Bailey v. Milo-Food & Agricultural Infrastructure & Services Inc., o/a Milo-FAIS, et al.

[Indexed as: Bailey v. Milo-Food & Agricultural Infrastructure & Services Inc.]

Ontario Reports

Ontario Superior Court of Justice,

Munroe J.

April 10, 2017

138 O.R. (3d) 144 | 2017 ONSC 1789

Case Summary

Limitations — Wrongful dismissal — Plaintiff given two years' working notice of termination and working for entire period — Plaintiff commencing wrongful dismissal action eight months after his last day of work — Plaintiff also making claims for severance pay, intentional infliction of mental distress and human rights violations — Wrongful dismissal and severance pay claims arising on date when plaintiff received notice of termination and not on last day worked — Those claims statute-barred — Other claims not statute-barred as they were based on conduct which continued throughout notice period.

The plaintiff was given two years' working notice of termination in March 2013. He continued working for the entire notice period. In December 2015, he commenced an action for damages for wrongful dismissal. He also asserted claims for severance pay, intentional infliction of mental distress and human rights violations. The defendant brought a motion to strike the statement of claim as disclosing no cause of action because the claim was statute-barred.

Held, the motion should be granted in part.

The wrongful dismissal and severance pay claims arose on the date when the plaintiff received notice of termination and not on the last day he worked. Those claims were statute-barred as the action was not commenced within two years of the date of notice. The claims for intentional infliction of mental distress and [page145] human rights violations were based on conduct which was ongoing throughout the working notice period. Those claims were not statute-barred.

Dixon v. Hanning House Ltd., 2007 ONSC 54954; Gallant v. Sudbury (District) Roman Catholic Separate School Board (1985), 56 O.R. (2d) 160 (ONCA); Goodwin v. Oxford (County) Board of Education (1980), 30 O.R. (2d) 359 (ONSC); Jones v. Friedman, 2006 ONCA 580; Jones v. Friedman, [2005] O.J. No. 6343 (ONSC); Kirkland v. Lohmann Tierzucht Canada Ltd., 2007 ONSC 19422; Stewart v. Lincoln (County) Board of Education (1972), 8 O.R. (2d) 168 (ONSC); Webster v. Almore Trading & Manufacturing Co., 2010 ONSC 3854; Zawislak v. Siemens Canada Ltd., 2012 ONSC 1043, consd

Other cases referred to

Ahmad v. Procter & Gamble Inc. (1991), 1 O.R. (3d) 491 (ONCA); Beardsley v. Ontario Provincial Police (2001), 57 O.R. (3d) 1 (ONCA); Conway v. Law Society of Upper Canada, 2016 ONCA 72, affg Jones v. Friedman, [2005] O.J. No. 6343 (ONSC); Correia v. Canac Kitchens, 2008 ONCA 506; Paton Estate v. Ontario Lottery and Gaming Commission, 2016 ONCA 458; Piresferreira v. Ayotte, 2010 ONCA 384 [Leave to appeal to S.C.C. refused [2010] S.C.C.A. No. 283]; R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42; South Holly Holdings Ltd. v. Toronto-Dominion Bank, 2007 ONCA 456; Tran v. University of Western Ontario, 2016 ONCA 978; Transamerica Life Canada Inc. v. ING Canada Inc., 2003 ONCA 9923; Web Offset Publications Ltd. v. Vickery (1999), 43 O.R. (3d) 802 (ONCA) [Leave to appeal to S.C.C. refused [1999] S.C.C.A. No. 460]

Statutes referred to

Employment Standards Act, 2000, S.O. 2000, c. 41, ss. 63(1) [as am.], (a), 64, (1), 65(1) Human Rights Code, R.S.O. 1990, c. H.19 Limitations Act, 2002, S.O. 2002, c. 24, Sch. B, ss. 4, 5 Occupational Health and Safety Act, R.S.O. 1990, c. O.1, ss. 1(1) [as am.], 25 [as am.], (2), 26 [as am.] [page146]

Rules and regulations referred to

Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 20, 21.01(1) (a), (b), (2)

Authorities referred to

Harris, David, Wrongful Dismissal, looseleaf, vol. 3 (Toronto: Carswell, 1990) Mew, Graeme, The Law of Limitations, 2nd ed. (Markham, Ont.: LexisNexis Butterworths, 2004) Mew, Graeme, The Law on Limitations, 3rd ed. (Toronto: LexisNexis, 2016)

MOTION to strike a statement of claim.

