Court File and Parties

Court File No.: CV-18-607296 Date: 2020-07-16 Superior Court of Justice - Ontario

Re: David Kerner And: Information Builders (Canada) Inc.

Before: Pollak J.

Counsel: Philip R. White & Jason Wong, for the Plaintiff Chris Dockrill, for the Defendant

Heard: November 26-28, 2019 with further submissions filed Jan. 29 and Feb. 6, 2020

Endorsement

[1] In this wrongful dismissal action, the parties agree that the Plaintiff was employed to work for the Defendant’s parent company in the United States, was subject to a Canadian employment agreement and a U.S. sales commission agreement and was paid by the Defendant. The parties agree that this court has jurisdiction to adjudicate this dispute, with Ontario law being applicable to Mr. Kerner’s employment, pursuant to his contract of employment. Commissions were paid by the Defendant in Canadian currency, after conversion from U.S. dollars. The parties also agree that:

• “The Plaintiff, David Kerner, was employed by the Defendant, Information Builders (Canada) Inc., from October 1996 to February 2013, when he resigned to accept other employment;
• The Plaintiff was unemployed for approximately one year before he was re-hired by the Defendant on January 16, 2018. He worked until September 4, 2018 as Regional Sales Manager – New York Region, earning a base salary of $200,000 per year with commission, as set out in Exhibits 1 to 16; and
• His benefits were at a cost of $450 per month to the Defendant employer.”

[2] The Plaintiff’s evidence was that 30 to 40% of the time he worked from his home in Ontario and that he also commuted to New York, where he stayed at a corporate apartment. He testified that none of the work performed during his employment “benefited” the Canadian Defendant. The Plaintiff further testified that he would not have accepted employment if he would have to work in New York “full-time”. The Defendant’s witness, Mr. Boyle, the Plaintiff’s direct superior, testified that the January 2017 offer letter to the Plaintiff included an agreed to base salary but that the other terms of employment were “standard for a Canadian employee”.

[3] The employment offer accepted by Mr. Kerner provided that “Builders Canada” was the employer and that he would be contracted to perform work as a consultant for the American parent company. There was no evidence, other than the method of payment I referred to above, with respect to the meaning of this reference. Further, the offer provided the Plaintiff with three weeks’ vacation, personal and sick days and benefits as per the company’s Canadian policy.

[4] The parties made submissions and agree that Ontario law applies to the employment contract, including that the Ontario Employment Standards Act, 2000, S.O. 2000, c. 41 (the “ESA”) is also applicable.

[5] The dispute between the parties is largely about the Plaintiff’s entitlement to commission for sales that were “booked and billed” after the Plaintiff’s employment was terminated.

[6] The Defendant submits that pursuant to the ESA, the Plaintiff, upon his termination of employment, is only entitled to two weeks’ pay in lieu of notice. It relies on a provision in the Canadian Application Form dated prior to the start of Mr. Kerner’s employment. Mr. Kerner testified that he was asked to sign and back date the form, but that he does not remember who gave him the form or asked him to sign it. The Defendant’s witnesses testified that they did not send the Plaintiff the Application Form and further testified that they did not ask the Plaintiff to sign and backdate it to before he started his employment.

[7] The Amended Statement of Defence pleads that the Plaintiff’s termination entitlements are limited to the ESA minimums as a result of a provision in the Application Form. This however, was not elaborated on in oral argument.

[8] There is no evidence on who or which legal entity asked the Plaintiff to sign the Application Form. I do not accept the submission that the legal result of the unidentified Application Form is an effective contracting out of the Plaintiff’s common law rights to reasonable notice of dismissal. This document does not satisfy the requirements set out in our jurisprudence on contracting out of the common law reasonable notice requirements. I find that this Application Form is not evidence of limitation of the Plaintiff’s termination entitlements to those set out in the ESA.

Analysis

[9] The issue for consideration is the quantification of the Plaintiff’s damages for the Defendant’s failure to provide reasonable notice of termination of employment.

