Superior Court of Justice

Citation: Thambapillai v. Labrash Security Services Ltd., 2016 ONSC 6068 Court File No.: CV-15-539858 Date: 2016-09-27

Between: Bertram Thambapillai, Plaintiff – and – Labrash Security Services Ltd., Defendant

Counsel: Bruce Baron and Maija Pluto, for the Plaintiff Kevin Power and Caitlin Dale, for the Defendant

Heard: August 25, 2016

Before: R. F. Goldstein J.

Reasons for Judgment

[1] The Plaintiff is a security guard. He worked for the Defendant employer for 12 years. At the time of his dismissal he made $24,000 per year. In November 2014 the employer advised him that his services would no longer be required as of January or February 2015. He continued working as he always had. In fact, he continued working until July 2015 when he was let go without notice, severance, vacation pay, or any of the other statutory entitlements under the Employment Standards Act.

[2] The Plaintiff sued. Pleadings closed in March 2016. In April 2016 he obtained a new job as a security guard. He earns $24,000 per year at the new job. The Plaintiff is currently 72 years old and requires a job to support himself and his family. Because of the mitigation he is asking for less on summary judgment than he did in his statement of claim.

[3] The Plaintiff says that the November 2014 letter was not proper notice and that he was never provided with a subsequent notice. He says that he had no idea that he would be let go until the day he was fired. He says that it is only due to extreme good fortune that he was able to obtain a new job. He should have received severance in the ballpark amount of about 12-months salary. Instead he got nothing. He seeks damages, including damages for mental distress.

[4] The Defendant argues that the most just and expeditious way of proceeding is to transfer this matter to the Small Claims Court, now that the Plaintiff has reduced his damages and the amount sought is within that Court’s monetary jurisdiction. The motion should be dismissed on that basis alone. In any event, the Defendant argues, the Plaintiff received sufficient notice.

[5] In my view, the letter of November 24, 2015 was not proper notice. The Defendant breached the implied terms of the employment contract. The Defendant also breached the Employment Standards Act. He is entitled to judgment. In addition, I find that what happened to the Plaintiff was simply unfair. He is also entitled damages for mental distress.

FACTS

[6] The plaintiff immigrated to Canada in 2000. He found work as a security guard at Atlantic Packaging factory in Toronto. He worked at the factory until his termination in July 2015. The Defendant took over security at the Atlantic Packaging factory in 2003. The Plaintiff’s employment was transferred from Atlantic to the Defendant at that time. Atlantic was later taken over by a company called Cascade Tissue. The Plaintiff continued to work at the factory as a security guard.

[7] On November 24, 2014 Mark Labrash, the principal of the Defendant, gave a letter to the Plaintiff. The letter stated that Cascade Tissue no longer required Labrash’s services. The letter also stated that the Plaintiff’s employment would end in January or February 2015. The letter noted that under the Employment Standards Act employers are required to give a termination notice to employees. The letter also stated:

Your employment with Labrash Security Services will end at the conclusion of our service to Cascades. As soon as we are given a firm date, we will advise you.

[8] The Plaintiff was never given a firm termination date, either orally or in writing. Other employees were re-located to other Labrash locations. He thought that might happen to him, although there is no evidence that anyone in authority suggested to him that that might happen. On July 24, 2015 Mr. Labrash advised the Plaintiff that he was terminated and gave him a record of employment.

[9] There is evidence that Scott Weber, Labrash’s general manager (and Mr. Labrash himself), reminded the Plaintiff from time to time that his employment would end. They urged him to look for work. They did not, however, provide him with a date certain for his termination until the day he was actually fired.

ISSUES AND ANALYSIS

[10] The Plaintiff filed his statement of claim on November 4, 2015. He sought $60,000.00 in damages for breach of contract, $15,000.00 in damages for mental suffering, and special damages of $15,000.00. The Defendant filed its statement of defence on December 9, 2015. The Plaintiff filed his reply on March 22, 2016. He found a new job on April 10, 2016.

[11] As a result, the Plaintiff concedes that he has mitigated. On this summary judgment motion he now only seeks damages of corresponding to 37 weeks of lost income (from July 25, 2015 to April 10, 2016). The amount he now seeks is $17,076.00 in damages and $7,500.00 in damages for mental distress.

[12] There are four issues to be determined here:

(a) Is this an appropriate case for summary judgment?

