Michela v. St. Thomas of Villanova Catholic School, 2015 ONSC 15

COURT FILE NO.: CV-13-491985

DATE: 20150107

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

DOMENICA MICHELA, SERGIO GOMES, and CATHERINE CARNOVALE

Plaintiffs

(Moving Parties)

– and –

ST. THOMAS OF VILLANOVA CATHOLIC SCHOOL

Defendant

(Responding Party)

Stephen J. Moreau, for the Plaintiffs/ (Moving Parties)

Ian St. John, for the Defendant/(Responding Party)

HEARD: September 17, 2014

LEDERER J.:

[1] Employment law is governed by the notion that the employer should not be able to use its larger power to unfairly gain an advantage over the employee.

BACKGROUND

[2] This is a motion for summary judgment. The parties have agreed that this is appropriate. Both sides seek an order for judgment, each in its own favour. The question is whether, following the direction found in Hyrniak v. Mauldin, 2014 SCC 7, [2014] 1 SCR 87; 366 DLR (4th) 641; [2014] CarswellOnt 640; 2014 SCC 7, there is a genuine issue for trial that cannot be determined relying only on the evidence before the court or whether inquiry must be made to determine if “the new fact-finding powers” referred to in rule 20.04(2.1) of the Rules of Civil Procedure could be utilized to overcome any deficiency in that evidence. The answer is that no such inquiry need be made. There is sufficient evidence before the court to make the decision requested.

[3] This motion is brought on behalf of three teachers: Domenica Michela, Sergio Gomes and Catharine Carnovale (collectively, the “three teachers”). They were employed by St. Thomas of Villanova Catholic School (the “School”). The School terminated the employment of the three teachers. They each received a letter, dated May 31, 2013. It informed the recipient that “due to lower enrollment”, the School would not be in a position to offer a full-time teaching contract for the upcoming school year (2013-2014) “at this time”. It advised that their duties and responsibilities would continue to June 30, 2013 and that their current contracts would expire on August 31, 2013. In this correspondence, the School offered a letter of reference and thanked the teacher for the work done on behalf of the School. The letter left some hope. It indicated that: “Should the school’s position change prior to the end of the year I will contact you with the information for your consideration”. For Domenica Michela and Catharine Carnovale, this was followed by a second letter, dated June 27, 2013. This letter was word-for-word the same as the first one except that, in the middle, it adds one sentence which refers to “a Final Release and Indemnity” that was enclosed and asked that it be returned no later than Thursday, July 4, 2013, which is to say, one week later. The communication delivered to Sergio Gomes after the letter of May 31, 2013, was different. On the same day, he received an e-mail from the School. It advised Sergio Gomes that, as a result of “a number crunch”, the School would not be able to offer him a contract “until at least the end of the month”. It asked that the School be advised of any offers he received. Still on May 31, 2013, Sergio Gomes wrote back and requested a letter of reference “…so that I can pursue other employment in the event that Villanova cannot offer me a contract for September”. On June 2, 2013, the School responded. It apologized for not having delivered a letter of reference. The e-mail from the School repeats that enrollment is such that “all contracts cannot be signed at this time”, but expresses the hope that it will be able to do so “by the end of June”. This is followed by a third e-mail from the School, which is dated June 30, 2013. It explained that the School remained short of enrollment and was “not in a position to sign a contract with you at this time.” This e-mail attached two copies of a severance package. It requested that both be signed and one returned.

[4] Each of the three teachers refused to sign the release proffered or to accept the offers made by the School. Instead, they commenced this action for wrongful dismissal.

[5] The School says that the contracts signed by the three teachers covering the then current school year (2012-2013) determined any rights they had, including the term of the contract and their termination should they not be retained for the following year.

[6] The School submitted that the employment of the three teachers was for a fixed term meaning that, absent renewal (a new contract), their employment expired without any rights other than those specified in the contract they had signed or pursuant to any legislation that applied (Employment Standards Act, 2000, S.O. 2000, c. 41). On this understanding, the three teachers had no rights to notice or payment in lieu of notice as prescribed by the common law:

In the domain of employment law, a fundamental common law principle is that ‘a contract of employment for an indefinite period is terminable only if reasonable notice is given’: Machtinger v. HOJ Industries Ltd., 1992 CanLII 102 (SCC), [1992] 1 S.C.R. 986 at p. 997, 91 D.L.R. (4th) 491 (per Iacobucci J.) (‘Machtinger’). The principle is not an absolute one; in Machtinger, Iacobucci J. described it as a ‘presumption, rebuttable if the contract of employment clearly specifies some other period of notice, whether expressly or impliedly’ (p. 998 S.C.R.). Moreover, as Iacobucci J.'s statement of the general principle clearly indicates, it applies only to employees engaged for an indefinite period. The principle does not apply to fixed-term contracts. An employee whose contract is not renewed at the conclusion of a fixed term is not dismissed or terminated; rather her employment simply ceases in accordance with the terms of the contract: see Gagnon v. Chambly (Ville), 1999 CanLII 703 (SCC), [1999] 1 S.C.R. 8, 235 N.R. 265.

(Ceccol v. Ontario Gymnastic Federation, 2001 CanLII 8589 (ON CA), 55 O.R. (3d) 614, at para. 1)

[7] If there was no more history to this than the contracts for the 2012-3013 school year, if these were the first and only contracts these three teachers had signed, there might have been greater strength to this position. In the circumstances, there is much more that colours the context and suggests why this approach cannot stand.

THE INITIAL CONTRACTS

[8] Each of the three teachers had a longer relationship with the School. This points to the concern raised in the opening paragraph of these reasons. The School has unfairly used its superior position in the relationship it had with its teachers. To understand the basis for this conclusion, it is necessary to go back. The three teachers had all been working at the School for some years. Sergio Gomes started at the School in September of 2000; Domenica Michela in September 2002; and Catherine Carnovale in September 2005.

[9] Sergio Gomes started his years of employment by signing a document entitled, “Employment Agreement”. For most of the years he taught at the School, he signed a fresh document, not in the same form. They changed over time.

[10] These agreements remained essentially the same for the first four years of the employment of Sergio Gomes (the 2000-2001, 2001-2002, 2002-2003 and 2003-2004 school years). For the following two years (the 2004-2005 and 2005-2006 school years), Sergio Gomes took leaves of absence to pursue a Masters Program. When Domenica Michela began teaching at the School, she signed the same agreement and did so for the first three years she taught at the School (the 2002-2003, 2003-2004 and 2004-2005 school years).

[11] These agreements all contained the terms that follow, each one adjusted to dates applicable to the school year involved:

AND WHEREAS VC and the Teacher wish to enter into an agreement whereby the Teacher shall teach at the School operated by VCS during the school year commencing September 1st, [the applicable year] and finishing [June 30, for the years up to and including 2003 or August 31, for the years thereafter for which this form of agreement was used] such agreement to be subject to review on an annual basis…

and

…Notice of intent to decline a renewal of a teaching contract must be in writing no fewer than thirty (30) days before the end of the existing contract…

and

Notwithstanding any other provision of this Agreement the parties agree that the Teacher’s employment under this Agreement may be terminated at any time by VC at its sole discretion and for any reason whatsoever upon providing the Teacher with one month’s written notice or pay in lieu thereof less standard employee deductions, subject to any additional notice or pay in lieu that may be required to meet the requirements of the Employment Standards Act R.S.O. 1990, as amended from time to time. The Teacher further understands and agrees that the notice requirements contained in this clause constitute a material inducement to the Teacher, and that the VCS would not enter into this Agreement absent such inducement.

[12] It is the position of the School that these contracts were for a fixed term and that, as a result, no common law rights for notice or pay in lieu of notice would arise when they expired. The only rights available to the teacher upon his or her termination during the course of the contract would arise from the agreement that had been signed.

[13] To guard against overzealous employers, the law requires that a contract for a fixed term be clear and unambiguous:

…the contract in this case does not contain the ‘unequivocal and explicit language’ necessary to establish a fixed term contract.

(Slepenkova v. Ivanov, [2007] O.J. No. 4708, at para. 73 (S.C.J.) aff’d 2009 ONCA 526)

[14] In Van Mensel v. Walpole Island First Nation, [2010] O.J. No. 5094, [2011] C.L.L.C., para. 210-054, the plaintiff had been employed to provide computer training to students of the First Nation for eleven years. Her job was to become permanent, was put up for tender and she was not offered a contract to continue for a twelfth year. Her contract was clear and unambiguous. It was only for the school term. She was not paid over a twelve-month period as were the employees of the First Nation. “Of great import [was] the fact that the plaintiff was uncertain that her contract would be renewed annually” (Van Mensel v. Walpole Island First Nation, supra, at para. 10). In 2005, her new contract was signed in June. She testified:

Do you know how nice that was? I didn’t have to anguish over the summer.

(Van Mensel v. Walpole Island First Nation, supra, at para. 10)

She went on to say that:

It is hard to spend money in the summer if you don’t know if you are going to make it in the fall.

(Van Mensel v. Walpole Island First Nation, supra, at para. 11)

[15] Moreover, the decision to make the position permanent meant that a “different segment of the [First Nation’s] hiring policy kicked in and the position had to be posted, with preference given to First Nations people... The policy provid[ed] that non-native individuals could only be hired on a ‘term’ contract...” (Van Mensel v. Walpole Island First Nation, supra, at paras. 14 and 15).

