Court File and Parties
Court File No. SC-10-85418-0000
and SC-10-85418-0000D1
Date: September 18, 2012
ONTARIO
SUPERIOR COURT OF JUSTICE
SMALL CLAIMS COURT
Deputy Judge Gonsalves
BETWEEN:
Miguel Angel Fajardo
-and-
Super Ceramic Tile Importing Ltd. and
Vito Ciancio
Heard at Richmond Hill: July 26, 2012
Plaintiff: self represented
Defendants: Michael Abrams
REASONS FOR JUDGMENT
INTRODUCTION
1 . A hearing was held in this matter on July 26, 2012. The court ordered the parties to make their closing submissions in writing to the court. The plaintiff was to provide his submissions by August 15 but failed to do so. The defendants provided their submissions by their deadline of August 30. As this case contains a number of issues in the Plaintiff and Defendants’ claims this court has elected to provide written reasons for judgment.
OVERVIEW
2 . The plaintiff claims that he was asked to carry out an illegal act in his workplace when his employer asked him to prepare a pay cheque for another employee without making or withholding source deductions. The plaintiff claims that his refusal to prepare such a cheque led to a situation of wrongful dismissal for which the plaintiff is seeking damages from his corporate employer and from the owner of the corporation personally.
3 . The plaintiff also seeks payment of his last pay cheque and vacation pay which to date remain unpaid.
4 . The plaintiff further claims damages for religious harassment in the workplace by his employer in the form of alleged negative comments concerning his religious practices as a member of the Jehovah Witnesses.
5 . For all of the above the plaintiff is seeking general, specific, and punitive damages.
6 . The defendant claims that the plaintiff resigned from his position and was never asked to do anything illegal. The defendant also states that he never harassed the plaintiff about his religious practices.
7 . The defendant has brought a defendant’s claim for the balance of a loan of $10,000 that he made to the plaintiff plus interest. The defendant claims that he can set off the plaintiff’s unpaid wages and vacation pay against the loan balance.
ISSUES
8 . Was the plaintiff asked by the defendant to commit an illegal act? If the answer to this question is yes then the plaintiff has grounds to claim that a situation of constructive dismissal existed.
9 . If there was a dismissal what is the appropriate notice period and did the plaintiff fail to mitigate his losses?
10 . Is the plaintiff entitled to his outstanding vacation pay and wages or should these be set off against the balance owing on the $10,000 loan? The parties agree that there is an outstanding loan of $10,000 and that one payment of $250 has been made leaving a balance of $9750. The parties disagree on whether or not there is interest to be paid on the loan and if there is they do not agree on the rate.
11 . Did the defendant harass the plaintiff in the workplace on the basis of his religion and religious beliefs?
12 . If wrongful/constructive dismissal and/or religious discrimination are found, is the defendant Vito Ciancio personally liable?
13 . What is the rate of interest, if any, on the $10,000 loan?
THE DISMISSAL
14 . The plaintiff was hired by the defendant in January of 2010. The parties knew each other from interactions while the plaintiff worked at his former employer. The plaintiff left the former employer to work for the defendant. The plaintiff was hired as a general employee to work in the store and the warehouse. The defendant was pleased with the plaintiff’s work and over time the plaintiff took over payroll duties for the defendant.
15 . In August of 2010 a new employee, namely Dennis, was hired by the defendant. On September 9, 2010, the plaintiff was told not to make source deductions and withholdings from Dennis’ pay. The plaintiff believed that this was an illegal act and obtained information to that effect on the Canada Revenue Agency website. The court asked the parties for the section of the Income Tax Act concerning source deductions but same was not provided. The court found that s. 153(1)(a) of the Income Tax Act clearly states that source deductions and withholdings must always be made. The Canada Pension Plan Act and Employment Insurance Act have similar provisions for their source deductions and withholdings. Therefore the court does find that the plaintiff was asked to commit an illegal act.
16 . The plaintiff became very uneasy about the demand to make a paycheque without taking source deductions and making withholdings and told his employer that he would not do so as he was a Jehovah Witness and must be honest in his actions. On September 13, 2010 the plaintiff tried to resolve the matter with the defendant but as he would not make the cheque up as the defendant wanted the defendant told him that he did not want to see him and that he could work in the warehouse but that there was not much work there. The plaintiff states that the defendant told him the alternative was to make up his last cheque and not return. The defendant denies that this was said however the court believes the plaintiff’s version of the events of September 13, 2010 and finds that the plaintiff was constructively dismissed from his position on September 13, 2010. The court relies upon the decision and reasoning in Farber v. Royal Trust Company 1997 387 (SCC) , [1997] 1 SCR 846 concerning the definition of constructive dismissal which is a subset of wrongful dismissal. In respect of the matter of being asked to commit an illegal act the court considered the persuasive decision in Nethery v. Lindsey Morden Claim Services Ltd. 1999 3857 (BCSC) . There was an allegation by the defendant that on one occasion the plaintiff failed to make payroll deductions on a cheque to himself. This court finds the evidence on this inconclusive and does not hold it against the plaintiff as the fact is that the defendant admits that in respect of the cheque to Dennis it did tell the defendant to not make source deductions and that in itself is an illegal act. The defendant claimed that an employer can simply make source deductions on the employee’s behalf and remit those in its monthly remittances to Canada Revenue Agency, however this is not the law and no evidence that it is legal was presented and in fact that position contradicts section 153 of the Income Tax Act .
