ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-14-518195
DATE: 20151210

BETWEEN:

AKBAR LALANI
Plaintiff/Moving Party

– and –

CANADIAN STANDARDS ASSOCIATION
Defendant/Responding Party

Aaron Rousseau, for the Plaintiff

Christopher M. Andree and
Michael Comartin, for the Defendant

HEARD: November 27, 2015

REASONS FOR DECISION

DIAMOND J.:

[1] After nearly 39 years of continuous employment with the defendant Canadian Standards Association (“CSA”), the plaintiff was terminated on August 14, 2014 from his then-current position in CSA’s functional safety group.

[2] Upon termination, CSA provided the plaintiff with his statutory minimum payments (34 weeks) as required under the Employment Standards Act, 2000 S.O. 2000 c.41. The parties have and continue to disagree upon the amount of common law reasonable notice due to the plaintiff.

[3] The plaintiff commenced this action seeking damages for wrongful dismissal. The defence of just cause is not being advanced by CSA, and thus the only true outstanding issue is one of damages.

[4] For this reason, the parties agreed that the most efficient course of action would be to have the outstanding issues determined by way of motion for summary judgment. I agree. Most, if not all, of the documentary evidence is not in dispute. On the record before me, I am confident that I can find the necessary facts and apply the relevant law to the evidence, and that it is in the interests of affordable and proportionate justice to proceed by way of motion for summary judgment. I am also confident that any potential credibility issues can be resolved without invoking the additional powers contained in Rule 20.04(2.2) of the Rules of Civil Procedure.

[5] Accordingly, the parties have asked me to decide the following issues:

Issue #1: What was the plaintiff’s position at the time of his termination?

Issue #2: What is the amount of common law reasonable notice due and owing to the plaintiff?

Issue #3: Did the plaintiff use reasonable efforts to mitigate his damages?

Issue #4: Is the plaintiff entitled to a Short-Term Incentive Plan (“STIP”) payment as part of his damages for wrongful dismissal?

Issue #5: If the notice period exceeds the date of disposition of this motion, what approach should be implemented to account for the plaintiff’s continuing duty to mitigate his damages?

Issue #1: What was the plaintiff’s position at the time of his termination?

[6] It is common ground that CSA carries on business in the certification and testing of products to ensure that they meet safety and performance requirements and standards. CSA services include testing, certification, product evaluation, codes and standards development and application, as well as education and training.

[7] As at the date of his termination, the plaintiff was 60 years old. He came to Canada via Tanzania in 1973 at the age of 19. After completing an Electrical Technician diploma from George Brown College in 1975, he responded to a newspaper advertisement and commenced employment with CSA. He remained continuously employed with CSA until the date of his termination.

[8] For the first 28 years, the plaintiff was employed as a skilled technical employee and/or frontline supervisor. Commencing in 2003, the plaintiff became a Product Group Manager, a position which carried with it responsibility for an annual budget of $5,800,000.00 and 18 direct reports. The role of Product Group Manager was a middle management position at CSA, complete with supervisory and human resources duties, responsibilities and obligations.

[9] Of note, the plaintiff began receiving payments under CSA’s STIP while he held the position of Product Group Manager.

[10] In 2012, CSA restructured its business and eliminated the Product Group Manager position. The plaintiff was bestowed the new title of Assistant Operations Manager and reported to CSA’s Operations Manager, Dale Morgan (“Morgan”). The plaintiff gave evidence that while he was a Product General Manager, he reported to Morgan in any event.

[11] Between April 2012 - December 2013, the plaintiff remained an Assistant Operations Manager. Not surprisingly, both the plaintiff and CSA attempted to, respectively, highlight both the responsibilities and lack of responsibilities that came with the plaintiff’s position. The plaintiff submits that since there were 30 employees reporting to Morgan (who had other extensive duties), the plaintiff typically made the staff decisions as Morgan would “rubber stamp” the plaintiff’s recommendations.

