Court File and Parties

CITATION: Ott v. Canadian Standard Home Services, 2017 ONSC 7114

COURT FILE NO.: CV-16-546625

DATE: 20171123

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: SERA OTT

AND:

CANADIAN STANDARD HOME SERVICES

BEFORE: KOEHNEN J.

COUNSEL: A. Monkhouse, for the Plaintiff

No one appearing for the Defendant

HEARD: October 10, 2017

Endorsement

[1] The plaintiff, Sarah Ott, brings this motion for default judgment. She claims damages for wrongful dismissal, unpaid overtime as well as punitive, aggravated, Bhasin and/or moral damages.

[2] The defendant, Canadian Standard Home Services, initially defended with counsel. Defendant’s counsel removed themselves from the record on March 23, 2017, pursuant to an order of Master Hawkins which required the defendant to appoint new counsel within 30 days. The defendant failed to do so. Ms. Ott moved to strike the defendant’s claim which she succeeded in doing and now brings this motion for default judgment.

[3] Consistent with this court’s direction in Elekta Ltd. v. Rodkin, 2012 ONSC 2062, [2012] O.J. No. 1439, Ms. Ott served the defendant with notice of this motion even though it was a motion for default judgment.

Background

[4] Ms. Ott that resides in the city of Toronto and is 31 years old. She began her employment with the defendant on November 10, 2014, as a recruiter. She was ultimately promoted to Human Resources Coordinator which gave her responsibility for recruiting in two of the defendant’s offices. At the time of her termination Ms. Ott earned $92,248 per year including bonuses.

[5] Her employment was terminated on January 6, 2016. The reason given in her termination letter was lack of work. Ms. Ott’s statement of claim asserts that the true reason for her termination was her decision to limit her work on weekends and into the evenings. Given that the defendant’s statement of defence has been struck, it is deemed to admit the factual allegations in the statement of claim.

[6] Ms. Ott secured new employment on March 25, 2016, 11 weeks after her termination. Ms. Ott’s new position paid $274 less per week than her position with the defendant.

Reasonable Notice

[7] The plaintiff pleads that she is entitled to 12 months notice. She submits that her entitlement is deemed to have been admitted by virtue of rule 19.02(1)(a). I disagree. The rule provides that a defendant who has been noted in default “is deemed to admit the truth of all allegations of fact” made in the statement of claim. The plaintiff’s entitlement to a certain period of notice is not a fact but a question of law.

[8] Reasonable 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 294 (ONSC), 24 D.L.R. (2d) 140 at p. 145.

[9] Ms. Ott is young, held a relatively junior position and earned a mid-range income. She was employed by the defendant for approximately 14 months. Ms. Ott’s counsel has taken me to numerous cases where employees employed for similar or shorter periods of time have been awarded notice of 12 months. Those cases, however, involved luring employees away from secure employment; often enticing employees to uproot themselves and their families to different areas of the country.

[10] I find that an appropriate notice period for Ms. Ott is six months.

[11] Her damages for lack of notice are calculated as follows. She received no income during the 11 weeks following her termination. She should have received 11 weeks at her normal weekly pay rate for a total of $19,514 less the amounts received from Canadian Standard ($3,284.58) for a total of $16,229.42. In addition, she should receive an additional 15 weeks (26 weeks notice minus the 11 weeks referred to above) pay of $274 per week (the difference between her salary with the defendant and her new employer) for a further payment of $4,110 for a total additional payment of $20,339.42 on account of notice.

Overtime, Commissions and Overrides

[12] The plaintiff’s statement of claim states that she worked approximately 1,281 hours of unpaid overtime while she was employed by the defendant. She calculates this based on a 65 hour work week or 21 hours of overtime per week. Pro-rating her income to an hourly rate would come to $32.45. Her overtime rate, calculated at 1.5 times her regular hourly rate would amount to $48.68 per hour for a total of $62,359. Ms. Ott has confirmed this in her affidavit in support of her motion for summary judgment.

[13] An issue arises about whether Ms. Ott was a managerial employee. If she was a managerial employee, she is not entitled to overtime pay. Ms. Ott’s statement of claim and her affidavit state that she had few, if any, management functions and was a recruiter who did not manage other people. In addition, Ms. Ott carried out purely administrative tasks, such as acting as a receptionist, on a regular basis. This would remove Ms. Ott from the management category of employee: see section 8 (b) of O Reg 285/01 “The Exemptions, Special Rules and Establishment of Minimum-Wage; Glendale Golf and Country Club Limited v. Sanago [2010] OESAD No. 76 4265 at paragraph 38.

[14] Given that the defendant is deemed to admit the truth of the allegations in the statement of claim and given that Ms. Ott has the statements about overtime in an affidavit which the defendant has not contested, she is entitled to judgment for unpaid overtime of $62,359.

[15] Ms. Ott pleads in paragraph 15 of her statement of claim that she was forced to pay back $330 in commission earnings and $250 in overrides that she states she was entitled to retain. The defendant is deemed to admit those allegations of fact and Ms. Ott is entitled to judgment in the amount of $580 on account of these claw backs.

Punitive, Aggravated, Bhasin and/or Moral Damages

[16] Ms. Ott claims $25,000 in punitive, aggravated, Bhasin and or moral damages.

[17] Her employment was terminated on January 6, 2016. At that time, she was owed $2,076 in unpaid wages. She was also owed termination/severance pay under the Employment Standards Act. The defendant paid neither her Employment Standards Act entitlements nor her unpaid salary until March 30, 2016, well after she commenced her action and after the defendant filed a statement of defence.

[18] The failure of an employer to meet its statutory obligations to a terminated employee amounts to malicious high-handed conduct for which an award of damages would be justified: see Nelson v. 977372 Ontario Inc. [2013] O.J. No. 3182.

[19] The termination pay to which Ms. Ott was entitled under the Employment Standards Act and her unpaid salary, both of which she was entitled to on or about the date of her termination, came to $3,284.58. In my view, in this case, an appropriate amount of damages to reflect the unwarranted failure to pay those sums when they were due is a sum equal to the amount owing. The defendant is therefore liable to pay Ms. Ott a further $3,284.58 on account of punitive damages.

Conclusion

[20] For the reasons set out above, the plaintiff is entitled to judgment in the following amounts:

(i) $20,339.42 on account of salary in lieu of notice;

(ii) $62,359 on account of unpaid overtime pay;

(iii) $580 on account of inappropriate claw backs; and

(iv) $3,284.58 on account of punitive damages.

[21] Given that this is a default judgment, the requirement of having the defendant approve the judgment as to form and content is dispensed with.

Costs

[22] Ms. Ott is entitled to her costs on a partial indemnity scale which I fix at $11,558.81 as set out in her costs outline. Ms. Ott has not pointed to any particular facts that would support an award for substantial indemnity costs, apart from perhaps the defendant’s failure to pay termination pay and unpaid salary in a timely manner. Ms. Ott has already been compensated for that by way of the punitive damages award.

Koehnen J.

Date: November 23, 2017