CITATION: Wetzel v. Procom Consultants Group Ltd., 2022 ONSC 6056
DIVISIONAL COURT FILE NO.: 529/20
DATE: 20221115
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Stewart, Akhtar and Shore JJ.
BETWEEN:
MARY WETZEL
Respondent and Appellant on Cross-Appeal
– and –
PROCOM CONSULTANTS GROUP LTD AND CANADIAN IMPERIAL BANK OF COMMERCE
Appellants and Respondents on Cross-Appeal
Daniel Chodos, for the Respondent and Appellant on the Cross-Appeal
D. Jared Brown, for Procom Appellant and Respondent on the Cross-Appeal
HEARD at Toronto: June 23, 2022
S.A.Q. AKHTAR J.
FACTUAL BACKGROUND AND OVERVIEW
Introduction
[1] This is an appeal and cross-appeal from the order of Dow J. dated 7 October 2020 granting summary judgment against Procom Consultants Group Ltd. (“Procom”) and awarding Mary Wetzel damages for wrongful dismissal.
[2] Procom appeals the award of damages for wrongful dismissal, Ms. Wetzel cross-appeals the dismissal of her claim for punitive damages.
[3] For the following reasons, both appeals are dismissed.
Background Facts
[4] In June 2012, Ms. Wetzel entered into the first of a series of multiple contracts with Procom, a recruiting, staffing, and placement agency in the IT sector, to work at the Canadian Imperial Banking Corporation (CIBC). Ms. Wetzel had previously worked at CIBC from 2007 to 2011, though it is agreed that this period of employment is not included in Ms. Wetzel’s claim.
[5] Between June 2012 and December 2018, Ms. Wetzel entered into nine separate contracts with Procom to work at CIBC. The contracts had varying durations, terms, positions, and pay rates. The penultimate contract was for a term of six months to end on October 31, 2018. However, the last contract was for a period of six weeks – to expire on December 15, 2018.
[6] Procom advised Ms. Wetzel, in three emails, dated November 15, 2018, November 30, 2018 and December 14, 2018, that her “contract is scheduled to end”. The emails also noted that efforts were being made to confirm any extension. Procom had sent Ms. Wetzel similar emails during her previous contracts, and, on each previous occasion, she had received an extension.
[7] Ms. Wetzel’s employment relationship with Procom ended on December 15, 2018. She was not paid after that date, despite making multiple requests to Procom to pay out her entitlements under the Employment Standards Act, 2000, S.O. 2000, c. 41 (“ESA”).
[8] The final employment agreement between Ms. Wetzel and Procom (the “Employment Agreement”) stated that the work relationship would end “without the requirement of further notice, severance, continuation of benefits or compensation in lieu thereof, except as may be required by applicable employment statute.” It also contained a “Termination without Cause” provision that provided for payments of additional amounts as required by the ESA, including the minimum notice period of termination or pay in lieu and minimum severance pay, if applicable.
[9] By the time Ms. Wetzel’s employment ended, she was earning $29.90 an hour, or $1,121.35 per week. Ms. Wetzel found similar alternative employment on June 3, 2019, 24.5 weeks after her employment with Procom ended.
The Summary Judgment Decision
[10] Ms. Wetzel brought a motion for summary judgement alleging wrongful dismissal and seeking damages for pay in lieu of notice. She also claimed punitive damages of $40,000 based on Procom’s continued refusal to pay her any amount at the end of the working relationship. Procom’s responding position was that Ms. Wetzel’s employment was subject to a fixed-term contract, which expired.
[11] The motion judge held that the history of the working relationship showed that Ms. Wetzel was an employee rather than an independent contractor. The motion judge found the company’s repeated renewals demonstrated that in reality, Ms. Wetzel’s contract was for an indefinite term which attracted the protection of the ESA. The motion judge held, following Ceccol v. Ontario Gymnastic Federation, 2001 8589 (ON CA), [2001] O.J. No. 3488 (C.A.), that employers could not avoid the statutory provisions set out in the ESA by labelling an employment contract as “fixed term”, when the reality showed it was one of continuous service.
