ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 11-301 SR
DATE: 20140320
BETWEEN:
HERBERT GRISTEY
John A. Tamming, for the Plaintiff
Plaintiff
- and -
EMKE SCHAAB CLIMATECARE INC.
David R. Rothwell for the Defendant
Defendant
HEARD: March 19, 2014
REASONS FOR JUDGMENT
Conlan J.
Introduction
[1] This is a wrongful dismissal case. It pits employee versus employer.
[2] The Plaintiff, Herbert Gristey (“Plaintiff” or “Mr. Gristey”), bears the burden of proving, on a balance of probabilities, liability and damages.
[3] Mr. Gristey alleges in his Statement of Claim (issued on November 4, 2011) that he was wrongfully dismissed by his former employer, the Defendant, Emke Schaab Climatecare Inc. (“Defendant” or “Schaab”).
[4] In his Statement of Claim, the Plaintiff sought the following damages: 18 months’ pay less statutory deductions, aggravated damages of $25,000 and “mental distress damages” of $50,000, together with interest and costs.
[5] In counsel’s opening address at trial on behalf of the Plaintiff, Mr. Tamming, quite responsibly, limited the claim to 12 months’ pay (about $55,000), less the approximate $10,000 paid to Mr. Gristey by the Defendant at the time of termination (the statutory minimum eight weeks’ pay), less $7,000 representing income earned by Mr. Gristey after termination in mitigation of his damages during what is alleged to have been the proper notice period (for a total of about $38,000), together with interest and costs.
[6] Schaab disputes both liability and damages. According to the Defendant, Mr. Gristey’s employment ended because of a lack of work. If the Plaintiff’s employment had not been terminated, he would have been paid nil by Schaab during what may be deemed to be a reasonable notice period because there was no work available, and the arrangement had always been that Mr. Gristey worked when there was something for him to do, says Schaab.
[7] Further, the alleged poor economic climate and the Defendant’s alleged precarious financial circumstances at the time of Mr. Gristey’s termination justify a shorter notice period than what may otherwise be determined, argues Schaab.
[8] The Defendant does not allege that Mr. Gristey’s employment was terminated for just cause.
[9] There is no dispute that Mr. Gristey was hired by the Defendant corporation (based in Walkerton, Ontario) on September 13, 1999. There is no dispute that the employment was terminated on September 5, 2011, about twelve years later. The Plaintiff was 52 years old at the time of termination, born August 27, 1959.
[10] This very short civil trial was held in Owen Sound on March 19, 2014. There was one Exhibit filed on consent of both parties – a Joint Documents Brief. There were three witnesses total – the Plaintiff, Douglas Schaab as the President of the Defendant and Claire Margetts, an employee of the Defendant. The evidentiary portion of the trial took less than one-half day.
[11] I reserved my decision.
The Evidence at Trial
Herbert Gristey, the Plaintiff
[12] Mr. Gristey is now 54 years old. He is separated and without dependants. He has a grade 8 education. At age 16 years, he obtained his oil burner technician, class 1, certificate. In about 1985, he obtained his gas licence. Schaab paid to upgrade his gas licence.
[13] Before joining Schaab (under its former name) in 1999, for about 13 years, Mr. Gristey operated his own business called Herb’s Heating.
[14] Mr. Gristey’s employment with Schaab continued, uninterrupted, for about twelve years until termination in September 2011. He did, however, receive worker’s compensation benefits in 2006 after breaking his ankle at work the year before, and he also received disability benefits after a stroke in 2010.
[15] During his tenure with Schaab, the Plaintiff had his own service vehicle and trained several apprentices. He worked in residential service only (not installations and not commercial), and always on-site (at the customer’s premises).
[16] It is admitted by Ms. Gristey that he was cautioned by the employer about some incidents which included smoking in a company vehicle, billing time at a job when at Tim Horton’s, causing the employer to have to write-off some invoices because of unhappy customers and driving haphazardly.
[17] Exhibit 1, tab 4, page 9 shows the Plaintiff’s net and taxable income figures while employed with Schaab. With the exception of 2010 when Mr. Gristey was off work because of a stroke, his net income was consistently above $55,000 per year during the last few years of his employment with Schaab.
[18] The Plaintiff recovered from the effects of his stroke for about 450 days. During that time, he received disability benefits under coverage paid for by Schaab.
[19] In 2011, Mr. Gristey returned to work, first with reduced hours and then, for a very short time before termination, full-time. By the time that he returned to work full-time, the effects of the stroke had dissipated except for some numbness in the Plaintiff’s left leg.
