Belsito v. 2220742 Ontario Ltd., 2017 ONSC 7207

CITATION: Belsito v. 2220742 Ontario Ltd., 2017 ONSC 7207

COURT FILE NO.: CV-16-3986-00

DATE: 2017 12 01

SUPERIOR COURT OF JUSTICE – ONTARIO

John Belsito Applicant

• and -

2220742 Ontario Ltd. o/a Bronte Construction Ltd. Respondent

BEFORE: Bloom, J.

COUNSEL: Ben Hahn, counsel for the Applicant

Gwendolyn L. Adrian, counsel for the Respondent

E N D O R S E M E N T

I. INTRODUCTION

[1] The Application at bar has been brought by the Applicant under Rule 14.05(3) (d) and (h) seeking (1) the payment of damages for wrongful dismissal under his contract of employment in the sum of $35,000.00 being three months’ salary, and (2) the payment under that contract of $6550.00 of matching RRSP contributions.

II. FACTS AND PROCEDURAL BACKGROUND

[2] On March 14, 2016 the Applicant commenced his employment with the Respondent as a senior superintendent. His contract of employment was written, and was an offer accepted on February 28, 2016 by the Applicant’s signature.

[3] The contract provided that “Bronte Construction agrees to pay three (3) month’s severance due to termination without just cause for first two (2) years of employment, increasing to five (5) months’ severance pay beyond (2) years of employment.” It also provided that “You will be eligible to participate in the company Benefits Program start immediately. Health, Medical coverage, Dental coverage, Basic Life Insurance and Basic AD&D….The Company’s benefit plans may be changed from time to time, and/or eliminated, without notice, at the discretion of the Company.” Further, it stated that the employer would provide “RRSP Contribution matching program.”

[4] The contract identified the Applicant’s key responsibilities as including “[p]rovide team direction and coaching”,“[e]ffectively manage work, equipment,…and personal [sic]”, “[c]omplete daily, weekly, monthly paperwork as required”, “[r]un & manage clean job site adhering to safety requirements”, “[p]rovide mentorship and guidance to Supervisors”, “[a]ctive participation of [sic] Sr management meetings”,“[p]articipation is [sic] Pre/Post Construction meetings”, and “[m]aintain company moral [sic]”.

[5] On June 21, 2016, Bronte terminated the Applicant’s employment without notice. Joel Van Beek, the President of the Respondent, in his affidavit sworn October 26, 2016 stated that he had intended to terminate the Applicant’s employment on June 14 when, according to the affiant’s understanding, the Applicant was on probation as a consequence of being in his first three months of employment, and could be terminated without notice. The affiant further stated that, since the termination did not take place within the three month period, he arranged for the preparation of “Employee Warning Notices” dated June 15, June 17, and two dated June 21(all of 2016) for delivery to the Applicant at the meeting of June 21 where his employment was terminated. The notices on their face purported to be respectively a first warning, a second warning, a second warning, and a final warning. Further, the affiant stated that the Applicant refused to read and sign them at the June 21 meeting, as well as to accept a letter of dismissal also dated June 21, 2016. The letter recited as the reasons for termination the misconduct identified in the notices; each of the notices purported to explain misconduct and provide for a plan of correction.

[6] On November 8, 2016 the parties appeared before Justice Bielby of this court. At the request of the Respondent he adjourned the Application to allow for cross-examination of the Applicant on his affidavit filed in support of the Application. Instead the Respondent filed a Supplementary Responding Application Record dated November 21, 2016 containing the Affidavit of Amanda Van Beek sworn November 18, 2016.

[7] Ms. Van Beek in her affidavit stated that she joined the Respondent company in mid-May of 2016 as the operational head of Health and Safety; that the company was “my brother, Joel Van Beek’s”; and that “only when it became obvious that improvement in his conduct and work habits, including how he treated people, would never occur and the decision was made to terminate Belsito that the written complaints, in their current form, were formally drafted and the complainants asked to formally acknowledge the complaint by signing it.” She attached several such complaints to her affidavit.

[8] In his affidavit sworn November 25, 2016 the Applicant responded to the affidavit of Amanda Van Beek.

[9] On November 29, 2016 Justice Snowie set July 26, 2017 as the hearing date for the Application as a long motion.

