Nemeth v Hatch Ltd., 2017 ONSC 1356

Nemeth v Hatch Ltd., 2017 ONSC 1356

COURT FILE NO.: CV-16-551716 DATE: 20170302

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

JOSEPH NEMETH Plaintiff – and – HATCH LTD. Defendant

COUNSEL: Dorian N. Persaud and Stephanie Pope, for the Plaintiff William D. Anderson, for the Defendant

HEARD: January 26, 2017

LEDERER J.

Introduction

1This is a motion brought by the plaintiff seeking summary judgment.

2The plaintiff, Joseph Nemeth, had been employed by the defendant for a little more than 19 years. When he was first employed, he signed an employment contract. It included a termination clause. It provided as follows:

The Company’s policy with respect to termination is that employment may be terminated by either party with appropriate notice in writing. The notice period shall amount to one week per year of service with a minimum of four weeks or the notice required by the applicable labour legislation.

3The employment of Joseph Nemeth was terminated. Consistent with the Employment Standards Act, 2000 [1] (the “Act”) he received 8 weeks’ notice and 19.42 weeks’ salary as severance pay. Counsel for the defendant acknowledges that Joseph Nemeth either has received, or will receive, benefits equivalent to those he would be entitled to, as an employee, for the period of notice. In particular, his pension benefits, whatever they may be, should and will take into account the notice period.

4Joseph Nemeth is dissatisfied with the notice provided. He believes he is entitled to more than the Act calls for. As he perceives it, the termination clause is ambiguous and raises the prospect that an employee that is party to it could find himself or herself receiving less notice than the Act directs. This would be illegal. Employers are not able to contract out of what the legislation provides. [2] Bearing this in mind, counsel for Joseph Nemeth goes on. In the factum filed on behalf of his client it is said that because the termination clause is silent as to severance and benefits it stands as an attempt to avoid payment of such entitlements; as counsel sees it, this is a further demonstration of an improper attempt to contract out of the provisions of the Act.

5It is said that these issues can be decided without resort to a trial.

The Conduct of this Motion

6At the outset I pointed out to counsel that this case was virtually identical to Cook v. Hatch Ltd. [3], a decision released by me just two weeks prior to the hearing of this motion. I reviewed that case with counsel, discussed decisions on which it relied and explained my understanding of some cases that had not been raised and were not referred to there but were noted in the factum of the plaintiff here. I note particularly Singh v. Qualified Metal Fabricators Ltd. [4] to which I shall refer later in these reasons.

7At the end of this initial review, I explained to counsel that it seemed unlikely that hearing submissions similar to those I had so recently turned my mind to, even after taking into account cases not referred to there, would persuade me to a view that was much different from the one already expressed. I wondered if their time and their clients’ resources would not be better spent considering whether an an appeal was advised and taking steps in that direction if they concluded that it was. As I believe will become apparent, Singh v. Qualified Metal Fabricators Ltd. is particularly pertinent to this idea. I undertook to counsel that I would do my best to prepare an Endorsement that would reflect this unusual approach.

8Counsel took some time to consider this and obtain instructions. To their considerable credit, they agreed to proceed as suggested. This is the Endorsement to which I referred.

Cook v. Hatch Ltd. and the Cases It Refers To

9The decision in Cook v. Hatch Ltd. was released on January 13, 2017.

10The employment of Tim Cook, with Hatch Ltd., was terminated after nearly 11 years of service. Tim Cook had entered into a contract of employment which contained the same termination clause as did the contract of Joseph Nemeth (see para. [2] above). Like Joseph Nemeth, Tim Cook was given 8 weeks’ notice. He received 10.58 weeks of severance. The decision considered a motion for summary judgment, brought on behalf of Tim Cook, in which it was submitted that the termination clause could not be sustained because it was ambiguous and, by its silence as to severance and benefits, indicated an intention to contract out of those obligations as they were required to be paid through application of the Act.

11The motion was unsuccessful. Summary judgment was ordered but in favour of the defendant (the employer) and not the plaintiff (the employee).

