Bovin et al v Over the Rainbow Packaging Services Inc., 2017 ONSC 1143

Court File and Parties

COURT FILE NO.: CV-16-553406 DATE: 20170217 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Laurie Bovin and Kiratpal Sidhu AND: Over the Rainbow Packaging Services Inc.

BEFORE: Madam Justice Jasmine T. Akbarali.

COUNSEL: A. Monkhouse, for the Plaintiffs No one appearing for the Defendant

HEARD: February 16, 2017

Endorsement

1The plaintiffs, Laurie Bovin and Kiratpal Sidhu, bring this motion for default judgment. They claim damages for wrongful dismissal, unpaid overtime and moral damages. They have abandoned their other claims. The defendant, Over the Rainbow Packaging Services Inc., has not defended and has been noted in default.

Background

2Ms. Bovin and Ms. Sidhu were long-term employees of Over the Rainbow. They each began working there in 1997. Ms. Bovin rose to the position of General Manager/Controller. She oversaw the administration of the business. Ms. Sidhu held the position of Supervisor. She was responsible for production. They were the two most senior and high level employees at the company.

3In the spring of 2016, Over the Rainbow appears to have been in trouble. One of the principals, Inderjit Gill, told Ms. Bovin the company would be closing down, and he would incorporate a new company to carry on its business. He asked Ms. Bovin to join the company and proposed she invest $100,000 in it. Ms. Bovin declined. Mr. Gill asked her what kind of pay cut she would be willing to take if she joined the new company. He sought a pay cut of 33%. Ms. Bovin said she would take only a 5% pay cut.

4Around the same time, apparently having concluded that Ms. Bovin and other senior employees like Ms. Sidhu were a liability, Over the Rainbow began a course of conduct designed to harass Ms. Bovin and Ms. Sidhu to make them quit.

5In the case of Ms. Bovin, this course of conduct included Mr. Gill telling her that she was overpaid and would have to start “at the bottom” when Over the Rainbow closed. He began sitting in Ms. Bovin’s office and staring at her while she tried to work. He had a payroll report prepared that disclosed Ms. Bovin’s salary and showed it to other employees at the company. He acted towards Ms. Bovin in a threatening way. For example, he delivered a letter to her indicating that his nineteen year old daughter, Parminder Gill, was going to represent him at the company, and that if his daughter found someone was not doing their job, Ms. Bovin would have to “take all legal action against that employee”, and that if she failed to do so, the company could take legal action against her.

6In the case of Ms. Sidhu, Mr. Gill started blaming her for production problems that were related to the company’s old machinery. He delivered letters to her making unfounded complaints about her work. Mr. Gill advised Ms. Sidhu in writing that she would no longer be paid for her lunch break, and she would be required to maintain a time card for the first time in almost twenty years of employment. Mr. Gill also removed some of Ms. Sidhu’s responsibilities and gave them to his daughter, Ms. Gill, who had less than a year’s experience at the company. Ms. Gill criticized Ms. Sidhu’s work despite having no experience with Ms. Sidhu’s responsibilities.

7Over the Rainbow also purported to unilaterally decrease Ms. Bovin’s and Ms. Sidhu’s salaries by approximately 40%, an action which Ms. Bovin and Ms. Sidhu protested.

8This disrespectful, demeaning and harassing conduct caused significant distress to both Ms. Bovin and Ms. Sidhu. Eventually neither could continue working. They did not resign, but stopped going to work.

Constructive Dismissal

9I have no difficulty concluding that Ms. Bovin and Ms. Sidhu were constructively dismissed by Over the Rainbow and are entitled to damages for wrongful dismissal. An employment contract contains an implied term that an employee is entitled to reasonable notice of their dismissal: Machtinger v. HOJ Industries Ltd., [1992] 1 S.C.R. 986 at paras. 19-20.

10Reasonable notice is determined on the facts of each case, having regard to the character of the employment, the length of service of the employee, the employee’s age, and the availability of similar employment having regard to the experience, training and qualifications of the employee: see Bardal v. Globe and Mail Industries (1960), 1960 ONSC 294, 24 D.L.R. (2d) 140 at p. 145.

