COURT FILE NO.: 11150/16 SR DATE: 2017/05/15
ONTARIO SUPERIOR COURT OF JUSTICE
B E T W E E N:
Kim Morrow, Plaintiff Louis Century, for the Plaintiff
- and -
Complex Services Inc., operating as Niagara Casinos, Defendant Michael J. Bonomi, for the Defendant
SUMMARY JUDGMENT MOTION HEARD at Welland, Ontario: March 31, 2017
The Honourable Justice T. Maddalena
REASONS FOR JUDGMENT
The Issues
[1] This is an action for wrongful dismissal arising out of the employment relationship between the plaintiff Kim Morrow (“Morrow”) and Complex Services Inc., operating as Niagara Casinos (“Complex Services”).
[2] Both parties agree that it is appropriate to proceed herein by way of summary judgment.
[3] There are two issues for determination at this summary judgment motion, as follows:
- Calculation of the period of reasonable notice; and
- Calculation of damages to Morrow based on the reasonable notice period.
[4] There are no substantial contested facts or issues of credibility and there are no allegations of just cause in this action.
The Position of the Plaintiff
[5] The plaintiff Morrow submits his entitlement to reasonable notice falls within the range of 9 to 12 months. Therefore, the plaintiff submits the court should award a notice period of 11 months.
[6] In addition to the usual damages, the plaintiff Morrow also seeks a modest award of aggravated damages.
The Position of the Defendant
[7] Complex Services submits that the notice period should not exceed 7.5 months.
[8] Complex Services also disputes any award of punitive, or aggravated or exemplary damages.
Background
[9] Morrow was employed by Complex Services from April 14, 2008 to September 14, 2015, i.e. seven years and five months.
[10] Complex Services exercised its contractual right to terminate Morrow’s contract, without just cause, on September 14, 2015.
[11] Morrow was age 53 at the time of his termination.
[12] Morrow was initially hired with the job title of “Health and Safety Specialist” in April 2008. In June 2008 Morrow’s job title changed to “Safety and Prevention Supervisor”.
[13] For approximately a period of two years and four months (i.e. between March 2011 and July 2013), Morrow had an employee that he was responsible for training and supervising.
[14] Separate and apart from the aforementioned time period, Morrow did not have any subordinate employees to manage or supervise.
[15] Morrow was responsible as Safety and Prevention Supervisor for developing and implementing safety and prevention programs and policies at Niagara Casinos. While his job title referenced “supervisor”, he did not ordinarily have a supervisory role (other than as aforementioned).
[16] While his tasks included development of a workplace safety plan and preparing health and safety policies, Morrow had no specific authority to improve or implement same. Approval and/or implementation were the responsibility of management. Morrow was not part of management.
[17] Morrow’s pay and benefits at the time that his employment ended consisted of the following:
- A base annual salary of $67,083;
- A discretionary bonus;
- Participation under the employee health and pension plans; and
- Paid vacation of three weeks per year.
[18] According to the evidence, for the last three fiscal years of Morrow’s employment, he received a discretionary bonus, despite the uncontroverted evidence that his recent performance evaluation placed his performance at below “meets expectations”.
[19] This will be canvassed more fully under the heading of “Damages and Bonus”.
[20] In addition, post-termination, Morrow was required by Complex Services to refrain from attending at Complex Services properties for a six-month period. The employer states this was standard practice for all former employees and not arbitrarily applied to Morrow.
The Law
[21] An employer may terminate a contract of employment in the absence of just cause provided the employee receives reasonable notice of termination.
[22] The case of Bardal v. The Globe & Mail Ltd. (1960), sets out the relevant factors for the court to consider when determining reasonable notice. The court held in Bardal as follows:
There can be no catalogue laid down as to what is reasonable notice in particular classes of cases. The reasonableness of the notice must be decided with reference to each particular case, having regard to the character of the employment, the length of service of the servant, the age of the servant and the availability of similar employment, having regard to the experience, training and qualifications of the servant.
[23] Further, the primary purpose of notice is to permit an employee a reasonable opportunity to seek alternate employment.
[24] In determining the notice, the court shall consider all the relevant Bardal factors in each circumstance. No one factor should be given disproportionate weight. [1]
ANALYSIS – The Bardal Factors
Age
[25] Mr. Morrow was terminated at age 53.
[26] By age 53 Morrow had over 20 years of experience in the field of health and safety, including with a wide range of employers.
[27] Therefore, his experience, reliability, and maturity are factors for consideration.
[28] Also a factor, from Morrow’s perspective, is that his age is now a barrier in the labour market as he faces competition with much younger workers.
[29] I find, at age 53, Morrow is neither old nor young. Morrow has productive years of employment ahead of him. He is not faced with retraining at this stage in his life and career. His experience crosses broad sections of employment.
Length of Service
[30] Morrow was employed by Complex Services for approximately 7.5 years in a specialized position relating to health and safety.
[31] This length of service is, according to case law, in the moderate range of neither short nor long term.
Character of Employment
[32] Despite the title of “Safety and Prevention Supervisor”, I find that Morrow did not act in a supervisory capacity, save and except for an approximate two and a half year period when he had the supervision of an employee.