12I reviewed with counsel the decision in Cook v. Hatch Ltd. and cases to which it referred. Such a review begins with in Machtinger v. HOJ Industries Ltd. [5] By specifying notice periods shorter than the statutory minimum, the agreement in that case evidenced an attempt to contract out of the statutory requirements whereas in subsequent cases, a suggested interpretation that could lead to a payment that was less than what the legislation called for was not enough to set aside the termination clause. To comply with the dictum in Machtinger v. HOJ Industries Ltd. there must be a clear intention to avoid the terms of the statute.

13In Macdonald v. ADGA Systems International Ltd. [6], the employee had worked for the employer for 6 years. Under the Act this would lead the employee to a notice entitlement of 6 weeks. The termination clause referred to the contract being terminated “at any time by giving not less than one (1) month’s written notice” [7]. It was argued that the contract provided for less than the legislation allowed and thus should be set aside. The Court of Appeal did not agree. It found that the clause did not violate the requirements of the statute. It made note of what was actually paid, distinguished Machtinger v. HOJ Industries Ltd. by observing that there was no attempt to contract out of the minimum requirements under the Act and by reading in words that were not present:

It would no doubt have been linguistically preferable had the termination provision in MacDonald’s contract contained words after the term of notice such as “as in accordance with the relevant provisions of the Employment Standards Act.” But while this layer of specificity might have enhanced the clarity of the parties’ intentions, its absence does not detract from the provision’s legality. [8]

14In Roden v. Toronto Humane Society [9], relying on comments made in Machtinger v. HOJ Industries Ltd., the court noted that it is sufficient if provisions relied on for terminations without cause incorporate, by reference, the minimum notice periods set out in the Act:

The without cause provisions in question are of precisely the type that Iacobucci J. [in Machtinger] says are valid: they referentially incorporate the minimum notice period set out in the Act. The without cause provisions do not attempt to provide something less than the legislated minimum standards: rather they expressly require the Society to comply with those standards. [10]

15In Clarke v. Insight Components (Canada) Inc. [11], it was demonstrated that the clause need not be specific in identifying the legislation that governed. In that case the termination clause referred to “the requirements of the applicable employment or labour standards legislation.” [12] These words were enough to limit the notice to be provided to what the applicable legislation allowed for:

Machtinger is distinguishable. It considered an employment contract which failed to meet the minimum notice requirements of the ESA. The rationale behind Machtinger is that an employer who drafts a clause that attempts to avoid the minimum statutory notice requirements cannot rely on such a clause to show that the intent of the parties was to provide the minimum statutory notice. The provision at issue meets that statutory standard. The ESA is the only statute applicable in this case. [13]

16In Oudin v. Centre Francophone de Toronto, Inc. [14], the consideration of the termination clause in the employment contract was founded on a fundamental premise of contract interpretation. Such an exercise is directed to a determination of the “objective intention of the parties” when they executed the contract. “The goal is always and everywhere to determine what was intended on a true and fair construction of the contract” [emphasis in the original]. [15] In Cook v. Hatch Ltd. the conclusion was as follows:

We are to look for the true intention of the parties, not to disaggregate the words looking for any ambiguity that can be used to set aside the agreement and, on that basis, apply notice as provided for by the common law. [16]

17The consideration of the termination clause in Cook v. Hatch Ltd. (word for word the identical clause to one found in the case being considered here) reveals that there was no intention to provide anything less than called for in the applicable legislation, found in that case to be the Act. [17]

18Cook v. Hatch Ltd. also considered whether the termination clause, by being silent as to severance and benefits effected a breach of the Act. The decision concluded that it does not. This too was reviewed with counsel at the beginning of this motion. The Act makes specific provision for severance and benefits. Severance is payable to an employee who has served for five years or more. It is calculated by multiplying the regular wages of the employee by the sum of the number of years plus the number of months of employment in addition to those years (the latter to first be divided by 12). [18] Benefits are also dealt with in the Act. They are to be continued through the notice period. [19]

19The termination clause in Cook v. Hatch Ltd. and here does not refer to either severance or benefits. The following demonstrates the conclusion in Cook v. Hatch Ltd.:

To my mind it is a peculiar idea that a contract that is silent as to a statutory requirement, through that silence is said to show an intention to contract out of what the legislation directs. Surely in this circumstance “silence gives consent”. Otherwise in using a termination clause to limit the notice requirement to what the applicable legislation requires, the contract would have to acknowledge all that it agrees to, as well. In this case the termination clause refers only to notice of termination; that is all it seeks to limit. It does not refer to, deal with, or attempt to avoid any other requirement under the Employment Standards Act or any other legislation. [20]