[16] The judge found that the contracts signed each year by the plaintiff were not ambiguous. “No opening [was] provided to the court to ‘interpret’ the contract in a manner more favourable to the plaintiff” (Van Mensel v. Walpole Island First Nation, supra, at para. 7). The judge made this finding “... mindful of the danger of repeated ‘fixed term’ contracts, but in this case the underlying reality of the employment was that the parties specifically knew they were entering into successive, independent contractor, fixed term contracts” (Van Mensel v. Walpole Island First Nation, supra, at para. 18).

[17] Having regard to the observation made in the opening paragraph of these reasons, it is important that the judge noted:

In my view, there was no inequality of bargaining power in this matter. In fact, the plaintiff was treated with a great deal of respect and asked to make initial contract submissions which would be seriously considered by the defendant, and were, in each case.

(Van Mensel v. Walpole Island First Nation, supra, at para. 17)

[18] The counterpoint to Van Mensel v. Walpole Island First Nation is Ceccol v. Ontario Gymnastic Federation, supra. From September 1, 1981 to May 9, 1997 (17 years), the plaintiff was the salaried Administrative Director of the defendant. She was the number two person in a 14-person office. For 15 years and 8 months, her employment was governed by a series of one-year contracts. The terms of these contracts were very similar. Like the contracts which initiated the arrangements between Sergio Gomes, Domenica Michela and the School, these contracts:

(1) referred to a specific time-frame to which they would apply (the “Federation hereby hires and the Employee hereby agrees to serve...for a period of 12 months commencing [the date] and terminating on [the date]...”)

(2) noted that the agreement was open to renewal (“Subject to acceptable performance reviews, this Agreement is subject to renewal, upon the consent of both parties...”) and

(3) provided for early termination by the employer (“The Federation may terminate this Agreement at any time according to the current Employment Standards Act by reason of the Employee's dissipation, violation of reasonable instructions or policies/procedures of the Federation, failure to comply with provisions of this Agreement as herein set out or for other cause. Any termination is subject to ratification by the Board of Directors. Participation/involvement in activities during business hours, which are contrary to or, violate the Criminal Code of Canada will be grounds for immediate dismissal”).

(Each of the quotations is found at Ceccol v. Ontario Gymnastic Federation, supra, at para. 5)

[19] In December 1996, the plaintiff and other employees were given written notice that their contracts, which were to expire in June 1997, would not be renewed or extended. In May 1997, the defendant confirmed that the plaintiff's contract would not be renewed. The trial judge, in part, based on his understanding of the reasonable expectations of the parties, concluded that the plaintiff was not a fixed-term employee.

[20] The Court of Appeal sustained the determination of the trial judge. Both the appeal and a cross-appeal were dismissed. The Court considered the clause of the contract that imposed the 12-month term. It found that the provision was ambiguous. It admitted “...of more than one construction” (Ceccol v. Ontario Gymnastic Federation, supra, at para. 14). The Court of Appeal observed:

Article 1.1 sets a term of 12 months for the contract. However, article 1.1 also specifically contemplates that the contract may operate either shorter or longer than 12 months: ‘unless sooner terminated or extended as hereinafter provided’. The longer life of the relationship is then dealt with in article 1.2 which provides that the contract is ‘subject to renewal’ if the employee has received acceptable performance reviews and if the parties can agree on the terms and conditions of renewal. The shorter life of the relationship is dealt with in article 5 of the contract which covers various termination scenarios, including (for sure) termination for cause, termination of probationary employees and termination by the employee, and (possibly) termination without cause.

(Ceccol v. Ontario Gymnastic Federation, supra, at para. 15)

[21] The Court of Appeal concluded:

…in my view, the relationship between articles 1.1 and 1.2 in the contract is not entirely clear. In particular, the words ‘subject to renewal’ in article 1.2 are not self-defining and cast doubt on the Federation's argument that article 1.1 is effective in creating a clear fixed-term contract.

(Ceccol v. Ontario Gymnastic Federation, supra, at para. 21)

[22] In arriving at this result, the Court of Appeal bore in mind the implications of its finding and the requirement that a fixed-term contract must be clear and unambiguous:

I conclude with this observation. Fixed-term contracts of employment are, of course, legal. If their terms are clear, they will be enforced: see Chambly and Lambert, supra.

However, the consequences for an employee of finding that an employment contract is for a fixed term are serious; the protections of the ESA and of the common law principle of reasonable notice do not apply when the fixed term expires. That is why, as Professor Geoffrey England points out in his text Individual Employment Law (Toronto: Irwin Law, 2000), ‘the courts require unequivocal and explicit language to establish such a contract, and will interpret any ambiguities strictly against the employer's interests’ (p. 222).

(Ceccol v. Ontario Gymnastic Federation, supra, at para. 24, referring to Gagnon v. Chambly, 1999 CanLII 703 (SCC), [1999] 1 S.C.R. 8, 235 N.R. 265; and Lambert v. Canadian Assn. of Optometrists (1996), 1996 CanLII 10216 (ON CA), 19 C.C.E.L. (2d) 315 (Ont. C.A.), affg (1994), 1994 CanLII 7382 (ON SC), 6 C.C.E.L. (2d) 129 (Ont. Gen. Div.) and at para. 25)

[23] On which side of the line do the initial contracts in this case fall? Do they have the requisite “unequivocal and explicit language” to demonstrate that they were fixed-term contracts? Are there ambiguities that are to be interpreted against the interests of the School?

[24] I begin with the obvious – referring to these initial contracts as “initial fixed-term contracts” does not mean they were:

It seems to me that a court should be particularly vigilant when an employee works for several years under a series of allegedly fixed-term contracts. Employers should not be able to evade the traditional protections of the [Employment Standards Act] and the common law by resorting to the label of 'fixed-term contract' when the underlying reality of the employment relationship is something quite different, namely, continuous service by the employee for many years coupled with verbal representations and conduct on the part of the employer that clearly signal an indefinite-term relationship.

(Ceccol v. Ontario Gymnastic Federation, supra, at para. 26, quoted in Monjushko v. Century College Ltd., 2008 BCSC 86, 63 C.C.E.L. (3d) 18, at para. 31)

[25] It is necessary to look at the substance of the contracts. Here, they are essentially the same as the contracts considered in Ceccol v. Ontario Gymnastic Federation, supra. The term is for one year, but the contract contemplates that it may operate for either a longer or shorter period. They were “subject to review on an annual basis” (see para. [11], above), indicating the expectation that they would continue, perhaps for some years into the future. On the other hand, the contracts authorized the School to terminate a teacher’s employment at any time in “its sole discretion” and “for any reason whatsoever” (see: para. [11], above). In Ceccol v. Ontario Gymnastic Federation, supra, this uncertainty was sufficient for the Court of Appeal to find that the contract was susceptible to more than one construction (see: para. [20], above).

[26] Moreover, it is the contract as a whole that should be examined and not the words of a single phrase, section or clause. Clause 1.2(b) of each of these contracts calls on the teacher to decline a renewal in writing 30 days before the end of the current contract (see para. [11], above and the contracts for the 2000-2001, 2001-2002 (Gomes); 2002-2003, 2003-2004 (Gomes and Michela), 2004-2005 (Michela)). Looking at this clause on its own, the default position is that there will be a renewal. The action required to override that result is a notice to decline from the teacher. Relying only on this clause, the expectation would be that the contract would be renewed. It is not clear. There is ambiguity. For the first three school years referred to, these contracts also included a term that says that the Agreement would automatically expire on September 1st of the applicable year (2000-2001 (clause 5.3); 2001-2002 (clause 5.3) and 2002-2003 (clause 5.4)). For the fourth and fifth years, the clause was amended by adding additional direction: “The teacher will be notified in writing by April 15th [of the applicable year] if the School does not intend to offer the teacher a full time position for the [subsequent] school year” (2003-2004 and 2004-2005 (clause 4.8)). For the first three years, which is it? Does the contract expire or, absent a notice declining renewal, was the contract renewed? For the fourth and fifth years, the position depends on a double default. Absent a notice that the School did not intend to offer the teacher a position for the upcoming year or a notice from the teacher declining a renewal, the teacher would continue for another year. Either way, there is ambiguity. These are not fixed-term contracts.

[27] This ambiguity is conceded in the affidavit of Paul Paradiso, the Head of School. In the affidavit, he acknowledged that Sergio Gomes took personal leaves of absence for the school years 2004-2005 and 2005-2006. Paul Paradiso goes on to say that “[d]uring the leaves of absence...” (including a subsequent leave taken for the 2012-2013 school year): “...Gomes remained an employee of [the School]” (see: Affidavit of Paul Paradiso, at paras. 74, 78 and 79). With respect to the first two of the three leaves of absence, in the normal course, the contracts of 2003-2004 and 2004-2005 would have continued to govern. Pursuant to those contracts, Sergio Gomes would have continued to be an employee if he did not give a notice declining renewal (clause 1.2 (b)) or if the School did not notify him by April 15, 2004 that it did not intend to offer him a position (clause 4.8) (the double default). In such circumstances, it would be inconsistent with their wording to say that, in the normal course, if no action was taken to renew, these contracts would have expired. To the contrary, if no such action was taken, Sergio Gomes would have been expected to return as a teacher for the following year.

[28] As it is, on April 4, 2004, Paul Paradiso wrote to Sergio Gomes approving his request for a one-year leave of absence (beginning September 1, 2004, concluding August 31, 2005). The letter says that, as a result, the School would not be renewing the contract of Sergio Gomes for the 2004-2005 school year. The letter thanks Sergio Gomes for his time at the School:

I personally would like to thank you for your four years of service to the students, staff and community, as a teacher, coach and colleague. My sincere best wishes for continued professional and personal success as you enter your Master’s [sic] programme.