Rodney M. Godard, for plaintiff. Anita Landry, for defendants.

[1] MUNROE J.: — This is a wrongful dismissal action. The plaintiff, Dan Bailey ("Mr. Bailey"), makes his claim against his former employer, the defendants, Milo-Food & Agricultural Infrastructure & Services Inc. ("Milo-FAIS") and its president and CEO, Geetu Pathak ("Ms. Pathak"). Mr. Bailey was given two years' working notice of his termination and worked for the entire notice period. More than six months after his last day at Milo-FAIS, Mr. Bailey commenced this action for wrongful dismissal. The defendants now move to strike the plaintiff's statement of claim pursuant to rule 21.01(1) (b) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, on the ground that it discloses no reasonable cause of action because it is statute-barred. It is common ground that the applicable limitation period is two years. The main issue, therefore, is whether the limitation period commenced at the time Mr. Bailey received notice of termination or on his last day of work.

[2] Other claims are also raised in the amended statement of claim: entitlement to severance pay, intentional infliction of mental distress and human rights violations. Because the defendants' notice of motion and factum are broadly worded and seek the dismissal of "the action", I must address the motion as it relates to these claims as well.

Facts and Overview

1. Commencement of action

[3] Mr. Bailey brought this action on December 21, 2015. He filed an amended statement of claim on February 24, 2016. [page147]

2. The parties

[4] The defendant Milo-FAIS is a corporation operating a cold storage and food processing facility in Wheatley, Ontario.

[5] The defendant Ms. Pathak was at all material times the president and CEO of Milo-FAIS.

[6] The plaintiff was 64 years of age at the time of the issuance of the statement of claim. He lives in Wheatley. Mr. Bailey worked for Milo-FAIS until March 23, 2015.

3. The employment

[7] Mr. Bailey began working for Omstead Foods Ltd. ("Omstead"), the predecessor to Milo-FAIS, on June 12, 1972. Thereafter, he "continued his employment on a continuous and uninterrupted basis, and under the same terms and conditions with each subsequent successor employer company, including . . . Milo-FAIS".

[8] On September 1, 2011, Milo-FAIS purchased the operations as an ongoing business and continued the operations uninterrupted.

[9] "Milo-FAIS continued to employ [Mr. Bailey] as the operation's General Manager on the exact same terms and conditions of employment."

[10] Mr. Bailey continued, uninterrupted, his employment as general manager, "performing all the same duties and functions, and with the same terms and conditions of employment".

4. Core allegations

[11] Mr. Bailey's 43 years of employment were exemplary.

[12] When Milo-FAIS took over the operations of the facility, Mr. Bailey advised Ms. Pathak that he wished to continue working for the company until his retirement at age 65, on or about December 2016.

[13] Commencing in 2013, Ms. Pathak "belittled, humiliated and demeaned [Mr. Bailey] continuously and unrelentingly by telling [Mr. Bailey], among other things, that he 'cost the company too much money'".

[14] By letter dated March 7, 2013, Ms. Pathak advised Mr. Bailey that Milo-FAIS could "no longer sustain the costs of [page148] his position" and proposed two options for his exit from employment. Mr. Bailey rejected the offer.

[15] This letter caused Mr. Bailey "severe anxiety and emotional upset" at the prospect of losing his job after so many years of dedicated and loyal service. He also was required to retain legal counsel.

[16] Shortly thereafter, Mr. Bailey received a letter from Milo-FAIS on March 18, 2013 advising him that his service prior to Milo-FAIS was not recognized and notifying him that his employment would end two years hence, on March 22, 2015. Mr. Bailey was further advised that during that 24-month period, he "was expected to perform all of the duties that are assigned to him in a diligent and conscientious fashion".

[17] Mr. Bailey continued his employment as general manager for Milo-FAIS, in the same diligent and conscientious fashion, throughout this two-year notice period until his last day on Monday, March 23, 2015.