20Cook v. Hatch Ltd. refers to cases dealing with this issue. It quotes Roden v. The Toronto Humane Society:

It is correct that without cause provisions do not address the Society’s obligations in respect of the benefit plan contributions during the notice period. However, in my view, they do not attempt to limit the Society’s obligations, in case of termination without notice, to payment of a lump sum. Rather the without cause provisions provide a mechanism for calculating the amount to be paid in lieu of notice and are silent in respect of the obligation to provide benefits. [21]

21In King v. Cannon Design Architecture Inc. [22], a termination clause that was silent on benefits and/or severance pay was found not to be automatically repugnant to, or purport to waive or contract out of any right or obligation under the Act. [23]

22As reviewed in Cook v. Hatch Ltd. and discussed with counsel at the beginning of this motion, one case that did allow that benefits were limited by a termination clause was Miller v. A.B.M. Canada Inc. [24] There the termination clause provided for the payment of only “salary”. Benefits, while included in the term “remuneration”, were not “salary”. On this understanding, the termination clause, by referring only to salary, attempted to exclude any payment of benefits and represented a contracting out of the obligations imposed by the Act. [25]

23I point out that both Tim Cook and Joseph Nemeth received severance calculated pursuant to the applicable sections of the Act [26] and counsel for Hatch Ltd. has conceded that, under the termination clause, the payment of benefits must respect what the Act requires, that is, recognition and payment through the notice period.

Other Cases

24Other cases were reviewed with counsel at the beginning of the hearing of this motion, significantly, Singh v. Qualified Metal Fabricators Ltd. mentioned as these reason began. The plaintiff was terminated after four years of employment with the defendant. There was a termination clause which specified notice periods for various lengths of service. It was submitted that the clause was “unenforceable since it violates the ESA” [27]. Arguably this was true. The periods outlined [28] were, for the most part, the same as the Act. There was an exception. The first three months were dealt with as a probationary period for which no notice was required whereas the legislation directs that one weeks’ notice be provided for all of the first year of employment. On the other hand, the term in the contract ends with what could be taken as an overriding proviso:

This policy shall be maintained in accordance with the Employment Standards Act. [29]

25Relying on the exception the judge held that the agreement did not comply with the requirements of the Act and, on that basis, held that it was unenforceable. We do not have that kind of inconsistency here. The termination clause, in this case, provides more than the Act does for the first three years of employment (four weeks’ notice) and complies with the requirements of the legislation for any further period.

26Be that as it may, the inconsistency was not the first or primary reason why the judge in Singh v. Qualified Metal Fabricators Ltd. set aside the termination clause and left the employee to claim his common law rights to notice. Before raising the inconsistency the judge asked “whether the termination clause in this case rebuts the presumption that the common law notice period continues to apply”. [30] He went on to note that: “In many of the cases in which the effect of such clauses has been considered, they have contained an express proviso that the clause displaces any rights to reasonable notice or common law notice.” [31] This would rebut the presumption and so long as provision was made to pay at least what the Act called for, the termination clause would stand. Even if there are many cases with this kind of proviso, this is not an indication that, absent the proviso, common law notice will inexorably continue to apply. Such cases do not serve to set aside the cases or the understanding referred to in the analysis in Cook v. Hatch Ltd.

27The judge in Singh v. Qualified Metal Fabricators Ltd. gave three examples of the cases he had in mind. I see their significance differently than did he. These are not cases where the failure of a termination clause to refer to the giving up of the right to common law notice was enough to found a determination that the right should be sustained. Rather they are examples where the right to common law notice was retained because the termination clause provided less then was called for in the Act. As such they are consistent with Machtinger v. HOJ Industries Ltd. and the cases that succeeded it. They are cases where there was a demonstrated intention and attempt to contract out of the minimum requirements found in the legislation.