[29] There is nothing in this that suggests any continuing relationship with the School and yet the letter advised that, should he wish to return to a full-time teaching position, the School must be advised no later than January 31, 2005. Sergio Gomes did not return the next year. He sought and obtained verbal approval to extend the leave for a further year. During this second leave, when requested, Sergio Gomes worked “periodically” at the School as an occasional teacher, for which he was paid a daily rate. Sergio Gomes, as a result of being a teacher with the School, was a member of the Ontario Teacher’s Pension Plan. During this leave period, the School continued to make its contributions on his behalf. After the two years, Sergio Gomes signed a Letter of Appointment and returned to teach at the School.

[30] The ambiguity arises because if they were fixed-term contracts, the agreements for 2003-2004 and 2004-2005 school years would have expired at the end of the applicable terms. There would be no contractual foundation for the leaves of absence. Instead, the School treated the relationship as if it was ongoing. With the leave of absence granted, it indicated a decision not to renew the contract for the following year. When Sergio Gomes decided not to return after the first leave of absence, the School granted a second one and continued to pay its share of the pension contributions made on behalf of Sergio Gomes. As Paul Paradiso indicated in his affidavit, even though there was no renewal of his contract, Sergio Gomes “remained” an employee of the school.

[31] There is at least the suggestion of another cause of ambiguity. These initial contracts required teachers to “...fulfill their responsibilities to their professional colleagues and to the students in such a way as to prevent disruption and inconvenience to either” (see: the contracts for the 2000-2001, 2001-2002 (Gomes); 2002-2003, 2003-2004 (Gomes and Michela), 2004-2005 (Michela) school years, each at clause 1.2 (b)). Article 2 of these contracts is entitled “Teacher Responsibilities”. Under this heading, clause 2.1 begins with the direction that: “It is understood that the Teacher shall accept and abide by the “Staff Handbook...”. There is no copy of any Staff Handbook in the record for the years to which these contracts apply. The only two that are included are for the years 2008-2009 and 2012-2013. What is interesting is that these Handbooks contain direction and are infused with a philosophy which is clearly contrary to the idea that teachers should see themselves as being year-to-year employees without any longer term commitment to the School, its students or its programs. As a result of clause 2.1 of the contract, these directions are included as part of a teacher’s contract. For the moment, in the absence of the Staff or Faculty Handbooks that apply to the years covered by these initial contracts, I observe only that any expressed desire or demonstrated intent to have teachers dedicated to the School beyond the current year and to have that desire and intent included in the contracts of employment, through their presence in a Staff Handbook, would contribute to the ambiguity that suggests these were not fixed-term contracts.

[32] I find that these initial contracts were, in fact, contracts of an indefinite term. The fact that this was the basis of the employment of Sergio Gomes and Domenica Michela is confirmed by the nature of the contractual relationship between them and the School as it changed and continued. They were joined in this by the third teacher, Catharine Carnovale.

THE LETTERS OF APPOINTMENT

[33] Beginning for the school year 2005-2006, the School no longer required its teachers to sign agreements in the form of those reviewed so far in these reasons. Rather, the School asked, and the teachers signed, “Letters of Appointment”. Domenica Michela first signed a Letter of Appointment for the 2005-2006 school year, as did Catharine Carnovale. It was to be her first year at the School. They both continued to sign Letters of Appointment, with one exception, for each year, through to and including the 2011-2012 school year. The exception was for the 2008-2009 school year. For that year, Dominica Michela did not sign a Letter of Appointment; she was on a sabbatical year. Sergio Gomes did not sign a Letter of Appointment for the 2006-2007 school year. There is one in the record, but it does not bear his signature. This was the year he returned to teaching from the two years of leaves of absence which he took to pursue his Masters program. For the following year (the 2007-2008 school year), there was no Letter of Appointment produced or signed by Sergio Gomes. Thereafter, he signed Letters of Appointment for each year, through to and including the 2011-2012 school year.

[34] The Letters of Appointment for each year and each teacher were essentially the same. They opened by offering a full-time teaching position for the upcoming school year:

It is with great pleasure that I offer you this Letter of Appointment to a full time teaching position for the [applicable] school year.

[35] They followed this by outlining “[t]he general terms of employment”. For the first five school years they were used, the Letters of Employment outlined six terms. For the remaining two years, they outlined only five. The change was the removal of the first term, which specified that the appointment was to a full-time position and the department the teacher was assigned to. The five terms that followed were generally the same and included for each of the seven years that Letters of Appointment were relied on. They cover, in order: the term of the contract, salary, benefits, pension contributions and the duties of the teacher.

[36] The Letters of Appointment ended with a request for confirmation of acceptance of the offer by the return of a signed copy by a specified date.

[37] To my mind, it cannot reasonably be said that these Letters of Appointment were demonstrative of annual fixed-term contracts each lasting for one year. Not all of them refer to only one year:

Domenica Michela

• The first of these documents signed by Domenica Michela says the offer is to a full-time teaching position for the 2005-2006 school year. The general terms of the appointment say that the “Contract term” is for four years “…commencing September 1, 2005 and ending August 31, 2006”. Presumably, this reference to 2006 is a typographical error, but no correction appears to have been made before or after the document was signed.

• The second of these documents signed by Domenica Michela says the offer is to a full-time teaching position for the 2006-2007 school year. The general terms of the appointment say that the “Contract term” is for three years “…commencing September 1, 2005 and ending August 31, 2008”.

• The third of these documents signed by Domenica Michela says the offer is to a full-time teaching position for the 2007-2008 school year. The general terms of the appointment say that the “Contract term” is for one year “…commencing September 1, 2007 and ending August 31, 2008”.

The following year was the sabbatical year taken by Domenica Michela (the 2008-2009 school year).

For each of the three remaining Letters of Appointment signed by Domenica Michela, the offering clause and the contract term both refer to one year, the same year.

Sergio Gomes

• The first of these documents concerning the employment of Sergio Gomes says the offer is to a full-time teaching position for the 2006-2007 school year. The general terms of the appointment say that the “Contract term” is for two years “…commencing September 1, 2006 and ending August 31, 2008”. This is the letter that was not signed by Sergio Gomes.

The following year is the year there was no Letter of Appointment for Sergio Gomes, signed or unsigned. I should point out that the index to the Motion Record notes that Exhibit “J” to the affidavit of Sergio Gomes is his Letter of Appointment for 2007-2008 (Motion Record, p. 535). It is not. It is a copy of the Letter of Appointment for the next year (the 2008-2009 school year).

For each of the four remaining Letters of Appointment signed by Sergio Gomes, the offering clause and the contract term both refer to one year, the same year.

Catharine Carnovale

For each of the seven Letters of Appointment signed by Catharine Carnovale, the offering clause and the contract term both refer to one year, the same year.

[38] None of the Letters of Appointment said anything about termination or indicated that the employment of the teacher would expire at the end of the school year or years referred to. There was no suggestion that, absent a decision by the School to terminate the employment or the teacher to leave, the teacher would not be expected to continue with the School into each succeeding year.

[39] Each Letter of Appointment required the teacher to comply with the rules and regulations promulgated by the School “…including the Faculty Handbook”. For this time period, there is an example of the Handbook in the Record. It is the “Faculty Handbook: Policy and Procedures for the 2008-2009 school year”. It confirms a general philosophy and specific directions that imply, if not require, a commitment to the School and its students that extend beyond one year. Under the heading, “The Villanova Teacher”, the Handbook identifies a teacher at the School as “One who fulfills in his/her own realm all that the school seeks to do” and “[o]ne who compliments [sic] the role of the parent in teaching, reproving, loving and supporting” the students. These do not speak to a short-term or uncertain relationship.

[40] Under the same heading, the teacher is described as one who is single-minded with [the School’s] Mission Statement. The Mission Statement includes a “Philosophy of Education”:

Villanova College is an independent, Catholic Augustinian School dedicated to academic excellence and to the enrichment of each of its students to prepare them for university and for a leadership role in society.

The school nurtures an environment of faith in spirit and truth in which a caring faculty strives to develop in each student the skills necessary to reach his/her potential.

As Christian educators, we firmly believe in these values and endeavor to impart them spiritually, intellectually, morally, and physically.

[Emphasis by underlining added]

[41] To my mind, it would be difficult, if not impossible, to accomplish these goals or espouse these values with a faculty that is constantly unsure whether it will be returning for the next school year. Surely, it has to be acknowledged that behind these ambitions is the recognition that there will be a consistency and continuation in the makeup of the teaching staff.

[42] The Mission Statement also contains a “Statement of Values”. Among them is the direction that “[m]embers of the community will … respond to a call of service.” The commitment made by the teacher to answer such a call, if it is to be meaningful, suggests that the “community” (the School) recognizes there is a concomitant commitment to the teacher. The Handbook describes the faculty as the “core of the institution” and as “providing to the school its characteristic tone”. It refers to the idea that this tone is established by “close interpersonal relationships among teachers…” and that this relationship is “based on the secure foundation of well-prepared, qualified thoroughly professional teachers…”. These characteristics imply a level of certainty in the teacher’s relationship to the School that extends beyond the current year.

