ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILES NOS.: 2056/09 & 1493/10
DATE: 2012-11-05

BETWEEN:

BIBI ABRAHIM, CHANDRAWATTIE BKSH, RAJCOOMARI BUDHRAM, JULIA CARVALHO, ASSUNTA CAVALLO, GUGLIELMINA CERILLI, APOLLONIA CIFARELLI, YU YING DENG, MARIA DAPONTE, MARIA HELENA FIDALGO, JAMES GOLDING, MARIA HENRIQUES, XUERUI HUANG, SHANMUGALINGAM KANDIAH, RAJ-RAJINDER LAL, YAN LAN MAK, RAMCOOMARIE MERARAM, BHARATKUMAR PATEL, MINAXIBEN PATEL, JUDY RAMSAHAI, ROSA RORIZ, PARAMJIT SAINI, ANNA SANTANGELI, INACIA SERODIO, CHITRALAKER SINGH, PRITTYPAU SINGH, RAJWONTI SINGH, EDWIN SUKHDEO, SURSATIE TOOLSIE, JASBIR THIND, JAIME TOAQUIZA, UMADAT and HELEN WONG

Plaintiffs

–and –

ALBERT SLIWIN, AVON SPORTSWEAR LIMITED, ALBERT SLIWINSKI LIMITED, FAYLAURA INVESTMENTS INC. and SHAIN SPORTSWEAR LIMITED

Defendants

Michael D. Wright, Counsel for the Plaintiffs

AND BETWEEN:

LUNA McCALLA

Plaintiff

• and –

ALBERT SLIWIN, AVON SPORTSWEAR LIMITED, ALBERT SLIWINSKI LIMITED, FAYLAURA INVESTMENTS INC. and SHAIN SPORTSWEAR LIMITED

Defendants

HEARD: October 29, 2012

REASONS FOR JUDGMENT

GRAY J.

[ 1 ] This a motion for default judgment. In the result, I grant judgment to the plaintiffs for wrongful dismissal damages in the amounts claimed. My reasons follow.

Background

[ 2 ] Some description of the background to this matter is necessary.

[ 3 ] On March 20, 2009, 33 plaintiffs filed a statement of claim, alleging that the defendants constituted a “common employer” and thus are jointly and severally liable for wrongful dismissal damages owing to them. On March 10, 2010, basically the same action was commenced by the plaintiff Luna McCalla. Thereafter, the two actions have essentially been pursued as one proceeding.

[ 4 ] In substance, the causes of action for wrongful dismissal damages arose when the business carried on by one or more of the defendants was discontinued, and was, perhaps, sold to someone else. It is alleged in the statements of claim that the plaintiffs were given no notice, or in some cases, inadequate notice, and no termination or severance pay.

[ 5 ] Statements of defence were delivered on behalf of all of the defendants.

[ 6 ] Ultimately, all of the statements of defence, except that of Faylaura Investments Inc. were struck. Motions to set aside the orders striking the statements of defence, and the subsequent noting in default of the defendants, were dismissed: see Abrahim v. Sliwin , [2011] O.J. No. 1370 (S.C.J.) . Appeals from that decision were dismissed: see Abrahim v. Sliwin , [2011] O.J. No. 5323 (C.A.) , and McCalla v. Sliwin , [2011] O.J. No. 5324 (C.A.) .

[ 7 ] Some of the plaintiffs now bring motions for default judgment, only as against the defendants Avon Sportswear Limited and Shain Sportswear Limited.

[ 8 ] Prior to the hearing of the motions, a separate motion was brought by a lawyer, Brad Teplisky, for leave to intervene in the motions. Mr. Teplisky had formerly been the solicitor for all of the defendants except Faylaura Investments Inc., and he was solicitor for those defendants when the motions to strike the statements of defence were heard and granted. Apparently, an action has now been commenced by Avon and Shain against Mr. Teplisky, and he sought leave to intervene in this proceeding on the basis that he would likely be affected by any order made on the motions for default judgment. Counsel for Mr. Teplisky also sought an adjournment of the motions for default judgment, so that he could file material and otherwise attack the motions themselves.

[ 9 ] For reasons that I endorsed in handwriting on the day Mr. Teplisky’s motion was heard, I reserved judgment on his motion for leave to intervene, but ruled that I would not grant an adjournment of the motions for default judgment in any event. I ruled that I would permit his counsel, Gavin Tighe, to remain during the argument of the motions for default judgment, and I would permit him to make whatever submissions he chose on those motions. In the result, Mr. Tighe elected not to remain during the argument of the motions for default judgment, and he withdrew Mr. Teplisky’s motion for leave to intervene.

