Estate of Cristian Drimba v. Dick Engineering Inc., 2015 ONSC 2843
COURT FILE NO.: 6419/13
DATE: 2015-04-30
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
THE ESTATE OF CRISTIAN DRIMBA
Plaintiff
– and –
DICK ENGINEERING INC.
Defendant
Marty Rabinovitch, for the Plaintiff
Gary S. Farb, for the Defendant
HEARD: March 24, 2015
REASONS FOR JUDGMENT
Gray J.
[1] In this motion for summary judgment, the plaintiff argues that Cristian Drimba, who is now deceased, was dismissed from his employment consequent upon a sale of a business, and as a result his estate is entitled to damages, including damages for injury to dignity, feelings and self- respect, and damages for “bad faith termination”. The plaintiff also seeks termination pay and severance pay pursuant to the Employment Standards Act.
[2] After hearing submissions, I advised counsel that I saw no meritorious argument based on an alleged dismissal consequent upon a sale of a business, nor did I see any merit in the argument that the plaintiff was entitled to exemplary damages. I adjourned the matter in order to give counsel the opportunity to file written submissions on whether, in the circumstances, the plaintiff is entitled to termination pay and severance pay under the Employment Standards Act.
Background
[3] The defendant operated a full service engineering design firm. On September 1, 2013, it sold its assets to KSH-DEI Solutions Inc. Notwithstanding the sale of its assets, the defendant continued to operate in order to complete commitments to clients, and it still exists as a corporate entity.
[4] Mr. Drimba began working for the defendant in 1996. As of May, 2013, his gross salary was $58,722.91.
[5] On or about May 22, 2013, Mr. Drimba advised the defendant that he had shingles and would be away for up to six months. In June, 2013, he was diagnosed with terminal cancer. On June 7, 2013, he commenced a leave of absence.
[6] On July 25, 2013, Mr. Drimba was advised of the asset sale, and he was urged to apply for group insurance benefits. On August 27, 2013, the defendant notified RBC Life Insurance that Mr. Drimba was in the process of filing a claim for long term disability and a critical illness claim.
[7] On August 29, 2013, the defendant confirmed in writing to Mr. Drimba that his employment would continue until such time as he was well enough to return to work, and that upon his return to work the defendant would arrange for Mr. Drimba to have an interview with KSH-DEI Solutions Inc. Mr. Drimba was not offered employment by KSH-DEI as he was on sick leave and he would be offered an interview on his return to work.
[8] On September 17, 2013, Mr. Drimba died.
[9] After Mr. Drimba’s death, the defendant expressed condolences to his survivors and outlined the benefits that would be payable to the family.
[10] As noted earlier, I advised counsel at the hearing of the motion that on these facts there is no scope to argue that Mr. Drimba had been terminated by any act of the employer, nor had he been constructively dismissed. Accordingly, I saw no basis for any claim for common law damages.
[11] However, I advised counsel that I saw some basis for a claim for termination pay and severance pay pursuant to the Employment Standards Act, on the ground that Mr. Drimba’s illness, which led to his death, constituted a frustration of the contract of employment, and arguably gave rise to a right to claim termination pay and severance pay under the Employment Standards Act. Accordingly, I granted the parties leave to file written submissions on that issue.
[12] Both parties filed written submissions in response to my invitation. However, counsel for the plaintiff also filed, without any invitation on my part, a supplementary affidavit of Marilena Drimba. This was objected to by counsel for the defendant.
[13] In my view, the filing of the supplementary affidavit was improper, and I have not considered it. The issue of whether Mr. Drimba was entitled to termination pay or severance pay was a live issue at the hearing, and it was the plaintiff’s obligation to put its best foot forward. It was not open to the plaintiff to fill in any evidentiary gaps after the hearing.
Submissions
[14] Counsel for the plaintiff submits that Mr. Drimba’s contract of employment was frustrated by his illness, which led to his death. In this case, Mr. Drimba suffered from terminal cancer, which caused his death. In view of the seriousness of his illness, it was highly unlikely that he would ever be able to resume his employment. Thus, at the point at which his inability to ever resume his employment became likely, the contract of employment was frustrated.
[15] Counsel submits that, pursuant to O.Reg.288/01, sections 2(1), clause 4; 2(3); 9(1), clause 2; and 9(2)(b), an employee is entitled to both termination pay and severance pay if an employment contract is frustrated by illness or injury.
