ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 11-163DC -Cay
DATE: 2012-10-19

B E T W E E N:

Daniel John Burgener

W. P. Murray, for the Plaintiff (Respondent)

Plaintiff
(Respondent)

• and –

Corporation of Haldimand County

B.J. Troup, for the Defendant (Appellant)

Defendant (Appellant)

HEARD: August 30, 2012

The Honourable Mr. Justice D. J. Gordon

REASONS FOR DECISION

[ 1 ] The defendant appeals from the decision of Deputy Judge F. C. Rous, Cayuga Small Claims Court, released October 13, 2011. Following a trial, judgment was awarded to the plaintiff for $15,565.10 and costs of $2,475.00. The judgment was for payment of accumulated sick leave credits for a former employee.

BACKGROUND

[ 2 ] Mr. Burgener commenced employment with the former Town of Haldimand on June 6, 1978. The County of Haldimand came into existence on January 1, 2001. On December 14, 2000, Mr. Burgener was offered the position of Supervisor of Revenue for the new municipality, a successor entity. He accepted.

[ 3 ] On July 6, 2007, Ms. Karen General, General Manager of Corporate Services for the County of Haldimand presented a severance proposal to Mr. Burgener. The proposal was accepted on July 10, 2007. Mr. Burgener, in essence, retired subject to the terms of the agreement. He signed a Release.

[ 4 ] The terms of the severance agreement were as follows:

a) The County will pay to you your full salary, as reflected in the recent Non Union Job Evaluation Process, and will provide benefits coverage (except for LTD) until May 31, 2008, which is the date that you become eligible for an unreduced OMERS early retirement pension.

b) You will not report to work during this period.

c) You will retire effective May 31, 2008.

d) You will then become entitled to the usual retiree benefits as per the County’s non-union policy.

e) The County will reimburse you for reasonable legal fees, to a maximum of $500, that you may incur in respect of this proposal. In this regard, I urge you to seek legal advice as to your rights and obligations.

f) The County will reimburse you for reasonable expenses you may incur in respect of retirement counselling, if you choose to seek that type of counselling, to a maximum of $500.

g) You will provide the County with a full and final release in respect of any claims you may have against the County arising out of your employment, the termination of that employment or the performance issues raised in this letter.

h) The settlement terms will remain confidential, except that you may discuss the settlement with your immediate family, as well as your financial and legal advisors.

[ 5 ] The release included the following:

In Consideration Of the terms and conditions set out in a letter from Karen General Manager of Corporate Services for the Corporation of Haldimand County, to Dan Burgener, dated July 6, 2007, attached hereto as Schedule “A”, I, Dan Burgener, (hereinafter referred to as the “Releasor”), Do Hereby Release And Forever Discharge, and by these presents do for his heirs, executors, administrators, successors and assigns, release and forever discharge The Corporation of Haldimand County and their affiliates, divisions, subsidiaries, predecessors, successors, assigns, agents, servants, employees, officers and directors, (hereinafter referred to as the “Releasees”) of and from any and all claims, demands, actions, causes of action of every kind, known or unknown, howsoever arising, which the Releasor had, has or may have against the Releasees for or by reason of any cause, matter or thing whatsoever existing up to the date hereof including, without restricting the generality of the foregoing, all claims arising out of or in any way related to the employment of the Releasor with the Releasees or any one of them, or the termination of such employment, including, without restricting the generality of the foregoing, all claims for wrongful dismissal or breach of contract or claims arising under or in connection with the Employment Standards Act, 2000, S.O. 2000, c. 41 (including sections 54 – 67 inclusive), the Ontario Human Rights Code or claims for mental or physical disability or sickness or for insurance benefits, save and except for those benefits which are to continue in accordance with the terms set forth in Schedule “A”, and including all loss or damage not now known or anticipated but which may arise in the future, and all effects and consequences thereof.

[ 6 ] Mr. Burgener did not report for work after July 10, 2007. His salary, however, continued until May 31, 2008, when he then retired.

[ 7 ] Subsequently, Mr. Burgener requested payment for his accumulated sick leave credits. When such was denied, he commenced this action.

[ 8 ] The basis for the claim is said to be the Policy Manual for Non-Union Staff, adopted by the County of Haldimand in January 2001. Section 13 of the Manual addresses “Sick Leave” and contains the following provision”

“An employee hired prior March 12, 1981 and who has a minimum of five (5) years of continuous service will be entitled to a payment equal to the value of one-half (.5) of the balance of the employee’s accumulated sick leave credits to a maximum of one hundred thirty (130) days pay at current salary, upon termination of employment for any reason.”

[ 9 ] Section 14 of the Policy Manual deals with Benefit Plans, such as extended health care, dental and life insurance. One item was said to be relevant to Mr. Burgener, namely:

Early Retirement Benefits: In the case of retirement prior to age sixty-five (65), if the employee is fifty-five (55) years of age or older has been an active employee for a least 5 years with Haldimand County and is eligible for unreduced early retirement under the OMERS pension plan, the Corporation agrees to continue the health benefits (Extended Health and Dental) until the employee reaches age sixty-five (65). Should the employee die prior to age sixty-five (65) and while in receipt of these health benefits, the employee’s spouse or same-sex partner shall receive such benefits until the date at which the employee would have been sixty-five (65) years of age or until remarriage of the spouse, whichever is sooner. Should the early retiree elect not to continue participation in the Health and Dental benefit plan, they will not be eligible to re-enrol at a later date.

