ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Margus Vist
Plaintiff
– and –
Best Theratronics Ltd.
Defendant
Christopher Rutherford for the Plaintiff
Siobhan M. O’Brien, for the Defendant
HEARD: October 22 and 23, 2013
REASONS FOR JUDGMENT
blishen j.
Introduction
Introduction
1The plaintiff Margus Vist claims against the defendant Best Theratronics Ltd.:
(a) damages for wrongful dismissal based on nine months’ pay in lieu of reasonable notice of dismissal and severance pay;
(b) damages for the loss of pension contributions during the period of reasonable notice;
(c) pre and post-judgment interest; and
(d) costs.
2The central issues in this case are: the appropriate period of reasonable notice of termination and the duty to mitigate.
Background facts:
Background facts
3Mr. Vist is 54 years old and has a Master’s degree in biophysics. He has worked mostly on development of radiation oncology systems and support throughout his career.
Employment History
Employment History
4After obtaining his Master’s degree, Mr. Vist commenced employment with AECL Medical in 1988. That company was renamed Theratronics International Ltd and Mr. Vist remained there until approximately September 1992 when he accepted a position with Radiation Oncology Computer Systems in California.
5In June, 1993 Mr. Vist accepted an offer of employment from his former employer, Theratronics International Ltd; returned to Ottawa and began employment on or about September 20, 1993.
6On or about May 20, 1998, Theratronics International Ltd was acquired by MDS Nordion and Mr. Vist transferred to the new company. He continued employment there until February, 2003 when MDS Nordion sold the assets of the business unit within which Mr. Vist was employed to an unrelated third party, Delft Instruments.
7Mr. Vist decided to stay with the unit and his employment was transferred to Delft Instruments. Upon completion of his employment with MDS Nordion, Mr. Vist received a written notice of termination and a summary of his benefits. He remained with Delft as a manager of the software development team and applications support group from February 11, 2003 until leaving that job on May 31, 2004.
8After leaving Delft, Mr. Vist took a break in employment for some months and began doing some contract work for MDS Nordion in October, 2004.
9From May 2006 to October 2006 Mr. Vist worked as a software analyst for Dinmar Consulting Incorporated (Dinmar), a company that dealt with E-health records.
10Mr. Vist left Dinmar when the company was acquired by another new company. At that point, Mr. Vist returned to consulting for MDS Nordion on a contract basis, engineering the development of a new product. On December 22, 2006 Mr. Vist received an offer for a term position as Senior Radiation Physicist in the Ottawa office to begin January 17, 2007. His annual salary was $90,000. This contract position was to end December 21, 2007.
11On July 9, 2007 MDS Nordion offered Mr. Vist the position of Senior Radiation Physicist on a full-time continuing basis effective July 10, 2007, at an annual salary of $95,000. The offer of employment indicated that for the purposes of calculating vacation and service milestones, Mr. Vis’s leave service date would be January 1, 1993.
12On November 29, 2007 Mr. Vist received notice that his unit had been acquired by Best Theratronics (“Theratronics”) and that his position as Senior Radiation Physicist would be transferred to the new company upon closing. Throughout the fall of 2004 there were meetings between Mr. Vist and other MDS employees with representatives of the defendant company.
13After the acquisition by Theratronics was finalized, Mr. Vist received a formal offer of employment as a Senior Radiation Physicist, on February 13, 2008. The offer was signed by the president of Theratronics, Krishnan Suthanthiran. That offer indicated Mr. Vist’s salary would continue to be $97,850 and his transfer to Theratronics would be effective on the anticipated closing date of February 29, 2008. The offer went on to state:
Theratronics Ltd will recognize any accrued continuous service with MDS Nordion and its predecessors.
Your terms and conditions of employment will continue on terms no less favourable than your employment terms with MDS Nordion immediately prior to closing.
Mr. Vist accepted this offer of employment on February 21, 2008.
14Prior to leaving MDS Nordion, Mr. Vist’s vacation leave (5 weeks annually) was calculated on the basis of 15 years’ service from January 1, 1993. In addition, during the fall of 2007 Mr. Vist received a written notice of recognition for 15 years’ service with MDS Nordion.