[20] By letter from the employer dated August 29, 2011 (Exhibit 1, tab 3, page 1), Mr. Gristey was terminated effective September 5, 2011. Eight other employees were terminated at the same time. As termination pay in lieu of notice, Mr. Gristey received just under $10,500 (after statutory deductions), based on eight weeks’ wages.
[21] At the time of termination, Mr. Gristey’s work with Schaab was not slow, however, he cannot speak for the health of the company generally except to say that Schaab bought some new trucks in 2011.
[22] After termination, the Plaintiff worked for about six weeks as a subcontractor for a business in Tiverton, Ontario. He earned about $7,000 (there were no source deductions).
[23] Mr. Gristey then put an advertisement in the newspaper and found a few jobs that way. He was still rather fatigued at times, likely a lasting consequence of the stroke in 2010.
[24] The Plaintiff then started his own sole proprietorship business.
[25] Mr. Gristey took no courses or continuing education or training after being terminated by Schaab.
Douglas Schaab, President of the Defendant Company
[26] Sixty to seventy five per cent of the Defendant’s work is commercial, with the remainder being residential.
[27] Exhibit 1, tab 10 is a list of hours worked by Mr. Gristey, per week, between October 2008 and September 2011. In the last two months of his employment, for example, the weekly hours worked by the Plaintiff vary from a low of 22 to a high of 37.25.
[28] According to Mr. Schaab, the Plaintiff’s work hours varied depending on what and how much there was for him to do.
[29] Sometime between January and June 2012, Mr. Schaab saw that three local companies were looking to hire a person with a gas licence. I pause here to say that I place no weight on that evidence; it was vague and is outweighed by other more reliable evidence on the issue of mitigation of damages.
[30] Unfortunately, in August 2011, the company decided that it had to terminate the employment of nine persons, including the Plaintiff. There was simply no work available. A termination meeting was held with Mr. Gristey on August 29, 2011.
[31] Mr. Gristey was not laid-off because there was no work available for him in the foreseeable future.
[32] The company concluded that fairness dictated the payment of eight weeks’ wages to the Plaintiff, less statutory deductions. A further eight weeks’ pay was offered if the Plaintiff signed a Release, however, Mr. Gristey declined.
[33] Interestingly, Mr. Schaab testified in direct examination that the decision to pay the eight weeks’ wages and offer the additional eight weeks had nothing to do with the Defendant’s ability to pay. It was simply thought to be fair.
[34] Mr. Schaab does not know what annual salary figure the termination payment to Mr. Gristey was based on. Further, he does not know how much money the company had in the bank as of the time of the termination of the Plaintiff’s employment.
[35] In cross-examination, Mr. Schaab admitted these items:
(i) at the time of termination, the Defendant was financially capable of continuing to pay to Mr. Gristey $1,000 to $1200 per week;
(ii) it was “certainly reasonable” for Mr. Gristey to have started his own business after the termination; and it would have taken that new business a while to get going.
[36] Exhibit 1, tab 27 contains some financials for Schaab. For the year ended February 29, 2012, the Defendant did very well and posted a net income of $174,590.00. Mr. Schaab explained that the said figure is deceiving because it included monies received for projects done before the start of that fiscal year. For the year ended February 28, 2013, the business had a net loss of more than $180,000.00.
Claire Margetts
[37] Mr. Margetts has worked for Schaab for some eleven years. He was an estimator and the commercial manager at the time of Mr. Gristey’s termination.
[38] As of September 2011, according to Mr. Margetts, the company had “no work”. Even for a company as well established as the Defendant, jobs were very hard to find.
Analysis
[39] This is not a complicated case.
Does the Plaintiff Have any Common Law Remedy at all?
[40] First, the Defendant submits that I should start by determining whether Mr. Gristey is entitled to a common law remedy for wrongful dismissal given the provisions of the Employment Standards Act, R.S.O. 1990, c. E.14, as amended (“ESA”), and the Regulations thereunder.
[41] I agree. Scapillati v. A. Potvin Construction Ltd., 1997 12420 (ON SC), affirmed (on this issue) by the Court of Appeal for Ontario at 1999 1473.
