Court File and Parties

CITATION: Popescu v. Wittman Canada Inc. 2018 ONSC 631

DIVISIONAL COURT FILE NO.: DC-17-1029-00

DATE: 20180126

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT AT OSHAWA

RE: Petre Popescu, Plaintiff (Respondent) AND: Wittman Canada Inc., Defendant (Appellant)

BEFORE: Abrams, Matheson and Ryan Bell JJ.

COUNSEL: Vlad Popescu, for the Plaintiff/Respondent David Hager, for the Defendant/Appellant

HEARD at Oshawa: January 23, 2018

Endorsement

RYAN BELL J.

[1] Wittman Canada Inc. appeals the judgment of Boswell J. in favour of Petre Popescu for $9,002.09 of termination pay under s. 57 of the Employment Standards Act, 2000, S.O. 2000, c. 41 (the “ESA”) as incorporated into his employment contract.

[2] Section 57 of the ESA provides that eight weeks’ notice is required in cases where an employee was employed for eight years or more. However, the ESA also provides that a “prescribed employee” – including an employee on a temporary lay-off and an employee who is on a temporary lay-off and does not return to work within a reasonable time after having been requested by his or her employer to do so – is not entitled to s. 57 termination pay.

[3] Mr. Popescu was employed by Wittman for about 12 years, pursuant to a written contract of employment. In 2014, he was temporarily laid off by Wittman.

[4] The central issue on the appeal is whether the trial judge erred in finding that paragraph 6.4 of the employment contract incorporated the notice provisions but not the termination provisions of the ESA.

[5] For the reasons set out below, the appeal is dismissed.

Background

[6] Paragraph 6.4 of Mr. Popescu’s employment contract with Wittman provides:

The Corporation my [sic] terminate the employment of the Employee without just cause, by giving the Employee the period of written working notice and payment of severance pay, if any, required by the Employment Standards Act (Ontario) or, in the alternative to such notice and severance pay, by making such benefits contributions and by giving the Employee the termination and severance pay, if any, required by the Employment Standards Act (Ontario).

[7] The employment contract also contains an entire agreement clause.

[8] On March 7, 2014, Mr. Popescu was notified by letter that he was being laid off, effective March 10, 2014 and that his date of recall was expected to be November 7, 2014. Group insurance plans were maintained throughout the lay-off period.

[9] Mr. Popescu was recalled and asked to report to work on October 6, 2014. Mr. Popescu did not return to work at Wittman. By that time, he had found new employment. He asserted that he had been constructively dismissed. At trial, Mr. Popescu limited his damages claim to eight weeks’ salary in lieu of notice – $9,002.09.

[10] Wittman conceded at trial that that Mr. Popescu was constructively dismissed at common law. Wittman argued that the constructive dismissal of Mr. Popescu does not trigger termination pay under s. 57 of the ESA because: (a) Mr. Popescu was constructively dismissed and failed to resign within a reasonable period of time; and/or (b) Mr. Popescu was temporarily laid off. The trial judge did not accept Wittman’s position. The trial judge found that Mr. Popescu was terminated and that the employment contract displaced the termination provisions of the ESA to the benefit of Mr. Popescu.

Standard of Review

[11] The parties agree that the standard of review for this appeal is as set out in Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235 – for questions of law the standard of review is correctness; for questions of fact, palpable and overriding error; and for questions of mixed law and fact, the standard varies. Where a legal principle can be extracted from the question of mixed law and fact, the standard for that question is correctness. Where the issue is the application of correct legal principles to the facts, the standard is palpable and overriding error.

[12] Contractual interpretation involves issues of mixed fact and law, generally subject to deferential review on appeal (Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633, at paras. 50 and 55). Wittman argues that the contractual interpretation questions in this case are questions of law, subject to correctness review. Wittman relies on the Supreme Court of Canada’s decision in Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, [2016] 2 S.C.R. 23, which carves out an exception to Sattva, where an appeal involves the interpretation of a standard form contract, the interpretation is of precedential value, and there is no meaningful factual matrix to assist the interpretation process.

[13] There is no evidence in the record that Mr. Popescu’s employment contract with Wittman is, or amounts to, a standard form contract. The standard of review on this appeal is, therefore, palpable and overriding error.

Analysis

[14] The trial judge found that Mr. Popescu was terminated by Wittman and that under paragraph 6.4 of the employment contract, Mr. Popescu is entitled to eight weeks’ termination pay.

[15] In interpreting the employment contract, the trial judge made a number of findings, including:

1. The employment contract represents the entire agreement between the parties.
2. The employment contract does not permit Wittman to lay-off Mr. Popescu.
3. The “purported lay-off” was a constructive dismissal of Mr. Popescu.
4. Paragraph 6.4 of the employment contract expressly imports the notice periods set out in the ESA.
5. Paragraph 6.4 of the employment contract does not import the termination provisions of the ESA.

[16] The trial judge also found that the termination provisions in the contract are more beneficial to Mr. Popescu in at least two respects. First, while the ESA provides that a constructively dismissed employee is only a terminated employee if the employee resigns within a reasonable period after the constructive dismissal, the employment contract does not. Second, the ESA provides for temporary lay-offs up to 35 weeks, without termination pay; the contract does not – “[t]here is no provision in the contract that permits Wittman to lay-off Mr. Popescu.” As a result, the employment contract is not precluded by s. 5(1) of the ESA.

[17] The appellant has not shown any error in principle in the decision appealed from and we find no palpable and overriding error by the trial judge in his interpretation of the employment contract. Wittman has not established that the trial judge’s interpretation of the employment contract was clearly wrong, unreasonable or unsupported by the evidence.

Disposition

[18] The appeal is dismissed. Wittman shall pay costs of the appeal to Mr. Popescu, fixed at the agreed upon amount of $5,000, inclusive of disbursements and applicable taxes.

Ryan Bell J.

I agree _______________________________

Abrams J.

I agree _______________________________

Matheson J.

Date: January 26, 2018