[18] Ms. Pathak "continued to repeatedly subject [Mr. Bailey] to ongoing degrading and humiliating comments and hostilities", thereby creating a hostile work environment.

[19] Ms. Pathak's conduct toward Mr. Bailey was done knowingly and with the intent to put Mr. Bailey under "so much stress and mental anguish" that he would resign during this two-year notice period.

[20] Ms. Pathak's abusive conduct toward Mr. Bailey was done knowing that Mr. Bailey had a "cancer diagnosis/history".

[21] Ms. Pathak's abusive conduct toward Mr. Bailey "resulted in irreparable harm to [Mr. Bailey's] self-esteem and created feelings of distrust, betrayal, loss of confidence, hurt and anger and diminution of self-worth". Further, Mr. Bailey had injury to "his feelings, dignity, pride and self-respect".

5. Pleaded causes of action

   a. Wrongful termination

[22] Milo-FAIS wrongfully terminated Mr. Bailey's employment as general manager "on or about March 20, 2015".

b.  **Severance pay**

[23] Milo-FAIS wrongfully failed to pay Mr. Bailey severance pay through to his last day of work pursuant to the Employment Standards Act, 2000, S.O. 2000, c. 41. [page149]

c.  **Intentional infliction of mental distress**

[24] Ms. Pathak engaged in wrongful conduct that caused Mr. Bailey emotional upset and mental suffering. Milo-FAIS is vicariously liable for the conduct of Ms. Pathak.

d.  **Human rights violations**

[25] Mr. Bailey was the subject of age discrimination by Ms. Pathak and Milo-FAIS in violation of his rights under his employment contract, and/or the Ontario Human Rights Code, R.S.O. 1990, c. H.19, and/or the Occupational Health and Safety Act, R.S.O. 1990, c. O.1 (the "OHSA") and/or common law duties owed to Mr. Bailey. This age discrimination manifested itself in his serious mistreatment and in his wrongful termination.

6. Statement of defence

[26] The defendants raised the limitation defence in their statement of defence filed on or about December 22, 2016. The defendants claim that the limitation period began to run on March 18, 2013, when the notice of termination was given to Mr. Bailey. Because the statement of claim was not issued until December 21, 2015, the defendants say the action is beyond the two-year limitation period and is thus statute-barred.

7. Reply

[27] The plaintiff filed his reply on or about January 13, 2017. He responded to the limitation defence by asserting, in pertinent part, that the limitation period had not expired prior to service of the statement of claim because the period commenced on the last day of work, March 22, 2015, and not on the notice date.

Positions of the Parties

1. Milo-FAIS

[28] Milo-FAIS submits that the claim should be struck because it fails to disclose any reasonable cause of action -- it was commenced after the expiry of the limitation period. Milo-FAIS says the applicable two-year limitation period commenced when Mr. Bailey received notice of his termination on March 18, 2013. The commencement of this action on December 21, 2015 was long after the expiration of the two-year period. Thus, this action is statute-barred.

[29] With regard to the severance pay issue, the extension of the employment period by a working notice of termination does not extend the commencement of the limitation period even [page150] though there were additional claimed damages, such as severance pay, incurred during that period. Moreover, Mr. Bailey is not entitled to severance pay on the face of his pleadings because he failed to satisfy the statutory precondition of written notice.

[30] With regard to the mental distress claim, Milo-FAIS does not argue vigorously that it has not been sufficiently pled, or that such an independent claim does not exist in law, but rather that any claim for conduct beyond the two-year limitation period should be struck.

[31] With regard to the human rights claim, Milo-FAIS says that the claim hinges on the employment termination, which results in the same limitation bar as the wrongful dismissal claim. In addition, and especially with regard to the OHSA claim, as particularized, it sets forth no reasonable cause of action and thus should be struck.

2. Mr. Bailey

[32] Mr. Bailey submits that his claim is not statute-barred because the limitation period did not commence until his employment ended on March 22, 2015. Thus, the commencement of this action on December 21, 2015 was well within the two-year limitation period. The motion to strike should be dismissed.

