ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-15-521123
DATE: 20150814

BETWEEN:

KEITH (“TONY”) DEAR
Plaintiff

– and –

GLAMOUR DESIGNS LTD.
Defendant

Paul Schwartzman, for the Plaintiff

Michael A. Kleinman, for the Defendant

HEARD: April 24, 2015

s.a.Q. akhtar j.

FACTUAL BACKGROUND

[1] Keith Dear seeks summary judgment of a claim for wrongful dismissal against his former employers, Glamor Designs Ltd. (“GDL”).

[2] Dear began his employment at Special Occasion Sales Ltd. (“SOS”) as a sales representative on 1 March 2005. That company was owned by Kathy Maccarone although Dear claims that he reported to her husband, Vince Maccarone, the President of International Fashion Group Ltd.

[3] In or around August 2013, Vince Maccarone informed all SOS sales associates that they would, in future, be compensated for their work by GDL. Dear’s job title, responsibilities and remuneration remained unchanged and, according to him, he continued to report to Maccarone thereafter. This aspect of Dear’s claim is denied by GDL.

[4] Dear was laid off three times during his employment with SOS/GDL: on 20 May 2013 (returning to work on 15 July 2013); 29 November 2013 (returning to work on 3 February 2014) and 16 May 2014 (returning to work on 25 August 2014).

[5] On 17 September 2014, Dear received notice that his employment was to be terminated without cause on 19 December 2014. He was given three months’ working notice.

[6] Dear claims that this notice period was insufficient. He argues that SOS and GDL were common employers under the umbrella of the International Fashion Group. As such, his employment for approximately 9 years entitled him to a notice period of 12 months.

[7] GDL denies that it shared common ownership with SOS. It claims that when Dear moved to GDL his employment with SOS had already been terminated, notice of which had been given some months prior. Moreover, GDL claims that, in the event that he was entitled to more notice, Dear did not sufficiently mitigate his loss.

LEGAL PRINCIPLES

The Test for Summary Judgment

[8] Rule 20.04(2)(a) of the Rules of Civil Procedure states that:

(2) The court shall grant summary judgment if,

(a) the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence; or

(b) the parties agree to have all or part of the claim determined by a summary judgment and the court is satisfied that it is appropriate to grant summary judgment.

(2.1) In determining under clause (2) (a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial:

1. Weighing the evidence.
2. Evaluating the credibility of a deponent.
3. Drawing any reasonable inference from the evidence.

[9] In Hryniak v. Mauldin 2014 SCC 7, [2014] 1 S.C.R. 87, the Supreme Court of Canada concluded at para. 47 that, “Summary judgment motions must be granted whenever there is no genuine issue requiring a trial”. The court indicated that the test under Rule 20.04 would be satisfied if the judge could reach “a fair and just determination on the merits of a motion for summary judgment.”

[10] When faced with a summary judgment motion the court must determine whether the process:

(1) Allows the judge to make the necessary finding of fact;

(2) Allows the judge to apply the law to the facts; and

(3) Is a proportionate, more expeditious and less expensive means to achieve a just result.

[11] I am satisfied that, in the circumstances of this case, there is no genuine issue requiring a trial.

THE ISSUES

1. Were Special Occasions Sales and Glamor Designs Common Employers?

[12] The crux of this dispute centres on whether Dear was employed by the same corporate entity from 1 March 2005 to 17 September 2014.

[13] Dear claims that he reported to, and was supervised by, Vince Maccarone throughout his tenure at GDL and SOS. As noted earlier, this is denied by both Vince and Michelle Maccarone. It is not disputed, however, that the terms of his employment and holiday schedule remained unchanged through the transition from SOS to GDL.

[14] GDL advances the position that Dear was employed by two separate companies. They claim the first, SOS, provided notice in March 2013 that SOS that it would cease operations terminating Dear’s employment in August that year. Vince Maccarone and his daughter, Michelle, told employees, including Dear, that they were hopeful that GDL would be able to offer new employment. Even though Maccarone claims that a formal written notice was sent to SOS employees, no such document was produced on this motion. Maccarone’s explanation for its omission is that he was unable to locate it because his previous premises were flooded. Dear denies this occurred.

[15] I reject GDL’s position for the following reasons.

[16] In Sinclair v. Dover Engineering Services Ltd. (1987), 1987 2692 (BC SC), 11 B.C.L.R. (2d) 176 (S.C.), aff'd (1988), 1988 3358 (BC CA), 49 D.L.R. (4th) 297 (B.C.C.A.), the court summarised the concept of a common employer in the following way, at para. 18:

As long as there exists a sufficient degree of relationship between the different legal entities who apparently compete for the role of employer, there is no reason in law or in equity why they ought not all to be regarded as one for the purpose of determining liability for obligations owed to those employees who, in effect, have served all without regard for any precise notion of to whom they were bound in contract. What will constitute a sufficient degree of relationship will depend, in each case, on the details of such relationship, including such factors as individual shareholdings, corporate shareholdings, and interlocking directorships. The essence of that relationship will be the element of common control.

[17] This passage was cited with approval by the Court of Appeal of Ontario in Downtown Eatery (1993) Ltd. v. Ontario (2001) 2001 8538 (ON CA), 54 O.R. (3d) 161 (C.A.) at para. 31.

[18] Corporate searches tendered by Dear show that:

[19]

(1) Vince Maccarone is listed as President for International Fashion Group;

(2) Michelle Maccarone is listed as President of GDL;

(3) Katharine Maccarone is listed as President of SOS;

(4) Both GDL and International Fashions display their mailing address as 120 Tycos Drive in Toronto; and

(5) SOS has a mailing address of 116 Tycos Drive Unit 2. This property is located adjacent to 120 Tycos Drive.