[10] When I apply and consider the jurisprudence with respect to the “Bardol factors” to determine the appropriate period of reasonable notice at common law, I agree with the submissions of the Plaintiff that a reasonable notice period of termination would be eight months. This conclusion is based on the following factors:

(1) The Plaintiff is 56 years old. (2) The Plaintiff’s work experience is almost entirely in the Information Technology/ Enterprise sector. (3) In total, he has worked for the Defendant for approximately 18 years. (4) His recent employment was in a senior position, as Regional Sales Manager – New York, from January 16, 2017 to September 4, 2018 and was relatively short. (5) His relatively high compensation package of approximately $300,000 per year ($200,000 base salary with $91,000 earned in commission in his last year of employment).

[11] The evidence is also that it has taken the Plaintiff approximately eight months to find a comparable job as a senior manager earning approximately $300,000 per year in compensation.

[12] Specifically, the Plaintiff’s calculation of his claim for damages is as follows:

1. $133,333.33 ($16,666.67/month), less two weeks already paid ($7,692.31). This is inclusive of ESA Severance pay of $68,923.08;
2. $3,600 for loss of benefits ($450/month);
3. $136,863.76 on commission, which is based on a. $99,237.36 (based on Exhibit 1-21); and b. $37,626.40 from January to April 2019 (an average of $9,406.60/month in commissions based on all commissions from start date to end of December 2018, which is a total of $225,758.46);
4. Pre-and post-judgment interest.

[13] The real focus of the dispute between the parties is the Plaintiff’s entitlement to commissions that he could have earned during this notice period, which I have found to be eight months. During this time, had he been given proper working notice, he would have had the opportunity to earn such commission.

[14] The Defendant submits that the Plaintiff is not entitled to any compensation in excess of his annual base salary and any “provable claim for loss of his employment benefits during the notice to which he is entitled”. His compensation while employed was based on the sales activity of the sales people who reported to him. The Plaintiff was not employed to “sell”, but rather, to manage his sales team. As a result, there were specific requirements for entitlement to commission fees, which were set out in both the 2017 and 2018 Sales Plans, which I review below.

[15] The Defendant did not argue that it had just cause to terminate employment, but it presented evidence that the Plaintiff was put on a performance improvement plan, as he did not make any of the sales quotes to which he had agreed to. The Defendant submits that pursuant to the terms of the relevant Sales Plans (which were part of his employment agreement) the Plaintiff was not entitled to the payment of commissions he claims.

[16] The relevant provisions of the 2017 Sales Plan regarding entitlement to commission, which this court is now asked to interpret, are as follows:

2017 Sales Plan

Please note that the governing principles set forth below are applicable in all cases. In order to be entitled to receive a commission you must met all of the requirements of paragraphs 1 through 3 below, as well as all applicable provisions of the attached documents. Unless you do so, no commission is earned, due, owing, or payable to you:

1. You must have been a procuring cause of the sale and complied with all other applicable requirements. In some cases commissions may be payable in installments.
2. No commissions are payable until the sale has been booked and billed.
3. In order to be entitled to receive a commission you must be employed by IB at the time the sale has been booked and billed.

[17] The wording of the above provision for the 2018 Sales Plan was amended prior to the Plaintiff’s termination of employment, to include the following:

2018 Sales Plan

Commissions are not payable in respect of any period of notice, whether contractual, statutory or based upon the common law, following termination of your employment for any reason whatsoever, unless the sale transaction was booked and billed prior to the date of termination of your employment, The date of termination is the date on which your active employment with Information Builders ceases and you are no longer providing services to the company. [emphasis added]

[18] The Defendant’s position is that it has not contracted out of statutory obligations pursuant to the ESA to provide the Plaintiff with his full wages during the statutory notice, which includes commissions that become payable during the notice period pursuant to the ESA, but rather that there is no entitlement to payment of commission pursuant to the terms of the Sales Plans.

[19] The Plaintiff argues that had his employment been properly terminated with working notice of dismissal, he would have been employed at the time the sales has been “booked and billed” and he would have received the commission payments. As it is argued that the Defendant breached the Plaintiff’s employment contract because he was not provided with reasonable notice of termination, the Plaintiff is entitled to wrongful dismissal damages at common law, which would include compensation he would have earned had the Defendant provided him with the proper working notice of dismissal.