[33] The fact that severance pay is determined according to the length of employment underscores the plaintiff's position that it is the end of actual employment that marks the commencement of the limitation period. Further, by statute Mr. Bailey does qualify for severance pay and written notice was unnecessary.

[34] With regard to the mental distress claim, Mr. Bailey argues that it has been sufficiently pled and that any added motion position taken by Milo-FAIS, beyond the limitation ground, should not be allowed.

[35] Regarding his human rights claim, Mr. Bailey says the allegations include continuing wrongful conduct through the notice period thus negating any limitation bar. In addition, because the defendants restricted their motion to the limitation claim, they should not be permitted to expand their grounds now.

Governing Principles

1. Motions to strike

[36] Rule 21.01(1) (b) of the Rules of Civil Procedure, provides, in pertinent part, as follows:

21.01(1) A party may move before a judge,

(a) for the determination, before trial, of a question of law raised by a pleading in an action where the determination of the question [page151] may dispose of all or part of the action, substantially shorten the trial or result in a substantial saving of costs; or

(b) to strike out a pleading on the ground that it discloses no reasonable cause of action . . .

and the judge may make an order or grant judgment accordingly.

[37] The test applicable to a motion to strike is uncontroversial.

A claim can be struck only if it is "plain and obvious" that the pleading discloses no reasonable cause of action. The claim must have no reasonable prospect of success.

All facts pleaded are assumed to be true unless they are patently ridiculous or manifestly incapable of being proven.

Claimants must plead all facts upon which they rely. The facts pleaded are the basis upon which the claim is evaluated.

A motion to strike is a tool to be used with care. The law is not static or unchanging. Thus, the approach must be generous and err on the side of permitting novel but arguable claims.

Statements of claim are to be read generously. Drafting deficiencies and a failure to plead with precision and clarity are not fatal if the necessary material facts are pleaded.

See R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, at paras. 17, 21-22; Paton Estate v. Ontario Lottery and Gaming Commission, 2016 ONCA 458, at paras. 4-5, 11-14.

[38] Further, if the area of the law in question is "muddy" or not settled, a court should not dispose of the matter on a motion to strike: see Transamerica Life Canada Inc. v. ING Canada Inc., 2003 ONCA 9923, at para. 39.

[39] The purpose behind the motion to strike was set forth by McLachlin C.J.C. in Imperial Tobacco, at paras. 19 and 20:

The power to strike out claims that have no reasonable prospect of success is a valuable housekeeping measure essential to effective and fair litigation. It unclutters the proceedings, weeding out the hopeless claims and ensuring that those that have some chance of success go on to trial.

This promotes two goods -- efficiency in the conduct of the litigation and correct results. Striking out claims that have no reasonable prospect of success promotes litigation efficiency, reducing time and cost. The litigants can focus on serious claims, without devoting days and sometimes weeks of evidence and argument to claims that are in any event hopeless. The same applies to judges and juries, whose attention is focused where it should be -- [page152] on claims that have a reasonable chance of success. The efficiency gained by weeding out unmeritorious claims in turn contributes to better justice. The more the evidence and arguments are trained on the real issues, the more likely it is that the trial process will successfully come to grips with the parties' respective positions on those issues and the merits of the case.

[40] No evidence is admissible on a motion to strike: see rule 21.01(2). Documents referred to and relied upon in a statement of claim are not evidence in this context but rather are deemed to be incorporated into the pleading and may be considered: see Web Offset Publications Ltd. v. Vickery (1999), 43 O.R. (3d) 802 (ONCA), at p. 803 O.R., leave to appeal to S.C.C. dismissed [1999] S.C.C.A. No. 460.

[41] When a litigant's pleading is struck, it should be done without leave to amend only in the clearest of cases "when it is plain and obvious that no tenable cause of action is possible on the facts as alleged": see Conway v. Law Society of Upper Canada, 2016 ONCA 72, at para. 16, citing South Holly Holdings Ltd. v. Toronto-Dominion Bank, 2007 ONCA 456, at para. 6.

