DATE: 20040521

DOCKET: C37679

COURT OF APPEAL FOR ONTARIO

RE: HENRY RASANEN (Appellant/Plaintiff) – and – LISLE-METRIX LTD. AND AQUAMETRIX INC. (Respondents/Defendants)

BEFORE: DOHERTY, MOLDAVER, ARMSTRONG, LANG and JURIANSZ JJ.A.

COUNSEL: Stacey Reginald Ball and Kenneth Alexander for the appellant James Holloway for the respondents

HEARD: May 17, 2004

On appeal from the judgment of Justice Michael R. Dambrot of the Superior Court of Justice dated January 25, 2004.

E N D O R S E M E N T

[1] Recent decisions of this court and the Supreme Court of Canada recognize that the judicial interpretation of contracts between employers and employees must be informed by the power imbalance between the two and the importance of employment to an individual’s dignity and sense of self-worth. The appellant relies on those principles to drive his argument that the court should reconsider its decision in Wallace v. T.D. Bank (1983), 41 O.R. (2nd) 161 (C.A.), and in particular the majority’s suggestion that the disappearance of the substratum of an employment contract is limited to the situation where an employee’s level of responsibility and status has escalated significantly. Put simply the appellant argues that if an employer unilaterally alters in a fundamental way an essential term in a written contract of employment, the employer cannot subsequently rely on the termination clause in the contract.

[1] We need not address the merits of this argument on this appeal. Without commenting on its potential force, the findings of fact made at trial foreclose its success. Even if the court were to accept the legal argument advanced by the appellant, his claim would fail on the facts as found by the trial judge.

[2] The appellant argued that the termination provision in the 1985 written employment contract that he entered in 1985 no longer applied when the respondent terminated his employment in 1994 because the respondent had changed fundamental aspects of his employment during his almost nine years of employment.

[3] The trial judge found as a fact that the appellant’s employment had not changed in any fundamental way. He held that all of the changes to the appellant’s employment contract were small and inconsequential, except for the change in the bonus structure. With respect to the bonus structure, he held that the change, which occurred in the first year of the appellant’s employment, was not “so substantial or serious” as to constitute a fundamental breach of the agreement. Furthermore, the trial judge found that even if the change to the appellant’s bonus were fundamental to his employment contract, the appellant went beyond condoning it and agreed to it.

[4] We think these findings were open to the trial judge on this evidence and reflect no misapprehension of the evidence. They are entitled to deference. Based on those findings of fact, this appeal must fail.

[5] Alternatively, the trial judge found that when the president of the respondent terminated the plaintiff in 1994, he offered him six months pay in accordance with the terms of the 1985 agreement. At the appellant’s request, the appellant was allowed to continue his employment with the respondent for those six months. During the negotiations concerning the appellant’s termination, he never suggested that he was entitled to more than six months notice. He did not give the respondent company any reason to believe that a claim for more than six months would ever be made against the respondent company. Indeed, the appellant made no reference to the notice period in a list of outstanding entitlements he identified as he prepared to leave the respondent company.

[6] In these circumstances, we agree with the respondent’s submission that the appellant is estopped by his conduct from asserting an entitlement to notice beyond the six months offered by the respondent company and accepted by the appellant.

[7] Viewing the same circumstances somewhat differently, and assuming the written agreement was not in force at the time of the termination, the parties by their conduct evinced an agreement whereby the appellant would receive six months notice upon termination.

[8] Viewed in either way described immediately above, the appellant’s conduct at the time of termination provides an alternative basis upon which his claim should be dismissed.

[9] The appeal is dismissed. The respondent is awarded its costs of the appeal fixed at $11,000.00 inclusive of disbursements and GST.

“D.H. Doherty J.A.”

“M.J. Moldaver J.A.”

“R.P. Armstrong J.A.”

“Susan Lang J.A.”

“R.G. Juriansz J.A.”