[20] The Defendant’s position is that because the Plaintiff has not “earned” these commissions during his employment, he is not entitled to payment of these commissions. The Defendant emphasizes that there are three conditions to "earn” entitlement to payment of commissions, which are included in both the 2017 and 2018 wording of the Sales Plan and that the Plaintiff has not satisfied these conditions. These are set out above.

[21] The Plaintiff has many submissions to support his claim for these commissions:

i. The termination provision in the 2017 Sales Plan does not rebut the presumption that payment of commission will continue during the reasonable notice period; ii. The Defendant has not notified the Plaintiff of the alleged unilateral change (in the 2018 Sales Plan) to the terms of his employment and entitlement to commissions during the notice period; iii. The inclusion of the “termination provision” in the 2018 Sales Plan is not supported by the necessary consideration to form a binding contract; and iv. The termination provision in 2018 Sales Plan is void because it potentially violates the ESA.

The Law

[22] Following the hearing of this trial, counsel for the Plaintiff advised that the Court of Appeal for Ontario released a relevant decision in O’Reilly v. IMAX Corporation, 2019 ONCA 991.

[23] This court asked counsel to make submissions on the effect of the O’Reilly decision, if any, on this court’s decision in this trial.

Plaintiff’s additional submissions

[24] The Plaintiff submits that the O’Reilly decision does not change the law as it relates to the Plaintiff’s entitlement to incentive compensation during his period of reasonable notice. However, the Court of Appeal did modify the applicable test and held that there is no distinction between an employee’s entitlement to stock options, bonuses, commission payments or any other form of variable pay during the notice period. The same analysis applies in each case.

Defendant’s additional submissions

[25] The Defendant submits that the decision in O’Reilly is of no assistance in this case as:

1. “It restates the applicable law on the issue at hand, i.e., is an attempt to oust the presumed common law right to all integral components of a terminated individual’s remuneration successful;
2. It does not modify the second part of the two part test first identified in Taggart v. Canada Life Assurance Co., [2006] O.J. No. 310 (C.A.); and
3. Much of what is stated in the decision is not pertinent since both issues before the Court of Appeal in O’Reilly relate to (i) permitting further vesting of stock options during the notice period and (ii) the timing of the presumed disposition of those options if they had vested.”

[26] I disagree with the submissions of the Defendant and find that the Court of Appeal’s analysis in O’Reilly is applicable and of assistance to this court in this trial.

[27] In O’Reilly, the Court of Appeal set out a very useful summary of the applicable law at para. 32:

“A useful summary of the principles set out in Taggart, Lin and Paquette is provided in Manastersky, at paras. 39-43. At the risk of paraphrasing Brown J.A., in light of the foregoing analysis, I would further summarize as follows:

1. A wrongfully dismissed employee is entitled to damages for the loss of wages, salary and other benefits, that would have been earned during the reasonable notice period.
2. The principle applies to bonuses, stock options, or incentives that are an integral part of the employee’s compensation, as well as pension benefits that would have been accrued or been earned during the reasonable notice period.
3. In considering whether the loss of such benefits is recoverable, the court undertakes a two-step analysis.
4. The first step requires a determination of the employee’s common law right to damages for breach of contract, bearing in mind that the measure of damages is the amount to which the employee would have been entitled had the employer performed the contract.
5. The second step requires the court to determine whether the terms of the relevant contract or plan unambiguously alter or remove the employee’s common law rights, having regard to the presumption that the parties intended to apply the law, in absence of clear language to the contrary.”

[28] The parties agree that damages for loss of commission entitlement are determined by considering if the commission was an integral part of the employee’s compensation package, triggering a common law entitlement to damages in lieu of bonus. They agree that they were.

[29] Participation and eligibility to be paid incentive compensation under the annual sales plan is governed by the express terms of the Sales Plans, which are distributed annually. Additionally, the Sales Plan Transmittal is signed by the employee and their manager annually.