[ 10 ] Mr. Wright, counsel for the plaintiffs, has filed affidavits sworn by the vast majority of the plaintiffs, outlining the nature of their employment, their length of service, the circumstances of their layoff or dismissal, and their attempts at mitigation, including the disclosure of any amounts they actually earned in mitigation.

[ 11 ] At my request, Mr. Wright also filed with me, subsequent to argument of the motion, certain decisions of employment standards officers made after termination of certain of the plaintiffs. In substance, those decisions disclose that the claimants were denied severance pay for two reasons: that the business had been sold to an organization called Wolff of Canada, and that the respondent to the claims did not have an annual payroll of $2.5 million or more. From these decisions, I am prepared to assume that none of the plaintiffs received any severance pay pursuant to the Employment Standards Act , 2000 . I understand that some of them received notice and/or termination pay, and Mr. Wright has made it clear that the claims of the plaintiffs are inclusive of any notice and/or termination pay received by any of the plaintiffs.

[ 12 ] To complete the factual matrix, Mr. Wright advises that he was unable to obtain affidavits from three of the plaintiffs, so that the claim now being advanced does not include them.

Submissions

[ 13 ] Mr. Wright submits that each of the plaintiffs is entitled to wrongful dismissal damages against both defendants. It is alleged in the statements of claim, and now not disputed, that the defendants, at all material times, were common employers and are thus jointly and severally liable for the plaintiffs’ damages.

[ 14 ] In each case, the relevant plaintiff was laid off and not recalled, or was dismissed, and is entitled to wrongful dismissal damages. In each case, the plaintiff has made reasonable efforts to mitigate his or her damages, or has offered a reasonable explanation for not making efforts to mitigate. In some cases, plaintiffs were successful in mitigating their damages, and those have been set out.

[ 15 ] Mr. Wright has proposed that the following formula be used in calculating the plaintiffs’ damages, subject to mitigation:

(a) one months’ pay for each year of service;

(b) subject, in any event, to a cap of 24 months.

[ 16 ] In each case, the plaintiff was employed in a non-managerial position, in a relatively unskilled job, at a low rate of pay.

Analysis

[ 17 ] While I disagree with Mr. Wright that the formula he proposes is a tenable one at law, I am nevertheless persuaded that the damages proposed for each plaintiff are reasonable, and I am prepared to award them.

[ 18 ] I will explain my disagreement with the formula proposed by Mr. Wright.

[ 19 ] The Court of Appeal, in Minott v. O’Shanter Development Co. (1999), 1999 3686 (ON CA) , 42 O.R. (3d) 321 (C.A.), has made it clear that a formula based on one month’s pay per year of service is not appropriate.

[ 20 ] At para. 69, Laskin J.A. held that the trial judge, Molloy J., erred by using as a starting point for determining the period of reasonable notice, a “rule of thumb” that an employee is entitled to one month’s notice for every year worked. At para. 73, he stated as follows:

The rule of thumb approach suffers from two deficiencies: it risks overemphasizing one of the Bardal factors “length of service” at the expense of the others; and it risks undermining the flexibility that is the virtue of the Bardal test. The rule of thumb approach seeks to achieve this flexibility by using the other factors to increase or decrease the period of reasonable notice from the starting point measured by length of service. But to be meaningful at all, this approach must still give unnecessary prominence to length of service. Thus, in my opinion, the rule of thumb approach is not warranted in principle, nor is it supported by authority.

[ 21 ] Interestingly, notwithstanding the rejection of the rule of thumb approach adopted by the trial judge, the Court of Appeal nevertheless upheld the award of wrongful dismissal damages amounting to 13 months’ pay in lieu of notice, as being reasonable in the circumstances.

[ 22 ] The Court also rejected the argument, made by the defendant, that the decision of the Court of Appeal in Cronk v. Canadian General Insurance Co. (1995), 1995 814 (ON CA) , 25 O.R. (3d) 505 (C.A.), had established an upper limit of 12 months for non-managerial employees.

[ 23 ] My other reservation is with respect to Mr. Wright’s proposal of a cap of 24 months. In my view, any such approach has now been rejected by the Court of Appeal in Di Tomaso v. Crown Metal Packaging Canada LP (2011), 2011 ONCA 469 () , 337 D.L.R. (4 th ) 679 (Ont. C.A.).

[ 24 ] In Di Tomaso , the plaintiff was employed for over 33 years as a mechanic and press maintainer. The trial judge, Allen J., awarded the plaintiff damages equal to 22 months’ pay. It was argued, as had also been argued in Minott , that case law had established 12 months as the upper limit of appropriate notice for clerical and unskilled employees. MacPherson J.A., for the Court of Appeal, disagreed. At para. 27, he stated that the character of the plaintiff’s employment “is today a factor of declining relative importance.” In practical terms, character of employment is now largely irrelevant except for a small class of very senior employees: see Love v. Acuity Investment Management Inc. (2011), 2011 ONCA 130 () , 89 C.C.E.L. (3d) 157 (Ont. C.A.)