[42] For motions to strike based on the expiry of a limitation period, such motions must be brought pursuant to rule 21.01(1) (a) and then usually only when a statement of defence has been filed and the plaintiff has had the opportunity to reply: see Tran v. University of Western Ontario, 2016 ONCA 978, at paras. 18-21. "The expiry of a limitation period does not render a cause of action a nullity; rather, it is a defence and must be pleaded": Beardsley v. Ontario Provincial Police (2001), 57 O.R. (3d) 1 (ONCA), at para. 21.

2. Limitations generally

[43] Limitations on the commencement of civil actions are governed by statute. In the province of Ontario, the general source is the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B. In pertinent part, ss. 4 and 5 state the following:

4. Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.

5(1) A claim is discovered on the earlier of,

(a) the day on which the person with the claim first knew,

(i) that the injury, loss or damage had occurred,

(ii) that the injury, loss or damage was caused by or contributed to by an act or omission, [page153]

(iii) that the act or omission was that of the person against whom the claim is made, and

(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and

(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).

(2) A person with a claim shall be presumed to have known of the matters referred to in clause (1)(a) on the day the act or omission on which the claim is based took place, unless the contrary is proved.

3. Limitations in wrongful dismissal actions

[44] The leading case in Ontario on the commencement of the limitation period in a wrongful dismissal action is Jones v. Friedman, 2006 ONCA 580 ("Jones (C.A.)"). In that decision, the Ontario Court of Appeal held, at para. 4, as follows:

A limitation period commences when the cause of action arises. In a breach of contract, the cause of action arises when the contract was breached. For the purposes of a wrongful dismissal action, the employment contract is breached when the employer dismisses the employee without reasonable notice.

[45] The court agreed with the motion judge that the limitation period commenced on the notice date and, as support, pointed to the plaintiff's statement of claim, which pleaded the notice date as the date of dismissal: see Jones (C.A.), at para. 11.

[46] The trial decision of Horkins J. provides a more fulsome analysis of the issue: see Jones v. Friedman, [2005] O.J. No. 6343 (ONSC) ("Jones (S.C.J.)"). Therein, the plaintiff was advised on December 12 that his employment would be terminated effective January 31 of the next year. The plaintiff issued his statement of claim on a date which put the commencement of the limitation period at issue: the issuance date was after the limitation period if it began on the notice date, but it was within the limitation period if it began when the employment ended.

[47] After noting the paucity of case law in the area, Horkins J. considered three decisions: Stewart v. Lincoln (County) Board of Education (1972), 8 O.R. (2d) 168 (ONSC); Goodwin v. Oxford (County) Board of Education (1980), 30 O.R. (2d) 359 (ONSC); and Gallant v. Sudbury (District) Roman Catholic Separate School Board (1985), 56 O.R. (2d) 160 (ONCA). [page154]

[48] The Stewart and Goodwin decisions reached opposite conclusions. In Stewart, the court held that the cause of action arose with the letter of termination, thereby making that case statute-barred. The court in Goodwin disagreed, holding that the limitation period began on the date the employment terminated and not on the notification date, noting that the board could always rescind the termination up to the date it took effect.

[49] Horkins J. then considered the Court of Appeal's decision in Gallant. In that case, after first noting the factual difference with its case -- it was a resignation case, not a termination case -- the Gallant court sided with the Stewart approach. Horkins J. quoted Gallant, at para. 13, as follows:

The learned judge, in the case before us, adopted Mr. Justice Cromarty's interpretation in the Stewart case. Those two cases, Goodwin and Stewart, dealt with unilateral termination of the teacher's employment contract by the board. Since such a decision is always liable to modification, the date of notification of dismissal can be considered the logical point of departure for calculating the limitation period.

[50] Horkins J. agreed with the Gallant court's endorsement of the approach taken in Stewart and stated the following [at para. 14]:

I agree that this is the logical approach to determining when the limitation period starts to run. Changes made by the employer after notice of termination is given, do not change the fact that a termination has occurred.

See Jones (S.C.J.), at para. 14.