[42] In the decision referred to, the Plaintiff worked for the Defendant as a non-union fishing carpenter in residential construction. The worker had been laid off from time to time. The trial judge had to wrestle with the fact that subsection 57(10) of the ESA provides that subsection 57(1), dealing with termination pay benefits, does not apply to an employee who is exempt by virtue of the Regulations; and subsection 2(e) of Regulation 327 provides that section 57 of the ESA does not apply to someone “employed in the construction, alteration, decoration, repair or demolition of buildings, structures, roads, sewers, water or gas mains, pipelines, tunnels, bridges, canals or other works at the site thereof”.
[43] The trial judge found that the worker was a person who was employed in the construction of buildings at the site thereof, and thus, subsection 57(10) of the ESA and section 2 of Regulation 327 thereunder applied, thereby disentitling the Plaintiff to the termination pay benefits outlined in subsection 57(1) of the ESA.
[44] Nevertheless, the trial judge found, at paragraph 19 of the decision reported and cited above, that the worker could still have a common law remedy for wrongful dismissal. That finding was upheld on appeal as being “clear and correct”.
[45] Thus, regardless of whether Mr. Gristey was entitled or not to termination pay benefits under the ESA, I conclude that he may pursue a common law remedy for wrongful dismissal.
What Would the Plaintiff have Earned if he was not Terminated?
[46] Second, the Defendant submits that this Court should ask itself what income Mr. Gristey would have earned had he worked during what is determined to be a reasonable notice period in all of the circumstances, less any amounts credited to mitigation.
[47] I agree. Sylvester v. British Columbia, 1997 353 (S.C.C.), at paragraph 1.
[48] Based on the totality of the evidence at trial, including but not limited to the history of Mr. Gristey’s weekly hours of work outlined at Exhibit 1, tab 10, I conclude that Mr. Gristey likely would have worked something less than 34 hours per week had he continued to have been employed by Schaab during a reasonable notice period. How much less than 34 hours per week, I do not know. But I am confident that, because of the relatively poor job market for Schaab, the Plaintiff’s hours would have been reduced from what he had been working over the last three weeks prior to his termination.
[49] I reject the argument by the Defendant that the Plaintiff would have earned nil income during a reasonable notice period had his employment not been terminated. That assertion does not jive with the evidence at trial. It is true that Douglas Schaab testified that Mr. Gristey’s hours of work fluctuated depending on the availability of something for him to do, however, it is also true that the Plaintiff had never worked less than 22 hours per week since July 2011 (Exhibit 1, tab 10). It is unrealistic to surmise that the economic climate suddenly plummeted in a heartbeat at the end of August 2011; it is more likely that relatively tough times had persisted for a while, yet the Plaintiff was working.
What Relevance Should be Placed on Economic Factors?
[50] Third, the Defendant submits that, in determining what is a reasonable notice period, I should take in to account the “economic factors”, including the market and the financial health of Schaab at the time of the termination of the Plaintiff’s employment.
[51] I agree. Bohemier v. Storwal International Inc., 1982 1764 (ON SC), affirmed by the Court of Appeal for Ontario at 1983 1956.
[52] I accept that work for the Defendant was sparse as of August/September 2011. I accept that the market, generally, was relatively poor.
[53] I accept that there was no sign of material improvement in the foreseeable future.
[54] But the testimony of Douglas Schaab works against the Defendant’s implied submission that eight weeks’ pay in lieu of notice was reasonable because that was all that the company could reasonably afford. The decision to pay eight weeks’ wages and offer another eight weeks had nothing to do with the company’s ability to pay, according to Mr. Schaab. That was not all that the Defendant could reasonably afford. In fact, Mr. Schaab acknowledged that the business could have afforded to continue paying to Mr. Gristey $1000 to $1200 per week after the end of August 2011. And, even accounting for delays in getting paid for projects completed in 2010, the fact is that the company amassed a large profit in the twelve months ending in February 2012.
[55] I will discount what I otherwise find to be a reasonable notice period to account for the economic factors that existed in August and September 2011, but not nearly to the extent advocated for on behalf of the Defendant.
What is a Reasonable Notice Period in this Case?
[56] So what would a reasonable notice period be in these circumstances? There is no science to that determination, however, I find instructive the decision of Whitaker J. of the Superior Court of Justice in Camaganacan v. St. Joseph’s Printing Ltd., 2010 ONSC 5184. In that case, the Court held that 16 months was appropriate (slightly less than one month per year of service). The Plaintiff in that case was employed for 18.5 years (6.5 years longer than Mr. Gristey). The Plaintiff in that case was a labourer pressman without management responsibilities but with some supervisory ones (similar to Mr. Gristey). The Plaintiff in that case was terminated at age 50 years (at little younger than Mr. Gristey). The Plaintiff in that case earned about $7,000-$8,000 more per year than Mr. Gristey, excluding overtime. The Plaintiff in that case did not have the types of prior health problems experienced by Mr. Gristey.