[30] The Plaintiff reviewed each of the Sales Plan and the Sales Plan Transmittal documents and indicated his acceptance of the terms and conditions of the plans by signing the Sales Plan Transmittal. The Plaintiff did this every year of his employment. He was also required to review these documents with his reports, who also participate in the sales plans.

[31] The Defendant relies on the terms and conditions set out in each of the Sales Plans and the Sales Plan Transmittal documents and the Plaintiff’s written acknowledgment, acceptance and agreement to be bound by those terms and conditions.

[32] It is the Defendant’s position that the Plaintiff has been paid all commissions and bonuses he “earned”, pursuant to the terms and conditions. The Plaintiff understood the practices under the sales plan; when he started his recent employment with the Defendant, he received commissions on transactions booked after he started, in which he had no direct involvement.

[33] Specifically, following his termination, the Plaintiff was paid his 2018 Q3 commissions, in the gross sum of $22,262.84, on September 15, 2018 and October 15, 2018, consistent with the timing of the payment of commission compensation to other employees for the third quarter (July – September 2018). These commissions were paid to him after his last day of active employment because they had been “booked and billed” by the last day of active employment and he was therefore entitled to receive them after the revenue for the sales was received.

[34] The issue is whether the wording of the provision in the 2017 and 2018 Sales Plans effectively limited the Plaintiff’s right to receive compensation for lost opportunity to earn commissions during the period of reasonable notice.

2017 Sales Plan

[35] I will apply the analysis set out by our Court of Appeal to the facts of this case. There is no dispute that commissions are an integral part of compensation. I have already found that the Plaintiff is entitled to a reasonable notice period of eight months. The next issue for the court to consider is whether the terms of the 2017 Sales Plan Transmittal unambiguously altered or removed the Plaintiff’s common law right to commission payments during the reasonable notice period. The 2017 Sales Plan states:

“In order to be entitled to receive a commission you must meet all of the requirements of paragraphs 1 through 3 below, as well as all applicable provisions of the attached documents. Unless you do so, no commission is earned, due, owing, or payable to you:

1. You must have been a procuring cause of the sale and complied with all other applicable requirements. In some cases commissions may be payable in installments.
2. No commissions are payable until the sale has been booked and billed.
3. In order to be entitled to receive a commission you must be employed by IB at the time the sale has been booked and billed.”

[36] The Defendant submits that the Plaintiff is not entitled to commission payments because he did not meet these requirements.

[37] The Plaintiff’s submission, however, is that the only reason he did not meet the requirements was because the Defendant breached his employment contract when it terminated his employment without providing him with proper working notice of dismissal. Had the Plaintiff been allowed to continue to work as Regional Sales Manager during the reasonable notice period, he would have met the requirements. This is because the evidence showed that the Plaintiff, as Regional Sales Manager, was deemed to be the procuring cause of the sale for all sales made in his region during his employment.

[38] In O’Reilly, the Court of Appeal stated at para. 52:

“While the language in all the plans at issue in this case extinguish the respondent’s right to exercise any unvested awards as of the date of “termination” or when employment “terminates”, they do not establish, in unambiguous terms, when the date of termination is or when employment terminates. In other words, they leave open the possibility that termination could have occurred at the end of the reasonable notice period. And, as expressed above, where such ambiguity exists, the language will be interpreted as mandating a lawful termination.”

[39] Following the guidance of the Court of Appeal in O’Reilly, the language of the 2017 Sales Plan must be interpreted as referring to a lawful termination, which would have effect at the end of a reasonable notice period. There is nothing in the language to preclude such an interpretation.

[40] In accordance with the principles set out in the O’Reilly case, the language in the 2017 Sales Plan Transmittal that states “you must have been a procuring cause of the sale and complied with all other applicable requirements” must be interpreted as referring to a situation where there has been lawful dismissal where the Plaintiff was given reasonable notice of dismissal. There is no “clear language to the contrary” in the 2017 Sales Plan Transmittal demonstrating that the parties had agreed that limitations on payment set out in the Sales Plan would apply to an unlawful dismissal.

