Court File and Parties

COURT FILE NO.: CV-14-515073 DATE: 20160622 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Giuseppe Bevilacqua, Plaintiff – and – Gracious Living Corporation, Defendant

COUNSEL: Lia Moody, for the Plaintiff Emilio Bisceglia, for the Defendant

HEARD: April 8, 2016

E.M. Morgan, J.

Reasons for Judgment

[1] The Plaintiff, Giuseppe Bevilacqua, sues for wrongful dismissal after 15 years of working for the Defendant, Gracious Living Corporation (“Gracious Living”). He is currently 59 years old, and worked as Gracious Living’s facilities manager at the time that his job came to an end in September 2014. He seeks compensation in the amount of 15 months’ salary in lieu of notice.

[2] Mr. Bevilacqua has brought a motion for summary judgment under Rule 20 of the Rules of Civil Procedure. In a hybrid proceeding authorized under the Rules, the motion has included viva voce evidence from Mr. Bevilacqua and from Enzo Macri, one of the owners of Gracious Living.

[3] On September 15, 2014, Mr. Bevilacqua was told that he was being temporarily laid off, and that he would be recalled three months hence – i.e. in mid-December 2015. This turns out to have been the case. Mr. Bevilacqua was indeed recalled to work in December of that year.

[4] Mr. Bevilacqua takes the position that the layoff was effectively a constructive dismissal. He says that he felt that the company had decided that they no longer valued or needed his full-time services, and so he started looking for another job and found one 15 months later. His counsel submits that this corresponds with the notice period an employee in Mr. Bevilacqua’s situation should have received.

[5] Both Mr. Bevilacqua and Mr. Macri testified that in 2014, Gracious Living was going through an economically difficult phase and was downsizing. Mr. Bevilacqua had heard rumors that he was going to be fired. He asked Mr. Macri about this, and Mr. Macri denied it.

[6] On September 15, 2014, Mr Bevilacqua was told he was being temporarily laid off. No one at Gracious Living ever told him he was being fired. Mr. Bevilacqua was specifically told that Gracious Living would be calling him back on December 15th of that year. Mr. Bevilacqua confirmed that he was advised by his employer to go onto employment insurance. Gracious Living kept Mr. Bevilacqua on his company benefits (health insurance, etc.), and they allowed him to keep his company Blackberry for the period of the layoff.

[7] The September 15, 2014 letter from Gracious Living to Mr. Bevilacqua reads:

Please allow this letter to confirm the substance of our conversation, at which time you were informed that you would be placed on temporary layoff commencing Tuesday, September 15, 2014.

[8] It is Mr. Bevilacqua’s position that under the first stage of analysis set out by the Supreme Court of Canada in Potter v New Brunswick Legal Aid Services, 2015 SCC 10, [2015] 1 SCR 500, at para 43, Gracious Living’s actions amount to a breach of his employment contract. There was no term of that contract that permitted Gracious Living to place him on lay-off, and there was no implied term that would have allowed the layoff after 15 years of employment where the prospect of a layoff had never been raised with him.

[9] The Ontario Court of Appeal has held that a unilateral layoff by an employer is, absent agreement to the contrary, a substantial change in employment, and that it therefore constitutes a constructive dismissal: Elesegood v Cambridge Spring Service, 2011 ONCA 831, at para 14. An employer has no right to impose a layoff either by statute or common law, unless that right is specifically agreed upon in the contract of employment. The fact that a layoff may be conducted in accordance with the Employment Standards Act, 2000, SO 2000, c. 41, is irrelevant to the question of whether it is a constructive dismissal. Gracious Living was not legally authorized to “simply place [Mr. Bevilacqua’s] employment status on hold without pay and expect that this will not constitute a constructive dismissal”: Martellacci v CFC/INX Ltd (1997), 1997 ONSC 12327, 28 CCEL (2d) 75, at para 30 (Gen Div).