[43] Under the heading, “Contract Renewals”, the Faculty Handbook notes:

Contracts are renewed on an annual basis. In February of each year, the School will present the contract outline for the upcoming school year to the faculty. Faculty will complete a Teacher Contract Renewal Form by the end of February, clearly indicating their desire to return to their position or terminate their contract.

Conferences with the Head of School will take place in March and April to review and discuss the teacher’s performance and his/her goals. A letter of appointment (LOA) will be issued to each teacher returning for assignment prior to April 15th of each school year.

A teacher will be notified in writing no later than April 15th of the school year, if the School does not wish to renew a teacher’s contract.

[44] The process outlined anticipates and is based on the expectation that teachers will return in succeeding years. This is confirmed by the treatment of benefits in the Faculty Handbook. I point, in particular, to pensions, where it is said that: “The School will contribute 100% of each qualified teacher’s contribution to the Plan on an annual basis” (emphasis added). It is further confirmed by the determination that a teacher remains a “new teacher” during the first two years of employment, which suggests the expected return of first-year teachers.

[45] The Faculty Handbook contains directions to teachers of responsibilities and duties they are obliged to undertake on an “annual basis” (i.e., be a coach or moderator for an extra-curricular program each year, chaperone or supervise at least one activity each school year and receive $100 to improve professionally through graduate courses, workshops, conferences etc.).

[46] Finally, the Faculty Handbook contains a draft employment agreement which, evidently, was not utilized during the years that the school relied on Letters of Appointment. Nonetheless, it contains a salary grid providing guidance as to the salaries a teacher may anticipate up to 10 years of experience at the school.

[47] I repeat that the Letters of Appointment incorporate the direction of the Faculty Handbook into the arrangement between the School and the teacher. The Letters of Appointment do nothing to demonstrate the kind of certainty required to establish a contract as a fixed-term agreement. If I am wrong in this, the Faculty Handbook, which is incorporated into the Letters of Appointment, indicates the kind of ambiguity or uncertainty which serves to show that these agreements were not for a fixed-term but for an indefinite period.

[48] I agree with counsel for the three teachers that, had their employment been terminated at the end of the 2011-2012 school year, there could have been no dispute that the School would have been bound by the common law requirements that reasonable notice be provided prior to the termination of their employment.

THE 2012-2013 CONTRACT

[49] This takes me to the 2012-2013 school year. The basis for the employment changed again. The School no longer relied on Letters of Appointment but returned to contracts similar to the initial contracts signed by Sergio Gomes and Domenica Michela. The term of the new contract contains the same indicators of uncertainty present in its earlier forbearers, meaning the contracts before the change to Letters of Appointment. The contracts refer to a term:

The term of this contract begins August 29, 2012 and ends August 31, 2013. The school year begins on August 29, 2012 and ends June 28, 2013.

[50] As with the initial contracts, there was an understanding that the contract could be renewed:

This Agreement shall automatically expire on the 31st day of August, 2013, unless an agreement to renew is reached prior to that time.

[51] As with the initial contracts, these could end sooner than the prescribed time-limit:

Notwithstanding any other provision of this Agreement the parties agree that the TEACHER’S employment under this Agreement may be terminated at any time by the SCHOOL, at its discretion and for any reason whatsoever upon providing the Teacher with one month’s written notice or pay in lieu thereof (less standard deductions) subject to any additional notice or pay in lieu that may be required to meet the requirements of the Employment Standards Act R.S.O. 2000 [sic], as amended from time to time.

[52] It was also open to the teacher to act to terminate the contract before it was scheduled to end:

The TEACHER may terminate his/her employment under this Agreement for any reason whatsoever upon giving the SCHOOL not less than 30 days notice in writing provided that the SCHOOL may waive notice in excess of that required by the Employment Standards Act, R.S.O. 2000, as amended from time to time.

[53] As with the initial contracts signed by Sergio Gomes and Domenica Michela and as demonstrated in Ceccol v. Ontario Gymnastic Federation, supra, this uncertainty as to the term of the new contracts is sufficient to find that there is not a clear and unequivocal statement of the length of the agreement necessary to find that it is a fixed-term contract.

[54] The ambiguity this presents is underscored by the proposition that none of the provisions of this contract provide a “benefit” that is fixed and final. They are all subject to unilateral change by the School:

The SCHOOL reserves the right to alter, change or eliminate any benefit in this Agreement in its sole discretion, at anytime [sic], for any reason, with or without prejudice.

[55] I pause to note that this term of the contract demonstrates the School’s use of, or reliance on, its relative power in its relationship with its teachers, as alluded to in the opening paragraph of these reasons. If you wish to teach at the School, you are obliged to sign a contract from which any benefit given to you, as an inducement to sign, may be unilaterally removed. There is no assurance as to what the teacher will receive in exchange for providing his or her services to the School.

[56] As with the initial contracts and the Letters of Appointment, this contract incorporates, by reference, the Faculty Handbook of the day. The Handbook is referred to in the contract, in relation to the duties and responsibilities of the teacher, in at least three places:

• The TEACHER will…[a]ccept the philosophy of the SCHOOL as set forth in the formal publications of the SCHOOL (the Faculty Handbook, Social Networking Agreement, Internet Agreement etc.).

• The TEACHER will... [p]erform the duties described herein at the time and place, and for the period prescribed by the SCHOOL and as specified in the Faculty Handbook. Duties include, but are not limited to: Classroom Teacher, Teacher-Advisor, Extracurricular Assignments (Departmental and School-Wide), Supervision Duties, Work Committees etc.

• The TEACHER will…[c]omply with and be bound by all rules and regulations promulgated from time to time by the SCHOOL, including but not limited to those contained within the Faculty Handbook.

[57] Like the one referred to earlier, the applicable Faculty Handbook contains provisions which are inconsistent with this as a fixed-term contract. Some of these are carried over from that earlier version.

[58] The Villanova Teacher is still one who, in his or her realm, fulfills what the School seeks to do, complements the role of the parent, and adheres to the Mission Statement of the School, as well as the Philosophy of Education and Statement of Values it includes. As before, the faculty is referred to as “the core of the institution”, contributing to its characteristic tone and the role of the close, interpersonal relationship among the teachers. Contract Renewals are discussed in the same terms (the only change being the removal of the obligation of the School to deliver, each February, the contract outline for the coming year). The default expectation that teachers will return remains. Benefits, including the School’s annual pension contribution, are the same.

[59] This stands as a further indication of uncertainty concerning the relationship of the School and the teacher. It adds to the ambiguity that leads to the conclusion that this is not a fixed-term contract.

[60] Finally, with respect to the nature of the relationship between the teacher and the School, I return to the question of the use by the School of its greater power in bringing forward this new contract. It is clear that the School was having difficulty meeting its enrollment requirements. Teachers were pressured to make a contribution to the School, in particular through the purchase of tickets associated with a fundraiser held annually by the School. There is evidence, from each of the three teachers, that the new form of contract was not discussed or reviewed with them. Not only did this contract make clear that the basis on which a teacher could be terminated (“at any time…at [the School’s] sole discretion …for any reason whatsoever with one month’s written notice...”), it also reduced the income anticipated to be received by the teachers by treating them as if they retained the same seniority as the year before (a fifth year teacher in 2011-2012 remained a fifth year teacher for 2012-2013). Moreover, the payment schedule which customarily increased each year was left as it had been the previous year. In short, salaries were frozen.

[61] Counsel for the three teachers submitted that changes like this cannot be made unilaterally without consideration. Each of the teachers deposed in the affidavits they swore that that they were not told that, if they did not sign, they would be terminated. Had this been done, it could be a form of consideration (see: Hobbs v. TDI Canada Ltd., [2204] O.J. No. 4876, at paras. 36-40). However, the contract contained the following provision:

The TEACHER further understands and agrees that the notice requirements contained in [the termination clause] constitute a material inducement to the TEACHER, and that the SCHOOL would not enter into this Agreement absent of such inducement.

[62] I make no comment as to whether this could overcome the argument that the changes to the contracts of the three teachers were made without consideration. I do say that the School used its superior position in its relationship with the teachers to impose terms that significantly changed the conditions of their employment. It is not without significance that this happened in May, a time when schools would be in the process of considering and filling their staffing requirements for the upcoming year. It is relevant to observe that the contract was distributed to Catharine Carnovale and to Domenica Michela by an e-mail, dated May 8, 2012. It provided it would be “invalid” and “null and void” if it is not returned, signed, “…to the Business Office by 3:00 PM on May 15, 2012” (Emphasis in the original). Sergio Gomes recalls that he received the contract “[i]n May of 2012” and that he signed it on May 11, 2012. The three teachers were not given much time to consider its terms or other employment.

[63] All of this brings home the significance of the fact that these documents, in all their various forms, were drafted by the School. If there is any confusion, uncertainty or ambiguity in their meaning, they must be construed against the School. “The authorities are unanimous in holding that provisions of an employment agreement that are ambiguous or even unclear are to be construed in favour of the plaintiff [the employee]” (Mellema v. Fishercast Global Corp., 2006 CanLII 15768 (ON SC), [2006] O.J. No. 1893, 50 C.C.E.L. (3d) 199, at para. 14, referring to Machtinger v. Hoj Industries Ltd., 1992 CanLII 102 (SCC), [1992] S.C.J. No. 41 (S.C.C.); Ceccol v. Ontario Gymnastic Federation, supra; Christiensen v. Family Counselling Centre of Sault Ste. Marie and District, 2001 CanLII 4698 (ON CA), [2001] O.J. No. 4418 (C.A.); and, Share v. Ladner Downs, [1997] B.C.J. No. 1013 (B.C.S.C.S.); aff’d 1998 CanLII 5755 (BC CA), [1998] B.C.J. No. 1045 (C.A.) (contra proferentem).