[10] On July 19, 2017 the Respondent filed the Second Supplementary Responding Application Record dated July 18, 2017 containing the affidavit of Joshua Salverda sworn July 18, 2017 and that of Michael Sheridan sworn July 18, 2017.

III. ISSUES

[11] The Applicant argues that the Application before me is properly brought under Rule 14.05(3) (d) and (h). Further, he argues that, respecting Rule 14.05(3)(h), there are “no material facts in dispute” because evidence tendered by the Respondent is inadmissible under Rule 39.01(5), is of little weight, or, even if believed, would not support termination of employment without notice, for cause. He argues also that he was entitled on the proper construction of the contract of employment to damages for wrongful dismissal in the amount of three months’ salary, being $35,000.00, and to $6,550.00 in matching RRSP contributions. Finally, he argues that there is no reason to convert the whole Application into an Action, or to direct trial of an issue of an aspect of the Application.

[12] The Respondent argues that the issue of the alleged dismissal without cause ought to be converted into an Action, and disposed of by treating it as subject to a summary judgement motion, which would then be dismissed. Further, the Respondent argues that the issue of the RRSP contributions ought to treated as an Application and dismissed.

[13] Accordingly, the following issues arise:

1. Whether the Application is properly brought under Rule 14.05(3)(d) or (h);

2. Whether evidence is inadmissible under Rule 39.01(5);

3. Whether the whole Application or any issue ought to be ordered to proceed to trial under Rule 38.10; and

4. Whether the Application ought to be granted in whole or in part.

IV. GOVERNING PRINCIPLES

A. Procedure

[14] Rule 14.05(3)(d) and (h) is important to a disposition of those issues:

Application under Rules

14.05 (3) A proceeding may be brought by application where these rules authorize the commencement of a proceeding by application or where the relief claimed is,

(d) the determination of rights that depend on the interpretation of a deed, will, contract or other instrument, or on the interpretation of a statute, order in council, regulation or municipal by-law or resolution;

or

(h) in respect of any matter where it is unlikely that there will be any material facts in dispute. R.R.O. 1990, Reg. 194, r. 14.05 (3); O. Reg. 396/91, s. 3.

[15] In Niagara Air Bus Inc. v. Cameraman, 1989 4161 (ON SC), [1989] O.J. 1425 (ON SC) (reversed on a different point at 49 O.A.C.7) Justice Watt at para. 27 discusses the use of these two provisions:

27 In applications under category c., supra, the enabling authority is found in rule 14.05(3) and derives from the nature of the relief claimed. It is only in para. (h) that mention is made of "... material facts in dispute" as a matter which may disentitle an applicant to the relief claimed. It is a commonplace, most especially in applications for injunctive or declaratory relief under rule 14.05(3)(g), that there will be material facts in dispute. The simple fact of dispute on material matters does not disentitle an applicant to his or her remedy. Rule 14.05(3)(h), as it would appear to me, is a residual category which speaks in more general terms than do the immediately preceding paragraphs which articulate more specific forms of relief. Indeed, even under rule 14.05(3)(h), a factual dispute, simpliciter, is not a disentitling factor. The dispute must relate to material facts, that is to say, facts necessary to a determination of the matter and without which a determination cannot be made. The requirement of materiality looks to the relation between the propositions for which the evidence is offered and the issues to be resolved in the case. It would seem logically to follow that where the dispute relates to facts not material to a determination of the issues raised in light of the relief claimed, the disparity is nihil ad rem.

[16] The following rules are also important to a consideration of the case at bar:

Contents

4.06 (2) An affidavit shall be confined to the statement of facts within the personal knowledge of the deponent or to other evidence that the deponent could give if testifying as a witness in court, except where these rules provide otherwise. R.R.O. 1990, Reg. 194, r. 4.06 (2).

Contents — Motions

39.01 (4) An affidavit for use on a motion may contain statements of the deponent’s information and belief, if the source of the information and the fact of the belief are specified in the affidavit. R.R.O. 1990, Reg. 194, r. 39.01 (4).

Contents — Applications

39.01 (5) An affidavit for use on an application may contain statements of the deponent’s information and belief with respect to facts that are not contentious, if the source of the information and the fact of the belief are specified in the affidavit. R.R.O. 1990, Reg. 194, r. 39.01 (5).