[33] Morrow, in his capacity as Safety and Prevention Supervisor, was responsible for putting forward safety and prevention policies and programs to his direct and immediate supervisors.
[34] While he was skilled and had expertise in health and safety, the court must consider that Morrow did not have management authority. The approval or implementation of his policies and programs did not fall to Morrow. Morrow’s employment, save and except for the two and a half years referenced already, was not managerial in character. He did not have managerial duties. He could not approve or implement any policies.
[35] I find Morrow was a highly skilled technician with highly portable skills in the field of health and safety.
[36] Morrow is neither a high level employee nor a low level unskilled employee.
The Availability of Similar Employment
[37] Complex Services submits Morrow is a skilled employee in a growth industry. This gives him an enhanced ability to secure alternate employment. Complex Services States that Morrow’s skills in health and safety are transferable across various sectors of employment.
[38] Morrow states that he has a high degree of expertise in health and safety. However, despite his expertise, he lacks some technical qualifications such as the Canadian Registered Safety Professional designation. Further, Morrow states that his postsecondary education is not in occupational health and safety, but in the field of chemistry and biochemistry.
[39] However, Morrow agreed in his cross-examination that his skills could be transferable to the auto sector, to the restaurant and hospitality industry, to the manufacturing sector, to the municipal sector, to the gaming sector, as well as industrial, education, health care and retail. This gives him a very wide range of suitable, alternate employment opportunities.
Period of Notice
[40] There is no hard and fast rule on what reasonable notice should be. At times, minute comparisons of cases may not always be helpful since all are based on their own specific facts.
[41] However, in the case of Beatty v. Best Theratronics Ltd., 2015 ONCA 247, the Ontario Court of Appeal upheld a ruling of the Superior Court of Justice where an employee, who was 58 years old at termination, with 16 years continuous employment with Theratronics Ltd., was provided 16 months’ notice.
[42] The employee in Beatty was a radiation safety officer with highly specialized and technical skills in radiation safety. The Court held that the lower court “… considered all of the Bardal factors, including, importantly, the specialized character of the respondent’s employment.” [2]
[43] Further, the Court in Beatty stated in para. 7 as follows:
[7] … The respondent’s responsibilities included the development and maintenance of a radiation safety program in compliance with applicable regulations, safety training and tours of the appellant’s facility and coordinating the safety program with local emergency authorities. The respondent undertook these functions in a highly regulated environment; indeed he was the site contact with the regulator, the Canadian Nuclear Safety Commission (the CNSC). When the respondent went on short term disability the appellant brought in an outside specialist to fill the role, a person with 25 years’ experience working with the CNSC. There is simply no merit to the argument that the motion judge mischaracterized the appellant’s position when he concluded that it was specialized and technical.
[44] The Court concluded that 16 months was an appropriate notice period under the circumstances.
[45] Extrapolating from Beatty, and balancing all of the Bardal factors, I conclude that eight months is an appropriate notice period in the current circumstances.
DAMAGES
Salary
[46] Morrow’s salary at termination was $67,083 per year (gross) or $5,590.25 monthly. Complex Services paid Morrow the Employment Standards Act, 2000, S.O. 2000, c. 41 severance on termination of $18,818.78, which amount is to be deducted from his salary based on an eight-month notice period.
Health Care Benefits
[47] The value of health care benefits, based on the evidence, is $383.98 per month. Complex Services continued health benefits for Morrow from September 14, 2015 to February 10, 2016, i.e. five months. Therefore, an additional three months of health care benefits are $1,151.98 to cover the balance of the notice period.
Pension
[48] According to the evidence, pension contributions by the employer were based on three percent of base salary. This pension contribution, therefore, amounts to $2,012.49 annually, or $167.70 monthly.
[49] According to the evidence, Morrow’s participation was continued for 1.6 months after termination (i.e. September 14 to November, 2015 which equals 1.6 months).
[50] Therefore, the outstanding pension for the balance of the notice period is $1,073.28 (6.4 months X $167.70).
Bonus
[51] It is clear in evidence that any bonus paid by Complex Services is said to be completely discretionary to the employer.
[52] The evidence is also clear that Morrow had received bonuses for the last three fiscal years.
[53] Morrow’s last three bonuses were as follows:
- $5,320 for fiscal 2012/203
- $4,970 for fiscal 2013/2014
- $4970 for fiscal 2014/2015
[54] The bonus period is calculated from April 1st through to March 31st of the following year.
[55] Colleen Falco is Director of Human Resources at Complex Services. She stated in her affidavit, sworn February 7, 2017, that bonuses are discretionary and reflect both individual performance as well as the overall financial performance of the organization.
[56] Ms. Falco confirmed that Morrow, for his last year of employment, received a below “meets expectations” evaluation but was still paid a bonus of $4,970.
[57] Based on this evidence, one may infer that the bonus was not based on Morrow’s personal performance but perhaps on the overall financial performance of the organization or, alternatively, that the bonus was not really discretionary, but perhaps part of expected salary.