[12] CSA maintains that the plaintiff’s characterization of his duties and responsibilities is exaggerated, and that Morgan did not “rubber stamp” the plaintiff’s decisions. However, this evidence is second-hand and hearsay, as there was no direct evidence from Morgan, and no substantive reason offered by CSA as to why Morgan was not able to provide an affidavit. Instead, CSA chose to tender the evidence of Nashir Jiwani (“Jiwani”) its Vice-President of Canadian Operations.

[13] If CSA intended to dispute the plaintiff’s account of his day to day experience with Morgan, and in particular the evidence that Morgan relied upon the plaintiff in conducting and overseeing that day to day business, I would have expected direct evidence from Morgan on this point. It is trite to state that a party responding to a motion for summary judgment (especially a party who agrees to have the action determined by way of motion for summary judgment) has a positive obligation to put its best foot forward, and lead trump or risk losing.

[14] Jiwani gave evidence that he received complaints from Morgan that the plaintiff was not “a team player” as he was unwilling to work with colleagues or take direction from Morgan. Again, I would have expected Morgan to provide this evidence in the circumstances.

[15] Jiwani claims that the plaintiff was given warnings arising from the plaintiff’s alleged attitude. In support of this position, Jiwani gave the following affidavit evidence:

“For example, Mr. Lalani was spoken to by CSA management for taking assignments to do client work in Europe and Asia that was supposed to be performed by frontline certification staff. As CSA’s Certifier employees in the Toronto office are unionized, his decision resulted in a union complaint that Mr. Lalani was performing bargaining unit work.”

[16] No particulars of the “CSA management” are provided. No supporting documentation was attached to Jiwani’s affidavit. The nature of the alleged complaint arises from the plaintiff’s decision to perform work which was within someone else’s purported area of responsibility.

[17] In December 2013, CSA transitioned the plaintiff to a full-time role rebuilding its functional safety business. CSA maintains that the plaintiff was reassigned to “assist in developing the functional safety business”, while the plaintiff described his role as a “Lead Manager”. There are e-mails produced by the plaintiff which seem to confirm CSA’s acceptance of the plaintiff describing his own role as Lead Manager. That said, on cross-examination the plaintiff confirmed that in his new role, he still reported to Morgan and was not the individual who presented the functional safety group’s executive briefing to CSA executives.

[18] In my view, the character of the plaintiff’s employment (i.e. middle management) did not change up until the date of his termination. When CSA reorganized and eliminated the Product Group Manager position, it had a duty to provide and maintain the plaintiff in a comparable position. In the absence of the plaintiff receiving some other form of consideration (usually monetary), to demote the plaintiff or unilaterally reduce or diminish his role and/or responsibilities would typically amount, in law, to a constructive dismissal. As held by the Supreme Court of Canada in the recent decision of Potter v. New Brunswick (Legal Aid Services Commission), 2015 SCC 10, [2015] 1 S.C.R. 500 (S.C.C.), an employer’s unilateral change which constitutes a breach of the employment contract and substantially alters an essential term of the employment contract will satisfy the first branch of the test for constructive dismissal.

[19] There is no evidence from CSA that, contemporaneous with making the plaintiff the Assistant Operations Manager or subsequently transitioning him into the functional safety group, CSA provided the plaintiff with new or additional consideration to avoid the effects of unilaterally changing a fundamental term of his employment.

[20] Accordingly, I agree with the plaintiff that his positions held in 2012-2014 amounted to, at worst, lateral moves within CSA. As such, as at the date of his termination the plaintiff maintained a middle management role.

Issue #2: What is the amount of common law reasonable notice due and owing to the plaintiff?

[21] There is no signed employment agreement between the parties. As such, the Court must determine the appropriate length of reasonable notice due and owing to the plaintiff. I am guided by the traditional criteria set forth in Bardal v. Globe and Mail, 1990 6677 (ON SC), [1990] O.J. No. 149 (H.C.J.) which include the plaintiff’s age, length of service, character of his employment and the availability of similar employment with regard to his experience, training and qualifications.