[17] In Aker Biomarine AS et al. v. KGK Synergize Inc., 2013 ONSC 4897 at paras. 9 to 13 Justice Leach discusses Rules 4.06(2), 39.01(4), and 39.01(5):

9 The aforesaid rules, and the very similar Rule 39.01(4) applicable to affidavit evidence for use on motions, (the subject of many of the authorities relied upon by KGK), read as follows:

4.06(2) An affidavit shall be confined to the statement of facts within the personal knowledge of the deponent or to other evidence that the deponent could give if testifying as a witness in court, except where these rules provide otherwise.

39.01(4) An affidavit for use on a motion may contain statements of the deponent's information and belief, if the source of the information and the fact of the belief are specified in the affidavit.

39.01(5) An affidavit for use on an application may contain statements of the deponent's information and belief with respect to facts that are not contentious, if the source of the information and the fact of the belief are specified in the affidavit.

10 These rules repeatedly have been the subject of judicial comment, emphasizing their importance and outlining a number of general principles and considerations to be borne in mind in their application. These include the following:

• An affidavit should generally conform to the requirements for affidavits as set out in Rule 4.02 of the Rules of Civil Procedure, and therefore be confined to statements of fact within the personal knowledge of the deponent. An affidavit should not contain improper hearsay. See, for example: Chopik v. Mitsubishi Paper Mills Ltd., [2002] O.J. No. 2780(S.C.J.); White v. Merk First Canada, [2004] O.J. No. 623 (S.C.J.); Punit v. Wawanesa Mutual Insurance Co. 2006 93712 (ON SC), [2006] O.J. No. 3685 (S.C.J.); Metzler Investment Gmbh v. Gildan Activewear Inc., [2009] O.J. No. 3394 (S.C.J.).

• Exceptions to the requirement of personal knowledge rule may be permitted where the facts attested are not contentious, clearly relevant, and not purposely put forward to avoid cross-examination. See, for example: Chopik v. Mitsubishi Paper Mills Ltd., supra; Punit v. Wawanesa Mutual Insurance Co., supra; Metzler Investment Gmbh v. Gildan Activewear Inc., supra.

• In this context, "contentious" refers to something that is in dispute or in respect of which there are differences between the contending parties. See, for example: Ontario (Attorney General) v. Paul Magder Furs Ltd. (1989), 1989 4253 (ON SC), 71 O.R. (2d) 513 (H.C.J.); and Cameron v. Taylor (1992), 1992 7575 (ON SC), 10 O.R. (3d) 277 (Gen. Div.)

• Violations of Rules 4.06(2), 39.01(4) and 39.01(5) are not mere technicalities or irregularities that may be cured or waived. To the contrary, where it is clear in law that evidence is inadmissible, leaving it on the record is embarrassing and prejudicial to the fair hearing of the motion or application. Evidence tendered in violation of the rules of evidence and Rules of Civil Procedure therefore must be regarded as worthless, and should not be considered; e.g., by the court refusing to receive the affidavit, striking the relevant paragraphs from the offending affidavit, and/or by the court otherwise paying no regard to the evidence. See, for example: Scarr v. Gower (1956), 1956 276 (BC CA), 2 D.L.R. (2d) 402 (B.C.C.A.); Merker v. Leader Terrazzo Tile Mosaic Ltd. (1983), 1983 1758 (ON SC), 43 O.R. (2d) 632 (H.C.J.); Bank of Montreal v. Anco Investments Ltd. (1986), 9 C.P.C. (2d) 97 (Ont.Dist.Ct.); Standelmier v. Hoffman (1986), 1986 2596 (ON SC), 57 O.R. (2d) 495 (Surr.Ct.); Ontario (Attorney General) v. Paul Magder Furs Ltd., supra; Cameron v. Taylor, supra; Noble China Inc. v. Lei (1998), 1998 14708 (ON SC), 42 O.R. (3d) 69 (Gen.Div.); Chopik v. Mitsubishi Paper Mills Ltd., supra; and Toronto Standard Condominium Corp. No. 1510 v. McCauley, [2008] O.J. No. 2291 (S.C.J.).