FINAL PAY CHEQUE AND VACATION PAY
17 . At the time of the dismissal the plaintiff was owed $733.73 in outstanding wages and $1092.50 in vacation pay. The Employment Standards Act is clear that an employer must pay an employee their outstanding wages and vacation pay within 7 to 14 days of the last day worked. In this case the defendant, more than 2 years from the last date of work has still not paid the plaintiff these monies owed to him. Instead the defendant wrote on the plaintiff’s Record of Employment form that he was offsetting these monies against the $10,000 loan owed to the defendant by the plaintiff. The defendant cannot make up his own self-help law concerning these matters. This establishes a pattern by the defendant to break the laws as he sees fit for his own benefit and those of his employees in deciding not to make required source deductions and withholdings from a pay cheque and in withholding an employee’s vacation pay and final pay contrary to law. The plaintiff testified that this caused great hardship to him and his family and that he did even have enough money to buy milk for his family.
THE LOAN
18 . It is clear from the testimony of both parties that they established a relationship somewhat warmer than a typical employer-employee relationship. The defendant took a keen interest in the plaintiff’s family and their well being. As the plaintiff testified he had some high interest credit card debt which he discussed with the defendant. The defendant offered him a loan of $3000 to help him out. The plaintiff declined but later requested a loan of over $14,000 to be paid back with one year’s interest of 5%. The defendant did not agree to this loan but did present the plaintiff with a cheque for $10,000 saying he must be crazy to do that. The plaintiff testified that on a few occasions he tried to arrange to make monthly payments on the loan but the defendant said he could wait until he was on his feet again to make payments. The plaintiff to date has made 2 payments of $250 each however, due to a bank error, one payment was returned marked NSF. Therefore the balance outstanding on the loan is $9750. The plaintiff denies that there is interest of 5% on the $10,000 and says that was only if it was for the higher amount of approximately $14,000. As there is no written, signed, agreement on the terms of the $10,000 loan concerning interest or payments this court finds that it was an open, non interest bearing loan of $10,000.
RELIGIOUS HARASSMENT
19 . The Ontario Human Rights Code prohibits harassment on the basis of religion in section 5(2). Harassment is defined in section 10 as engaging in a course of vexatious comment that is known to be unwelcome. The plaintiff relies on Anderson v. Tasco O SCJ 2011 ONSC 269 in bringing his claim for compensation in the small claims court instead of to the OHRC.
20 . The plaintiff is a Jehovah Witness and claims that the defendant made negative comments to him on a regular basis about his religion, in particular about not celebrating birthdays and not believing in higher education for children. The plaintiff did not bring to the court an expert witness on the Jehovah Witness religion so the court has no independent evidence as to the practices and beliefs of Jehovah Witnesses. As well the plaintiff did not provide any psychological or physical evidence as to how the alleged religious harassment affected him.
21 . The plaintiff himself first introduced the topic of religion into the parties relationship. At the job interview the plaintiff told the defendant that he was a Jehovah Witness and as such the defendant would find that he would be hard working and do a great job.
22 . The defendant testified that the plaintiff gave him a bible and a number of religious pamphlets and that out of respect he had not destroyed them.
23 . The plaintiff testified that one week into the job the defendant questioned him as to why he did not allow his kids to celebrate birthdays. The plaintiff said he offered to give the defendant information about this.
24 . In Streeter v. HR Techs Inc ., 2009 HRTO 841 , the OHRC found that religious harassment only occurred where the employer knew or ought to reasonably have known that the comments would be unwelcome. In the case at hand the court finds that as the plaintiff introduced his religion and discussion about it into the workplace from his job interview onwards that the parties had a socially interactive dialogue going on about the plaintiff’s religious practices and that this did not constitute harassment.
DAMAGES
25 . On the matter of dismissal, this court orders the corporate defendant to pay to the plaintiff damages of $1500 which consists of 3 weeks notice at $500 per week. The figure of $500 is a reduced one being used to take into account the plaintiff’s lack of forthrightness with the court concerning his Employment Insurance benefits and his part time business earnings following his dismissal. As well the plaintiff failed to mitigate his damages by only applying for 3 or 4 jobs and not even producing a resume for the court to demonstrate his search for replacement employment. The court did take into account that the plaintiff worked for the defendant for under one year but in the employee’s favour took into account the fact that the plaintiff had left his previous position of 4 years when asked by the defendant to come and work for him. The plaintiff shall have interest on this amount commencing September 13, 2010 at the CJA rate of 1.3% per annum. Post judgment interest of 3% per annum commencing today shall apply.
26 . The withholding of the plaintiff’s final pay of $733.73 and vacation pay of $1092.50 for a period of 2 years which continues to this date causes the court the most concern and the corporate defendant is ordered to pay those sums to the plaintiff plus punitive damages of $1000. The final pay, vacation pay, and punitive damages shall have interest on them commencing September 13, 2010 at the CJA rate of 1.3% per annum. Post judgment interest of 3% per annum shall apply.
27 . The defendant, Vito Ciancio, pursuant to his defendant’s claim shall have judgment for $9750 without any pre or post judgment interest. In accordance with section 28 of the Courts of Justice Act which allows the court to order payment by installments if proposed by the payor – which the payor in this case did in his defence to the defendant’s claim, this court orders the plaintiff to pay the sum of $250 a month to the defendant on or before the 15 th day of each month commencing October 15 until such time as the entire $9750 has been paid. In the event that the plaintiff misses a payment or a payment is returned marked NSF then the entire balance outstanding shall become due.
28 . The defendant Vito Ciancio is not found liable for any damages in his personal capacity as the plaintiff did not lead any evidence as to why he should be held responsible.
29 . As each party has had some success on their respective claim/defendant’s claim, each party shall bear their own legal costs and disbursements.
Deputy Judge Gonsalves