15The deal between MDS Nordion and Theratronics was completed as of May 1, 2008 and as of this date Mr. Vist began his employment as a Senior Radiation Physicist for an indefinite duration, pursuant to the terms of the written employment agreement. Theratronics is a privately owned company and a federally regulated employer. An implied term of the contract was that in the absence of just cause for termination, Theratronics would provide Mr. Vist with reasonable notice of his termination or compensation in lieu of notice.
Positions and Responsibilities with Theratronics
Positions and Responsibilities with Theratronics
16As a Senior Radiation Physicist with the defendant company, Mr. Vist’s duties included:
(a) responsibility for overseeing all radiation related activities;
(b) developing and validating products;
(c) facilitating sales and marketing support for Theratronics radiation products; and
(e) managing safety from a physicist’s perspective in relation to the safe operation and handling of radioactive sources.
17Mr. Vist testified that as of May, 2008 the company president requested that he act as General Manager of the company. In May, 2008 Mr. Vist received a $7,000 salary raise which resulted in an annual salary of $104,850. Director of Human Resources for Theratronics, Ms. Poonam Sharma testified she was not aware Mr. Vist was operating as the General Manager from May, 2008. She was instructed by the president to increase Mr. Vist’s salary and officially recognize him as General Manager commencing January 1, 2009. His salary was then increased to $115,000 annually.
18I find as a fact that although not officially recognized as General Manager until January 1, 2009, Mr. Vist began acting in that capacity as of May, 2008. In May of 2009 Mr. Vist indicated in writing to the president he no longer wished to act as General Manager.
19Mr. Vist’s duties as General Manager included:
(a) the day-to-day management of Theratronics;
(b) facilitating the transition of Theratronics into a stand-alone entity;
(c) overseeing, advising, and directing on the installation of an IT system;
(d) overseeing and advising on the completion of regulatory submissions;
(e) overseeing, advising and directing on the development of an enterprise resource planning system;
(g) overseeing the maintenance of sales and service targets;
(h) overseeing, advising and directing the research of new product lines; and
(i) overseeing the implantation of efficiencies in the manufacturing process.
20In his position as General Manager, Mr. Vist oversaw a team of eight managers and approximately 150 employees. He reported directly to the president of Best Theratronics, Krishnan Suthanthiran.
21On May 19, 2009 Mr. Vist wrote to Mr. Suthanthiran indicating he wished to leave his position as General Manager to return to an engineering role. He noted the last year had been successful and challenging. His goal had been to oversee the day-to-day operations of the company and provide guidance and mentoring to new managers and employees. It was Mr. Vist’s belief he had succeeded in that goal and he felt it was time for him to move back into his role in engineering to develop products, support products and provide marketing insight. It was his recommendation that the company look for a General Manager with skills and experience in business. He recommended a particular individual as a possibility. Mr. Vist’s letter concluded with his offer to provide whatever support was needed to find a solution. He indicated “please feel free to discuss options with me”.
22Mr. Vist received no response to that letter and on June 17, 2009 was hand delivered a notice of termination of his employment without cause. Mr. Vist was informed he would be paid his regular salary up to and including July 22, 2009 which included two weeks in lieu of notice and three weeks of severance pay. At the time of his dismissal, Mr. Vist continued to hold the position of General Manager with Theratronics.
Evidence re: Mitigation
Evidence re: Mitigation
23Mr. Vist testified he was in shock upon his termination by the defendant company. He took a day or two to discuss the situation with family and friends and then began calling colleagues and friends in the industry regarding possible employment. He was aware of a meeting of the Association of Physicians and Surgeons in late June 2009 and therefore drafted a letter for colleagues to hand around at the meeting. In addition, he contacted friends in the industry and looked on the internet for possible positions. Mr. Vist also contacted the Cancer Centre at the Ottawa General Hospital and applied there. Although his focus was initially on Ottawa, he was prepared to consider employment in the United States and elsewhere in Canada, specifically Montreal, Cornwall and Toronto.
24At the time, Mr. Vist was almost 50 years old and separated with two children. He was continuing to pay child support for his youngest child who was just beginning university. His goal was to attempt to find some kind of work in his field of radiation therapy. Within that field he had done technical work, sales, marketing applications and support.