11Ms. Bovin and Ms. Sidhu held senior positions, a factor that generally warrants a longer notice period: Love v. Acuity Investment Management Inc., 2011 ONCA 130 at para. 21. They were long-term employees at Over the Rainbow. They are each in their mid-forties. Since their dismissal, they have been looking for new positions, including some for which they are overqualified, but without success. I conclude that the availability of similar employment is poor.

12Ms. Bovin and Ms. Sidhu claim entitlement to 24 months notice. Based on the case law provided in para. 39 of the plaintiffs’ factum, and the factors I identify above, I am satisfied that 24 months is an appropriate notice period in this case.

13I am also satisfied that Ms. Bovin and Ms. Sidhu have made reasonable efforts to mitigate, given their job search, which includes applying for positions for which they are over-qualified.

14Thus, Ms. Bovin is entitled to damages for wrongful dismissal in the amount of $155,076.06. Ms. Sidhu is entitled to damages for wrongful dismissal in the amount of $139,261.76.

Unpaid Overtime

15Ms. Sidhu also claims damages for unpaid overtime. Her affidavit, at paras. 28-29 and Exhibit L, establishes that between 2014 and 2016, she worked 1,066 hours overtime for which she was not properly paid. Ms. Sidhu’s hourly rate was $25.00/hour. She argues she was entitled to be paid one and a half times her hourly rate for her overtime hours. She therefore claims $13,325.00 in unpaid overtime, representing half her hourly rate ($12.50) for the number of hours worked. This claim is based on s. 22(1) of the Employment Standards Act, 2000, S.O. 2000, c. 41. I find that this claim is made out on the evidence. Ms. Sidhu is entitled to $13,325.00 in damages for unpaid overtime.

Moral Damages

16Ms. Bovin and Ms. Sidhu also seek moral damages from Over the Rainbow. Whether moral damages are warranted is fact-specific. In considering this claim, I am entitled to consider pre-termination conduct that is a component of the manner of dismissal: Doyle v. Zochem Inc., 2017 ONCA 130 at paras. 8 and 14. Moral damages may be appropriate where there is evidence of untruthful, misleading or unduly insensitive conduct: Zochem at para. 23.

17In this case, I conclude that an award of moral damages is appropriate. I have already detailed the harassing conduct which Ms. Bovin and Ms. Sidhu were made to suffer. I have no difficulty concluding that it is unduly insensitive. I note in particular the threatening letter to Ms. Bovin that the company could take legal action against her, Mr. Gill’s conduct in revealing Ms. Bovin’s salary to her co-workers and Mr. Gill’s conduct in sitting in her office, staring at her while she tried to work. I note also the letter to Ms. Sidhu that she would no longer be paid for her lunch and had to keep a time card, and the removal of some of Ms. Sidhu’s key responsibilities to a nineteen year old with less than a year’s experience at the company who proceeded to criticize Ms. Sidhu, all of which I find is conduct that was designed to humiliate her.

18Moreover, this conduct in the manner of dismissal was deliberate and an attempt to force Ms. Bovin and Ms. Sidhu to quit. This is another factor that justifies the imposition of moral damages: Struckwick v. Applied Consumer & Clinical Evaluations Inc., 2015 ONSC 3408 at para. 36.

19In the circumstances, I conclude that each plaintiff is entitled to $15,000.00 in moral damages.

Costs

20The plaintiffs are entitled to their costs of this proceeding. Counsel sought costs on a substantial indemnity scale, pointing to the fact that the defendant retained a lawyer but then failed to defend, a factor he said increased the plaintiffs’ costs. I disagree that retaining a lawyer at the outset of litigation and then not proceeding to defend it is reprehensible conduct in the litigation deserving of an elevated costs award.

21I therefore award the plaintiffs’ their claimed partial indemnity costs in the amount of $11,558.81 all inclusive, which I find is a fair and reasonable amount considering the steps that have been taken in this litigation.