28The first of the cases was Carpenter v. Brains II Canada Inc. [32] It follows the logic and circumstances found in Miller v. A.B.M. Canada Inc. (see para. [22] above):

In my view, the present case comes within the scope of principles discussed in Miller and is not within the same category as Roden. In the present case, as in Miller, remuneration and benefits are discussed separately in the agreement. In the termination clause, reference is made to salary in lieu of notice, without any mention of benefits being paid should notice not be provided. Indeed, the employment agreement in the present case goes farther than the one in Miller because it expressly provides that the employee is not entitled to any other compensation by reason of the termination of her employment. In other words, not only does the clause provide the employer with the right to pay salary, without mentioning or obliging to pay benefits during the notice period, it also expressly exempts the employer from any other obligations. [33]

29The fact that the termination clause purported to exempt the employer from paying anything other than salary was taken by the judge to amount to a waiver of the employee’s rights under section 61(1)(b) of the Act. The section provides that benefits are to be paid, where no notice is given, as if the employment has been continued through the notice to which the employee was otherwise entitled. Any contracting out of the statute was void. [34] The elimination of the plaintiff’s common law right to sue for damages was unenforceable. [35]

30The second of the three examples was Wright v. Young and Rubicam Group of Companies [36]. It is the same issue and the same result. The termination clause referred only to the payment of salary, benefits were not included and like Carpenter v. Brains II Canada Inc., was, thus, in breach of s. 61(1)(b) and s. 5(1) of the Act:

I do not accept that submission. Benefits are part of the compensation. Benefits are purchased for the employee by payments made by the employer to a benefits provider. This agreement was drawn by the employer. Even if there is an ambiguity, the ambiguity should be resolved in accordance with the principle of contra proferentum. The fact that the defendant continued benefits for the statutory notice period under the Act does not change the meaning of the language used in the agreement stipulating that the payments under the termination provisions are to be inclusive of “all … entitlements to compensation”. The agreement provides for payment of base salary only. Payment of base salary, if treated as inclusive of all entitlements to compensation, means that there will be no other compensation flowing to the employee – in short, no benefits. [37]

31The third example provided by the judge in Singh v. Qualified Metal Fabricators Ltd. was Garreton v. Complete Innovations Inc. [38] In that case, the termination clause included a limitation on the payment as to severance and various named benefits:

The termination provisions set forth above represent all severance entitlement, notice of termination or termination pay in lieu thereof, salary, bonuses, automobile allowances, vacation and/or vacation pay and other remuneration and benefits payable or otherwise provided to you in relation to your employment by Complete Innovations Inc. and any preceding employment by any company. [39]

[Emphasis added]

32As in both Carpenter v. Brains II Canada Inc. and Wright v. Young and Rubicam Group of Companies, this limitation on what was to be paid to the terminated employee was contrary to provision in the Act. Thus, the termination clause was void and unenforceable. The employee was free to claim reasonable notice as prescribed by the common law.

33To my mind these cases do not, as the judge in Singh v. Qualified Metal Fabricators Ltd., seems to suggest, demonstrate that where a termination clause is silent as to its impact on the common law entitlement to reasonable notice there is an inherent ambiguity and the right to such notice is, on that basis, retained. Rather these are cases where the termination clauses, through the limitations sought to be imposed on payments and rights of the terminated employee, have demonstrated an intent and attempt to contract out of the requirements of the Act. As I have already said they are consistent with Machtinger v. HOJ Industries Ltd. and the cases that succeeded it.

34This is not the end of the analysis found in Singh v. Qualified Metal Fabricators Ltd. The judge referred to Wood v. Industrial Accident Prevention Association [40]. In that case, an “employment letter” provided: “While we do not anticipate the situation arising, we feel you would wish to know that should it be necessary to terminate your employment without cause it will be in accordance with the Employment Standards Act of Ontario.” [41] The judge in Singh v. Qualified Metal Fabricators Ltd. noted that in Wood v. Industrial Accident Prevention Association the judge concluded that this contractual term was clear and thus served to “rebut the presumption of reasonable notice”. The applicant was entitled to termination pay calculated in accordance with the Act and nothing more. In Singh v. Qualified Metal Fabricators Ltd. the judge was clear in his disagreement:

With great respect …I reach a different conclusion.