25Mr. Vist provided evidence of a number of specific job applications: a company called “RBR” as a Scientific Sales Engineer, Rad Source Technologies for a position as Product Manager-Marketing Manager-Product Specialist, the Ottawa Hospital for a position as a Physics Resident, the Lock Search Group for a position as Project Manager, Harpell Associates for a position as Sales Associate and Halogen Software for a position as Product Manager.
26Mr. Vist made these numerous inquiries and applications during June and July, 2009. In July he received a positive response from RBR, a small family company developing oceanographic data loggers. The company interviewed Mr. Vist on two occasions for a position as a Scientific Sales Engineer and on August 14, 2009 he was offered employment in that capacity, which he accepted. His start date was September 1, 2009 at a base salary of $85,000 per year.
27Mr. Vist remains at RBR Limited. His main responsibility is to assist in selling product, marketing and sales. Mr. Vist testified that he is now less employable in the radiation therapy field as new technologies have been developed and, at the age of 54, it would be difficult to get back into that field.
Positions of the Parties
Positions of the Parties
28The plaintiff, Mr. Vist, argues the appropriate period of reasonable notice of termination under the circumstances was nine months. He was provided with two weeks’ notice and three weeks’ severance, which is the minimum pursuant to the Canada Labour Code, Part III, R.S.C., 1985, c. L-.2. Mr. Vist argues that a number of factors must be considered and balanced in determining a reasonable notice period. Only one of those is length of service. He further argues that he has mitigated his damages by applying for relevant available positions as quickly as he could and by obtaining employment within less than 3 months of his termination with a salary of 74% of his last salary at Theratronics.
29The defendant argues given that Mr. Vist’s accrued continuous service with MDS Nordion and Best Theratronics was only 2.5 years, the five week total period of salary in lieu of notice and severance pay is adequate under all the circumstances. The defendant further argues that Mr. Vist did not attempt to mitigate his damages in a role comparable to the General Manager position he held when terminated by Best Theratronics.
Law and Analysis
Law and Analysis
30The defendant, Best Theratronics, is a federally regulated employer for the purpose of employment law. Therefore it is first important to consider the Canada Labour Code. Individual terminations of employment are dealt with under s. 230(1) which indicates:
(1) Except where subsection (2) applies, an employer who terminates the employment of an employee who has completed three consecutive months of continuous employment by the employer shall, except where the termination is by way of dismissal for just cause, give the employee either
(a) Notice in writing, at least two weeks before a date specified in the notice, of the employer’s intention to terminate his employment on that date, or
(b) Two weeks wages at his regular rate of wages for his regular hours of work, in lieu of notice.
31Severance pay is dealt with under s. 235(1) which states:
(1) An employer who terminates the employment of an employee who has completed twelve consecutive months of continuous employment by the employer shall, except where the termination is by way of dismissal for just cause, pay to the employee the greater of
(a) Two days wages at the employee’s regular rate of wages for his regular hours of work in respect of each completed year of employment that is within the term of the employee’s continuous employment by the employer, and
(b) Five days wages at the employee’s regular rate of wages for his regular hours of work.
32It is these sections that the defendant relies upon in providing the two weeks’ pay in lieu of notice along with three weeks of severance pay. As previously noted, the defendant argues this is adequate given that Mr. Vist’s accrued continuous service with both MDS Nordion and Best Theratronics totalled 2.5 years.
33S. 168(1) of the Canada Labour Code indicates:
(1) …nothing in this Part shall be construed as affecting any rights or benefits of an employee under any law, custom, contract or arrangement that are more favourable to the employee than his rights or benefits under this Part.
34It is well-established that the Court has discretion to modify notice periods to fit the circumstances of the case. The time limits listed in the Canada Labour Code are a minimum standard only.
35It is admitted that Mr. Vist was employed in a professional position at the time of his termination without cause. It was an implied term of the contract signed by Mr. Vist that, in the absence of just cause for termination, the defendant would provide him with reasonable notice of his termination or compensation in lieu of notice.
36In calculating the reasonable notice period, the starting point is to review the factors outlined in Bardal v. the Globe & Mail Ltd., 1960 294 (ON SC), [1960] CarswellOnt 144, O.W.N. 253, 24 D.L.R. (2d) 140 in which McRuer C.J.H.C. states at paragraph 21
21 There can be no catalogue laid down as to what is reasonable notice in particular classes of cases. The reasonableness of the notice must be decided with reference to each particular case, having regard to (1) the character of the employment (2) the length of service of the servant (3) the age of the servant and (4) the availability of similar employment, having regard to the experience, training and qualifications of the servant.