[64] I find that these are not fixed-term contracts. They are contracts of an indefinite term. As such, the common law applies. The three teachers are owed reasonable notice or payment in lieu of that notice.

[65] What does this mean in this case?

REASONABLE NOTICE

[66] The application of reasonable notice is a matter of individual analysis of each case. There is no fixed answer to any particular circumstance:

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 the character of the employment, the length of service of the servant, the age of the servant and the availability of similar employment, having regard to the experience, training and qualifications of the servant.

(Bardal v. Globe & Mail Ltd. (1960), 1960 CanLII 294 (ON SC), 24 D.L.R. (2d) 140, at p. 145, quoted in Kyliuk v. Cardiac Wellness Institute of Calgary Inc., [2005] A.J. No. 1891, 155 A.C.W.S. (3d) 101, at para. 10; Whiting v. Boys and Girls Club Services of Greater Victoria, [2011] B.C.J. No. 967, at para. 46; Parks v. Atlantic Provinces Special Education Authority Resource Centre for the Visually Impaired, 1991 CanLII 4412 (NS SC), [1991] N.S.J. No. 192, 102 N.S.R. (2d) 330, at para. 79; and, Panimondo v. Shorewood Packaging Corporation, 2009 CanLII 16744 (ON SC), 2009 O.J. No. 1519, 73 C.C.E.L. (3d) 99, at para. 29)

[67] The first issue is to establish the date which marks the beginning of any applicable notice period.

[68] The purpose of notice is to give the terminated employee time to arrange their affairs and secure alternate employment (Deputat v. Edmonton School District No. 7, 2008 ABCA 13, at para. 11). To be effective, notice must be “specific and unequivocal” and it must be clearly communicated to the employee” (Yeager v. R.J. Hastings Agencies Ltd., 1984 CanLII 533 (BC SC), [1984] B.C.J. No. 2722, at para. 40, referred to in Williams v. McCormick, Rankin & Associates Ltd., [1987] O.J. No. 1617, at p. 2 of 3). Notice is a “binary concept: either there is notice or there is not” (Kerfoot v. Weyerhauser Co, 2013 BCCA 330, at para. 27).

[69] The test for when notice of termination is to be effective has been said to be:

What would a reasonable man understand from the words used in the context in which they are used in the particular industry, in the particular working place, and in all of the surrounding circumstances?

(Wilson v. Crown Trust Co., [1992] O.J. 1765, at p. 4 of 10, quoting from Ellen E. Mole, Wrongful Dismissal Practice Manual, (1984), Sect. 216)

[70] Notice of termination must lead a reasonable person to conclude that their employment will end at a specific future date (Prinzo v. Baycrest Centre for Geriatric Care, 2002 CanLII 45005 (ON CA), [2002] O.J. 2712, at para. 17, referring to Gibb v. Novacorp International Consulting (1990), 48 B.C.L.R. (2d) 28, at 34.

[71] The letter, dated May 31, 2013, delivered to each of the three teachers (see para. [3], above), advised that the School was unable to offer them teaching contracts for the 2013-2014 school year “at this time”. It ends by indicating that, if the situation changes, they will be contacted. This does not contain the sort of unequivocal and specific statement required to represent notice of termination. It put the three teachers into an uncertain space between having a job and termination.

[72] The subsequent letters that were delivered to Domenica Michela and Catharine Carnovale, the ones that were dated June 27, 2013 (see: para. [3], above), were the same except that they referred to and enclosed a Final Release and Indemnity. This is the mark of a final separation from the school. It makes the difference. These letters represent an unequivocal notice that employment at the School has come to an end. The reasonable man considering the working environment and circumstances of employment of a teacher in a private school would understand the delivery of a Release, with the request that it be signed and returned, to be notice.

[73] Sergio Gomes was in a different situation. While he had signed a contract for the 2012-2013 school year, he subsequently was granted a leave of absence for the year. He indicated a desire to return. The e-mail, dated June 2, 2013 (see: para. [3], above) from Paul Paradiso, among other things, said: “I trust you know it is my intent to have you return”. This does not fit with an unequivocal statement of termination and this e-mail is not one. It was followed by the further e-mail of June 30, 2013 (see: para. [3], above) which included “a severance package for your review and consideration”. This makes clear that Sergio Gomes was being terminated and represents notice that, with an appreciation of the circumstances, would be recognized, as such, by the reasonable man.

[74] The three teachers do not accept the end of June as the point when any period of notice should begin to run. On their behalf, it was submitted that the appropriate date was September 1, 2013. For Domenica Michela and Catharine Carnovale, this is justified on the basis that the money they were paid during the summer months reflected work done during the ten months of the school year. It would be unfair to allow the School to take advantage of these payments and to rely on them as reflective of payment during a period of notice when it was money that had already been earned for work already done. I do not agree. To me, this misunderstands what the payment represents. It is not a severance payment measured on past contribution. The primary consideration is notice; that is time, not money. A payment of money is said to be in lieu of notice. It is provided instead of time between when the employee is advised of being let go and when he or she actually departs. In this situation, the term of the contracts signed by Domenica Michela and Catharine Carnovale ended on August 31, 2013. The payments are scheduled over 12 months. The two months, are, in effect, two months of working notice. This is not a deferral of the payment of money already earned; it is the recognition that the rhythm of the employment of a teacher allows a two-month period, each year, where no immediate time commitment is required. The contract acknowledges this by separating the school year from the term of the contract:

The term of the contract begins August 29th, 2012 and ends August 31st, 2013. The School Year begins on August 29th, 2012 and ends June 28th, 2013.

(Teacher Employment Contract (2013-2013), clause 2)

[75] Consistent with the quotation from Bardal v. Globe & Mail Ltd. (see para. 66, above), this is a circumstance where the particular character of the employment informs an understanding of the appropriate commencement of the notice period. For these two teachers, it began to run at the end of the school year, June 28, 2013.

[76] Sergio Gomes did not teach during the 2012-2013 school year. He was on a leave of absence. Does this change the point at which the notice period began to run? In the factum filed on behalf of the three teachers, reference is made to Kyluik v. Cardiac Wellness Institute of Calgary Inc., supra, a decision of the Alberta Provincial Court. The plaintiff was employed by the defendant. She took a maternity leave which was followed by parental leave. It was her intention to return to work when her entitlement to these benefits was exhausted. At a time after her maternity leave had expired and her parental leave had already commenced, she was given notice that her employment would be terminated on the day her maternity leave was to expire. It was understood that, despite the error in the status of her leave (maternal, rather than parental leave), it was intended that her employment would end the day she was scheduled to return to work. The employer could not rely on time taken up by the leave as included in the notice period. Notice could only be given as of the time of her return and, accordingly, had to extend beyond the date of her return. Counsel for the three teachers says that the same logic should apply to Sergio Gomes and that, on this basis, his period of notice could only begin at the end of his leave, being September 1, 2013.

[77] This situation is different. In Kyluik v. Cardiac Wellness Institute of Calgary Inc., the leave periods were rights provided by statute (see: Employment Standards Code, R.S.A. 2000, Chapter E-9, sections 45, 46 and 50, as quoted in Kyluik v. Cardiac Wellness Institute of Calgary Inc., supra, at para. 21). The leave of Sergio Gomes is as a result of an arrangement he made with the School. If the position of Sergio Gomes is accepted, it means that the School allowed for the leave on the basis that, if there was no position available for Sergio Gomes should he decide to return, it would be required to provide him with notice beginning September 1, 2013, just as a new school year was beginning, a time when it would be virtually impossible to find an alternate teaching position. This is another demonstration of how the nature of the school year and the particular character of the employment of a teacher, at a private school without a collectively bargained contract, affects the understanding of the appropriate period of notice. For his part, Sergio Gomes, on being made aware that his employment was at risk, did not complain or demand the right to be left to continue with his leave. He asked for a letter of reference.

[78] In Kyluik v. Cardiac Wellness Institute of Calgary Inc., the legislation made clear that the employment relationship was not to be disturbed during a leave provided for in the statute:

No employer may terminate the employment of, or lay off, an employee who

(a) has started her maternity leave, or

(b) is entitled to or has started parental leave.

[Emphasis added]

(Employment Standards Code, supra, s. 52(1))

[79] In understanding the clause, it should be noted that the employer argued that “...terminating and giving notice of an intention to terminate are different; while terminating is prohibited, giving notice is not” (Kyluik v. Cardiac Wellness Institute of Calgary Inc., supra, at para. 22). If this position had been sustained, the decision would have gone the other way.

[80] In the case before the court, there is no such statutory limitation. The position of Sergio Gomes is not different because he was on leave. As with Domenica Michela and Catharine Carnovale, his notice period began at the end of the school year, albeit two days later (June 30, 2013), the day he received the e-mail enclosing the “severance package”.

[81] What should the length of notice have been?