11 However, it must be remembered that the concern underlying these particular rules is and at all times remains the prevention of inadmissible hearsay; a necessary context for the application of Rules 39.01(4) and (5) made clear by many of the authorities relied upon by KGK. See, for example: Evans v. Holroyd, [1988] O.J. No. 1705 (H.C.J.), at paragraphs 12, 17 and 18; Metzler Investment GmbH v. Gildan Activewear Inc., supra, at paragraphs 11, 15, 48-51, and 54-55; and Lockridge v. Ontario (Director, Ministry of the Environment), 2012 ONSC 2316, [2012] O.J. No. 3016 (S.C.J.), at paragraphs 109 to 116.

12 What these and other authorities in this area make clear is that Rules 39.01(4) and 39.01(5) operate as controlled exceptions to the hearsay rule, and that challenges to admissibility based on alleged failure to satisfy the demands of those exceptions are predicated on an express or implicit finding that the impugned affidavit evidence should indeed be characterized as hearsay.

13 Put another way, the literal wording of Rule 39.01(5) should not be interpreted or applied so as to create some form of "stand alone" method of challenging and excluding evidence that is not clearly hearsay; i.e., on the alleged basis that the affiant has not detailed the basis of his or her evidence to an opponent's satisfaction and/or in a manner to satisfy the demands of the applicable test or burden under consideration.

[18] Finally, Rule 38.10 addresses conversion of an Application into an Action:

DISPOSITION OF APPLICATION

38.10 (1) On the hearing of an application the presiding judge may,

(a) grant the relief sought or dismiss or adjourn the application, in whole or in part and with or without terms; or

(b) order that the whole application or any issue proceed to trial and give such directions as are just. R.R.O. 1990, Reg. 194, r. 38.10 (1).

(2) Where a trial of the whole application is directed, the proceeding shall thereafter be treated as an action, subject to the directions in the order directing the trial. R.R.O. 1990, Reg. 194, r. 38.10 (2).

(3) Where a trial of an issue in the application is directed, the order directing the trial may provide that the proceeding be treated as an action in respect of the issue to be tried, subject to any directions in the order, and shall provide that the application be adjourned to be disposed of by the trial judge. R.R.O. 1990, Reg. 194, r. 38.10 (3).

Exception, applications in estate matters

(4) Clause (1) (b) and subrules (2) and (3) do not apply to applications under Rule 74, other than applications under rule 74.18, and Rule 75. O. Reg. 484/94, s. 11; O. Reg. 193/15, s. 4.

[19] In a leading textbook on civil procedure, Paul M. Perell & John W. Morden, The Law of Civil Procedure in Ontario, 2d ed (Markham, Ontario: LexisNexis Canada Inc., 2014) at paras. 5.221 to 5.224 the learned authors set out the following principles relative to the conversion of Applications to Actions:

5.221 Where there are material facts in dispute that require a trial, the judge may order that the application proceed to trial. The applications judge may decide that where there is a dispute with respect to facts material to the issues to be resolved, an application is not appropriate and a trial should be ordered. An order direction a trial is discretionary and is typically granted where there is conflicting evidence and complex and disputed questions of fact or credibility where oral evidence is required. The difficult question for the court is determining whether as a matter of procedural fairness and substantive justice a trial is necessary. If the application cannot fairly be determined by the summary process of affidavits and cross-examinations, then the application should proceed to trial and a hearing of witnesses. However, if the determination including issues of credibility can properly be made on the application record, then the application should not be converted into an action with a trial.

5.222 In determining whether to convert an application into a trial of an issue, the court will consider such factors as: (a) whether there are material facts in dispute; (b) the presence of complex issues; (c) whether there is a need for the exchange of pleadings and discovery; and (d) the importance and the nature of the relief sought by application. … The court should consider whether if the proceeding had already been commenced as an action and the moving party had brought a motion for a summary judgment would the court be satisfied that there is no genuine issue requiring a trial in which case a trial would not necessary. …

For a trial to be ordered there must be more than a factual dispute; the factual dispute must be material to the issues before the court and of a sort that cannot be fairly determined by the process of affidavits and cross-examinations.