35Relying on Wright v. Young and Rubicam Group of Companies where it was said that there was “…no particular difficulty in fashioning a termination clause that does not violate either the minimum standards imposed by the Employment Standards Act or the prohibition against waiving statutory minimum requirements…” he went on to say:

In our case, it was open to the employer to draft a contract that excluded common-law notice. Instead it proffered an Employment Agreement that was silent on the subject. At best it is an open question whether it was or was not intended to override common-law notice entitlement. I would therefore construe it as ambiguous. That ambiguity must be construed against the defendant, having regard to the power imbalance that exists between an employer and an employee as a matter of course. I am not prepared to find that the Employment Agreement operated to nullify or detract from the implied common-law requirement of reasonable notice of termination. [42]

36This is in furtherance of the proposition that silence in the agreement as to some matter, in this case whether the right to common law notice is extinguished, can, on its own, create ambiguity. As a general proposition this would be inconsistent with a number of the cases referred to in Cook v. Hatch Ltd. [43] I confess that this approach strikes me as stepping away from the basic instruction on how to interpret the intention of the parties to a contract: read the words. The calculus proposed in Singh v. Qualified Metal Fabricators Ltd. is not to look at the words that are present but, no matter how clear those words may be, to draw conclusions from those that are not. I say this cognizant of the inconsistency as between the termination clause in Singh v. Qualified Metal Fabricators Ltd. and the Employment Standards Act, 2000 with respect to the notice period to be provided for a termination during the first three months of employment (see para. [24] above). The applicable clause does specifically provide that the termination policy “shall be maintained in accordance with the Employment Standards Act.” This can be interpreted as a true ambiguity but it is not the one the judge was referring to when he considered that the agreement was silent as to the forsaking of any right to notice at common law. Consistent with the cases referred to in Cook v. Hatch Ltd. (see fn. 43) I am unprepared to accept that silence as to the giving up of common law notice, inevitably leads to ambiguity. I repeat that to my mind the termination clause utilized where Hatch Ltd. was the employer is not ambiguous and is clear as to what it provides. As to the “power imbalance” between employer and employee to which the judge in Singh v. Qualified Metal Fabricators Ltd. refers and on which he relied (see para. [35] above, the quotation), this is a consideration where an ambiguity is present. It dictates that, in such circumstances, the principle of contra proferentem (interpretation against the draftsman) applies. The case of Ceccol v. Ontario Gymnastics Federation [44] is a case in point. The court found there were two “plausible interpretations” to the termination provision of the employment contract:

One interpretation would remove the common law entitlement to reasonable notice; the other would preserve it. One interpretation would result in a termination provision which that trial Judge described as 'especially stringent and onerous'; the other would provide an employee with notice which at common law, both parties accept, is reasonable. [45]

37The court expressed “genuine uncertainty” as to the meaning of the clause [46] and reflected on the idea that employment standards legislation is designed to protect "a vulnerable employee". [47] Accordingly, when a contract is capable of more than one interpretation, regard must be given to that fact and the court should choose the interpretation that benefits the employee. Here, as in Cook v. Hatch Ltd. the clause, at issue, is not ambiguous. It offers a single common intention in the parties:

There is nothing unconscionable or contrary to public policy in permitting the parties to an employment agreement to contract out of the common law "reasonable notice" standard and incorporate the ESA standards by reference as has been done here.... That is now settled law. [48]

38Where there is no ambiguity, the principle of contra proferentem and any further concern for a power imbalance have no role to play. To suggest otherwise is to place on employers the positive obligation to explain what the employee should be concerned about when entering into the employment contract. So far as I am aware, we have not yet gone that far. In this case there is nothing to suggest that Hatch was dishonest or overbearing or that the employee was denied the right to seek legal assistance before signing and entering its employ.

39In drawing the conclusion that, given its silence as to the giving up of common rights to notice, the termination clause was ambiguous, the judge in Singh v. Qualified Metal Fabricators Ltd. relied on Dwyer v. Advantis Inc. [49] and Howard v. Benson Inc. [50] as reaching the same conclusion. [51] I do not read them as being definitive on the point.

40In Howard v. Benson Inc. an employee with a fixed term contract was terminated without cause. The contract contained a provision which ostensibly allowed for the employee to be let go “at any time” with payments being made “in accordance with the Employment Standards Act of Ontario.” [52] The motions judge found that the clause was ambiguous and that the employee was entitled to reasonable notice as provided by the common law. The matter was appealed but not as to the finding of ambiguity. The appeal was granted in that the contract was for a fixed term. With the application of the termination clause withdrawn due to its ambiguity, the terms of the contract, rather than a right to reasonable notice, applied. The employee was awarded what the full term of the contract called for.