[ 25 ] In my view, if a cap of 12 months is not appropriate, I fail to see how a cap of 24 months, or indeed any maximum, is appropriate. Two of the plaintiffs had worked for one or more of the defendants for at least 35 years, and were 63 years of age or older. I might have decided to award more than 24 months’ pay had such a request been made.

[ 26 ] However, I will honour Mr. Wright’s request to limit the damages to a maximum of 24 months pay.

[ 27 ] I am satisfied that each of the plaintiffs made reasonable efforts to mitigate his or her damages, or in the few cases where efforts were not made, the explanation is reasonable.

[ 28 ] Mr. Wright has furnished me with a helpful chart which summarizes the damages sought for each of the plaintiffs for whom affidavits were filed. That chart takes into account amounts actually received by way of mitigation. I have attached the relevant damages for each plaintiff as Appendix ‘A’ to these reasons.

[ 29 ] While I disagree with the approach that damages should be calculated according to a formula of one month’s pay for each year of service, as did the Court of Appeal in Minott I think the amount claimed on behalf of each plaintiff is reasonable in the circumstances, and I am prepared to award the damages claimed.

Disposition

[ 30 ] Default judgment shall issue against the defendants Avon Sportswear Limited and Shain Sportswear Limited, jointly and severally, for the amounts reflected in Appendix ‘A’ to these Reasons for Judgment.

[ 31 ] Pre-judgment interest on these amounts shall be paid at the statutory rate from and after the date of issuance of the relevant statement of claim.

[ 32 ] The costs of these actions shall be paid by those defendants, jointly and severally, fixed in the amount of $35,000, all-inclusive.

GRAY J.

Released: November 5, 2012

Plaintiff Common Law Damages Sought

1. Bibi Abrahim $26,254.80
2. Rajcoomari Budhram $19,760.00
3. Julia Carvalho $10,530.00
4. Assunta Cavallo $36,251.80
5. Guglielmina Cerilli $34,378.56
6. Apollonia Cifarelli $18,123.00
7. Yu Ying Deng $10,027.33
8. Maria Daponte $34,560.00
9. James Golding $50,000.00
10. Maria Henriques $10,322.81
11. Raj‑Rajinder Lal $23,985.00
12. Yan Lan Mak $11,570.00
13. R. Meraram $43,622.40
14. Bharatkumar Patel $30,743.00
15. Minaxiben Patel $23,975.47
16. Inacia Serodio $34,560.00
17. Prittypaul Singh $32,618.00
18. Rajwonti Singh $26,602.54
19. Edwin Sukhdeo $43,043.87
20. Sursatie Toolsie $38,090.64
21. Jaime Toaguiza $37,440.00
22. Umadat $40,300.00
23. Helen Wong $37,440.00
24. Luna McCalla $32,470.20

$706,678.42

COURT FILES NOS.: 2056/09 & 1493/10
DATE: 2012-11-05

ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: BIBI ABRAHIM, CHANDRAWATTIE BKSH, RAJCOOMARI BUDHRAM, JULIA CARVALHO, ASSUNTA CAVALLO, GUGLIELMINA CERILLI, APOLLONIA CIFARELLI, YU YING DENG, MARIA DAPONTE, MARIA HELENA FIDALGO, JAMES GOLDING, MARIA HENRIQUES, XUERUI HUANG, SHANMUGALINGAM KANDIAH, RAJ-RAJINDER LAL, YAN LAN MAK, RAMCOOMARIE MERARAM, BHARATKUMAR PATEL, MINAXIBEN PATEL, JUDY RAMSAHAI, ROSA RORIZ, PARAMJIT SAINI, ANNA SANTANGELI, INACIA SERODIO, CHITRALAKER SINGH, PRITTYPAU SINGH, RAJWONTI SINGH, EDWIN SUKHDEO, SURSATIE TOOLSIE, JASBIR THIND, JAIME TOAQUIZA, UMADAT and HELEN WONG Plaintiffs –and – ALBERT SLIWIN, AVON SPORTSWEAR LIMITED, ALBERT SLIWINSKI LIMITED, FAYLAURA INVESTMENTS INC. and SHAIN SPORTSWEAR LIMITED Defendants AND BETWEEN: LUNA McCALLA Plaintiff - and – ALBERT SLIWIN, AVON SPORTSWEAR LIMITED, ALBERT SLIWINSKI LIMITED, FAYLAURA INVESTMENTS INC. and SHAIN SPORTSWEAR LIMITED Defendants REASONS FOR JUDGMENT GRAY J.

Released: November 5, 2012