[58] Therefore, while puzzling, it is still clear in evidence, and admitted, that Morrow was paid a bonus in the last full year of his employment despite the fact that his performance was rated below “meets expectations” and therefore unsatisfactory.
[59] Therefore based on the aforementioned, I conclude that, notwithstanding that bonuses are said to be discretionary, and notwithstanding that Morrow’s performance was below “meets expectations”, it is likely that a bonus would have been paid to Morrow had he remained. Therefore, I include a bonus of $4,970 for fiscal 2015/2016 up to and including March 31, 2016 only and not beyond, (even though the full notice period would extend to May 14, 2016).
Vacation Pay
[60] Morrow was entitled to three weeks’ vacation paid per year. Any pay for unused vacation prior to dismissal is clearly recoverable.
[61] Vacation pay is also a statutory benefit under the Employment Standards Act, 2000, S.O. 2000, c. 41.
[62] It is clear in the evidence that Morrow received $431.44 plus $547.86 as against his vacation pay.
[63] However, an employee is not entitled to damages for vacation entitlement during the notice period. Case law has held that, if permitted, this would amount to double recovery by the employee.
[64] The case of Cronk v. Canadian General Insurance Co., in part VI, the Court noted:
… The vacation allowance, it is said, is merely an entitlement to time away from work during the employment period, and that it cannot accrue during the notice period. The entitlement to vacation pay is not part of the common law but is governed by Part VIII of the Employment Standards Act, R.S.O. 1990, c. E.14.
I agree with the per curiam judgment of the British Columbia Court of Appeal (a five-judge panel) in Scott v. Lillooet School District No. 29 (1991), 60 B.C.L.R. (2d) 273, which contains a full discussion of the vacation pay issue at pp. 276-80, and which concludes as follows:
Vacation pay arises as a result of the contract of employment providing for a period of time during the employment year when the employee is not required to “work” but yet is entitled to pay.
During the 15-month notice period awarded to the respondent, he was free from any obligation to the appellant, either to go to work or to expend any effort in its behalf.
In the case at bar, the respondent led no evidence of loss or expense associated with lost vacation benefits nor did he lead any evidence that he had suffered in any way as a result of his not being able to take a meaningful holiday.
To award the respondent damages for vacation pay, on top of an award of full salary for the period of notice to which he was entitled, (which necessarily includes payment of his salary for any vacation he may have taken had he worked during that notice period), is to provide double indemnity, or put another way, to provide compensation for loss that he has not suffered.
The respondent was entitled to receive vacation pay upon the termination of her employment. The statutory benefit must obviously be calculated in accordance with the provisions of the statute and does not apply to the period of notice to which the respondent is entitled at common law if that period exceeds the period to which the statutory benefit applies.
[65] Accordingly, based on Cronk, the request for vacation pay is dismissed.
Punitive, Exemplary and Aggravated Damages
[66] Morrow seeks $4,000 in punitive, exemplary and aggravated damages. This is as a result of a request made by Complex Services that Morrow refrain from attending casino property for six months post-termination.
[67] The evidence, which I accept, is that Morrow was not arbitrarily targeted for the application of this policy by Complex Services. I accept that this policy and procedure of Complex Services was applied to all involuntary terminations (both with or without just cause).
[68] Further, Complex Services offered assistance and support to Morrow once terminated including outplacement counselling.
[69] The affidavit of Colleen Falco, sworn February 7, 2017, confirms that Morrow received immediate payout of statutory entitlements, continuation of group employee health care coverage for seven weeks, coverages under group employee health care benefits plan to February 10, 2016, outplacement counselling for six months, enhanced outplacement counselling and career transition services for three months. In addition, Morrow received employment letters for job searches.
[70] I conclude that there is no basis in the evidence for an award of punitive, exemplary or aggravated damages and, thus, that request is also dismissed.
Judgment
[71] Based on a notice period of 8 months, Complex shall pay to Morrow damages calculated at $33,098.44. (See Schedule “A” – attached)
[72] Pre-judgment interest is calculated at 1.3%. [3]
Costs
[73] The parties may make written submissions on costs. Submissions are limited to two pages (double-spaced), plus a bill of costs and any applicable offers to settle. The defendant shall serve and file submissions by May 29, 2017. The plaintiff shall serve and file submissions by June 12, 2017.
Maddalena J.
Released: May 15, 2017
Schedule “A”
$5,590.25 X 8 months $44,722.00 Less ESA paid -$18,818.78 Add health care benefits for 3 months $ 1,151.94 Add pension $ 1,073.28 Add bonus $ 4,970.00 Vacation 0 Exemplary 0 $33,098.44
Based on a notice period of 8 months, Complex shall pay to Morrow damages calculated at $33,098.44.
[1] Honda Canada Inc. v. Keays, 2008 SCC 39, [2008] 2 S.C.R. 552, para. 32 [2] Beatty v. Best Theratronics Ltd., 2015 ONCA 247, para. 5 [3] Interest table published pursuant to O. Reg. 339/07: INTEREST RATES for action commenced January 5, 2016.