[12] The motion judge found that Ms. Wetzel was entitled to common law notice of termination and awarded her damages in an amount equivalent to her pay for the 24.5 weeks she sought. That amount totalled $27,470.63, a number that Procom did not dispute. The motion judge dismissed Ms. Wetzel’s claim for $40,000 in punitive damages holding that Procom’s conduct did not rise to the level justifying punitive damages set out in Whiten v. Pilot Insurance Co., 2002 SCC 18, [2002] 1 S.C.R. 595.
[13] Procom appeals the motion judge’s finding of liability and resultant award of damages. Ms. Wetzel cross-appeals the dismissal of her claim for punitive damages.
[14] For the following reasons, both appeals are dismissed.
THE APPEAL BY PROCOM
The Grounds of Appeal
[15] Procom appeals the motion judge’s judgment on two grounds.
[16] First, they allege that he erred by considering extrinsic evidence - the renewals or extensions to Ms. Wetzel’s employment - to interpret the Employment Agreement without first finding an ambiguity. Second, Procom argues that the motion judge failed to consider the effect of its advance written notice terminating Ms. Wetzel’s employment.
[17] For the following reasons, Procom’s appeal must fail.
[18] There is no dispute between the parties that appellate standards of review apply in this case. Questions of law are reviewable on a correctness standard. Questions of fact and questions of mixed fact and law are reviewable on a standard of palpable and overriding error: Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235 at paras. 8, 10, and 37.
[19] Procom argues that its first ground of appeal concerns a question of law alone. Ms. Wetzel disagrees. She suggests that the motion judge’s decision involved mixed law and fact, and appellate intervention is only warranted after a finding of palpable and overriding error.
[20] I agree with Ms. Wetzel: the motion judge’s determination was premised on a factual interpretation of the parties’ intentions.
[21] In the leading case of Sattva Capital Corp. v. Creston Moly Corp, 2014 SCC 53, [2014] 2 S.C.R. 633 at para. 50, the Court explained that “[c]ontractual interpretation involves issues of mixed fact and law as it is an exercise in which the principles of contractual interpretation are applied to the words of the written contract, considered in light of the factual matrix”. Accordingly, deference is owed to the motion judge’s interpretation of the facts. Only a finding of palpable and overriding error could justify this court’s interference with his decision.
The Requirement for an Ambiguity
[22] Procom submits that the motion judge was required to find an ambiguity in the terms of the contract before considering the repeated renewals of Ms. Wetzel’s employment to determine whether she was an employee of continuous service.
[23] In Ceccol, the court recognised that in cases of fixed term contract, an employee would not have the protections conferred by the ESA or be entitled to common law notice. However, the court found that an ambiguity arose because the contract, purportedly of a fixed term nature, contained the phrase “subject to renewal” which was not self-defined. This term, which undermined the 12-month fixed term contained in the contract, allowed the application judge to consider extrinsic evidence of intention and conduct relating to the contract. There, the defendant organisation renewed the employee’s contract for a 16-year period leading the court to conclude that the employee’s employment was for an indefinite term subject to renewal and termination as specified in the contract.
[24] A similar ambiguity arises in this case. The last fixed term contract agreed to by both parties on 25 October 2018 (two months before Ms. Wetzel was terminated) stated that Procom could terminate Ms. Wetzel’s employment without cause “by providing you with only the minimum amount of notice of termination or pay in lieu thereof (at the Company's sole discretion, in any combination), minimum benefits (if applicable), and minimum severance pay (if applicable), as required by the Employment Standards Act, 2000, as well as accrued wages and vacation pay up to and including the date of termination”.
[25] However, if Ms. Wetzel was a fixed term employee with a term of one month, she would not be entitled to pay in lieu of notice or severance pay as governed by the ESA.