41The decision in Howard v. Benson Inc. does not rely on the absence of comment concerning the giving up of any right to reasonable notice as demonstrative of the ambiguity that made the termination clause unenforceable. Rather it is founded on the acceptance that the words “any amounts paid” as referred to in the termination clause were inherently ambiguous. [53] What did those words mean?

42Further in Howard v. Benson Inc. the motion judge relied on Miller v. A.B.M. Canada Inc. To my mind, that case does not stand to support the idea that silence as to the impact of the termination clause on the right to reasonable notice at common law creates ambiguity. To the contrary that case relies on the words of the clause. By referring to “salary”, which excluded the payment of benefits as opposed to “remuneration”, the termination clause limited the payments to be made to an employee who was let go to something less than was required by the Act. This rendered the clause unenforceable.

43The decision of the motion judge in Howard v. Benson Inc. also referred to and relied on Dwyer v. Advantis Inc., the second of the two cases relied on by the judge in Singh v. Qualified Metal Fabricators Ltd. (see para. [39] above) when he found that silence as to the exclusion of reasonable notice demonstrated ambiguity. The case does say:

Furthermore, the clause is at least ambiguous as to whether it limits the Plaintiff's entitlement to "the applicable Employment Standards Act" and nothing more. Any ambiguity should be construed against the Defendant as the author of the document, particularly given the disparity in the bargaining position of the parties. [54]

44There is no reference to silence (or any other explanation) as the foundation of the ambiguity. Moreover, as I see it, this ambiguity is not the true ratio of the case. At the time the employee was hired he signed an employment contract. It provided that he could be terminated if “…there is not a fit between your skills and the requirements of the job.” [55] Two years later his job changed to the “new position of Chief Marketing Officer”; it was designed to meet the, by then, exhibited skills of the employee. [56] At that time the parties executed an “Amended Employment Contract”. There was no provision relating to termination. “It was no longer appropriate to relate ‘a fit between your skills and the requirements of the job’ to the new job specifically designed to provide employment responsibilities tailored to the demonstrated job skills of Mr. Dwyer.” [57] Nonetheless, when he was terminated, the employer relied on the clause in the original employment contract. The judge found that the termination clause was no longer part of the understanding between the parties. It could not be relied on. This was the first and primary reason why the employer (the defendant) was unable to rely on the contract as ousting the right to reasonable notice.

45In the case I am asked to decide, there is a second remedy sought. The plaintiff seeks to amend its Statement of Claim so as to increase the damages sought for loss of pension benefits from $30,000 to $66,700. In the normal course there would not seem to be much purpose to this. I say this because I assume, although so far as I can recall nothing was said of it, that the increase reflects the larger pension that might arise from a longer period of notice. Be that as it may, I have received a particular request from counsel for the plaintiff that I provide a determination of this question. Given that the continued life and nature of this action may be uncertain, resolving it could prove to be helpful. A party may amend a pleading after pleadings are noted closed with leave of the court. [58] In this case the Statement of Defence is dated May 16, 2016. On the assumption that it was served shortly thereafter, and there being no reply from the plaintiff, by now pleadings are considered to be closed. [59] Leave is required. There is no prejudice to the defendant in making the change that is asked for. The amendment is granted.

Conclusion

46As reviewed with counsel at the hearing of this motion, I see no reason to divert from the views expressed in Cook v. Hatch Ltd. The motion for summary judgment is dismissed. The only case discussed in these reasons which were not referred to in either the decision in Cook v. Hatch Ltd. or the discussion and review with counsel at the hearing is Wright v. Young and Rubicam Group of Companies. I do not believe the parties are prejudiced by this. That case does not play a significant role in this decision.

47For all my uncertainty about its conclusion, Singh v. Qualified Metal Fabricators Ltd. stands apart from this decision. It can be understood as moving the law forward. This decision conflicts with it. It may be that counsel will see this conflict as needing resolution by a higher court. Hence my comment at the outset that considering whether an appeal is warranted may be a more productive use of counsels’ time and their clients’ resources.