(b) Should this case be transferred to the Small Claims Court?

(c) Did the November 24 letter constitute sufficient notice?

(d) Should the Plaintiff receive damages for mental distress?

(a) Is this an appropriate case for summary judgment?

[13] In my view, the most just and expeditious way to proceed in this matter is through the summary judgment process. The key facts are the content and nature of the November 24, 2014 notice; the termination date of July 24, 2015; and the Plaintiff’s mitigation.

[14] During the course of the hearing I found that it was un-necessary to hear viva voce evidence. The only real credibility issue that viva voce evidence could have gone to is whether or not the Defendant is punishing the Plaintiff for being a “whistle-blower”. That assertion is contained within the Plaintiff’s reply affidavit. The Defendant therefore had no opportunity to respond to it. The Plaintiff’s evidence on this point is speculative. Even if accepted it would add nothing to the damages claim. I indicated during submissions that I would give it no weight. No viva voce evidence was required to reply to it.

[15] In any event, the main issues on this case are not complicated. Even if I were to accept all of the assertions in the affidavits of Mr. Weber and Mr. Labrash, it would not make a significant difference. The case on its face is clear and the issues are simple. The credibility issues are limited and do not really strike at the fundamental facts in the case. I am confident that I can decide the case on the basis of the material before me. This is a case under the simplified procedure rules where the amount claimed is about $25,000.00. It is not complicated. It would be disproportionate to the potential outcome and contrary to the interests of justice to permit this matter to go to trial: Hryniak v. Maudlin, 2014 SCC 7, [2014] 1 S.C.R. 87 at para. 57.

[16] I also did not permit viva voce evidence regarding the size of the company. This evidence would have been relevant if the Employment Standards Act notice period for larger companies came into play. The Defendant provided no evidence on those points. A party is required to put its best foot forward. I should assume that the evidence would not improve at trial: Sweda Farms Ltd. v. Egg Farmers of Ontario, 2014 ONSC 1200 at paras. 32-33; affirmed at 2014 ONCA 878. The Defendant should not be permitted to supplement the affidavit evidence with viva voce evidence simply because it realized later that further evidence was necessary.

(b) Should the case be transferred to Small Claims?

[17] Mr. Power argues that this case should have been transferred to the Small Claims Court and that I should do so now, rather than hear a summary judgment motion. He argues that the matter is now within the monetary jurisdiction of the Small Claims Court (under $25,000.00). The Small Claims Court is the most just and expeditious manner of proceeding at this point.

[18] I disagree. It would be unfair to the Plaintiff to send this matter to the Small Claims Court at this point. It would effectively penalize him for mitigating his damages by finding a new job. It would deprive the Plaintiff of his ability to seek costs beyond the scale sought in the Small Claims Court tariff. I agree as well it would put a chilling effect on terminated employees. What incentive would they have to go looking for a new job and mitigate?

[19] Furthermore, I am satisfied that I can decide the case in a summary way. It would not be in the interests of justice to have the parties re-start the proceedings in a different court when this court can decide the matter on the basis of the filed material. It would drive up costs for both parties – costs that the Plaintiff could not recover based on the tariff. I will not exercise my discretion and transfer the case.

(c) Did the November 24 letter constitute sufficient notice?

[20] The Defendant argues that the November 24 letter and the subsequent conversations with Mr. Labrash and Mr. Webber provided the Plaintiff with sufficient notice. A reasonable person would have understood that his employment would come to an end at some certain date in the future.

[21] I disagree. The notice was insufficient for two reasons: it did not give a date certain, and the Plaintiff was kept beyond the 13-week regulatory period.

[22] The notice was deficient because the Plaintiff was notified that when Labrash’s contract with Cascade ended his employment would end. Labrash suggested that employment would end in January or February 2015. In fact, his employment did not end. The plaintiff was entitled to a fresh notice. A notice of termination must be clear and unambiguous: Ahmad v. Proctor & Gamble Inc. (1991), 1 O.R. (3d) 491 (C.A.) at para. 22.

[23] The Defendant relies on Gibb v. Novacorp International Consulting Inc., [1990] B.C.J. 1705 as authority for the proposition that failure to provide an actual date certain is not fatal if all the circumstances suggest that a reasonable person would understand that his or her employment was coming to an end. I do not accept that this point applies here. The combination of the oral reminders and the letter were simply insufficient when all the circumstances – including the fact that the Plaintiff’s employment continued and other employees were transferred to other locations – are considered.

