coming to her decision on this issue. She was entitled to conclude that the evidence did not establish the sufficiency of the communication of the policy. Again, I am unable to find that she made a palpable and overriding error.
10Accordingly, and despite Ms. Taylor’s able and persuasive argument, this appeal is dismissed.
COSTS
11I have endorsed the Appeal Book and Compendium as follows: “Appeal dismissed for oral reasons delivered in Court today. Costs are fixed at $14,000.”
___________________________ DAMBROT J.
Date of Reasons for Judgment: December 7, 2016
Date of Release: December 9, 2016
CITATION: Larkey v. State Street Bank and Trust Company, 2016 ONSC 7683
DIVISIONAL COURT FILE NO.: 90/16
DATE: 20161207
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
MICHAEL LARKEY Plaintiff (Respondent)
– and –
STATE STREET BANK AND TRUST COMPANY Defendant (Appellant)
ORAL REASONS FOR JUDGMENT
Dambrot J.
Date of Reasons for Judgment: December 7, 2016
Date of Release: December 9, 2016