[26] In light of this ambiguity, it was open to the motion judge to consider the entire relationship between Ms. Wetzel and Procom as part of the factual matrix to resolve the ambiguity. In this vein, the employment relationship in this case - with numerous repeated extensions to work on the same basis at the same pay over a six-and-a-half-year period - supported Ms. Wetzel’s contention that she was a continuous term employee who was entitled to damages for wrongful dismissal.
[27] Accordingly, I find no error in the motion judge’s conclusion to that effect and this ground of appeal is dismissed.
The Notice Period
[28] Procom also argued that the motion judge erred in awarding Ms. Wetzel damages based on a notice period of 24.5 weeks, because he failed to take into account the fact that Procom had delivered written notice to Ms. Wetzel one month prior to the end of her employment. In turn, Ms. Wetzel had delivered a written acknowledgement of her “confirmed end of contract date with no further extension”. Procom accordingly argues that the damages should have been reduced to reflect this written notice.
[29] In Minott v. O’Shanter Development Co., 1999 3686 (Ont. C.A.), the Court of Appeal for Ontario held that a motions judge’s decision regarding a reasonable notice period attracts significant deference.
[30] In Di Tomaso v. Crown Metal Packaging LP, 2011 ONCA 469, [2011] O.J. No. 2900 at para. 21, the court dealt with a similar situation to the instant case. There, the court found that where an employer offered multiple contract extensions to an employee which created uncertainty about the date on which their employment ended, written notice was insufficient unless that uncertainty was clarified by a final confirmation date. See also: Thambapillai v. Labrash Security Services Ltd, 2016 ONSC 6068, at para. 26.
[31] Here, Procom would, over the course of Ms. Wetzel’s employment with them, issue termination notices and then withdraw them extending her employment. This practice created the uncertainty referred to in Di Tomaso.
[32] Further, Procom’s emails did not indicate a clear and final termination date as they included the possibility that Ms. Wetzel’s employment might be extended. The final termination date was only unequivocally communicated to Ms. Wetzel in the email dated 14 December 2018. Accordingly, as there was no certainty until that date, the prior emails cannot be considered as sufficient notice of termination.
[33] For these reasons, Procom’s appeal is dismissed.
THE CROSS-APPEAL BY MARY WETZEL
Did Dow J. Err in Declining Punitive Damages to Ms. Wetzel?
[34] In her cross-appeal, Ms. Wetzel argues that the motion judge erred by failing to award punitive damages in the amount of $40,000 as a result of Procom’s “reprehensible” conduct when terminating her employment and refusing to pay the sums she was entitled to under the ESA.
[35] The motion judge considered the principles governing punitive damages set out in Whiten v. Pilot Insurance Co., at para. 18, and decided there was some support for Procom’s refusal to pay or provide assistance following the end of Ms. Wetzel’s employment. As a result, the motion judge held that Ms. Wetzel’s claim did not meet the substantial threshold defined in Whiten.
[36] As previously described, the motion judge’s decision is subject to considerable deference being one of mixed fact and law. Such a determination may only be reversed on a finding of palpable and overriding error which has not been demonstrated in this case.
[37] Accordingly, Ms. Wetzel’s appeal is dismissed.
COSTS
[38] Both parties agreed that if neither was successful in their appeal, there should be no order for costs. Accordingly, there shall be no costs ordered to either party.
S.A.Q. AKHTAR J.
I agree _______________________________
E.M. STEWART J.
I agree _______________________________
S. SHORE J.
Released: November 15, 2022
CITATION: Wetzel v. Procom Consultants Group Ltd., 2022 ONSC 6056
DIVISIONAL COURT FILE NO.: 529/20
DATE: 20221115
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Stewart, Akhtar and Shore JJ.
BETWEEN:
MARY WETZEL
Respondent and Appellant on Cross-Appeal
– and –
PROCOM CONSULTANTS GROUP LTD AND CANADIAN IMPERIAL BANK OF COMMERCE
Appellants and Respondents on Cross-Appeal
REASONS FOR JUDGMENT
S.A.Q. AKHTAR J.
Released: November 15, 2022