[41] Following such interpretation and guidance, I find that the 2017 Sales Plan language does not exclude the Plaintiff’s right to be paid commission during the notice period.

[42] The Plaintiff’s claim for wrongful dismissal damages includes his claim for commission.

[43] The evidence with respect to the quantification of damages is as follows: Exhibit 1-21 (Tab 21 of the Plaintiff’s Trial Document Brief) was entered into evidence and Mr. Kerner testified that this document (which was created by the Defendant) set out the commission that he was paid in 2018 and also the potential commissions he would have earned from September through December 2018 but for his dismissal. Mr. Kerner testified that three very large deals that closed in November 2018 (New York Mellon Bank, Mount Sinai Hospital, and Persing) resulted in the very large commission generated in November. The Defendant did not dispute this evidence. Exhibit 1-21 also provides evidence of what Mr. Kerner would have earned during his reasonable notice period from September to December 2018. After that date, direct evidence of potential commission earnings is not available because of restructuring in the New York office. A reasonable estimate that should be used to determine his commission entitlement would be the average commission earned by the Plaintiff during his employment (including the reasonable notice period).

[44] As the Defendant breached the Plaintiff’s employment contract by failing to give him reasonable notice of dismissal, the Plaintiff is entitled to wrongful dismissal damages at common law, consisting of the compensation he would have earned had the Defendant provided him with working notice of dismissal. This compensation would have included the Plaintiff’s commissions, pursuant to the 2017 Sales Plan.

The 2018 Sales Plan

[45] With respect to the 2018 Sales Plan, there was change in the wording of the Plan.

[46] The Defendant submits that there was no effective change in the language in the 2018 Sales Plan, compared to the 2017 Sales Plan. However, if I were to accept that submission, my finding above with respect to the interpretation of the 2017 Sales Plan would apply to the 2018 Sales Plan. Whether or not there was an effective change in the wording of the Sales Plan, will not affect the Plaintiff’s entitlement to be paid commission he would have earned during the notice period under the 2018 Sales Plan. The same analysis as I have referred to above for the interpretation of the provisions of the 2018 Sales Plan is applicable, as it must be interpreted to refer to lawful termination, where working notice has been given.

[47] Alternatively, the Plaintiff also submits that “the Defendant has failed to notify him of the change to the terms of his employment and entitlement to commissions during the notice period”. Notwithstanding the Defendant’s argument that the Plaintiff has “admitted he understood the provisions of both the 2017 and 2018 Sales Plans”, I find that the evidence does not support this submission.

[48] I accept the Plaintiff’s summary of the evidence on this issue as follows:

• Plaintiff testified that he read the Sales Plan documents during his previous years of employment. He read the 2017 Sales Plan documents.
• Exhibit 1-13: Summary of Major Changes to the 2018 Sales Plan.
• Exhibits 1-10, 11, 12: Plaintiff testified that he read 2018 Sales Plan with the Major Changes document. He scanned the 2018 Sales Plan Transmittal quickly, assuming nothing had been changed.
• Plaintiff signed 2018 Sales Plan Transmittal.
• Plaintiff testified that the 2018 Sales Plan was most significant change he experienced.
• Mr. Boyle testified that the 2018 changes were not more than usual, and it was an average series of changes. He also testified that a document similar to the Major Changes document had been prepared before to show changes to the Sales Plan. However, he could not recall when the last time a change was made to sales plans.
• Mr. Boyle testified that change in language to the termination provision in the 2018 Sales Plan Transmittal was not brought to Plaintiff’s attention because Mr. Boyle did not believe there were any changes to Plaintiff’s employment.
• To be eligible for commission payment, employees must sign the Sales Plan Transmittal.
• Mr. Boyle and the Plaintiff testified that prior to the changes, there was a call with management (including the Plaintiff) to discuss changes to 2018 Sales Plan. During the call:
  • The changes discussed were all the major changes with respect to compensation.
  • Mr. Boyle did not want individual employees to flip through the documents to see the changes themselves, so that they could concentrate on selling.
  • Mr. Boyle recognized that what most employees are concerned about when there are changes to the Sales Plan is how the changes would financially impact them.
  • Mr. Boyle agreed that if there were changes to the sales plan he would bring it to the sales force’s attention “if it changed their compensation”. He agreed that the reason he would do so was because he did not want the change to be missed as this “would financially impact them”.