ISSUES

[ 10 ] The same issues were presented at trial and on this appeal, as follows:

i) was Mr. Burgener entitled to payment for accumulated sick leave credits;

ii) was the executed Release a bar to this action;

iii) was the claim statute barred by operation of the Limitations Act, 2000.

TRIAL DECISION

[ 11 ] The trial judge found in favour of the plaintiff on all three issues.

i) Entitlement to Accumulated Sick Leave

At para.s 70-77, the trial judge determined the plaintiff was entitled to the benefit claimed, saying:

“I was not provided with, nor did I find, any specific law that would help in determining the first question. To me it really comes down to what is the common sense interpretation of the defendant’s policy, based on a plain reading of that policy.

The defendant argued that Mr. Burgener was not entitled to the benefit of the provision in Section 13 of the Human Resources Policy Manual for Non-Union Staff for “Employees Hired Prior to March 12, 1981” as he was not such an employee. The rationale for that is that he was an employee of the former Town of Haldimand and not the former Regional Municipality of Haldimand-Norfolk.

The difficulty I have with that is that there is nothing in the policy manual that indicates that employees of the defendant are going to be dealt with differently depending on which level of former municipality she or he worked for before the creation of the defendant.

Similarly, there is nothing explicit in the policy indicating the particular portion of Section 13 applies only to former regional employees. That may well have been senior management’s intention and belief, but I find nothing in the evidence that persuades me that this was specifically communicated to the non-union staff.

The defendant asked me to interpret the email from Heather Scott, Tab 3 of the Plaintiff’s Document Brief, as such evidence, but I cannot do so. To me that email really just reinforces the idea that the plaintiff was eligible for “future sick bank payouts”, as it specifically made clear that the “one time top of 87 days” was not (my emphasis) eligible for pay out, to me the clear implication is that all other sick leave is eligible for payout.

I cannot accept the defendant’s position that the plaintiff was not entitled to the benefit because he actually started working for the defendant on January 1, 2001. Counsel for the defendant particularly noted the Record of Employment provided to the plaintiff. If that were the case, the defendant would necessary have no employees hired before January 1, 2001because it did not exist. In that case, what would have been the use in including in the policy manual provisions for “Employees Hired Prior to March 12 th , 1981”, “Employees Hired between March 12 th , 1981 and December 31, 1985” and “Employees Hired on, or after January 1 st , 1986. To accept the defendant’s submission would be to make those clauses completely irrelevant.

I am also mindful of the defendant’s offer of employment to the plaintiff, represented by the letter from Ms. General to Mr. Burgener of December 14, 2000. That letter refers to “a benefit package similar to that provided to current employees of the Regional Municipality of Haldimand-Norfolk”, and specifically “1.5 days per month sick leave credit.”

In this absence of specific written communication from the defendant to the plaintiff that this did not mean he was entitled to the benefit he is claiming, none of which was provided in evidence, I cannot find that Mr. Burgener was not entitled to the benefit claimed.”

[ 12 ] (ii) Release

At para.s 81-94, the trial judge determined the Release was not a bar to the claim, saying:

“The Release refers to, and specially incorporates, the defendant’s letter to the plaintiff of July 6, 2007. It is, indeed, a general and comprehensive release. However, it is also limited by the term “save and except for those benefits which are to continue in accordance with the terms set forth in Schedule “A”. Schedule “A” is the aforesaid letter.

I take that to mean that I must then look specifically at the letter, and particularly the defendant’s proposal therein, to determine what the plaintiff was releasing. In that proposal, I consider paragraphs numbered 1,3 and 4 to be relevant to the issue.

By paragraph 1, the plaintiff was entitled to continue to receive his full salary and benefits, excluding long term disability benefits, until May 31, 2008, at which time he would be eligible for an unreduced pension.

By paragraph 3, Mr. Burgener retired on May 31, 2008.

By paragraph 4, upon his retirement, he was entitled to the “usual retiree benefits as per the County’s non-union policy.”

My findings related to those paragraphs are:

(a) Mr. Burgener remained an employee of Haldimand County until May 31, 2008;

(b) he retired from that employment on May 31, 2008;

(c) he retained all his benefits, except long term disability, until May 31, 2008;

(d) on May 31, 2008 he became entitled to the County’s usual retiree benefits.

I then have to look to the Human Resources Policy Manual for Non-Union Staff.

I have already determined that the plaintiff was entitled to the benefits provided to “Employees Hired Prior To March 12 th , 1981 in Section 13 of the policy manual, so I must then consider what those benefits entailed.

As I read, and interpret, that particular paragraph, “upon termination of employment for any reason” the plaintiff was entitled to a payment of up one-half of the value of his accumulated sick leave credits, to a maximum of 130 days pay at his then-current salary.