37The “Bardal factors” have been adopted and relied upon in most wrongful dismissal cases. The Supreme Court of Canada adopted the Bardal factors in Machtinger v. HOJ Industries Ltd., 1992 102 (SCC), [1992] SCJ No 41 at paragraph 22 and notes that what constitutes reasonable notice will vary with the circumstances of each particular case.
38More recently the Ontario Court of Appeal in Lowndes v. Summit Ford Sales Limited, et al, 2006 14 (ON CA), [2006] O.J. No. 13, 47 C.C.E.L. (3d) 198, (2006), 206 O.A.C. 55 (Ont. C.A.) confirmed the trial judge’s finding that most dismissal cases yield a range of reasonable notice periods. The Court stated at paragraph 9 that the trial judge had:
properly emphasized the holdings of this court in Minott v. O’Shanter Development Co. (1999), 1999 3686 (ON CA), 42 O.R. (3d) 321 at 343-44 that most wrongful dismissal cases yield a “range of reasonableness”; that “determining the period of reasonable notice is an art not a science”; that, in each case, trial judges must “weigh and balance a catalogue of relevant factors”; and that “there is no one right figure for reasonable notice”.
All the Bardal factors must be weighed and balanced. The length of service, although a significant factor, is only one aspect to be considered
Age and Character of Employment
Age and Character of Employment
39In this case Margus Vist was almost at 50 years old when his employment was terminated by the defendant. He initially worked in a professional capacity as Senior Radiation Physicist and then assumed the role of General Manager. I have previously found that Mr. Vist commenced acting as General Manager without any formal designation, in or around May of 2008. He was formally offered and accepted the role of General Manager in January, 2009 and continued in that role until his dismissal.
40In addition to supervising the managers and employees, Mr. Vist was involved in the day-to-day management of the company and was instrumental in facilitating the transition of Best Theratronics into a stand-alone entity. He was responsible for numerous other tasks as outlined above.
41Mr. Vist began his employment at Best Theratronics at a salary of $97,850 but shortly thereafter received a $7,000 raise bringing him to an annual salary of $104,850. After being formally designated as General Manager in January, 2009, his annual salary became $115,000. It remained at that level until his dismissal in June, 2009.
Availability of Similar Employment
Availability of Similar Employment
42As previously noted, Mr. Vist was almost 50 years old at the time of his dismissal. He was separated, had two children and was paying child support for his youngest daughter who was attending university. His financial obligations were such that he needed to find employment as soon as possible. Mr. Vist had been in the work force since 1988 and had a Master’s degree in biophysics. He was not in a position to retrain. Throughout his career he had worked largely in the field of radiation therapy but had also been involved in marketing, sales, and software applications support in the past.
43The evidence is that throughout June and July, 2009 Mr. Vist applied to a number of positions in the Ottawa area in the radiation therapy field including Rad Source as a Product Manager, Marketing Manager or Product Specialist, the Ottawa Hospital Cancer Centre as a Physics Resident, Lock Search Group as a Project Manager, Harpell Associate,s a company involved in nuclear medicine, as a Sales Associate and Halogen Software as a Project Manager. In addition he applied for and ultimately obtained employment as a Scientific Sales Engineer with RBR. Mr. Vist describes RBR as a small family company developing oceanographic data loggers. Although he did not have experience in this area he did have applicable skills. After two interviews he was hired and commenced employment on September 1, 2009 at a salary of $85,000.
44Although Mr. Vist applied to numerous positions in the Ottawa area related to his field, the only interview he obtained was with RBR. It was his evidence that he also applied via the internet to other positions in Eastern Ontario. I am satisfied there was little availability of employment directly related to his field of radiation therapy in the Ottawa area. Mr. Vist was under significant pressure to obtain employment given his financial obligations to his family and obviously to himself.
45Mr. Vist has now been working with RBR for almost five years and has focused on learning the business and in his words “making the job work”. According to Mr. Vist there have been advances in radiation therapy over the last number of years and he would now be less employable in that field.