[51] As additional support for this interpretation, Horkins J. cited Justice Graeme Mew's views in his book, The Law of Limitations, 2nd ed. (Markham, Ont.: LexisNexis Butterworths, 2004):

A cause of action has accrued and, hence, a limitation period starts to run when all of the elements of a wrong exist, such that an action can be brought. [citation omitted]

Actions for breach of contract . . . accrue upon the breach, and do not require proof of damage. When a plaintiff's cause of action arises from breach of contract, it is generally not too difficult to ascertain the starting point for a limitations period as the question of damage does not enter into the formula. Once a competent plaintiff and defendant have been identified and a breach of contract has occurred, time will start to run.

See Jones (S.C.J.), at para. 15.

[52] Horkins J. concluded that the limitation period commenced on the date of the notice, when the employment was terminated. The elements of the wrong existed on that day: see Jones (S.C.J.), at para. 16.

[53] Later cases have considered the issue. None has concluded that the limitation period begins to run from the last day of employment as opposed to when the notice of termination was given. [page155]

[54] In Kirkland v. Lohmann Tierzucht Canada Ltd., 2007 ONSC 19422, Matheson J. quoted both Jones (C.A.) and David Harris' looseleaf volume, Wrongful Dismissal, loose-leaf, vol. 3 (Toronto: Carswell, 1990), for the proposition that the limitation period begins when the employer gives the employee notice of dismissal, even if the actual termination date is in the future: see Kirkland, at paras. 12-13.

[55] In Dixon v. Hanning House Ltd., 2007 ONSC 54954, Gordon J. agreed with Horkins J. in Jones (S.C.J.) that "the limitation period commences on the day notice of termination is provided, not the last day the employee worked", on the principle that the cause of action arose on the notice date: see Dixon, at paras. 16 and 21.

[56] The comments of Pitt J. in Webster v. Almore Trading & Manufacturing Co., 2010 ONSC 3854, at para. 12, although made in the context of the discoverability of a claim for wrongful dismissal after actual dismissal, are helpful:

Wrongful dismissal, in my view, raises a particularly difficult issue in the limitation context since it is not a dismissal per se that is actionable but rather dismissal without reasonable notice or salary in lieu of such notice, that is actionable. Accordingly, the limitation period for an action for wrongful dismissal does not necessarily run from the date of actual dismissal. It is activated when the cause of action is discovered -- that is, the date that the terminated employee knew or ought to have known that he was discharged without cause and without notice or pay in lieu of notice and that a proceeding would be an appropriate way to get redress.

[57] The case of Zawislak v. Siemens Canada Ltd., 2012 ONSC 1043 dealt with a Rule 20 summary judgment motion to dismiss the plaintiff's wrongful dismissal claim as being statute-barred. In that case, Baltman J. found that "in wrongful dismissal actions, a claim is 'discovered' when the employee is given notice of his termination: citing Jones (C.A.)": see Zawislak, at para. 25. For the notice to commence the limitation period, however, the notice must be clear and unambiguous: see Zawislak, at para. 26, citing Ahmad v. Procter & Gamble Inc (1991), 1 O.R. (3d) 491 (ONCA).

[58] Treatise opinions reach the same conclusion. In Wrongful Dismissal, at p. 10-32.1, David Harris cites the Court of Appeal's decision in Jones for the proposition that "[i]n cases of outright dismissal, the limitation clock begins ticking when the employer gives the employee notice of dismissal. This is so even if the actual termination date is in the future". In The Law on Limitations, 3rd ed. (Toronto: LexisNexis Canada, 2016), at p. 316, Justice Graeme Mew cites Jones (C.A.) for the proposition that "[t]he [page156] limitation period commences on the day notice of termination is provided, not the last day the employee worked or was paid".

4. Severance pay

[59] The entitlement to severance pay is governed by statute, the Employment Standards Act. Section 64(1) addresses entitlement and states the following:

64(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,

(b) the employer has a payroll of $2.5 million or more.

[60] What constitutes severance is found at s. 63(1), which states, in pertinent part, as follows:

63(1) An employer severs the employment of an employee if,

(a) the employer dismisses the employee . . . ;

(e) the employer gives the employee notice of termination in accordance with section 57 or 58, the employee gives the employer written notice at least two weeks before resigning and the employee's notice of resignation is to take effect during the statutory notice period.