[10] This lack of right to layoff an employee applies even where the employer does not mean to repudiate the contract, Damery v Matchless Inc (1996), 1996 NSSC 5518, 151 NSR (2d) 321, or where the layoff is temporary in nature: Stolze v Addario (1997), 1997 ONCA 764, 36 OR (3d) 323. An employee in Mr. Bevilaqua’s position is entitled to the opportunity to assess his newfound situation for a reasonable period of time in order to come to a decision as to whether to accept it: Belton v Liberty Insurance Co of Canada (2004), 2004 ONCA 6668, 72 OR (3d) 81, at para 8.

[11] The employer’s imposition of a layoff in the absence of a contractual clause permitting a layoff effectively repudiated a fundamental term of its employee’s employment agreement: [Chen v Sigpro Wireless Inc, 2004 CarswellOnt 2225, at para 12 (SCJ)](Chen v Sigpro Wireless Inc, 2004 CarswellOnt 2225). Gracious Living may not have intended to terminate Mr. Bevilacqua, but its actions amounted to a constructive dismissal.

[12] Mr. Bevilacqua testified that he was on friendly terms with his employer over the years. Gracious Living is a family-owned company, and he had a personal friendship with the owners. For that reason, although he knew that the layoff was not personal and that the company was trying to cope with economic difficulties, he was shocked when he was informed that he would be temporarily laid off in September 2014.

[13] In his testimony Mr. Bevilacqua conceded that he was told it was a temporary layoff, and that he was not told that Gracious Living was firing him. What he was told is that he would be called back to work some three months later – on December 15th of that year. He was told to go on employment insurance, but that he would be keep receiving the company’s benefits (health insurance, company Blackberry) for the three month layoff period.

[14] While Mr. Bevilacqua said in his testimony that he did not believe that the layoff would be temporary, he never told anyone at Gracious Living that he felt that way. In fact, at one point during the layoff period he was asked to come to work to fill in for an absent employee, and he did so. Instead of taking a day’s salary he banked the time to be credited against a future, post-layoff work day. As he put it in his testimony, “I knew that I would be called back because they needed someone to plow.” That had been one of his functions at Gracious Living, and he fully expected his job to continue.

[15] While neither Gracious Living’s nor Mr. Bevilacqua’s expectations about the temporary nature of the layoff makes it any less of a constructive dismissal, it does raise a question of why he did not accept the company’s offer to return to work. On October 23, 2014, some six weeks after the layoff, Gracious Living asked Mr. Bevilacqua to return to work as a guard at the gatehouse of the company’s property. The gatehouse guard was one of his supervisory responsibilities prior to the layoff, and over the years he had with some frequency filled in for others in this role. He had never previously indicated to anyone at Gracious Living that he had a problem with working at the guardhouse.

[16] Mr. Bevilacqua now says that he suffers from anxiety, and that working in the confined space of the guardhouse exacerbates this condition. That came as news to Gracious Living, as none of his supervisors had ever heard him mention this problem before. In any case, he refused to return to work when invited to do so on October 24, 2014. At the hearing of this matter, Mr. Bevilacqua testified that he had by then determined that he was not going back to work no matter what, as he had already decided to sue. He issued his Statement of Claim five days later, on October 29, 2014.

[17] In response, Gracious Living wrote a letter to counsel for Mr. Bevilacqua dated November 5, 2014, in which they expressed surprise at having been served with a Statement of Claim. That letter contained an offer which one would think an employee under these circumstances would find difficult to reject. Gracious Living wrote:

Your client was put on a temporary lay-off. The statutory period of 13 weeks has not even passed as of yet; it will end December 15, 2014. Yet, here we have your client’s Statement of Claim. My client is extremely confused as to why it was delivered. In any event, please note that my client is prepared to reinstate your client to his exact same position, at the same terms as prior to the lay-off, starting December 15, 2014, as stated in the temporary lay-off letter that your client was provided.

[18] The Employment Standards Act does not, as Gracious Living might have believed, authorize a layoff in the absence of a contractual provision to that effect. However, Mr. Bevilacqua cannot explain why he did not want to take up his employer’s offer of reinstatement to the same job, on the same employment terms as before. He testified that he feared another layoff might come in the future, but no one at Gracious Living had intimated that would happen. Mr. Macri testified that, “He was a trusted employee, so he was there to stay there.”