B. Substantive Law

[20] The following provisions of the Employment Standards Act, 2000, S.O. 2000, c. 41 are relevant:

Definitions

1 (1) In this Act,

“employment standard” means a requirement or prohibition under this Act that applies to an employer for the benefit of an employee; (“norme d’emploi”)

No contracting out

5 (1) Subject to subsection (2), no employer or agent of an employer and no employee or agent of an employee shall contract out of or waive an employment standard and any such contracting out or waiver is void. 2000, c. 41, s. 5 (1).

Greater contractual or statutory right

(2) If one or more provisions in an employment contract or in another Act that directly relate to the same subject matter as an employment standard provide a greater benefit to an employee than the employment standard, the provision or provisions in the contract or Act apply and the employment standard does not apply. 2000, c. 41, s. 5 (2).

No termination without notice

54 No employer shall terminate the employment of an employee who has been continuously employed for three months or more unless the employer,

(a) has given to the employee written notice of termination in accordance with section 57 or 58 and the notice has expired; or

(b) has complied with section 61. 2000, c. 41, s. 54.

Employer notice period

57 The notice of termination under section 54 shall be given,

(a) at least one week before the termination, if the employee’s period of employment is less than one year;

(b) at least two weeks before the termination, if the employee’s period of employment is one year or more and fewer than three years;

(c) at least three weeks before the termination, if the employee’s period of employment is three years or more and fewer than four years;

(d) at least four weeks before the termination, if the employee’s period of employment is four years or more and fewer than five years;

(e) at least five weeks before the termination, if the employee’s period of employment is five years or more and fewer than six years;

(f) at least six weeks before the termination, if the employee’s period of employment is six years or more and fewer than seven years;

(g) at least seven weeks before the termination, if the employee’s period of employment is seven years or more and fewer than eight years; or

(h) at least eight weeks before the termination, if the employee’s period of employment is eight years or more. 2000, c. 41, s. 57.

Requirements during notice period

60 (1) During a notice period under section 57 or 58, the employer,

(c) shall continue to make whatever benefit plan contributions would be required to be made in order to maintain the employee’s benefits under the plan until the end of the notice period. 2000, c. 41, s. 60 (1).

Pay instead of notice

61 (1) An employer may terminate the employment of an employee without notice or with less notice than is required under section 57 or 58 if the employer,

(a) pays to the employee termination pay in a lump sum equal to the amount the employee would have been entitled to receive under section 60 had notice been given in accordance with that section; and

(b) continues to make whatever benefit plan contributions would be required to be made in order to maintain the benefits to which the employee would have been entitled had he or she continued to be employed during the period of notice that he or she would otherwise have been entitled to receive. 2000, c. 41, s. 61 (1); 2001, c. 9, Sched. I, s. 1 (14).

[21] The common law interacts with the Employment Standards Act (“ESA”) in relation to the termination of employment.

[22] In Nagribianko v. Select Wine Merchants Ltd., [2017] O.J. No. 3410 (Ont CA) at paras. 6 to 12 the Court addressed the issue of a probationary term:

6 The trial judge's decision to treat the term "Probation... Six months" as having no meaning was wrong. The parties agreed to a probationary contract of employment, and the term "probation" was not ambiguous. The status of a probationary employee has acquired a clear meaning at common law. Unless the employment contract specifies otherwise, probationary status enables an employee to be terminated without notice during the probationary period if the employer makes a good faith determination that the employee is unsuitable for permanent employment, and provided the probationary employee was given a fair and reasonable opportunity to demonstrate their suitability: Mison v. Bank of Nova Scotia (1994), 1994 7383 (ON SC), 6 C.C.E.L. (2d) 146 (Ont. Ct. (Gen. Div.)), at para. 43.

7 It is true that there is a presumption that an indefinite employment contract is terminable only on reasonable notice, however that presumption is overcome if the parties agree to a probationary period of employment: Machtinger v. HOJ Industries Ltd., 1992 102 (SCC), [1992] 1 S.C.R. 986, at p. 999; Jadot v. Concert Industries Ltd. (1997), 1997 4137 (BC CA), 44 B.C.L.R. (3d) 327 (C.A.), at para. 29; Ly v. British Columbia (Interior Health Authority), 2017 BCSC 42, [2017] B.C.J. No. 43, at para. 42.

8 Since it is not possible to contract out of the minimum notice standards provided for in the Employment Standards Act, 2000, S.O. 2000, c. 41 (the "ESA"), probationary employees are entitled to receive statutory notice, or pay in lieu of that notice. In this case, the required period of notice is one week, which the appellant received: ESA, ss. 54, 61.