[24] Furthermore, the Plaintiff’s employment continued for significantly more than 13 weeks after November 24, 2014. Even if the notice had been valid, the defendant was simply required to give him fresh notice: Regulation made under the Employment Standards Act (O.Reg. 288/01): Termination and Severance of Employment Under the Employment Standards Act.

[25] As MacPherson J.A. stated in DiTomasso v. Crown Metal Packaging Canada LP, 2011 ONCA 469 at paras. 20-21:

The motion judge's interpretation of the Regulation is correct: it contemplates a single period of temporary work that is not to exceed 13 weeks. If the temporary work exceeds that duration, fresh notice is required. To find, as Crown Metal suggests, that the Regulation allows employers to give notice of termination but then extend employment for multiple, serialized periods of less than 13 months would be inconsistent with the ESA's status as remedial, benefit-conferring legislation designed to protect the interests of employees: Rizzo v. Rizzo Shoes Limited, [1998] 1 S.C.R. 27 at para. 36.

I would add only that "clear and unambiguous" notice of termination must include the final termination date. In the present case, the September 9, 2009 notice of termination included a termination date that came and went, as did several others during the five-month period that followed. As the motion judge found, "the cumulative effect of the multiple extensions created uncertainty for [Mr. Di Tomaso] as to when he would no longer have his job." It was not until the February 24, 2010 letter that this uncertainty was cured. Mr. Di Tomaso's termination date was confirmed, and Crown Metal's notice to him was made good on that day.

[26] The facts as described by MacPherson J.A. are strikingly similar to the facts in this case. There was no final termination date in Mr. Labash’s November 24 letter. It could not create any certainty in the mind of a reasonable person.

[27] The Plaintiff must have initially understood that he would be kept until the contract with Cascade ended. He assumed, not unreasonably, that when January or February of 2016 came and went and he was provided with no further notice that he might be kept on. I accept the Plaintiff’s evidence on that point.

[28] In any event, the Cascade factory did not immediately close as the Plaintiff had been led to expect. There were obviously business decisions made that he was not privy to. It would be unreasonable to expect a man in his position to guess how those business decisions might play out and affect his employment situation.

[29] I accept Mr. Weber’s evidence that he reminded the Plaintiff that his employment would end at some point. In my view, Mr. Weber’s (and Mr. Labrash’s) oral reminders were not a substitute for a proper fresh written notice. These reminders were certainly belied by the actions of the Defendant. Despite the reminders, the Defendant continued in business, other employees were relocated, and the Plaintiff continued to have a job. In those circumstances, something more than a reminder that “you better look for a new job because at some point we’ll let you go” is required

[30] Furthermore, the Plaintiff at the time was a 72-year-old immigrant. He was not a native English speaker. He did not have a management or supervisory role. He was not a sophisticated professional. There was a significant power imbalance between employer and employee and the employer took unfair advantage of that imbalance. He is exactly the type of person that the employment laws are designed to protect.

[31] In my view, the Plaintiff’s damages for breach of contract corresponding to 37 weeks of lost income is fair and appropriate. I award $17,076.00 in damages. Any Employment Standards Act amounts are subsumed within that award.

(d) Should there be damages for mental distress?

[32] Mr. Power argues that this is not an appropriate case for damages for mental distress. Damages are not available for the simple pain and distress of being let go. Since there was no independent actionable wrong damages are not appropriate: Vorvus v. Insurance Corporation of British Columbia, [1989] 1 S.C.R. 1085 at paras. 21-22.

[33] Mr. Power refers to the decision in Kalman v. Singer Valve, 1997 CarswellBC 1459 (CA). He relies on the test set out in para. 63 of that case:

The test which the trial judge applied in awarding damages for mental distress is taken from Rahemtulla v. Vanfed Credit Union (1984), 51 B.C.L.R. 200 (B.C. S.C.) at 215-216, a decision of Madam Justice McLachlin when she was a member of the Supreme Court of British Columbia. The test may be summarized in this way:

To support an award for mental distress in tort, the employer's conduct must constitute an independent and actionable wrong and:

(a) must be flagrant and extreme;

(b) must be plainly calculated to produce some effect of the kind that was produced; and

(c) must have caused actual physical harm, a "visible and provable illness".