[82] The teachers seek damages based on the following notice periods:

• for Domenica Michela, 12 months

• for Catharine Carnovale, 12 months

• for Sergio Gomes, 14 months

[83] This is said by counsel for the three teachers to be “more than reasonable”. He relied on four cases that are said to reflect on terminations of “comparable educational and related employees” (see: Factum of the Moving Parties, at para. 70). The relationship between this case and those cases is not readily apparent. Rather, they tend to stand as a confirmation of the observation that, for the purpose of determining reasonable notice, each situation needs to be evaluated on its own particular facts. Bardal v. Globe & Mail Ltd., to which I have referred in making this point (see para. [66], above), is quoted in two of the four cases to which counsel for the three teachers referred in establishing the notice periods he says should be applied (Whiting v. Boys and Girls Club Services of Greater Victoria, supra, at para. 46; and, Parks v. Atlantic Provinces Special Education Authority Resources Centre for the Visually Impaired, supra, at para. [79]).

[84] To begin with, only one of the four employees could be said to be a teacher. The one teacher did not work in a conventional school but for a “college” teaching courses it obtained through a partnership arrangement with Athabasca University described as an “open university” or “distance-education university” (students did not have to attend at the campus of Athabasca University). The teacher was terminated without prior warning when the partnership was ended and the business (the college) was sold. The court concluded that an appropriate award was based on 15 months’ notice (Monjushko v. Century College Ltd., supra). The other three plaintiffs were:

(1) a “program manager” for the Boys and Girls Club who was terminated when, after 13 years of employment, the funding for the program she was responsible for was withdrawn. Reasonable notice was determined to be 18 months (Whiting v. Boys and Girls Club Services of Greater Victoria, supra).

(2) the Director of the Social Science Computing Laboratory at the University of Western Ontario, who was also an Adjunct Professor without tenure whose termination was set aside because the university had ignored its own personnel policy which was incorporated into and was part of the employment contract of the plaintiff. In so doing, the University had breached the contract and the general duty to act fairly. The termination was attached to a copyright issue concerning software developed, using the computers of the university, ostensibly by the plaintiff as the owner of a business. The appropriate notice period was found to be 18 months (Hanis v. Teevan, 1998 CanLII 7126 (ON CA), [1998] O.J. No. 2560; 162 D.L.R. (4th) 414).

(3) a “resident counsellor” at a school for students “...with multiple handicaps” including those “...with both physical and mental handicaps...” who was terminated because he could no longer lift a particular student, a quadriplegic. As a result of trying he had injured himself. He could no longer do it. He was offered a transfer. He accepted. It appears this offer was countermanded and being able to do the lifting was made a condition of his continued employment. The employer claimed the plaintiff had resigned. The court found that, had things been left as they were, the plaintiff would have been able to do the job in a satisfactory manner. He had not resigned. He was found to have been entitled to 15 months’ notice (Parks v. Atlantic Provinces Special Education Authority Resource Centre for the Visually Impaired, supra.

[85] These cases are of little assistance. In two of them, the termination could not be justified: one because fairness was owed but denied (Hanis v. Teevan, supra), and the other because a qualification for the job was added, after a problem came to light, to justify the termination when, in fact, the employee was still able to do the job (Parks v. Atlantic Provinces Special Education Authority Resource Centre for the Visually Impaired, supra). In another, whereas the court was told that the termination resulted from “diminished” funding, the reason given to the employee was that “...as a result of strategic planning there was a need for organizational change” (Whiting v. Boys and Girls Club Services of Greater Victoria, supra, at paras. 2 and 21). The termination in the last of the four resulted from commercial changes in the business being the end of a partnership on which the business relied and the sale of the business (Monjushko v. Century College Ltd., supra).

[86] In the case before the court, the reason for the termination was the lower than anticipated enrollment. If there were not enough students, the School would neither need nor could afford the number of teachers employed in earlier years. Presumably, this is something that would be watched each year. While I have found the teachers were employed for an indefinite period, the fact remains that, each year, decisions had to be made as to whether contracts or Letters of Appointment would be offered to each of them. I should point out that, in the one case, it might be said that the terminated employee was a teacher, although not relied on, the contract of employment included a term that the appointment was contingent on sufficient enrollment (Monjushko v. Century College Ltd., supra, at para. 8). This was not like the “program manager” where, after thirteen years, funding was reduced and strategic plans changed (Whiting v. Boys and Girls Club Services of Greater Victoria) or like the “college” teacher, whose period of notice was lengthened because he was given no warning that his job was in peril (Monjushko v. Century College Ltd., supra, at paras. 17, 21 and 38). Here, the teachers were told in May that, as matters stood, they could not be offered contracts. This was not notice of termination, but it was a warning. There is no suggestion that the School owed the teachers a duty of procedural fairness either as generally required or pursuant to any employment contract (Hanis v. Teevan, supra). The decision to end the employment of the three teachers does not arise from a newly-identified requirement of the job (Parks v. Atlantic Provinces Special Education Authority Resource Centre for the Visually Impaired, supra).

[87] What are the particular circumstances that should be considered in assessing the appropriate notice period to apply in this case?

[88] The School is not a college directed to making a profit, it is not a large, established university and did not cater to students with multiple handicaps. It is not a club. The School is independent, which I understand to mean, independent of any Board of Education. “It is committed to providing a university preparatory program based on the teachings of the Catholic faith”. It opened in September of 1999 with three grades (7, 8 and 9) and 26 students. The School “...will be home to 800 students when it has completed its permanent facilities” (Villanova College: Faculty Handbook Philosophy and Policy Procedures, 2012-2013, at p. 2).

[89] It should be self-evident that, by its nature, the School could not provide the security of employment offered by larger, more established and better-funded institutions. The teachers must be taken to have understood the circumstances of their employer. Every year, they had to wait until June before the School could be sure of its requirements for the upcoming year. In their affidavits, each of the three teachers refers to a staff meeting that took place in September 2011, the beginning of the 2011-2012 school year. The staff was informed that there were some financial issues at the School. The enrollment targets had not been met. There was a surplus of teachers. The Board of the School had expressed the view that some should be let go. The Board had been prevailed upon to keep all of the teachers. For the 2012-2013 school year, the School terminated the employment of six teachers. In the affidavits they swore, the three teachers outlined how, for the school year that preceded their final year of teaching at the School (2011-2012), they were expected to assist in and contribute to the annual fundraising at the School. Each of them “believes” that donation through payroll deduction was given as an example. In an e-mail, dated February 21, 2012, the teachers were advised that their salaries were to be frozen for the upcoming school year (2012-2013). In their affidavits, Domenica Michela and Sergio Gomes indicated that, just prior to the March break, at a meeting of the department chairs, they were advised that enrollment for the 2012-2013 school year was “not clear”, but efforts were being made to improve the numbers. For her part, at about the same time, Catharine Carnovale was told in a meeting with two department heads that the school “...intended to cut some staff” and that they had been told to tell teachers in their departments to “...polish up their resumes and consider looking for work elsewhere”.

[90] The three teachers cannot be taken to have been unaware of the circumstances of the School. Whatever their rights to notice, it must be understood that they worked there understanding its circumstances. This cannot be ignored in assessing what is reasonable notice. It is an aspect of the “character of the employment” as referred to in Bardal v. Globe & Mail Ltd. (see: para. 66, above). These are facts that are particular to this case.

[91] “The rationale for requiring reasonable notice is to allow the employee time to find a new job” (Ellen E. Mole, Marion J. Stendon, The Wrongful Dismissal Handbook, Third Edition LexisNexis Canada Inc. 2004, at p. 260). Uncertainty, especially where an employee knows that there are financial concerns, can be a factor in reducing the length of notice that might otherwise be reasonable:

An employee may be dismissed either on reasonable notice or by payment in lieu of notice. The latter alternative is almost invariably selected because, for obvious reasons, it is not helpful to a business to continue to employ a person who has received notice of dismissal. Payment in lieu of notice involves a cost to the employer for which there is no corresponding production or benefit. In my view, there is a need to preserve the ability of an employer to function in an unfavourable economic climate. He must, if he finds it necessary, be able to reduce his work force at a reasonable cost.

(Bohemier v. Storwal International Inc., 1982 CanLII 1764 (ON SC), 40 O.R. (2d) 264, at p. 268)

[92] As recently as March of this year (2014), this court “...[i]n light of the economic factors... discounted the notice period by one third, from twelve to eight (8) months”. The defendant employer had argued that its “...alleged precarious financial circumstances” and “... the alleged poor economic climate” should shorten the notice period. This took into account “...the market and the financial health of [the employer] at the time of the termination of the Plaintiff’s employment” (Gristey v. Emke Schaab Climatecare Inc., 2014 ONSC 1798, at paras. 7, 50, 51 and 59).

[93] The School assessed its financial position due to the lower enrollment anticipated for the 2013-2014 school year. In his affidavit, Paul Paradiso says that it was determined that the School “would probably be facing a $300,000 shortfall in revenue” and that the shortfall could be met by terminating 5 teachers, including Sergio Gomes, Domenica Michela and Catharine Carnovale.

[94] Sergio Gomes began his employment with the School in September, 2000. In the 13 years that followed, he was granted and took 3 leaves of absence. He did some supply teaching during at least one of those years. He worked full-time for 10 of the 13 years. While prior to his third leave of absence (2012-2013) he had been department Chair in Religion, in indicating a desire to return to full-time employment, Sergio Gomes requested that he be relieved of those responsibilities and asked to teach in the Social Studies Department, specifically Canadian and World Studies.

[95] Domenica Michela commenced working as a teacher at the School in September 2002. During the 2008-2009 school year, she was on sabbatical. Like Sergio Gomes, she taught full-time for 10 years.

[96] Catharine Carnovale started at the School in September 2005 and worked there as a full-time teacher for the following 8 years.