9 This is not a case such as Machtinger, or Garreton v. Complete Innovations Inc., 2016 ONSC 1178, [2016] O.J. No. 869, where the termination clauses in employment contracts were rendered null and void because they expressly provide for notice periods shorter than the statutory minimum, contrary to employment standards legislation. There is nothing in the appellant's employment contract purporting to oust the statutory notice requirements under the ESA.

10 The Divisional Court was therefore correct in holding that the trial judge erred in failing to give effect to the probationary term of the contract, and in treating the appellant, for dismissal purposes, as though he was a permanent employee.

11 The Divisional Court was also correct in finding the trial judge erred by interpreting the term "Probation... Six months" according to the subjective understanding of the appellant, when contractual terms are to be interpreted based on an objective assessment of the intention of the parties: Salah v Timothy's Coffees of the World Inc., 2010 ONCA 673, 2010 O.A.C. 279, at para. 16.

12 Since there are no specific terms in the appellant's employment contract to the contrary, the contractual term "Probation... Six months" carries the common law meaning described in para. 6 of this decision.

[23] In determining whether there is just cause to terminate an employee without notice the common law has set out a number of principles.

[24] In Barton v. Rona Ontario Inc., 2012 ONSC 3809 at paras. 9, and 11 to 14 Justice Lauwers, as he then was, stated:

9 The Supreme Court of Canada's approach in McKinley v. B.C. Tel 2001 SCC 38, [2001] 2 S.C.R. 161 sets the framework for analyzing whether an employee's wrongful act will be found to constitute just cause for termination. As a factual matter, the employee had been somewhat dishonest about his medical condition and the treatments available for it. The issue in that case was whether an employee's dishonesty could inevitably justify termination. The Supreme Court held that there was no such invariable rule.

11 In short, the Supreme Court concluded that the "principle of proportionality" requires an "effective balance" to "be struck between the severity of an employee's misconduct and the sanction imposed" (McKinley, at para 53). The Supreme Court of Canada thus effectively adopted the approach to progressive discipline that labour arbitrators had been applying for years in a labour context.

12 As I see it, I am instructed by McKinley to adopt an analogous approach to assessing whether Mr. Barton's clear misconduct justifies Rona's termination of his employment. The contextual approach, to paraphrase paragraph 57 of the decision, requires me to examine the case on its own particular facts and circumstances, while considering the nature and seriousness of the misconduct, in order to assess whether it is reconcilable with sustaining the employment relationship. This approach mitigates the possibility that Mr. Barton will be unduly punished by the strict application of an unequivocal rule, but recognizes that misconduct going to the core of the employment relationship could warrant dismissal for just cause.

13 The plaintiff cites Echlin J. in Tong v. Home Depot of Canada Inc., [2004] O.J. No. 3458 (Ont. S.C.J.), at para 1 as explaining the basic rationale for the McKinley approach: "Just Cause is "the capital punishment crime of employment law"." Echlin J. elaborated in Carscallen v FRI Corp., [2005] O.J. No. 2400 at paras70, 72:

70 A modern seminal Canadian expression of a definition of "just cause" has been provided by Schroeder J.A. in dissent in the off-cited R. v. Arthurs, ex parte Port Arthur's Shipbuilding Co. (1967), 1967 30 (ON CA), 62 D.L.R. (2d) 342 at p. 348 (Ont. C.A.) (per Schroeder J.A. dissenting):

If an employee has been guilty of serious misconduct, habitual neglect of duty, incompetence or conduct incompatible with his duties, or prejudicial to the employer's business, or if he has been guilty of wilful disobedience to the employer's orders in a matter of substance, the law recognizes the employer's right to summarily dismiss the delinquent employee.

72 The important factors emerging from these expressions of the principle of law include that the misconduct must be "serious"; that the misconduct must amount to "a repudiation of the contract"; that the acts "evince of intention to no longer be bound by the contract"[sic]; that dismissal is an "extreme measure"; and must not be resorted to in trifling cases. As previously observed, just cause is truly is the "capital punishment of employment law".