[16] Counsel for the plaintiff relies on Dartmouth Ferry Commission v. Marks (1904), 1904 61 (SCC), 34 S.C.R. 366; Naccarato v. Costco Wholesale Canada Ltd. (2010), 83 C.C.E.L. (3d) 82 (Ont. S.C.J.); O.N.A. v. Mount Sinai Hospital (2005), 2005 14437 (ON CA), 75 O.R. (3d) 245 (C.A.); Parks v. Atlantic Provinces Special Education Authority Resource Centre for the Visually Impaired (1992), 1992 2564 (NS CA), 87 D.L.R. (4th) 369 (N.S.C.A.); Peter Kiewit Sons Co. v. Eakins Construction Ltd., 1960 37 (SCC), [1960] S.C.R. 361; O.N.A. v. William Osler Health Centre (2009), 179 L.A.C. (4th) 143 (Shime); Ricci Trucking & Communications v. C.E.P., Local 324 (2012), 111 C.L.A.S. 80 (Herman); and St. Joseph’s General Hospital v. O.N.A. (2006), 2006 53948 (ON LA), 148 L.A.C. (4th) 326 (Randall).
[17] Counsel for the defendant submits that Mr. Drimba’s employment contract was severed only by his death. In such a case, his estate is not entitled to termination pay or severance pay under the Employment Standards Act.
[18] Counsel for the defendant submits that a proper interpretation of the Employment Standards Act suggests that the Act contemplates severance of employment as the unilateral initiative of the employer.
[19] Counsel for the defendant submits that the defendant not only did not terminate Mr. Drimba’s employment, it reaffirmed after the sale of assets that Mr. Drimba’s employment would be continued notwithstanding his illness. Mr. Drimba’s employer continued to be the defendant, Dick Engineering Inc., up to the date of Mr. Drimba’s death. Counsel submits that Mr. Drimba submitted claims under the disability policies available to employees, and must have intended that his employment continue. Clearly, the defendant had the same intention up to the date of Mr. Drimba’s death.
[20] Counsel for the defendant submits that in a case where both parties contemplated and expected that the employee would return to work following his illness, it cannot be concluded that his employment contract has been frustrated by that illness. Accordingly, Mr. Drimba’s estate is not entitled to claim termination pay or severance pay under the Employment Standards Act.
[21] Counsel for the defendant relies on Rizzo & Rizzo Shoes Ltd. (Re), 1998 837 (SCC), [1998] 1 S.C.R. 27.
Analysis
[22] I have taken the liberty of reproducing the relevant provisions of the Employment Standards Act and O.Reg 288/01, made under the Act, as an Appendix to these reasons.
[23] In my view, it is clear from the combined effect of the relevant statutory provisions, together with the relevant provisions of O.Reg 288/01, that an employee whose contract of employment is severed by frustration on account of illness or injury is entitled to both termination pay and severance pay pursuant to the Employment Standards Act. Thus, the only question in this case is whether Mr. Drimba’s contract of employment was frustrated by his illness, or whether his employment came to an end on his death.
[24] It is clear, in my view, that Mr. Drimba suffered from a debilitating, and ultimately fatal, illness. Marilena Drimba, in her original affidavit sworn September 2, 2014, deposes that in June, 2013, Mr. Drimba was diagnosed with terminal cancer and he commenced a leave of absence on June 7, 2013. He died on September 17, 2013.
[25] In my view, it must have been apparent that, as a result of the severity of Mr. Drimba’s illness, it was highly unlikely that he would ever return to his employment, notwithstanding the generosity of his employer to keep his position open for him in the event that he recovered. This was likely a false hope after he was diagnosed with terminal cancer, and it ultimately proved to be the case.
[26] While it is obviously not possible to pinpoint the precise date at which Mr. Drimba’s contract of employment became frustrated, it was undoubtedly at some point between June 7, 2013, and September 17, 2013, his date of death.
[27] Accordingly, Mr. Drimba’s contract of employment became frustrated before he died. He became entitled to both termination pay and severance pay under the Employment Standards Act. His estate is now so entitled.
[28] Having arrived at this conclusion, I assume counsel will be able to make the necessary calculation as to the plaintiff’s entitlement. If they are unable to agree, I may be spoken to.
[29] I will entertain brief written submissions with respect to costs, not to exceed three pages, together with a costs outline. Mr. Rabinovitch will have five days to file his submissions, and Mr. Farb will have five days to respond. Mr. Rabinovitch will have three days to reply.
Gray J.
Released: April 30, 2015
APPENDIX – EMPLOYMENT STANDARDS ACT AND [O.REG 288/01](https://www.canlii.org/en/on/laws/regu/o-reg-288-01/latest/o-reg-288-01.html)
Employment Standards Act
- (1) An employer may terminate the employment of an employee without notice or with less notice than is required under section 57 or 58 if the employer,
(a) pays to the employee termination pay in a lump sum equal to the amount the employee would have been entitled to receive under section 60 had notice been given in accordance with that section; and
(b) continues to make whatever benefit plan contributions would be required to be made in order to maintain the benefits to which the employee would have been entitled had he or she continued to be employed during the period of notice that he or she would otherwise have been entitled to receive.