[97] The School asserts that each of the three teachers were let go as a result of decreased enrollment. Both Domenica Michela and Catharine Carnovale dispute this. Domenica Michela points out that, while the three teachers were terminated, others were hired. She expressed concern that arose from a new “lockdown” procedure prepared in response to a school shooting in the United States. Domenica Michela says that, in response, Paul Paradiso suggested that she, “like everyone, ‘has the option not to remain in the employ of the School’”. Catharine Carnovale believes that her termination may be related to a problem she had with a particular student and the complaints of the parents.

[98] The three teachers were not terminated for cause. Accordingly, these concerns do not affect any assessment of reasonable notice. Counsel for the teacher believes these issues contribute to an allegation of bad faith on the part of the School. I shall return to this idea later in these reasons. For the moment, I note only that the initial calculation of reasonable notice reflects the proposition that there was no cause and that the teachers were fired as a result of a lower than expected enrollment. I add to this the economic circumstances of the School and the fact that the teachers were made aware of the situation some time before their termination.

[99] In accounting for the appropriate periods of notice, I begin by noting that Catharine Carnovale has been within the employ of the School for three years less than Domenica Michela and has taught full-time for two years less. Despite this, they seek the same period of reasonable notice (12 months). Sergio Gomes has been within the employ of the school for two years longer than Domenica Michela, but has taught full-time for the same period of time. I see no reason to differentiate between the claim made by Sergio Gomes and that of Domenica Michela. In the circumstances, I take Domenica Michela to be the base point of this analysis. Neither Sergio Gomes nor Catharine Carnovale is so different in their experience that their claims can be or should be distinguished from that of Domenica Michela. Accordingly, I reduce the period of notice being considered for Sergio Gomes by two months so that it is the same as that being requested on behalf of the other two teachers (12 months).

[100] Even so, bearing in mind the particular circumstances, I find that the notice period proposed is too long. I point out that, if notice for 12 months is reasonable, the School will have to pay the same amount for these teachers as if they had remained on staff for the year that was upcoming. Assuming that the other two teachers who were terminated maintained the same rights, it is not difficult to see that the School would be unable to reduce its prospective deficit by terminating staff it did not need. The law does not ignore the dilemma of the employer. The teachers should be taken to understand this aspect of their employment and, in this case, were made aware of the concern. In this situation, I reduce the claim for notice by half, to six months. I do this, in part, in recognition that six months would take the teachers to the Christmas season; that is the end of the first term. It seems reasonable to presume that, if there is a moment in the course of the school year where teaching positions may become available, it would be during this holiday period.

[101] This takes me to a consideration of mitigation. The School takes the position that each of the teachers did not satisfy their obligation to mitigate their damages and that the period of notice should be reduced accordingly.

[102] I do not agree.

[103] This submission cannot apply to Catharine Carnovale. There is nothing in the material to explain how it can be said that her efforts to find work were insufficient. Her affidavit explains the efforts she made to find new work, the part-time job she took and explains why it was impractical for her to accept another that was offered.

[104] Her position is similar to that of the plaintiff in Schalk v. Sitel, 2014 CanLII 10385 (On SCSM). As here, there were a limited number of jobs the plaintiff could apply for. She had applied for five jobs, she had taken courses on-line, she had spent quite a bit of time looking for jobs, but she could not apply for those she found because she did not have the necessary qualifications. It was held that she had made reasonable efforts to mitigate her loss.

[105] Catharine Carnovale used her computer to search for teaching jobs on appropriate employment web sites and those from school boards in the Toronto area. She trained to be an administrative or office assistant and searched for these jobs as an alternative to teaching. She took courses associated with becoming a principal.

[106] I find that Catharine Carnovale has made reasonable efforts to mitigate her loss.

[107] Domenica Michela made similar efforts to find new employment. She was interviewed and asked to return to conduct a teaching demonstration. Domenica Michela has a daughter with a history of mental health problems. Two days before the demonstration, her daughter threatened to harm herself and Domenica Michela. The police were called. Her daughter was taken into custody and admitted to the McKenzie Health Centre. She was released the next day, leaving it to Domenica Michela and her husband to monitor their daughter, educate themselves as to her condition and to find the appropriate treatment program. As a result, Domenica Michela did not attend for the teaching demonstration and withdrew her name from further consideration for that position and another for which she had also been interviewed.

[108] The position of the School is that these withdrawals are an indication of the failure of Domenica Michela to properly mitigate. In his affidavit, Paul Paradiso said:

…[R]especting the potential for a position as a “business/economics teacher” at De La Salle College, her actions in that case, while resulting from unfortunate circumstances, indicate that she did not pursue a directly comparable position in January 2014.

(Affidavit of Paul Paradiso, at para. 70)

[109] Having said that the three teachers had made insufficient efforts to mitigate, its counsel gave as an example, the following:

For example, Michela was successful in obtaining a series of interviews but ultimately withdrew her applications....

(Factum of the Responding Party, at para. 57)

[110] This is neither the right nor the appropriate way to account for the personal concerns of Domenica Michela. It presumes that, had Domenica Michela not been dismissed, the School would have been within its rights to refuse any accommodation that would have allowed Domenica Michela to provide her daughter with the care and consideration she needed.

[111] While it is settled law that the employee (the plaintiff) must take all reasonable measures to mitigate the loss, it is the employer (the defendant) that bears the onus of proving a failure to do so:

[T]he defendant must show that by the exercise of reasonable diligence, the plaintiff could have found other employment of a similar kind, suited to his or her skills or abilities.

(Panimondo v. Shorewood Packaging Corporation, supra, at paras. 63 and 64, referring to Michael v. Red Deer College, 1975 CanLII 15 (SCC), [1976] 2 S.C.R. 324; Evans v. Teamsters Local Union No. 31, 2008 SCC 20, [2008] S.C.J. No. 20; and, Clark v. BMO Nesbitt Burns Inc. 2007 CanLII 44172 (ON SC), 61 C.C.E.L. (3d) 268 (Ont. S.C.J.) varied on other grounds 2008 ONCA 663, 243 O.A.C. 235 (C.A.)

[112] Where it was apparent that the employee (the plaintiff) had not made reasonable efforts to find employment but the employer (the defendant) had failed to prove that such efforts made during the notice period would have resulted in a reduction of the damage, the employer had not discharged the onus and no reduction to the award was made (Panimondo v. Shorewood Packaging Corporation, supra, at para. 66).

[113] In this case, I am not prepared to find that the withdrawal of Domenica Michela from the teaching demonstration and the interview are demonstrative of a failure to make reasonable efforts to find alternate employment. If I am wrong in this, it does not matter. The School has not proved that, had the demonstration or the interview proceeded, one of the two jobs would have been available to Domenica Michela. The statement made by Paul Paradiso that, in his view, given her background, Domenica Michela should have little difficulty in obtaining another position is, at best, self-serving and, at worst, gratuitous. It does nothing to confirm that, with reasonable efforts, she would have found another job; neither does the list of positions apparently provided by the School.

[114] It is a sad observation, but it seems that the School believes it should be able to take advantage of the misfortune of Domenica Michela to its own benefit.

[115] I am not prepared to reduce the period of reasonable notice that should have been provided to Domenica Michela on account of a failure to mitigate.

[116] Sergio Gomes indicates that, after receiving the notification of his termination, he began extensive work to find employment for the 2013-2014 school year. These efforts or, rather, any alleged deficiency in these efforts, is not the concern to which the complaint dealing with the supposed failure to mitigate is directed.

[117] Nancy Carvalho is the wife of Sergio Gomes. She is employed by the Toronto Catholic District School Board. She works with high needs students. These are students who have been engaged in criminal activity, are dealing with mental health issues and addictions. Nancy Carvalho is a specialist in Special Education. She majored in criminology at the University of Toronto with a focus on youth in the justice system. Her role is not that of a traditional secondary school teacher.

[118] At the time Sergio Gomes was advised that he was being terminated, his wife was on maternity leave. She did not intend to return to work until February 2014. During August, it became apparent that Sergio Gomes was not likely to find employment for the coming school year. A family needs an income. Sergio Gomes and Nancy Carvalho decided that she should return to work early. She began, with the start of the new school year, on September 3, 2013. During the first week, Nancy Carvalho met with each of the students she was responsible for and had set up their courses and assignments. She had transitioned from parental leave to work.

[119] The following Saturday, September 7, 2013, in the evening without prior advice, Paul Paradiso sent an e-mail to Sergio Gomes explaining that enrollment was up, a position was available; a contract offer was enclosed. The attached letter (September 6, 2013) expressed the hope that the offer would be accepted no later than 9:00 a.m. the following Wednesday, September 11, 2013. The next day (Sunday, September 8, 2013) there was an exchange of correspondence between counsel for the School and counsel for the teachers. The latter noted that, as part of the offer of employment, the School had requested that some accommodation be made on account of a severance payment made pursuant to the Employment Standards Act, 2000. Counsel indicated that Sergio Gomes would have to be given more time to respond. The following morning (Monday, September 9, 2013) counsel for the School answered: “Kindly advise by September 11, 2013 as to your client’s intentions with respect to the proffered return to work so that our client might plan accordingly.”