14 The elements of the analytical framework were set out by the Ontario Court of Appeal in Dowling v. Ontario (Workplace Safety and Insurance Board), 2004 43692 (ON CA), [2004] O.J. No. 4812, 246 D.L.R. (4th) 65per Gillese J.A. at paras 49-50:

49 Following McKinley, it can be seen that the core question for determination is whether an employee has engaged in misconduct that is incompatible with the fundamental terms of the employment relationship. The rationale for the standard is that the sanction imposed for misconduct is to be proportional -- dismissal is warranted when the misconduct is sufficiently serious that it strikes at the heart of the employment relationship. This is a factual inquiry to be determined by a contextual examination of the nature and circumstances of the misconduct.

50 Application of the standard consists of:

1. determining the nature and extent of the misconduct;

2. considering the surrounding circumstances; and,

3. deciding whether dismissal is warranted (i.e. whether dismissal is a proportional response).

[25] In C.R. v. Schneider National Carriers, Inc., 2006 532 (ON SC) at para. 29 Justice Taliano discusses the burden of proof in a case of alleged unjust dismissal:

29 The employer has the onus of demonstrating that cause exists for an employee's summary dismissal, which has been characterized as the "capital punishment" of the employment relationship.

V. ANALYSIS

[26] I intend first to address the issue of dismissal for cause, including ruling on the admissibility of evidence where necessary. Second, I will address the issue of the RRSP contributions.

A. The Issue of Dismissal for Cause

[27] The employment contract in issue did not create a probationary period. Therefore, none existed, since none was imposed by the ESA or the common law. In coming to those conclusions I rely upon the principles set out in Nagribianko v. Select Wine Merchants Ltd., supra; those same principles are discussed also by Deputy Judge Winny in Deacon v. Moxey et al., [2013] O.J. No. 2014 (Ont Sm Cl Ct) at paras. 5 to 11:

5 Economy submits that there was a probationary period of three months during which it was entitled to dismiss without just cause. I disagree.

6 The defence cites s. 54 of the Employment Standards Act, 2000, which provides:

54. No employer shall terminate the employment of an employee who has been continuously employed for three months or more unless the employer,

(a) has given to the employee written notice of termination in accordance with section 57 or 58 and the notice has expired; or

(b) has complied with section 61.

7 By its terms, all s. 54 does is to create a statutory minimum notice requirement, which does not apply to new employees who have not been continuously employed for at least three months. It does not refer to a probationary period and does not say that employees whose employment is of less than three months' duration can be terminated without just cause.

8 Section 5(2) of the Act indicates that if a contractual term in an employment contract provides a greater benefit than an applicable employment standard, the contractual term prevails. Section 8(1) indicates that civil remedies are not affected by the Act.

9 Based on a plain reading of s. 54, I find that the Act does not confer on employers a general right to terminate, without notice, the employment of any employee whose employment has not yet reached three-months' duration. The Act establishes certain minimum employment standards. The Act does not codify the common law governing employment relationships: Machtinger v. HOJ Industries Ltd., 1992 102 (SCC), [1992] 1 S.C.R. 986 at para. 25; Stevens v. Globe & Mail (1996), 1996 10215 (ON CA), 28 O.R. (3d) 481 (C.A.).

10 Specific aspects of the common law may be affected by the Act: see Elsegood v. Cambridge Spring Service (2001) Ltd. (2011), 2011 ONCA 831, 109 O.R. (3d) 143 (C.A.). But in my view s. 54 cannot properly be interpreted as displacing the common law obligation on a employer who dismisses an employee to give either reasonable notice or pay in lieu of reasonable notice, in the case of employees whose employment is of less than three months' duration. Such an interpretation cannot be reconciled with any aspect of the modern cardinal rule of statutory interpretation.

11 Since the Act has no effect on the probationary period defence, that defence must turn on common law considerations. I agree with the plaintiff's submission that there is no evidence that a probationary period was agreed or even mentioned between the parties in this case. Accordingly, there is no probationary period applicable to Mr. Deacon's employment with Economy: see Rejdak v. Fight Network Inc. (2008), 2008 37909 (ON SC), 67 C.C.E.L. (3d) 309 (Ont. S.C.J.).

[28] The employment contract provided for severance pay of three months’ salary in the event of termination without just cause within the first two years of employment. That provision applies to the case at bar, since it was not contrary to the ESA.