46A factor to be considered in this case is Mr. Vist’s desire not to continue as the General Manager of the defendant. He made that clear in a letter to the defendant dated May 19, 2009. It was Mr. Vist’s preference not to work as a General Manager after the termination of his employment and there is no evidence that he sought out or applied for employment of that nature, nor is there any evidence as to the availability of General Manager positions in the radiation therapy field.
Length of Service
Length of Service
47The final and most contentious factor to consider in this case is the length of service.
48Mr. Vist argues that although there was a break in service of approximately three and a half years, his years of employment with Best Theratronics and its predecessors MDS Nordion and Theratronics International should be considered in calculating a reasonable notice period. MDS Nordion recognized January 1, 1993 as the relevant date for vacation and service requirements. Therefore 15 years of service should be considered and reasonable notice would be nine months. He argues in the alternative, even if he is considered a short term employee of approximately two and a half years, as argued by the defendant, length of service is just one factor to consider in calculating a reasonable notice period and should not be given disproportionate weight.
49Best Theratronics argues the Court should not include Mr. Vist’s early period of employment with Theratronics International and MDS Nordion given the break in employment of over three years. In addition, the defendant relies upon the February 13, 2008 offer of employment accepted by Mr. Vist which notes that “Best Theratronics Ltd will recognize any accrued continuous service with MDS Nordion and its predecessors.” Given the break in employment, it is argued that Mr. Vist had accrued continuous service of only two and a half years. Based on that service and in weighing and balancing of the other factors, the defendant argues the total of five week’s pay provided for under the Canada Labour Code was adequate.
50Mr. Vist began his career with Theratronics International in 1988 and continued there until September of 1992. He then left and worked in an unrelated field returning to his position with Theratronics in September, 1993. In May of 1998 MDS Nordion acquired Theratronics and Mr. Vist transferred his employment to MDS. On February 11, 2003 MDS sold the assets of Mr. Vist’s unit to an unrelated company Delft and Mr. Vist went to work with Delft in an unrelated position. At that time he received a written notice of termination and a summary of the benefits he received on termination. Therefore he worked with Theratronics and MDS continuously for nine and a half years until he went to Delft.
51Mr. Vist continued his employment with Delft from February, 2003 May 31, 2004. He did some contract work for MDS Nordion until May 2006 when he began employment with Dinmar. He worked with Dinmar from May to September 2006 when he again began doing some contract work with MDS Nordion. Therefore he was either self-employed or employed by unrelated companies and employers for approximately three and a half years.
52In January, 2007 Mr. Vist accepted an offer of employment on a full-time term basis with MDS Nordion. In July, 2007, he was offered full-time continuous employment with MDS.
53When MDS Nordion sold the assets of Mr. Vist’s unit to Best Theratronics, he began working with Theratronics in May, 2008 until his employment was terminated in June 17, 2009. Therefore, his last term of continuous service with MDS Nordion and Best Theratronics was approximately two and a half years.
54There are numerous cases dealing with whether a break in service interrupts the concept of continuous service for the purposes of reasonable notice. These cases are very fact specific and each case is decided based on its own circumstances.
55Where there is no express term in a reemployment contract dealing with the issue of whether the returning employee is to be treated as having maintained continuous employment, the question is whether the employer has effectively recognized continuity of service (see Donald Edward Malcolm Beach v. IKON Office Solutions, Inc., [1999] 5522 (BC SC).
56In this case within months of Mr. Vist returning to MDS Nordion in 2007, MDS did recognize continuity of service with respect to vacation, leave and service recognition. His employment contract signed in July, 2007 notes “for the purposes of calculating vacation and service milestones, your leave service date will be January 1, 1993. Mr. Vist’s vacation leave was calculated on that basis and in addition he received a recognition award for 15 years’ service.
57When Mr. Vist moved from MDS Nordion to Best Theratronics his contract indicated that his “terms and conditions of employment will continue on terms no less favourable than your employment terms with MDS Nordion immediately prior to closing”. However, the offer also indicated “Best Theratronics Ltd will recognize any accrued continuous service with MDS Nordion and its predecessors”. On its face I find the offer ambiguous. There were no express terms dealing with continuous service for the purposes of reasonable notice.
