RULING ON SMALL CLAIMS COURT APPEAL

BOSWELL J.

[1] Mitsche & Aziz Inc. appeal the judgment of Deputy Judge A. Fisher dated July 25, 2017, requiring them to pay Lisa Ferguson $25,000 plus interest and costs as damages for breach of an employment contract.

[2] The appellants are a firm of land surveyors. They hired Ms. Ferguson to fill a one year maternity leave position performing drafting and calculating. The parties executed a half-page contract that provided for a one year fixed term of employment, at a wage of $25 per hour. The contract is so brief that I have set out its entire terms on Appendix “A”.

[3] The contract did not specify the number of hours to be worked, but the evidence at trial was consistent that it was intended to be a full time position. Mr. Abdelshahid, a principal of the appellant, gave evidence that he understood full time to mean 35-40 hours per week.

[4] It is agreed that Ms. Ferguson worked between 38 and 40 hours per week from the time the contract commenced (October 1, 2014) to the time it was terminated (March 1, 2015). It is further agreed that she earned a total of $21,042.60 during that time period.

[5] In late February 2015, Mr. Abdelshahid sent Ms. Ferguson an email and told her she was laid off, effective March 1, 2015, due to a shortage of work. She was paid no severance and was never called back to work. The appellant concedes that Ms. Ferguson was terminated.

[6] Ms. Ferguson found alternative work beginning in September 2015. She made roughly $3,373 during that month, which was the last month of her contract with the appellant.

[7] The trial judge made a number of factual findings, including the following:

(a) The employment contract was a fixed-term contract for one year;

(b) Ms. Ferguson worked between 38 and 40 hours per week prior to termination;

(d) Based on an estimated annual income of $52,000, the value of the unexpired term of the contract was $30,331; and,

(e) After deducting the $3,373 earned in mitigation, Ms. Ferguson’s damages still exceeded the monetary limit of the small claims court.

[8] The appellant listed nine grounds of appeal in its Notice of Appeal. Only one ground, however, was argued when the appeal was heard. In particular, that the trial judge had erred in his interpretation of the employment contract by failing to recognize that it did not guarantee Ms. Ferguson any particular hours of work. In other words, the contract was silent as to hours of work and could not form the basis of a damage award based on seven months of full time hours. It was an error, the appellant submits, to infer that Ms. Ferguson’s hours of work were going to be consistent.

[9] I am not persuaded that the trial judge erred.

[10] The employment contract was drafted by the appellant. The appellant could have made the contract open-ended, or for any other period of time. The appellant elected to provide for a fixed, one-year term. The appellant’s counsel concedes that there was a valid basis for the trial judge’s conclusion that the contract was for a fixed term.

[11] In my view, there is also a sufficient evidentiary basis to support the conclusion that the contract was intended to be for full time employment. Both Ms. Ferguson and Mr. Abdelshahid testified that their individual expectations were that the contract was for full time hours. Ms. Ferguson in fact worked full time hours at all times prior to her termination.

[12] There is no provision in the contract that entitled the employer to reduce or eliminate Ms. Ferguson’s hours. There is no basis upon which to imply a term that gave the employer discretion to reduce Ms. Ferguson’s hours at will. If the employer had wanted such a term in the agreement, it could easily have inserted it into the contract.

[13] The court’s approach to contract interpretation is governed by the Supreme Court’s decision in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53. Sattva directs trial judges to take a “practical, common-sense approach” to contractual interpretation. The central concern is to identify the objective intent of the parties. Here, the objective intent of the parties was not a matter of contention. Both sides indicated that the expectation was for full time employment. Implying a term that would allow the employer to unilaterally reduce the employee’s hours of work at will, down to nothing if it pleased, does not accord with common sense in my view.

[14] I am also satisfied that the means by which the trial judge calculated Ms. Ferguson’s damages for the unexpired portion of the contract term had a rational basis. He determined that her wages would have been in the range of $52,000 for the year and calculated her damages as 7/12 of that figure. Even after deducting the wages Ms. Ferguson earned through other employment in September 2015, the balance remaining exceeded the court’s jurisdiction. I find no error in the trial judge’s calculations or in the approach he took to the assessment of damages. I might have taken the wages actually earned ($21,000) and divided that figure by five to calculate a monthly wage. I might then have multiplied the monthly wage by seven. The result would, however, have been the same: the damages would still exceed the monetary limit of the court. In any event, the fact that I might have utilized a slightly different formula does not mean that the trial judge was in error.

[15] The appeal, as argued, is based on an alleged factual error. To succeed, the appellant must establish that the trial judge made a palpable and overriding error: see Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235. I find no such palpable or overriding error in this case. In my view, there was ample evidence to support the trial judge’s conclusions.

[16] In the result, the appeal is dismissed.

[17] The parties may make written submissions on costs on a 14 day turnaround. The respondent’s submissions shall be served and filed by October 25, 2018; the appellant’s by November 8, 2018. Submissions should not exceed two pages in length and should be emailed to my assistant at diane.massey@ontario.ca.

Boswell J.

Released: October 11, 2018

Appendix “A”

Employment Contract

October 1, 2014

Lisa Ferguson

59 Bascon Street

Uxbridge ON L9P 1J2

Please be advised your one year contract employment (sic) with Mitsche & Aziz Inc. starts October 01, 2014, at hourly rate of $25.00, to be reviewed in 3 months based on your performance.

You entitle (sic) 5 weeks’ paid vacation annually, with maximum tow (sic) week at a time based on work load.

We require 4 weeks’ notice before your quoting (sic) the job.

Should you agree on above, please sign and return to me.

Signed: Lisa Ferguson

Signed: Aziz Abdelshid (president)

Lisa Ferguson v. Mitsche & Aziz Inc., 2018 ONSC 6021

Case Summary

RULING ON SMALL CLAIMS COURT APPEAL

Appendix “A”

Judge

Counsel

Parties

Areas of Law

Fact Patterns

Financial Outcomes

Issues