[61] The calculation of severance pay is governed by s. 65(1), which states as follows:

65(1) Severance pay under this section shall be calculated by multiplying the employee's regular wages for a regular work week by the sum of,

(a) the number of years of employment the employee has completed; and

(b) the number of months of employment not included in clause (a) that the employee has completed, divided by 12.

5. Intentional infliction of mental distress

[62] Intentional infliction of mental distress is recognized as a free-standing tort separate from a wrongful dismissal claim: see Correia v. Canac Kitchens, 2008 ONCA 506, at para. 81. In contrast, the tort of negligent infliction of mental distress is not available in the employment context: see Piresferreira v. Ayotte, 2010 ONCA 384, at para. 63, leave to appeal to S.C.C. refused [2010] S.C.C.A. No. 283.

[63] The elements of the tort of intentional infliction of mental distress are as follows: (1) the defendant engaged in flagrant or outrageous conduct; (2) the defendant's conduct was intended to cause harm or occurred in circumstances where it was known [page157] that harm would ensue; and (3) the defendant's conduct caused actual damage to the plaintiff: see Correia, at para. 77.

6. Human rights violations

   a. Human Rights Code

[64] Ontario's Human Rights Code provides, in pertinent part, as follows:

5(1) Every person has a right to equal treatment with respect to employment without discrimination because of race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex, sexual orientation, gender identity, gender expression, age, record of offences, marital status, family status or disability.

(2) Every person who is an employee has a right to freedom from harassment in the workplace by the employer or agent of the employer or by another employee because of race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sexual orientation, gender identity, gender expression, age, record of offences, marital status, family status or disability.

9. No person shall infringe or do, directly or indirectly, anything that infringes a right under this Part.

46.1(1) If, in a civil proceeding in a court, the court finds that a party to the proceeding has infringed a right under Part I of another party to the proceeding, the court may make either of the following orders, or both:

1. An order directing the party who infringed the right to pay monetary compensation to the party whose right was infringed for loss arising out of the infringement, including compensation for injury to dignity, feelings and self-respect.

2. An order directing the party who infringed the right to make restitution to the party whose right was infringed, other than through monetary compensation, for loss arising out of the infringement, including restitution for injury to dignity, feelings and self-respect.

(2) Subsection (1) does not permit a person to commence an action based solely on an infringement of a right under Part I.

(Emphasis added)

b.  **Occupational Health and Safety Act**

[65] The definitional section of the OHSA provides the following definition for workplace harassment at s. 1(1):

1(1) "workplace harassment" means,

(a) engaging in a course of vexatious comment or conduct against a worker in a workplace that is known or ought reasonably to be known to be unwelcome, or

(b) workplace sexual harassment[.][page158]

[66] The OHSA codifies numerous duties imposed on employers in ss. 25 and 26. In s. 25(2), the following duties are included:

25(2) Without limiting the strict duty imposed by subsection (1), an employer shall,

(a) provide information, instruction and supervision to a worker to protect the health or safety of the worker;

(h) take every precaution reasonable in the circumstances for the protection of a worker[.]

Principles Applied

1. Wrongful dismissal and severance

[67] The issue to be addressed is straightforward: when does the limitation period begin to run for this wrongful dismissal action -- at the time notice of termination was received or on the last day worked?

[68] The parties are in agreement that a two-year limitation period governs, that notice of termination was received by the plaintiff on March 18, 2013, and that the plaintiff's last day of employment was March 22, 2015. The parties also agree on the key legal issue to be decided: whether the limitation period commenced on the notice date or on the last day of work. My ruling does not depend on the resolution of any factual issue. Thus, a motion to strike in these circumstances, pursuant to rule 21.01(1) (a), is appropriate because it seeks a determination of a question of law that will dispose of all or part of the action.

[69] As reviewed above, the weight of authority holds that the limitation period in a wrongful dismissal case commences on the date of notice of termination, even when the actual end of employment is in the future. Indeed, that is the holding in Jones (C.A.), which is binding on this court.

[70] Counsel for the plaintiff valiantly argues that, read properly, the Jones (C.A.) holding is limited only to those cases where the plaintiff pleads that his or her employment was terminated on the date of notice. Counsel further argues that the correct conclusion can be found in the Goodwin case, which held that the limitation period began on the date the employment ended and not on the notice date. I will address each argument.