58Poonam Sharma the Human Resources Director for Best Theratronics testified as to her understanding that the January 1, 1993 date was to be used only for the purposes of calculating vacation leave and service milestones but not for anything else unless specifically negotiated. The defendant used Mr. Vist’s hire date of January 17, 2007 to count his years of accrued continuous service.
59I find that neither party directed their mind specifically to the question of length of service on termination. I further find the offer, drafted by the defendant and accepted by Mr. Vist, which formed the contract between them, ambiguous.
60In conclusion, with respect to length of service, I note the following:
(1) Mr. Vist’s interruption in continuous service was relatively brief – three and a half years of a total of approximately 16 years.
(2) During the break in service Mr. Vist did some contract work with MDS Nordion.
(3) Upon being rehired by MDS Nordion the employer indicated a leave service date of January 1, 1993 for the purposes of calculating vacation and service milestones. He was considered a long term employee.
(4) There was nothing explicit in Mr. Vist’s contract regarding length of service for purposes of termination.
(5) When Mr. Vist’s unit was acquired by the defendant, Mr. Vist’s offer indicated that the terms of employment would be no less favourable than those with MDS Nordion.
(6) Although the defendant indicated in the offer that the organization would recognize any accrued continuous service with MDS Nordion and its predecessors it was unclear for what purpose.
(7) As previously stated, neither party directed his/its mind to the question of length of service on termination.
Therefore I find that, although there was an interruption, Mr. Vist should be given some credit for his past services. He should be treated as a long term employee having given 16 years of service to the defendant and its predecessors.
61I note that even if I had determined Mr. Vist to be a short term employee with a length of service of only two and a half years, length of service is only one factor to consider and should not be given disproportionate weight.
62In Paul Love v. Acuity Investment Management Inc. and Ian Ihnatowycz, [2011], ONCA 130 (CanII) the Ontario Court of Appeal notes at paragraph 19
While short service is undoubtedly a factor tending to reduce the appropriate length of notice, reference to case law in a search for length of service comparables must be done with great care. The risk is that while lengths of service can readily be compared with mathematical precision that is not so easily done with other relevant factors that go into the determination of notice in each case. Dissimilar cases may be treated as requiring similar notice periods just because the lengths of the service are similar. The risk is that length of service will take on a disproportionate weight.
It is important to weigh and balance all the Bardal factors. As stated by the Ontario Court of Appeal, although a short length of service is a factor tending to reduce the appropriate length of notice it should not take on a disproportionate weight.
63As in McMaster v. Dresser Canada Inc., 1989 3354 I find it reasonable to give some recognition to the prior years of service by Mr. Vist. Although I find he was a long term employee, I do not find his length of service cumulative. There is no specific formula to determine an appropriate award. I have given some weight to his previous years of service. That factor along with his age, his position as a senior executive, the character of his employment as a General Manager and the lack of availability of similar employment in the radiation therapy field, lead me to conclude that a period of six months is appropriate reasonable notice for his dismissal.
64I have previously discussed the issue of mitigation in considering the availability of similar employment. I find that Mr. Vist did his utmost to mitigate his losses. Although he did not find work specifically in his field, given his pressing obligations, he was able to find work within three months at approximately 74% of the salary he was receiving when he left Best Theratronics. I have considered Mr. Vist’s desire not to work again as a General Manager. However he made significant, timely efforts to find appropriate employment and thereby mitigated his loss.
Conclusion
Conclusion
65Having found six months to be reasonable notice for termination, I leave it to counsel to calculate:
(a) the precise amount of damages for wrongful dismissal based on six months pay in lieu of reasonable notice of dismissal and severance pay, less the income earned as of September, 2009 at RBR;
(b) the amount of damages for loss of pension contributions during the six month reasonable notice period; and
(c) the amount of pre and post-judgment.
66These calculations are to be agreed upon and submitted to me for inclusion in my judgment by June 13, 2014.
67If there is any disagreement on the calculations, counsel may contact the trial coordinator to obtain a date for further brief submissions to be heard by July 5, 2014.
68If there is no agreement on costs, written submissions are to be provided by counsel for Mr. Vist within 2 weeks of the release of my judgment, by the defendant, within a further 2 weeks with a right of reply by the plaintiff within a further week. The submissions are to be no more than 3 pages in length plus Offers to Settle, Bills of Costs and any other relevant attachments.
Blishen J.
Released: May 29, 2014