[120] In the meantime, Sergio Gomes and Nancy Carvalho had been wondering what to do. She felt committed to the students and the responsibilities she had returned to. It was not an option to reverse fields and return to a leave. If they were both at work, who would look after their children? Originally, they had planned her return to work to a time when his mother would be available to help. As it was, the mother of Sergio Gomes was to have knee surgery in the summer of 2013 and would not have recovered sufficiently by September (or before February 2014) to take over responsibility for the three children. Nancy Carvalho called four daycare centres. None were able to accommodate their children. On Tuesday, September 10, 2013 at 11:13 p.m., Sergio Gomes sent an e-mail to Paul Paradiso turning down the offer. The School takes the position that, in doing so, Sergio Gomes failed to mitigate and that any assessment of reasonable notice must be shortened in recognition of that failure.

[121] The responsibility to mitigate may encompass a return to work for the dismissing employer:

Where the employer offers the employee a chance to mitigate damages by returning to work for him or her, the central issue is whether a reasonable person would accept such a responsibility.

(Evans v. Teamsters Local Union No. 31, supra, at para. 30)

[122] This is subject to the qualification that this should only occur where there are no barriers to the re-employment. For the most part, these barriers reflect on circumstances in the work place:

The critical element is that an employee ‘not [be] not be obliged to mitigate by working in an atmosphere of hostility, embarrassment or humiliation’ and it is that factor which must be at the forefront of the inquiry into what is reasonable.

(Evans v. Teamsters Local Union No. 31, supra, at para. 30, quoting from Farquhar v. Butler Bros. Supplies Ltd. (1988), 1988 CanLII 185 (BC CA), 23 B.C.L.R. (2d) 89, at p. 94)

[123] Nonetheless, what is required is a “multi-factored and contextual analysis” (Evans v. Teamsters Local Union No. 31, supra, at para. 30).

[124] These situations do not occur in a vacuum. The School cannot have expected that Sergio Gomes and his wife would sit, not acting in the interests of their family, but waiting in case the School might make an offer. It is not reasonable for the School to assume that Sergio Gomes and his wife would bend their lives to suit an employer who had terminated him two months earlier. This is underscored by the requirement that an answer be provided within two working days of the receipt of the offer.

[125] On the other hand, the position taken by Sergio Gomes is, itself, problematic. As he and his wife had planned it, one of them would work while the other was responsible for the day-to-day care of their children. There would be one income. As it is, Sergio Gomes proposes that only his wife would be at work, he would look after the children, but there would be two incomes, as suggested by him, for 14 months. This misunderstands the purpose of notice or a payment in lieu of notice. As has already been said, this is not something earned as a result of years of employment. It is not a payment as a reward for past service. It is to provide a reasonable opportunity for the fired employee to find work. Even though Sergio Gomes does not propose to use the time to find work, the appropriate recognition has to be judged on that basis.

[126] In this case, the notice period (or any payment in lieu of notice) would have to extend at least to September 7, 2013, the date of the offer. This would not be enough. The question that remains is how long would it reasonably take for Sergio Gomes and his wife to make the adjustments necessary to allow him to return to work given that there was no place available at the day care centres, Nancy Carvalho could not return to a leave and the mother of Sergio Gomes would not have recovered sufficiently from her operation to take responsibility for her grandchildren. It was understood that the mother of Sergio Gomes would be ready in February 2015. To my mind, that is too far in the future. Some other alternative would have to have been found. This returns me to the proposition that the appropriate notice period would be six months. This would be the start of a new term at School allowing for a proper transition of Sergio Gomes into the school environment. It would be a new session for any day care or provide time to find an individual appropriate to care for the children. If necessary, it would allow the children to become accustomed to a new person in their lives.

[127] In the circumstances, I am not prepared to make any adjustment to the six-month period of notice on account of a failure to mitigate with respect to any of the three teachers.

[128] There is one further issue to be reviewed. The three teachers submit that the School did not deal with them in good faith. As a result, they each claim $10,000 as to what is referred to as “general damages”. They say that bad faith was demonstrably present in the failure of the School to provide “termination notice or pay in lieu”, as prescribed by the Employment Standards Act, 2000, S.O. 2000, c. 41 s. 54.

[129] Each of the three teachers proposed that there was bad faith in the manner of their termination and treatment by those representing the School. Domenica Michela did not accept that the reason for her termination was low enrollment. She suspected that it was related to her objection to the new lockdown procedure. She concluded that Paul Paradiso would not give her a good reference in her search for a new job. Sergio Gomes does not accept that the offer made to him on September 7, 2013 was genuine. He believes that it was “...somewhat forced or tactical”. He does not trust the claim that the School was short on enrollment in May and June and in early September had sufficient enrollment to offer him a position. For her part, Catharine Carnovale believes that she was misled. On May 31, 2013, she met with Paul Paradiso. As she understood it, despite the letter, dated May 31, 2013, advising her that the School was not able to offer her a position “at that time”, it was his intention to bring her back. She was surprised to be told by the Director of Student Services that, in fact, in an e-mail of May 30, 2013, Paul Paradiso had advised that Catharine Carnovale was on a list of those who would not be offered a contract.

[130] Each of the teachers referred to the fact that, subsequent to their termination, three new teachers were hired, in some part, to teach courses they had taught or were qualified to teach.

[131] What is bad faith?

‘Bad faith’ has been explained as ‘not simply bad judgment or negligence but rather it implies the conscious doing of a wrong because of dishonest purpose or moral obliquity ... it contemplates a state of mind affirmatively operating with furtive design or ill will.’

(M.G. v. G.G., 2010 ONSC 792, quoting S.(C.) v. S.(M.) 2007 CanLII 20279 (ON SC), 2007 38 R.F.L. (6th) 315 (S.C.J.), referring to Biddle v. Biddle (2005), 2005 CanLII 7660 (ON SC), 137 A.C.W.S. (3d) 1164, [2005] W.D.F.L. 2089, [2005] O.J. No. 1056, 2005 CarswellOnt 1053 (Ont. Fam. Ct.), at para. [14])

[132] It may be that some of the decisions made on behalf of the School were ill-considered and some of the actions taken ill-advised, but I am not prepared to find that this amounts to bad faith. I accept that the School did not understand that there would be more owing to the three teachers. I do not accept that any interaction between the teachers and those representing the School were intended to deceive. I believe that what was done was in furtherance of balancing a variety of competing values and interests.

[133] Finally, I am not going to allow suspicion to override the evidence of Paul Paradiso to the effect that, in late July and early August, enrollment numbers increased so that additional positions became available. Both of the other two teachers that were initially not offered contracts got offers from the School over the course of the summer months. One accepted; the other had already obtained a position at another school. It was suggested the reason offers were not made to Domenica Michela and Catharine Carnovale was that they had commenced litigation against the School. The Statement of Claim was issued on October 31, 2013. The record makes clear counsel was retained earlier than that. Presumably, the proposition is that, having taken an adversarial position, there would be a risk to the work environment in bringing them back. I point out that the commencement of litigation is a factor to be considered in determining whether accepting a position with the employer who fired you would be required as part of reasonable mitigation. The employee cannot be expected to return where the relationship with the employer has become “seriously damaged” and “acrimonious” (Evans v. Teamsters Local Union No. 31, supra, at paras. 30 and 50; and, see: para. [122], above). Similarly, the employer need not offer positions to former employees who have launched or are likely to start an action against it. The fact that the School chose to offer a position to Sergio Gomes, who had also retained counsel, does not change this conclusion in respect of the other two teachers. The circumstances of each teacher can be independently assessed.

[134] The affidavits of each of the three teachers, relying on work done by a summer student and her affidavit, note that “by the start of the school year, or early in the 2013-2014 school year, [the School] had hired four (4) teachers…” and names them. There is nothing in this that is inconsistent with enrollment having increased over the summer months and the decision being made not to offer positions to either Domenica Michela and Catharine Carnovale. It might be that a position could have been offered earlier to Sergio Gomes, but that is not clear on the evidence. If it was after August 16, 2013, it would have been after Nancy Carvalho had announced her intention to return to work. Like the rest of the concerns raised on behalf of the three teachers, I am not prepared to find that this is demonstrative of bad faith on the part of the School.

[135] For the reasons reviewed here, I grant summary judgment in favour of the three teachers. They are each awarded payment in lieu of notice for a six-month period, commencing on July 1, 2013 and ending on December 31, 2013, including salary and benefits. The amount of the award is reduced by the value of any payments made on account of notice, pursuant to the Employment Standards Act, 2000 (that is, pursuant to sections 57, 60(1), and 61(1)) and any payments made on account of salary owed by the School and payable during the months of July and August, 2013.

[136] No submissions were made as to costs. If the parties are unable to agree, I will consider written submissions on the following basis:

1. On behalf of the three teachers, no later than 15 days following the release of these reasons. Such submissions are to be no longer than 4 pages, double-spaced, excluding any Costs Outline or Bill of Costs that may be relied on or case law that may be referred to.

2. On behalf of the School, no later than 10 days thereafter. Such submissions are to be no longer than 4 pages, double-spaced, excluding any Costs Outline or Bill of Costs that may be relied on or case law that may be referred to.

3. If necessary, on behalf of the three teachers, in reply, no later than 5 days thereafter. Such submissions are to be no longer than 1 page, double-spaced.

LEDERER J.

Released: 20150107

CITATION: Michela v. St. Thomas of Villanova Catholic School, 2015 ONSC 15

COURT FILE NO.: CV-13-491985

DATE: 20150107

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

DOMENICA MICHELA, SERGIO GOMES, and CATHERINE CARNOVALE

Plaintiffs

(Moving Parties)

– and –

ST. THOMAS OF VILLANOVA CATHOLIC SCHOOL

Defendant

(Responding Party)

JUDGMENT

LEDERER J.

Released: 20150107