[34] He argues that the evidence falls far short of the requirements set out in Kalman.

[35] I respectfully disagree that an independent actionable wrong is required. The test in Kalman does not apply.

[36] An independent actionable wrong is generally required for an independent head of damages. That said, employers have an obligation of good faith and fair dealing with employees: Wallace v. United Grain Growers Limited, [1997] 3 S.C.R. 701 at para. 95. The obligation takes into account the power imbalance that generally exists between employers and employees. The obligation also takes into account that the point at which an employee is dismissed is often traumatic and the employee is vulnerable. Breach of the obligation may well be compensated by damages.

[37] At para. 98 the Court mentioned some of the factors that make up the obligation of good faith and fair dealing:

The obligation of good faith and fair dealing is incapable of precise definition. However, at a minimum, I believe that in the course of dismissal employers ought to be candid, reasonable, honest and forthright with their employees and should refrain from engaging in conduct that is unfair or is in bad faith by being, for example, untruthful, misleading or unduly insensitive. In order to illustrate possible breaches of this obligation, I refer now to some examples of the conduct over which the courts expressed their disapproval in the cases cited above.

[38] Wallace was a departure from the hard-and-fast rule in Vorvis that an independent actionable wrong was required. The Court revisited the question again in Keays v. Honda Canada Inc., 2008 SCC 39, [2008] 2 S.C.R. 362. The Court adopted the principle that in cases where “parties have contemplated at the time of the contract that a breach in certain circumstances would cause the plaintiff mental distress, the plaintiff is entitled to recover.” See: Keays v. Honda Canada Inc. at para. 55. Bastarache J., for the Court, further observed at para. 57 that Wallace type damages could be available where an employer engages in behaviour that is unfair or is an act of bad faith. This principle arises from the type of relationship between employer and employee. Bastarache J. further observed at para. 59:

To be perfectly clear, I will conclude this analysis of our jurisprudence by saying that there is no reason to retain the distinction between "true aggravated damages" resulting from a separate cause of action and moral damages resulting from conduct in the manner of termination. Damages attributable to conduct in the manner of dismissal are always to be awarded under the Hadley principle. Moreover, in cases where damages are awarded, no extension of the notice period is to be used to determine the proper amount to be paid. The amount is to be fixed according to the same principles and in the same way as in all other cases dealing with moral damages. Thus, if the employee can prove that the manner of dismissal caused mental distress that was in the contemplation of the parties, those damages will be awarded not through an arbitrary extension of the notice period, but through an award that reflects the actual damages. Examples of conduct in dismissal resulting in compensable damages are attacking the employee's reputation by declarations made at the time of dismissal, misrepresentation regarding the reason for the decision, or dismissal meant to deprive the employee of a pension benefit or other right, permanent status for instance (see also the examples in Wallace, at paras. 99-100).

[39] In this case, I agree with the Plaintiff that the Defendant’s actions were unfair. When the Defendant let him go, the Plaintiff was a man of 71 years old who had worked at the same location since he immigrated to this country in 2000. He had limited English and was clearly not a sophisticated professional. In essence, the Defendant, by continually extending the Plaintiff’s employment and never providing a fresh notice with a date certain, left him hanging in the wind for some seven months before abruptly terminating him.

[40] I appreciate that the Defendants sincerely believe that they treated the Plaintiff fairly by warning him that his employment would eventually end. With respect, I must disagree. A reasonable person might well conclude, based on the Defendant’s actions, that his employment would continue. Failure to give a proper notice to a man like the Plaintiff, and then to refuse to pay any statutory entitlements, amounted to unfair conduct. Accordingly, I would award the Plaintiff the $7,500.00 he asks for. When combined with the amount of just over $17,000.00 awarded for breach of the employment contract, the plaintiff will receive $24,576.00 in total. That amount is appropriate, given that he likely would have been entitled to about 10-12 months in any event had the Defendant given him proper notice.

DISPOSITION

[41] Summary judgment is granted. The Plaintiff is awarded $24,576.00 in total damages.

COSTS

[42] The parties may each file a costs outline and submissions of no more than two pages within 15 days of the release of these reasons for judgment.

R.F. Goldstein J.

Released: September 27, 2016