[29] The parties adduced affidavit evidence on the issue of cause.

[30] For the Respondent, the affidavits of Joshua Salverda and Michael Sheridan painted a picture of the Applicant as abusive of employees under his supervision, thereby lowering employee morale.

[31] Much of the affidavit of Amanda Van Beek filed by the Respondent violates Rule 39.01(5) by adducing hearsay evidence of contentious facts. I do, however, note that her admissible evidence that the Applicant “ was often rude, and would raise his voice sometimes to the level where he was yelling at me” squares with the evidence of Salverda and Sheridan. She also provided admissible evidence that the incidents related by Salverda and Sheridan were brought to the Applicant’s attention “and together… [she and the Applicant] discussed steps to rectify the problem and what was necessary to prevent reoccurrences.”

[32] At paragraphs 16 and 17 of Joel Van Beek’s affidavit filed by the Respondent, the affiant provided evidence that he warned the Applicant that he was not to treat employees in a demeaning manner, but that the Applicant rejected this caution. The affiant also stated that he cautioned the Applicant about his failure to file daily supervisory reports.

[33] The Applicant in his affidavit evidence rejected the above complaints against him, and disputed that he had had warnings from the Respondent about his job performance.

[34] The evidence adduced by the Respondent directly engages key responsibilities of the Applicant identified in his employment contract, including effective management of personnel, completing daily paperwork, and maintaining company morale.

[35] While the onus lies on the Respondent to demonstrate just cause for termination, applying the principles of substantive law set out above I find that the evidence I have reviewed establishes a need for a trial on the issue of dismissal for cause. The alleged misconduct goes to the core responsibilities of the employee. It is completely denied. A trial on the basis of oral evidence is necessary to resolve the questions of credibility, so that findings of fact can be made to which to apply the relevant legal principles. Procedural fairness and substantive justice require a trial.

B. The Issue of RRSP Contributions

[36] In respect of the issue of the claimed matching RRSP contributions, the contractual provisions which I have set out above are inconclusive. In my view, even applying the principle of contra proferentem as argued by the Applicant, a trial will be necessary to resolve the issue. The evidence in the record from the Applicant and Joel Van Beek is insufficient to make findings of fact which will necessarily be credibility based. Moreover, the question of contractual interpretation involved will require application of complex principles of law relating to the admissibility of parol evidence regarding a written contract; applying those principles will require a clear factual basis produced from a complete evidentiary record.

C. The Appropriate Procedural Mechanism to Resolve the Issues

[37] I, therefore, order that the whole Application proceed to trial subject to directions which I will give, after considering the submissions of the parties.

[38] I am not granting summary judgement as argued by the Respondent. No written notice of this argument was given before it was made orally. Further, on the record before me a trial is required for the reasons I have given.

[39] The next portion of this endorsement sets out the manner in which I will receive the submissions from the parties concerning the steps to be taken to bring this proceeding to trial.

VI. SUBMISSIONS CONCERNING NEXT STEPS AND COSTS

[40] The parties had agreed that, if I directed trial of the dismissal for cause issue, there was no need for either party to file an affidavit of documents, but that both should make written submissions on the procedural steps to be followed. Having regard to that agreement, I order that the parties should make written submissions of no more than 4 pages of the steps to be taken to bring the matter to trial. The Moving Party is to serve and file his submissions within 14 days of release of this endorsement; the Responding Party is to serve and file its submissions within 14 days from service of those of the Moving Party. There shall be no reply.

[41] Further, if the parties cannot agree on costs of this motion, they may extend those written submissions by no more than 3 pages on the costs issue, excluding a bill of costs.

Bloom, J.

DATE: December 1, 2017

CITATION: Belsito v. 2220742 Ontario Ltd., 2017 ONSC 7207

COURT FILE NO.: CV-16-3986-00

DATE: 2017 12 01

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: John Belsito Applicant

-and-

2220742 Ontario Ltd. o/a Bronte Construction Ltd. Respondent

BEFORE: Bloom, J.

COUNSEL: Ben Hahn, counsel for the Applicant

Gwendolyn L. Adrian, counsel for the Respondent

ENDORSEMENT

Bloom, J.

DATE: December 1, 2017