[22] As of the date of his termination, the plaintiff was 60 years old and had been employed for CSA for approximately 39 years. While I agree with CSA that for the majority of his employment the plaintiff did not hold a managerial role, for the last 11 years of his employment the plaintiff did hold a middle management position. While his responsibilities may have changed from 2012 onward, the essential character of his employment did not.

[23] In Rienzo v. Washington Mills Electro Minerals Corp., [2005] O.J. No. 5126 (C.A.) and Lowndes v. Summit Ford Sales Ltd., 2006 14 (ON CA), [2006] O.J. No. 13 (C.A.), the Court of Appeal for Ontario held that while there is no upper limit or cap on what may constitute reasonable notice, generally only exceptional circumstances will support a base notice period in excess of 24 months. As stated by the Court in Lowndes, “a base notice period of 24 months, the high end of the appropriate range of reasonable notice for long-term employees in the respondent’s position, recognizes these factors and rewards them accordingly.”

[24] The plaintiff’s age, character of employment and length of service all support an award at or near the traditional base notice period of 24 months. In support of his request for an award in excess of that base notice period, the plaintiff relies upon the fact that CSA was the only employer for whom he ever worked throughout his adult life in Canada. The plaintiff submits that this factor supports the presence of “exceptional circumstances”, thereby justifying a higher notice period.

[25] CSA submits that when an individual has been employed with the same employer for a lengthy period (i.e. 30+ years), it will always be the case that the individual has only known that employer for the majority, or all, of his /her working life. I agree. An employee’s length of service is one of the traditional Bardal criteria to be considered by the Court in awarding reasonable notice; the lengthier the service, the more likely the notice period will be extended. In most cases of lengthy service, the employee will only have had one employer (or one relevant employer). To equate the plaintiff’s lengthy service at CSA with “exceptional circumstances” would effectively permit the plaintiff to “double-dip” in achieving both an award at or near the base notice period of 24 months, and an award surpassing that same base notice period. I therefore do not find the presence of “exceptional circumstances” in this case.

[26] It has been held consistently that the assessment of reasonable notice is an art and not a science. The plaintiff’s age, length of service and middle management position all warrant significant consideration. Having reviewed the relevant jurisprudence, and having considered the traditional Bardal criteria, I find the appropriate notice period to be 24 months.

Issue #3: Did the plaintiff use reasonable efforts to mitigate his damages?

[27] As a terminated employee, the plaintiff had a duty to make reasonable efforts to mitigate his loss of income. A failure to discharge that duty can lead to the Court reducing the reasonable notice period. The onus of proving that a terminated employee failed to discharge his/her duty to mitigate rests squarely upon the employer, and that onus is typically a high one. As Justice Perell recently held in Paquette v. TeraGo Networks Inc. 2015 ONSC 4189 (S.C.J.), “in assessing the innocent party’s efforts at mitigation, the Courts are tolerant, and the innocent party need only be reasonable, not perfect”.

[28] Upon terminating the plaintiff, CSA attempted to assist the plaintiff in locating a new job by paying for career counselling services. Specifically, CSA retained the services of Gordon Brandt (“Brandt”) of Feldman Daxon Partners (“FDP”), an outplacement counselling service firm. Brandt gave evidence that he is an experienced Human Resources professional with over 30 years of experience in the industry.

[29] Brandt further testified that he and FDP provided the plaintiff with the following services:

(a) a career counselling program which included access to the FDPs WebCrawler service designed to search the Internet for relevant job postings;

(b) assisting the plaintiff in preparing his resume and LinkedIn profile. According to Brandt, the LinkedIn profile is “most important in today’s job market”;

(c) providing the plaintiff with information on how to properly network to find a new job. Again, according to Brandt networking was far more important than responding to online job advertisements because 90% of FDP graduates find work through networking as opposed to responding to postings.

(d) offering networking seminars which the plaintiff chose not to attend.

