Court of Appeal for Ontario

Date: December 5, 2017 Docket: C62451

Judges: Rouleau, Benotto and Roberts JJ.A.

Between

Michael Nufrio Plaintiff (Appellant)

and

Allstate Insurance Company of Canada and The Allstate Corporation Defendants (Respondents)

Counsel

For the Appellant: Kenneth Alexander and Kristopher Stone

For the Respondents: Seann D. McAleese and Kathryn L. Meehan

Heard and Released Orally: November 30, 2017

Appeal Information

On appeal from the judgment of Justice Andra Pollak of the Superior Court of Justice, dated June 23, 2016, with reasons reported at 2016 ONSC 2791, 2016 C.L.L.C. 210-049.

Reasons for Decision

[1] On July 24, 2007 the appellant received notice of fundamental changes to his employment contract with the respondents. He was given working notice up to September 1, 2009.

[2] Based on the evidence, it is apparent that he accepted the working notice. In fact, he indicated that he intended to retire from his employment with the respondents at the end of the notice period.

[3] In October 2008, the respondents sought to impose immediate changes to the employment relationship by requiring the appellant to close his neighbourhood office and move to an Allstate operated office by November 1, 2008. The appellant refused, insisting on operating under the previous agreements during the notice period. These agreements were the Allstate Agent Compensation Agreement (the 830 agreement) and the Neighbourhood Office Agent Amendment (the NOA). His refusal led to his termination for cause on November 6, 2008.

[4] The trial judge found that the appellant was properly terminated for cause on November 6, 2008. In her view, the respondents had the right to impose the new terms of employment, since the appellant had been given reasonable notice of the changes.

[5] In our view, the trial judge erred by not addressing the question of whether the change in location, including the change to the business model under the NOA, could be made by the respondents during the working notice period. She also erred by not considering whether the NOA precluded them from unilaterally requiring the changes to the appellant's business model and location.

[6] In this court, the respondents maintain that the 830 agreement entitled them to require closure of the appellant's office and his relocation to the Allstate operated office.

[7] For his part, the appellant asserts that the NOA, which amended the 830 agreement, precluded the respondents from insisting on his relocation.

[8] We agree with the appellant's submissions. The proposed relocation was more than a geographic relocation of the appellant's office; rather, it was a fundamental change to the business model that had been agreed to under the NOA.

[9] The appellant was entitled to continue to operate in accordance with the 830 agreement and the NOA during the period of working notice to September 1, 2009, as had been set out in the respondent's July 2007 letter. The NOA precluded the respondents from unilaterally imposing the changes during the period of working notice.

[10] Accordingly, the appellant is entitled to compensation for the balance of the notice period from November 6, 2008 to September 1, 2009, a period of nine months and 25 days. We agree that it is to be calculated on the basis of $20,000 per month.

[11] Further, it is clear from a plain reading of the 830 agreement that any compensation interest the appellant had in renewed insurance policies ended with the termination of his employment, despite his argument to the contrary.

[12] Accordingly, the appeal is allowed in part. Costs to the appellant fixed at $7,500 for the appeal and $60,000 for the trial, both are inclusive of disbursements and applicable taxes.

"Paul Rouleau J.A."

"M.L. Benotto J.A."

"L.B. Roberts J.A."