48The motion is dismissed. Summary judgment is granted to the defendant. The action is dismissed.

Costs

49As agreed to by the parties, costs are to be paid by the plaintiff to the defendant in the amount of $10,000.

Lederer J.

Released: March 2, 2017

COURT FILE NO.: CV-16-551716 DATE: 20170302 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: JOSEPH NEMETH Plaintiff – and – HATCH LTD. Defendant

REASONS FOR JUDGMENT Lederer J. Released: March 2, 2017

1S.O. 2000 Chap. 41

[2] Ibid The Employment Standards Act, 2000 s. 5 provides: (1) Subject to subsection (2), no employer or agent of an employer and no employee or agent of an employee shall contract out of or waive an employment standard and any such contracting out or waiver is void. (2) If one or more provisions in an employment contract or in another Act that directly relate to the same subject matter as an employment standard provide a greater benefit to an employee than the employment standard, the provision or provisions in the contract or Act apply and the employment standard does not apply.

32017 ONSC 47

4[2016] O.J. No. 4219 released on May 10, 2016

5, [1992] 1 S.C.R. 986

6, [1999] O.J. No. 146 , 117 O.A.C. 95

7Ibid ( Macdonald v. ADGA Systems International Ltd ) at para. 3 quoted in Cook v. Hatch Ltd. , supra (fn. 3) at para. 15

8Ibid ( Macdonald v. ADGA Systems International Ltd ) at para. 23 quoted in Cook v. Hatch Ltd. , supra (fn. 3) at para. 16

9, [2005] O.J. No. 3995 , 142 A.C.W.S. (3d) 441 , 2005 CarswellOnt 4479

10Ibid ( Roden v, Toronto Humane Society ) at para. 62 referring to Machtinger v. HOJ Industries Ltd. supra (fn. 5) at para. 35 quoted in Cook v. Hatch Ltd. , supra (fn. 3) at para. 19

112008 ONCA 837 , [2008] O.J. No. 5025 , 173 A.C.W.S. (3d) 493

12Ibid ( Clarke v. Insight Components (Canada) Inc . ) at para. 1 quoted in Cook v. Hatch Ltd. , supra (fn. 3) at para. 20

13Ibid ( Clarke v. Insight Components (Canada) Inc . ) at para. 6 quoted in Cook v. Hatch Ltd. , supra (fn. 3) at para. 21

142015 ONSC 6494 , 260 A.C.W.S. (3d) 281 , 2015 CarswellOnt 16476 appeal dismissed 2016 ONCA 514

15Ibid ( Oudin v. Centre Francophone de Toronto , Inc ) at para. 51 (S.C.J.) quoted in Cook v. Hatch Ltd. , supra (fn. 3) at para. 24

16Cook v. Hatch Ltd. , supra (fn. 3) at para. 25 referring to and quoting from Oudin v. Centre Francophone de Toronto , Inc ., supra (fn. 4) at paras. 50, 52, 54 ( Superior Court of Justice ) and para. 9 ( Court of Appeal )

17The legislation calls for 1 week notice for up to the end of the first year, 2 weeks notice from the end of the first year to the beginning of the third year and an additional week for every year thereafter up to the end of the eighth year. For any employment that lasted more than 8 years the notice period is fixed at 8 weeks, it goes no higher ( Employment Standards Act, 2000 , supra (fn. 1) at s. 54 and 57 ). The termination clause applicable in this case and in Cook v. Hatch Ltd. , supra (fn. 3) calls for 4 weeks notice where the employment has been 4 years or less, an additional week for each of the years 5, 6, 7 and 8, fixed at 8 weeks for any period of employment in excess of 8 years (see para. [2] above).

18Employment Standards Act, 2000 (fn. 1), s. 64(1) and s. 65(1) .

19Ibid at s. 60(1)(c) and s. 61(1) (b)

20Cook v. Hatch Ltd. , supra (fn. 3) at para. 41 and in reference to the included quotation “silence gives consent” the case notes at fn 46: “It may not be a legal precedent but these words were nonetheless used in conjunction with the Latin maxim: “Qui tacet consentiret” is ascribed to Sir Thomas More and referred to in the play by Robert Bolt” “A Man for all Seasons”.”