[71] Reading Jones (C.A.) narrowly, as advocated by plaintiff's counsel, cannot withstand close scrutiny. First, such a reading means the drafter of a statement of claim alone is permitted to choose the commencement date of the limitation period in a wrongful dismissal action. This position is untenable. Second, [page159] such a reading means the decision was made on the basis of a pleading error. But such a conclusion makes little sense when the decision is read as a whole. Why would the court expound on the question of when the limitation period commences in a wrongful dismissal action if the case turned on the failure to correctly plead? Respectfully, the case should not be so narrowly read. The inclusion of the pleading made the case easier to decide and simply marked the plaintiff's recognition of the correct commencement date. Moreover, Jones (C.A.) was decided over ten years ago, and no other court or commentator has so limited the decision.

[72] I decline to follow Goodwin. The plaintiff states that the employers could have changed their mind or sold the company during the working notice period, making the end of employment the correct commencement date. That may be, but I agree with Horkins J. in Jones (S.C.J.), at para. 14, that any change after the notice of termination is given does not change the fact that termination occurred on that date.

[73] With regard to the entitlement to severance pay claim, I reach a similar conclusion but on a statutory basis. Mr. Bailey's entitlement to severance arose when he was dismissed by the notice of termination received on March 18, 2013: see Employment Standards Act, s. 63(1)(a). It is on this date that the limitation period for this claim began to run.

[74] I have considered but disagree with the plaintiff's position that s. 65(1) of the Employment Standards Act indicates the severance date should be at the end of work. Section 65(1) is the calculation section, not the entitlement section. Entitlement is by reason of severance per s. 64(1) and severance is by dismissal per s. 63(1).

[75] In sum, I find that the wrongful dismissal and severance pay claims arose on March 18, 2013, when the notice of termination was received by Mr. Bailey. The applicable limitation period commenced on this date. Because the statement of claim was filed after the expiry of the limitation period, the claims of wrongful dismissal and severance pay are statute-barred.

2. Intentional infliction of mental distress

[76] The amended statement of claim does adequately allege the tort of intentional infliction of mental distress. The allegations [page160] are continuous beyond the 2013 notice of termination, thus making the claim well within the limitation period. At this stage, it is inappropriate to accept the defendants' invitation to make a limitation ruling with regard to purported pre-notice conduct because it is entangled with factual issues.

3. Human rights violations

[77] It is clear that a civil action may be prosecuted for age discrimination in the workplace under Ontario's Human Rights Code. The defendants do not argue to the contrary. Whether a civil action may be brought for a claimed violation of the OHSA is less than clear, but the defendants have not raised that issue and thus I do not address it. Moreover, novel but arguable claims should not be disposed of by a motion to strike: see Transamerica Life Canada Inc., 2003 ONCA 9923, at para. 39.

[78] The defendants do challenge the Human Rights Code claims as being statute-barred and the OHSA claim as failing to state a cause of action. For the reasons above, I disagree. The allegations fall within the limitation period. Further, at this stage, the amended statement of claim does disclose a reasonable cause of action under both statutes.

Conclusion

[79] For the above reasons, I order as follows:

(1) the wrongful dismissal and severance pay claims in the plaintiff's amended statement of claim are struck pursuant to rule 21.01(1)(a) at the Rules of Civil Procedure;

(2) the motion to strike is dismissed with regard to the claim of intentional infliction of mental distress; and

(3) the motion to strike is dismissed with regard to the human rights claims.

Costs

[80] As success was divided on the motion, there shall be no order as to costs.

Motion granted in part.

Notes

1. These are the facts as pled in the amended statement of claim. On a motion to strike, I must assume they are true.

2. The end date is variously pled as either March 22 or March 23. Because this one-day difference is of no legal significance here, I decline to address it further.

3. There is one reference to "negligent infliction of mental suffering" at para. 16 of the amended statement of claim. Such a claim is not available in the employment context. However, read as a whole, the claim is for the intentional tort, which is how I construed it.

End of Document