[49] The Plaintiff further submits that he did not accept the alleged newly imposed terms of employment. He relies on the Court of Appeal decision in Dawe v. The Equitable Life Insurance Company of Canada, 2019 ONCA 512, 435 D.L.R. (4th) 573, which held that in order for a party to accept changes to a contract, it must first be found that the party had knowledge of the changes: at para. 72.

[50] The Defendant has the burden of proving that the Plaintiff knew about the changes or that the Defendant properly communicated these changes to the Plaintiff. There is no evidence that the relevant changes to the 2018 Sales Plan were brought to the Plaintiff’s attention before they were implemented.

[51] The evidence is that the Defendant summarized and highlighted 15 changes that had been made to the 2018 Sales Plan without reference to the relevant change to the “termination clause” in the 2018 Sales Plan. The Plaintiff testified that he relied on the Defendant’s summary and assumed that there were no other material changes made to his contract of employment.

[52] The Plaintiff submits that as the Defendant argues that the changes to the “termination clause” language of the 2018 Sales Plan did not change the meaning, it is not reasonable to expect him to be aware of the change when the Defendant itself was not aware of the change.

[53] I accept the Plaintiff’s arguments on this issue and find that the Plaintiff was not aware of the alleged change and therefore could not and did not accept this material change to his employment contract.

Changes to the 2018 Sales Plan are not supported by the necessary consideration

[54] The employer also has the burden of proving that a unilateral change to a significant term of employment is supported by consideration.

[55] The Defendant’s alleged changes to the termination clause in the 2018 Sales Plan could have significantly modified the Plaintiff’s entitlements upon termination. The changes had the potential to disentitle the Plaintiff to a significant part of his income during his notice period. The evidence was that in the last four months of 2018, had the Plaintiff remained employed, he would have earned $99,237.36 in commission income but only $50,000.00 in base salary.

[56] Our jurisprudence has held that a significant change to the terms and conditions of employment requires consideration. In this case, I find that there was no consideration.

[57] The Court of Appeal, in Hobbs v. TDI Canada Ltd., [2004] O.J. No. 4876 (C.A.), described the law as follows:

“The requirement of consideration to support an amended agreement is especially important in the employment context where, generally, there is inequality of bargaining power between employees and employers. Some employees may enjoy a measure of bargaining power when negotiating the terms of prospective employment, but once they have been hired and are dependent on the remuneration of the new job, they become more vulnerable: at para. 42.”

[58] There was no evidence regarding how the changes to the 2018 Sales Plan would benefit the Plaintiff. The Plaintiff testified that the changes to the Plan would help some but not others.

[59] The Defendant’s attempt to limit the Plaintiff’s right to commission during the notice period is a significant modification which would require reasonable notice.

[60] Further, A new notice of termination provision in an employment contract is “a significant modification of the implied term of reasonable notice” that requires consideration. There was no consideration for this change.

Limiting provision in the 2018 Sales Plan is void because it potentially violates the ESA

[61] In Covenho v. Pendylum Inc., 2017 ONCA 284, 43 C.C.E.L. (4th) 99, the Court of Appeal held, at para. 7:

In determining whether the contract is in compliance with the ESA, the terms must be construed as if the appellant had continued to be employed beyond three months; if a provision’s application potentially violates the ESA at any date after hiring, it is void. [emphasis added]

[62] The language in the 2018 Sales Plan has the potential effect of contracting out of the Defendant’s statutory obligation to provide the Plaintiff with his full wages during the statutory notice period, which includes commissions that become payable during the notice period.

[63] Commissions are included as “wages” pursuant to s. 1(1) of the ESA. The Court of Appeal, in North v. Metaswitch Networks Corporation, 2017 ONCA 790, 417 D.L.R. (4th) 429, has held that commissions must be paid during the notice period. If no notice period is provided, commissions must be paid as part of the lump sum wage payment in lieu of notice (s. 61).