21Roden v. The Toronto Humane Society, supra (fn. 9) at paras. 58-59 quoted in Cook v. Hatch Ltd. , supra (fn. 3) at para. 45

222015 CarswellOnt 20496

23Ibid ( King v. Cannon Design Architecture Inc. ) at para. 22, see also: Macdonald v. ADGA Systems International Ltd. , supra (fn. 6), Clarke v. Insight Component (Canada) Inc., supra (fn. 11) and Oudin v. Centre Francophone de Toronto , supra, (fn. 14).

24[2014] O.J. No. 3221 , 2014 CarswellOnt 9232 (S.C.J.) , 16 C.C.E.L. (4 th ) 294 aff’d 2015 ONSC 1566

25Cook v. Hatch Ltd. , supra (fn. 2) at paras. 47-49

26See: fn. 17

27Singh v. Qualified Metal Fabricators Ltd., supra (fn. 4) at para. 10

28Ibid at para. 9: “Start date to three months...probationary period...not entitled to any notice” “Three months to one year-one-week notice ” “One year to three years-two weeks’ notice” “Three years and over-one weeks’ notice for each year of employment to a maximum of eight weeks.”

29Ibid at para. 9

30Ibid at para. 12

31Ibid at para. 12

322015 CarswellOnt 15542 (S.C.J.) , aff’d 2016 CarswellOnt 8767 (Div. Ct.)

33Ibid at para. 17 quoted in Cook v. Hatch Ltd. (fn. 3) at para. 50

34Employment Standards Act , supra (fn. 1), s. 5(1) quoted at fn. 2

35Carpenter v. Brains II Canada Inc., supra (fn. 32) at para. 18

36[2011] O.J. No. 4960 , 2011 ONSC 4720

37Ibid ( Wright v. Young and Rubicam Group of Companies ) at para.16

38[2016] O.J. No. 869 , 2016 ONSC 1178 , 263 A.C.W.S. (3d) 947(ONSC DC)

39Ibid ( Garreton v. Complete Innovations Inc. ) at para. 20 quoted in Cook v. Hatch Ltd. , supra (fn. 3) at para. 42

40[2000] O.J. No. 2711

41Singh v. Qualified Metal Fabricators Ltd., supra (fn. 4) at para. 13

42Ibid at para. 15

43See for example Roden v. Toronto Humane Society , supra (fn. 8), Macdonald v. ADGA Systems International Ltd. , supra (fn. 6), Clarke v. Insight Components (Canada) Inc. , supra (fn. 11) and Oudin v. Centre Francophone de Toronto , Inc., supra (fn. 14)

44, [2001] O.J. No. 3488 (ONCA)

45Ibid at para. 49

46Ibid at para. 37

47Ibid at para. 49

48Oudin v. Centre Francophone de Toronto , Inc., supra (fn. 14) at para. 48 referin to Roden v. Toronto Humane Society , supra (fn. 8) at paras. 61-63

49, [2009] O.J. No. 1956

502015 ONSC 2638 (motions judge) and on appeal 2016 ONCA 256 , [2016] O.J. No. 1814 , 129 O.R. (3d) 677 , 397 D.L.R. (4 th ) 485 . The appeal was granted but not as to whether the termination clause was ambiguous. The motion judge found that it was. That finding was not appealed.

51Singh v. Qualified Metal Fabricators Ltd., supra (fn. 4) at para. 15

52Howard v. Benson Inc. supra (fn. 50) (Ont. Sup. Ct.) at para. 9

53Howard v. Benson Inc., supra (fn. 50) at paras. 14-17 where the submissions of the plaintiff as to this ambiguity are reviewed and at para. 55 where they are accepted by the motion judge.

54Dwyer v. Advantis Inc., supra (fn. 49)

55Ibid at para. 6

56Ibid at paras. 7, 8 and 35: In a letter to the Foreign Workers Program at Service Canada the employer wrote that the employee had “demonstrated the exceptional skill sets and unique experience necessary for this new position”. A year later, in a follow up letter the employer said that the employee was “ ‘uniquely qualified’ for the position and ‘has exceptional expertise and experience within our niche market.’ ”

57Ibid at para. 35

58Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 26.02 (c).

59Ibid rule 25.05(a)