[30] CSA relies upon Brandt’s evidence that since networking was the key to finding alternative employment, the plaintiff’s failure to follow Brandt’s advice amounted to “the barest appearance of mitigation efforts”. Brandt stated that the plaintiff did not follow the FDP “to the fullest extent he could have”. Brandt believed that the plaintiff did not work hard enough to find a new job, primarily due to his failure to network properly or at all.

[31] In my view, CSA is tendering Brandt’s evidence as opinion evidence on the issue of whether the plaintiff discharged his duties to use reasonable efforts to mitigate his loss of income. While this is the “ultimate issue” which I must decide in respect of the duty to mitigate, CSA submits that Brandt’s evidence is akin to being a “participant expert” as that term has recently been described by the Court of Appeal for Ontario in Westerhof v. Gee Estate 2015 ONSC 206 (C.A.). I disagree. In Westerhof, the Court of Appeal for Ontario held that a witness with special skill, knowledge, training or experience may give opinion evidence for the truth of its contents without complying with Rule 53.03 of the Rules of Civil Procedure when “that witness has not been engaged by or on behalf of a party to the litigation”. Here, it was CSA who retained the services of Brandt and FDP, and thus Brandt was engaged by CSA even before this litigation commenced. While I appreciate that Brandt was retained for the purpose of assisting the plaintiff in locating a new job, such a result would also obviously benefit CSA’s exposure to pay reasonable notice.

[32] I must thus assess whether the steps taken by the plaintiff amount to reasonable efforts to discharge his duty to mitigate. In his affidavit and during this cross-examination, the plaintiff testified that he applied for 39 jobs and spent several hours during the weekdays reviewing a job listing aggregator to find jobs that suited his experience. The plaintiff met in person with an outplacement counsellor, attended a safety industry conference in an attempt to meet people (i.e. network the old fashion way), and registered with various websites including different employers and governmental organizations. The plaintiff did prepare a LinkedIn profile and finalized his resume for the above purposes.

[33] In Carter v. 1657593 Ontario Inc. 2015 ONCA 823 (C.A.), the Court of Appeal for Ontario heard an appeal of a finding by the trial judge that an employee had adequately mitigated his damages arising out of his wrongful dismissal. While there are distinguishing factors such as the employer making accusations of theft against the employee, the Court did consider the employee’s age and the fact that he had worked for the employer for most of his adult life in concluding that his re-employment prospects were diminished.

[34] In my view, the plaintiff has discharged his duty to mitigate. He has made diligent and reasonable efforts to locate alternative employment. While those efforts may not have overlapped with every single FDP recommendation, the plaintiff is not to be held to a standard of perfection, only reasonableness. It is unfortunate that the plaintiff has not located alternative employment to date, and as discussed below in my disposition of Issue #5, his duty to mitigate will continue.

Issue #4: Is the plaintiff entitled to a Short-Term Incentive Plan (“STIP”) payment as part of his damages for wrongful dismissal?

[35] Since 2003, the plaintiff received an annual incentive payment under CSA’s STIP. On average, that payment was at least 10% of his salary during each of those years.

[36] Upon termination, in addition to being paid the minimum 34 weeks’ termination and severance pay under the Employment Standards Act, 2000, the plaintiff was also paid a pro-rated STIP payment for 2014-2015 in amount of $6,487.92 ( i.e. until the end of the 34 week period).

[37] The governing STIP plan requires participants to be “employed” (also described therein as “actively employed”) at the end of CSA’s fiscal year in order to be eligible to receive a STIP payment. CSA takes the position that it does not pay any dismissed employees a STIP beyond the end of the Employment Standards Act 2000 notice period as the employee then ceases to be “employed” or “actively employed”.

[38] In Paquette, Justice Perell was faced with a similar Bonus Program which required participants to be actively employed by the employer on the date of the bonus payout in order to be eligible for a bonus based upon the employee’s salary. This language is essentially identical to the language in the governing STIP plan. Justice Perell held that the employee was not entitled to any bonus payments as there was no ambiguity in the contract terms of the Bonus Program.