[19] This attitude on the part of Gracious Living is borne out by its actions. They simply offered Mr. Bevilacqua his job back, with no demotion, no change, and apparently no hard feelings. During the entire layoff period, everyone at Gracious Living had remained on friendly terms with Mr. Bevilacqua and, indeed, continued to call him for advice and information on matters pertaining to the company. The relationship between him and his employer was, and continued to be, quite friendly. Both sides concede this is the case.

[20] This is especially important given the lengthy period of time it took Mr. Bevilacqua to mitigate his loss by finding another job. After 15 months, he finally landed a new position as a truck driver – a significantly different type of work than what he had done before.

[21] Mr. Bevilacqua was clear in his testimony that he did not send out his resumé during his job search, and did not apply to a single job. He has provided a record of his mitigation efforts that amounts to little more than casual conversations with various people. He made no concerted effort at finding a new job. Rather, he says that he relied on word of mouth from contacts he knew from his years at Gracious Living.

[22] Significantly, Mr. Bevilacqua also indicated that for the first several months he told prospective employers that he had been temporarily laid off by Gracious Living, and was looking for temporary replacement employment. For obvious reasons, that made it virtually impossible for him to find suitable new work to replace his job at Gracious Living.

[23] Mr. Bevilacqua’s lackadaisical approach to mitigation, and his initial comfort level with returning to work after what his employer had characterized as a temporary layoff, makes it all the more inexplicable why he did not simply accept Gracious Living’s offer to return to his old job. Mr. Macri specifically testified that he was welcome to do so, and that his claim of wrongful dismissal for Gracious Living’s mistake in thinking it had the right to lay him off would not have impacted on that offer or on his return to work.

[24] I agree with counsel for Mr. Bevilacqua that mitigation efforts need not be perfect; however, I also agree with counsel for Gracious Living that Mr. Bevilacqua’s own evidence demonstrates that he failed to take any reasonable steps to look for alternate employment or otherwise mitigate his damages. He is in technologically literate, able bodied and by all appearances in good health. There is no reason other than the shortcomings of his search (or, more accurately, his non-search) for his failure to mitigate in a relatively short period of time.

[25] Gracious Living has satisfied the onus that is on it to prove that Mr. Bevilacqua has not mitigated: Christianson v North Hill News Inc, 1993 ABCA 232, at para 11. In her factum, counsel for Mr. Bevilacqua cites Evans v Teamsters Local Union No 31, 2008 SCC 20, [2008] 1 SCR 661, at para 108, which, in turn, quotes David Harris’ text on Wrongful Dismissal, vol. 2, at para 11, for the proposition that, “Surely the employee should not be kept on the employer’s strings, having to respond at the slightest whim of the same company that deliberately rejected him by the act of dismissal.” With respect, however, this thinking does not apply to Mr. Bevilacqua’s situation.

[26] Mr. Bevilacqua was not rejected by Gracious Living. As far as Gracious Living understood, he was temporarily laid off, albeit in circumstances where Gracious Living was not entitled to do so. There was nothing either in law or in interpersonal relations with his employer that prevented him from accepting the offer to return.

[27] Gracious Living constructively dismissed Mr. Bevilacqua on September 15, 2014. It offered him his old job back on November 5, 2014, to begin work on December 15, 2014. Mr. Bevilacqua is entitled to pay in lieu of notice for the three months that he would have been out of work had he mitigated his damages by accepting Gracious Living’s offer. Since he kept all of his employment benefits during that time, he is entitled to his salary alone. I leave it to the parties to calculate three months’ pay at the salary that Mr. Bevilacqua was earning in September 2014.

[28] Counsel for both parties may make written submissions in respect of costs. I would ask that they be sent to the court at 361 University Avenue, Toronto, to my attention, within two weeks of today’s date. The submissions should include a Bill of Costs and brief written submissions of no more than three pages in length.

Morgan, J.

Released: June 22, 2016