- (1) An employer who severs an employment relationship with an employee shall pay severance pay to the employee if the employee was employed by the employer for five years or more and,
(a) the severance occurred because of a permanent discontinuance of all or part of the employer’s business at an establishment and the employee is one of 50 or more employees who have their employment relationship severed within a six-month period as a result; or
(b) the employer has a payroll of $2.5 million or more.
(3) Prescribed employees are not entitled to severance pay under this section.
(1) The following employees are prescribed for the purposes of section 55 of the Act as employees who are not entitled to notice of termination or termination pay under Part XV of the Act:
Subject to subsection (2), an employee who is hired on the basis that his or her employment is to terminate on the expiry of a definite term or the completion of a specific task.
An employee on a temporary lay-off.
An employee who has been guilty of wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer.
An employee whose contract of employment has become impossible to perform or has been frustrated by a fortuitous or unforeseeable event or circumstance.
An employee whose employment is terminated after refusing an offer of reasonable alternative employment with the employer.
An employee whose employment is terminated after refusing alternative employment made available through a seniority system.
An employee who is on a temporary lay-off and does not return to work within a reasonable time after having been requested by his or her employer to do so.
An employee whose employment is terminated during or as a result of a strike or lock-out at the place of employment.
A construction employee.
Revoked: O. Reg. 397/09, s. 4.
An employee whose employment is terminated when he or she reaches the age of retirement in accordance with the employer’s established practice, but only if the termination would not contravene the Human Rights Code.
An employee,
i. whose employer is engaged in the building, alteration or repair of a ship or vessel with a gross tonnage of over ten tons designed for or used in commercial navigation,
ii. to whom a legitimate supplementary unemployment benefit plan agreed on by the employee or his or her agent applies, and
iii. who agrees or whose agent agrees to the application of this exemption. O. Reg. 288/01, s. 2 (1); O. Reg. 549/05, s. 1 (1); O. Reg. 492/06, s. 2; O. Reg. 397/09, ss. 1, 4; O. Reg. 95/10, s. 1.
(2) Paragraph 1 of subsection (1) does not apply if,
(a) the employment terminates before the expiry of the term or the completion of the task;
(b) the term expires or the task is not yet completed more than 12 months after the employment commences; or
(c) the employment continues for three months or more after the expiry of the term or the completion of the task. O. Reg. 288/01, s. 2 (2).
(3) Paragraph 4 of subsection (1) does not apply if the impossibility or frustration is the result of an illness or injury suffered by the employee. O. Reg. 549/05, s. 1 (2).
(1) The following employees are prescribed for the purposes of subsection 64 (3) of the Act as employees who are not entitled to severance pay under section 64 of the Act:
An employee whose employment is severed as a result of a permanent discontinuance of all or part of the employer’s business that the employer establishes was caused by the economic consequences of a strike.
Subject to subsection (2), an employee whose contract of employment has become impossible to perform or has been frustrated.
An employee who, on having his or her employment severed, retires and receives an actuarially unreduced pension benefit that reflects any service credits which the employee, had the employment not been severed, would have been expected to have earned in the normal course of events for purposes of the pension plan.
An employee whose employment is severed after refusing an offer of reasonable alternative employment with the employer.
An employee whose employment is severed after refusing reasonable alternative employment made available through a seniority system.
An employee who has been guilty of wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer.
A construction employee.
An employee engaged in the on-site maintenance of buildings, structures, roads, sewers, pipelines, mains, tunnels or other works.
Revoked: O. Reg. 397/09, s. 5.
O. Reg. 288/01, s. 9 (1); O. Reg. 492/06, s. 3; O. Reg. 397/09, s. 3, 5; O. Reg. 95/10, s. 2.
(2) Paragraph 2 of subsection (1) does not apply if,
(a) the impossibility or frustration is the result of,
(i) a permanent discontinuance of all or part of the employer’s business because of a fortuitous or unforeseen event,
(ii) the employer’s death, or
(iii) the employee’s death, if the employee received a notice of termination before his or her death; or
(b) the impossibility or frustration is the result of an illness or injury suffered by the employee. O. Reg. 288/01, s. 9 (2) ; O. Reg. 549/05, s. 2.
CITATION: Estate of Cristian Drimba v. Dick Engineering Inc., 2015 ONSC 2843
COURT FILE NO.: 6419/13
DATE: 2015-04-30
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
THE ESTATE OF CRISTIAN DRIMBA
Plaintiff
– and –
DICK ENGINEERING INC.
Defendant
REASONS FOR JUDGMENT
Gray J.
Released: April 30, 2015