The policy manual does not contain any specific provision for retirement or what benefits are available after retirement. There is mention of early retirement in Section 14, Section 15 relates to “Pension Plans” and Section 20 deals with “Termination.” I cannot see that any of those sections apply to the plaintiff.

What then are the “usual retiree benefits” offered by the defendants and accepted by the plaintiff?

I can only assume, and so find, that there was really only one ‘retiree benefit’, and that was the entitlement to payment for accumulated sick leave.

Counsel for the defendant suggested in his submissions that “normal retiree benefits” were specifically for retired people and retirement benefits were completely different than sick leave benefits, because retired employees do not require sick leave. That, indeed, seems to be common sense. However, as I see it, that ignores the specific terminology in the relevant portion of Section 13.

I suppose it could be argued that the clause in question does not apply because I have found that Mr. Burgener was not ‘terminated’, but retired. To me that would be too literal a reading of the phrase “termination of employment for any cause”. The logical conclusion then would be that the defendant was prepared to provide a benefit to employees it terminated, even for just cause, but not to employees who reach what one hopes is the pleasant stage of normal retirement. That makes no common sense to me.”

[ 13 ] (iii) Limitations Act

At para.s 95 – 97, the trial judge rejected the defendant’s position as to the limitation period, saying:

“The defendant submits that the plaintiff’s action is barred by the Limitations Act, 2002, S.O. 2002, c. 24, Sch B , as it was not commenced within two years of the time it says the plaintiff knew of the cause of action. The submission was that operative date was either January 2, 2002, the date of Ms. Scott’s letter regarding the top up of 87 sick days, or July 2007, when the Release was signed. With respect, I disagree.

I am not prepared to give Ms. Scott’s letter the import suggested by the defendant; I simply do not interpret it in that light.

Similarly, based on my findings in paragraph 85 above, I do not consider that the cause of action arose when in July 2007. At that time, and until May 31, 2008, the plaintiff remained an employee of the defendant. As such, he was not entitled to the payment of accumulated sick leave as provided for in the relevant portion of Section 13 of the policy manual; he only became eligible upon his retirement. Thus, I find that the cause of action arose on May 31, 2008, at the earliest. As the proceedings were commenced in January 2010, that was within the two year limitation period provided for in the statute.

STANDARD OF REVIEW

[ 14 ] Counsel agree the standard of review on this appeal is palpable and overriding error, not correctness, see Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 SCR 235.

ANALYSIS

[ 15 ] (i) Entitlement – Interpretation of Policy Manual

There is no dispute that the Policy Manual applies to Mr. Burgener’s employment and retirement.

[ 16 ] Much was made as to the interpretation of the Policy Manual by the parties at trial. As I said to counsel at the appeal hearing, it is unclear to me as to how or why such evidence was tendered. Section 13 of the Policy Manual is clear. The position advanced by the County of Haldimand was that the provision for accumulated sick leave only applied to form employees of the Regional Municipality of Haldimand-Norfolk, not those of the former Town of Haldimand.

[ 17 ] However, the Policy Manual makes no such distinction. It is to be noted, the document was prepared by the County of Haldimand and, as well, it is a successor employer. Mr. Burgener was an employee of one of the former municipalities and was so employed prior to March 12, 1981.

[ 18 ] The trial judge determined that Section 13 of the Policy Manual applied in favour of Mr. Burgener. That interpretation was open to him and, hence, I am not persuaded there is palpable and overriding error. Indeed, I am in agreement with his determination of this issue.

[ 19 ] (ii) Release

Mr. Burgener signed a Release. The severance agreement, however, was incorporated into the Release. But for that agreement, the Release would have been a bar to the claims, see Better Beef Ltd. V. MacLean, 2006 17930 , 80 O.R. (3d) 689 (ON S.C.D.C.).

[ 20 ] The severance agreement allows a claim for “usual retiree benefits”, being item 4 in the proposal.

[ 21 ] The trial judge, at para. 92, determined there was really only one “retiree benefit”, being payment for accumulated sick leave pursuant to Section 13 of the Policy Manual. I disagree, as section 14 brings into play other benefits. Nevertheless, accumulated sick leave may be considered one of several retiree benefits and, hence, I agree with the ultimate determination of the trial judge that the Release did not apply.

[ 22 ] (iii) Limitations Act

The County of Haldimand takes the position the limitation period commenced on July 10, 2007, on acceptance of the severance proposal, if not earlier on January 2, 2004.

[ 23 ] This argument fails if the sick leave credits are determined to be part of the retiree benefits, as counsel conceded in his submissions. The limitation period thus commenced on May 31, 2008 and, therefore, the claim was presented in time. I agree with the trial judge on this issue as well.

SUMMARY

[ 24 ] There being no palpable or overriding error, the appeal is dismissed.

[ 25 ] If the parties are unable to resolve the issue of costs, brief written submissions are to be delivered to my chambers in Cayuga within 30 days.

Gordon, J

Released: October 19, 2012