[64] The Plaintiff argues that the “termination clause” in the 2018 Sales Plan contracts out of the ESA, contrary to s. 5(1) of the Act, and is therefore void and unenforceable.

[65] Section 5(2) of the ESA does permit an employer to contract out of the ESA as long as a greater benefit is given to the employee. There is no evidence that the 2018 Sales Plan gives Mr. Kerner a greater benefit. The termination clause in the 2018 Sales Plan does not substitute a greater benefit by providing reasonable notice; rather, it provides for the ESA’s minimums.

[66] The Plaintiff submits that there are circumstances where the Plaintiff would be better off if he were to be paid his minimum ESA entitlements instead of his base salary during a reasonable notice period determined at common law. Pursuant to the ESA, the Plaintiff would be entitled to two weeks’ notice of termination and 17.92 weeks’ severance pay. Pursuant to s. 60 of the ESA, the Plaintiff would be entitled to receive his wages, including any commissions that become payable in those weeks.

[67] Therefore, the Plaintiff’s minimum statutory entitlement to termination of employment must include notice of termination, severance pay, and any commissions payable during the notice period. These payments would not be subject to the duty to mitigate.

[68] If the provision in the 2018 Sales Plan’s termination clause were enforceable to exclude commission payments to the Plaintiff earned during his notice period, the greatest entitlement benefit the Plaintiff could receive would be reasonable notice at common law, based on his base pay only, excluding commissions. I find that there is a real possibility that a common law notice period calculated using the Plaintiff’s base pay would be less than the Plaintiff’s minimum statutory entitlements. Section 5 of the ESA prohibits such a result.

[69] The Plaintiff’s evidence was that his largest booking and billing was an $11,000,000 deal with a commission earned between $150,000 to $200,000. It would be better for the Plaintiff to be paid commission during the statutory notice period instead of being paid base salary during the reasonable notice period.

[70] Finally, notwithstanding the evidence of the Defendant on the Plaintiff’s poor performance and being put on a performance plan, I find that as the Plaintiff was informed of his termination date in writing on September 4, 2018, that is the date upon which he became entitled to notice of termination.

[71] For all of the above noted reasons, I find that the Plaintiff is entitled to be paid for the loss of the opportunity to earn commissions during the period of 8 months reasonable notice and to be awarded damages as set out below.

[72] The value of the Plaintiff’s claim for 8 months’ damages in lieu of reasonable notice is calculated as follows:

1. $133,333.33 ($16,666.67/month), less two weeks already paid ($7,692.31). This is inclusive of ESA Severance pay of $68,923.08;
2. $3,600 for loss of benefits ($450/month) (as agreed costs to the employee); and
3. $136,863.76 in commission, which is based on a. $99,237.36 based on Exhibit 1-21; and b. $37,626.40 from January to April 2019 (an average of $9,406.60/month in commissions based on all commissions from start date to end of December 2018, which is a total of $225,758.46).

[73] I do not accept the Defendant’s submission that the Plaintiff must prove he has incurred medical expenses. I award damages on the only evidence before the court which is the cost to the Defendant of proving these benefits. I find that this is a reasonable amount to award the Plaintiff for his loss of benefits during the period of reasonable notice.

[74] I award damages as set out in paragraph 73 with pre and post judgment interest to the Plaintiff. No submissions above were made with respect to the interest calculation.

Costs

[75] The parties have reached an agreement on costs to be awarded on a partial indemnity basis to the successful party on these motions at the hearing of this matter. The successful party, the Plaintiff, is therefore awarded costs on a partial indemnity basis of $30,000, in accordance with the agreement of the parties.

[76] Notwithstanding Rule 59.05, this Judgment is effective from the date it is made and is enforceable without any need for entry and filing. In accordance with Rules 77.07(6) and 1.04, no formal Judgment need be entered and filed unless an appeal or a motion for leave to appeal is brought to an appellate court. Any party to this Judgment may nonetheless submit a formal Judgment for original signing, entry and filing when the court returns to regular operations.

Pollak J. Date: July, 16, 2020