[57] In my assessment, economic factors aside, a reasonable notice period for Mr. Gristey would have been twelve (12) months.
[58] I think, however, that 12 months is too high when one factors in the economic considerations. This was a tough decision for the company. It was entitled to adjust its operations in light of the relatively poor market prevailing at the time. I attribute no bad motives or callous behaviour to the Defendant or to Douglas Schaab. In fact, he struck me as a caring and earnest gentleman who has successfully built a solid business with an unblemished reputation. I give him a great deal of credit for that.
[59] In light of the economic factors, I have decided to discount the notice period by one-third, from twelve to eight (8) months. Essentially, this is a recognition that (as I said above), had Mr. Gristey’s employment not been terminated, he would have likely worked less hours during the notice period. Thus, it would not be fair to the Defendant to apply the full twelve-month notice period.
Mitigation and Damages
[60] The Plaintiff had a duty to mitigate his damages.
[61] Clearly, Mr. Gristey properly mitigated his damages. The evidence of Douglas Schaab and Claire Margetts supports that finding. No complaint can possibly be made about the Plaintiff taking a job in Tiverton. No complaint can possibly be made about him putting an ad in the newspaper. No complaint can possibly be made about him starting his own business. And no criticism is warranted for the fact that it took a while for Mr. Gristey to find jobs.
[62] The only credit on mitigation shall be the $7,000 earned by Mr. Gristey at Commercial Alcohol in Tiverton.
[63] A further credit on damages shall be the $10,447.37 received by Mr. Gristey from Schaab as termination pay in lieu of notice.
[64] There shall be no further set-offs on damages.
[65] The gross damages shall be calculated by counsel on the basis of eight (8) months’ pay less statutory deductions, using $55,000 per year as the measuring stick. From that figure shall be deducted the $7,000 and the $10,447.37, to arrive at the net damages figure.
[66] Should counsel be unable to agree on the calculation, I may be spoken to.
[67] Judgment shall issue in favour of the Plaintiff for that net amount, plus prejudgment interest as sought in the Statement of Claim.
[68] The other claims advanced by the Plaintiff in his Statement of Claim are dismissed as abandoned.
Conclusion
[69] Judgment in favour of the Plaintiff in accordance with these Reasons.
[70] Having considered all of the evidence at trial, the helpful submissions of counsel and the relevant jurisprudence filed, I am satisfied that the Plaintiff has proven, on a balance of probabilities, both liability and damages to the extent adjudged herein.
[71] Mr. Gristey was wrongfully dismissed.
[72] On the principal issue of reasonable notice, regardless of whether Mr. Gristey is exempt from the termination pay benefits provided for in the legislation, I conclude that eight weeks is insufficient and unreasonable, in all of the circumstances. The company's offer of an additional eight weeks is more adequate but still below what I view as reasonable. Eight months is reasonable.
[73] On the secondary issue of mitigation of damages, I find, on balance, that Mr. Gristey, after termination, satisfied his duty to adequately mitigate his damages.
[74] On the final issue of the calculation of damages, beyond the arithmetic of statutory deductions and the credits mentioned above, the only contentious point possible is what to use as the annual salary to calculate the eight months' pay in lieu of notice. There is no good reason to use any figure other than the $55,000 as the most recent and reliable amount.
[75] Although Mr. Gristey has obtained a Judgment worth significantly less than the relief prayed for in his Statement of Claim, given the reduced relief sought by the Plaintiff at trial and the position of the Defendant at trial in advocating that the action be dismissed in its entirety, the Plaintiff has been successful.
Costs
[76] Costs would normally be awarded in favour of the Plaintiff, depending upon other factors such as any Offers to Settle that may have been exchanged.
[77] If the parties are unable to agree on costs, the Trial Coordinator in Owen Sound may be contacted within two weeks of the release of these Reasons to schedule a brief Court attendance to address that issue. If that is necessary, Mr. Rothwell may appear by teleconference.
Conlan J.
Released: March 20, 2014
COURT FILE NO.: 11-301 SR
DATE: 20140320
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
HERBERT GRISTEY
Plaintiff
- and -
EMKE SCHAAB CLIMATECARE INC.
Defendant
REASONS FOR JUDGMENT
Conlan J.
Released: March 20, 2014