[39] I agree with Justice Perell’s findings in Paquette, While the plaintiff may be notionally an employee during his 24 month notice period, he is no longer an “active employee” and does not qualify for the STIP payment.

[40] The STIP payment date fell outside of the plaintiff’s statutory notice period under the Employment Standards Act 2000. The plaintiff submits that CSA will be permitted to exclude the plaintiff from a STIP payment by reason of the timing of his termination, and thus the terms of the plaintiff’s employment contract breached the requirements of the Employment Standards Act 2000 and are void ab initio. I do not agree. The plaintiff has already been provided with his pro-rated STIP payment up to the end of the statutory 34 week notice period. As stated, the relevant provisions of the governing STIP plan are clear and unambiguous, and ought to be enforced.

[41] As such, I find the plaintiff is not entitled to any additional STIP payment over and above what CSA has paid him upon his termination.

Issue #5: If the notice period exceeds the date of disposition of this motion, what approach should be implemented to account for the plaintiff’s continuing duty to mitigate his damages?

[42] This judgment is being ordered before the expiration of the reasonable notice period, and as such the plaintiff is still subject to the duty to mitigate during the balance of the notice period (i.e. until the end of 24 months post-termination). As summarized by Justice Perell in Paquette, the Court has traditionally employed three approaches to address this situation:

(a) the Contingency Approach, whereby the employee’s damages are discounted by a contingency for re-employment during the balance of the notice period;

(b) the Trust and Accounting Approach, whereby the employee is granted judgment but a trust in favour of the employer is impressed upon the judgment funds for the balance of the notice period requiring the employee to account for any mitigation income; and

(c) the Partial Summary Judgment approach, whereby the employee is granted a partial summary judgment and the parties then return to court during and/or at the end of the notice period for further payments subject to an assessment of the employee’s ongoing duty to mitigate.

[43] While the parties initially differed as to which approach was appropriate in this case, during oral argument counsel agreed with my suggestion that I make a “hybrid order” somewhere between the Trust and Accounting approach and the Partial Summary Judgment approach.

[44] Essentially, I proposed that a trust in favour of CSA would be impressed upon the funds paid to the plaintiff during the balance of the notice period, but the plaintiff would be required to account to CSA on a monthly basis with respect to his mitigation efforts and any mitigation income which he earns. This way, the potentially impractical and expensive consequences of the Partial Summary Judgment approach can be hopefully avoided by reason of the transparency of the plaintiff accounting for his mitigation efforts and potential income on a monthly basis.

[45] The parties agreed with this suggestion, and thus I make that order.

[46] Finally, subject to my dismissal of the plaintiff’s request for the STIP payment during the balance of his notice period, it appeared to me that the parties were ad idem on the total value of the plaintiff’s remuneration as at the date of his termination (as broken down in paragraph 18 of the plaintiff’s factum). As such, the balance of the payments due during the notice period would presumably be easy to calculate, especially given the amount of the payments made by CSA upon the plaintiff’s termination. If I am incorrect in this assumption, counsel may advise my assistant, Olga Misko for the purpose of making further submissions, if necessary.

Costs

[47] I would strongly recommend that the parties exert the necessary efforts to try and resolve the costs of this motion, and the action itself. If such efforts prove unsuccessful, the plaintiff may serve and file written costs submissions (totaling no more than 4 pages including a Costs Outline) within 10 business days of the release of this decision.

[48] CSA shall thereafter serve and file its responding costs submissions (also totaling no more than 4 pages including a Costs Outline) within 10 business days of the receipt of the plaintiff’s costs submissions.

Diamond J.

Released: December 10, 2015

COURT FILE NO.: CV-14-518195
DATE: 20151210

ONTARIO
SUPERIOR COURT OF JUSTICE

BETWEEN:

AKBAR LALANI
Plaintiff/Moving Party

– and –

CANADIAN STANDARDS ASSOCIATION
Defendant/Responding Party

REASONS FOR DECISION

Diamond J.

Released: December 10, 2015