[20] It is clear that Vince Maccarone was involved in GDL, reflected by the fact that he “assumed control” as soon as his daughter began her maternity leave. His name is listed as the contact person on the Record of Employments received by Dear from both GDL and SOS. The interrelation between all three companies is further demonstrated by the fact that although GDL’s address is listed as 120 Tycos Drive in their Corporation Profile Report, their company letterhead on 27 August 2013 displayed their address as 116 Tycos Drive Unit 4 in Toronto - the very same building from which SOS operated. That letter, ostensibly offering Dear employment at GDL, made clear that the salary, job description, health plan and “existing” holiday time would be “matched”, i.e. the same.

[21] In my view, International Fashions, GDL and SOS were three components of the same corporate structure: a family business. Their company could easily have operated as one. They were entitled to choose not to do so but that choice did not eliminate Dear’s rights as an employee. In Downtown Eatery (1993) Ltd., the court stated at para. 36, “[A]lthough an employer is entitled to establish complex corporate structures and relationships, the law should be vigilant to ensure that the permissible complexity in corporate arrangements does not work an injustice in the realm of employment law.”

[22] In this case, the fact that the family business was split into three segments should not be the cause of injustice to Dear who was continuously employed by that common employer from 1 March 2005 to his termination date of 19 December 2014.

2. What is the Correct Notice Period?

[23] Dear is a 66-year-old man who had provided almost 10 years of service to his employer. The courts have shied away from setting rigid guidelines for notice periods and, instead, have directed that the length of notice should be determined by a variety of factors such as the employee’s age, length of service, experience and background.

[24] Dear submits that his age warranted a longer notice period because of the difficulties he would experience in obtaining employment. I agree with his position that twelve months would have been the appropriate amount. See: Bangert v. EW Bickle, 1990 1072 (B.C.S.C.); Heslop v. Cooper’s Cranes (1994) 1994 7384 (ON SC), 6 C.C.E.L. (2d) 252 (Ont. Gen. Div); Lavergne v. Meloche Windows Ltd., 2001 CarswellOnt 790, 103 A.C.W.S. (3d) 967 (S.C.J.).

3. Mitigation

[25] The onus rests on GDL to show that Dear has “found, or by the exercise of proper industry in the search, could have procured other employment of an approximately similar kind reasonably adapted to his abilities”: Michaels v. Red Deer College, 1975 15 (SCC), [1976] 2 S.C.R. 324, at p. 332; Somir v. Canac Kitchens (2006) 2006 42369 (ON SC), 56 CCEL (3d) 234, at para. 58.

[26] GDL submits that Dear failed to mitigate his loss in two ways:

(1) He refused GLD’s offer of seasonal employment equivalent to the period of time that he would have worked through the year; and

(2) He made no meaningful attempts to find suitable alternative employment.

[27] I disagree.

[28] In order to succeed on their first argument, GLD must demonstrate that Dear was offered a clear opportunity to work out the notice period after alleging his wrongful dismissal: Farwell v. Citair, 2014 ONCA 177, at para. 20.

[29] GLD fails to discharge this burden. It relies upon a letter dated 20 August 2015 where Michelle Maccarone informed Dear that it was GLD’s intention to offer him part-time employment. However, before they could do so, they received notification that he had filed a complaint with the Ministry of Labour.

[30] In my view, however, Dear did not refuse GLD’s offer because one was never made. The letter contained no clear offer and, on an objective review, was simply an explanation by Michelle Maccarone to justify GLD’s actions after Dear had filed a complaint. The letter, at its highest, explores the possibility of Dear’s return in a vague manner.

[31] The subsequent email exchange with GLD’s counsel, enquiring whether Dear would be interested in part time employment, took place on 17 February 2015. By this time, Dear had secured new employment and it was reasonable to refuse any offer of part time employment.

[32] I also find that Dear made adequate attempts to secure alternative employment. This is evidenced by the fact that on 18 February 2015 he began working on a commission basis for Aglaia Dress Inc. I accept that the lack of remuneration in this particular job was sufficient reason for his departure on 27 February 2015. On 5 May 2015, however, Dear once again found new employment with Carmen Start Inc. working on a commission of 20% of all sales.

[33] For the above reasons, I am of the view that Dear did take sufficient steps to mitigate his damages.

4. What Damages Should Be Awarded?

[34] I agree that Dear should receive nine months’ earnings and out-of-pocket losses sustained as a result of lost health benefits. This, however, should be calculated on the basis of his last two years of income and not the previous six years as requested. I would also subtract the income earned since 5 May 2015.

[35] I calculate the relevant sum of income to be $44657.78 for the nine month notice period. I am advised that Dear has earned the sum of $395.35 since starting work at Aglaia Dress Inc. His damages are therefore calculated as $44262.43 in addition to $2051.00 for out-of-pocket expenses, totalling $46313.43.

5. Costs

[36] At the end of the oral argument, both parties agreed that the costs of this motion should be fixed in the sum of $7,500.00.

[37] I order that GLD pay Dear that sum forthwith.

S.A.Q. Akhtar J.

Released: August , 2015

COURT FILE NO.: CV-15-521123
DATE: 20150814

ONTARIO
SUPERIOR COURT OF JUSTICE

BETWEEN:

KEITH (“TONY”) DEAR
Plaintiff

– and –

GLAMOUR DESIGNS LTD.
Defendant

REASONS FOR JUDGMENT

S.A.Q. Akhtar J.