COURT FILE NO.: CV-17-572522

DATE: 2018-04-11

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Kobi Rabin, Plaintiff

AND: The Brick Warehouse LP, Defendant

BEFORE: Pollak J.

COUNSEL: Emilio Bisceglia, for the Plaintiff

Brian G. Wasyliw and Tim Allen, for the Defendant

HEARD: January 9, 2018

ENDORSEMENT

[1] This is a motion for summary judgment brought by the plaintiff, Kobi Rabin (“Mr. Rabin”) for wrongful dismissal against the defendant, The Brick Warehouse LP (“The Brick”). Mr. Rabin seeks damages for an amount equivalent to 24 months of his compensation, including lost bonus and benefit continuation; $25,000 for mental and emotional distress; and $25,000 in punitive damages.

[2] Mr. Rabin was employed with The Brick for approximately 30 years. He started his employment as a sales representative and after receiving various promotions, he held the position of National Director. At the time of his termination of employment he was 70 years old. His compensation was worth approximately $316,000 per year (which included his salary, bonus, and pension contribution). Following his termination of employment the Brick paid him :

(a) $94,899.30 as his severance pay;

(b) $29,199.80 as his pay in lieu of notice;

(c) $11,585.31 as his 2016 bonus; and

(d) Continued eligibility for benefits for 34 weeks.

[3] The issues in this case are:

• the determination of his appropriate notice period;

• the determination of the amount he is entitled to be paid as damages for failure to provide notice of termination of employment; and

• whether Mr. Rabin has fulfilled his obligation to mitigate his damages.

Summary judgment

[4] The parties are agreed on the test that this Court must apply to determine whether or not summary judgment should be granted. In the case of Hryniak v. Mauldin, 2014 SCC 7, [2014] S.C.R. 87, the Supreme Court of Canada provided us with a roadmap to follow on a motion for summary judgment. The court states, at para. 66,

On a motion for summary judgment under Rule 20.04, the judge should first determine if there is a genuine issue requiring trial based only on the evidence before her, without using the new fact-finding powers. There will be no genuine issue requiring a trial if the summary judgment process provides her with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure, under Rule 20.04(2)(a). If there appears to be a genuine issue requiring a trial, she should then determine if the need for a trial can be avoided by using the new powers under Rules 20.04(2.1) and (2.2). She may, at her discretion, use those powers, provided that their use is not against the interest of justice. Their use will not be against the interest of justice if they will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole.

[5] Applying the Supreme Court of Canada’s roadmap referred to above, I must ask myself the following:

1. On the basis of the evidentiary record alone, are there genuine issues requiring a trial?

2. Does the evidentiary record in front of me provide me with the evidence I need to “fairly and justly adjudicate the dispute”?

[6] The Brick submits that there is a conflict in the evidence with respect to whether or not the bonus plan was changed in 2014 and that the Court ought to refuse summary judgment because there is a genuine issue requiring a trial. Alternatively it is submitted that the Court should exercise its powers and hear all evidence to resolve the conflict in the evidence.

[7] For the reasons discussed below, I do not accept the submissions of The Brick that there is a genuine issue requiring a trial with respect to the issue of the bonus plan.

[8] On this motion, I find that the evidentiary record before me provides me with the necessary evidence to fairly and justly adjudicate the issue of the determination of the appropriate period of notice. The issue of the quantum of damages is however, discussed below.

Reasonable notice

[9] The parties agree that the amount of reasonable notice an employee is entitled to must be determined by considering the dismissed employee's age, length of service, and character of employment, and the availability of similar employment opportunities. The purpose of reasonable notice of termination is to enable an employee to secure alternative employment. In assessing the reasonable notice period it will necessarily be longer if the dismissed employee will face a challenge finding similar employment: Bardal v. Globe & Mail Ltd. (1960), 1960 CanLII 294 (ON SC), 24 D.L.R. (2d) 140 (Ont. H.C.), at para. 21; Love v. Acuity Investment Management Inc., 2011 ONCA 130, 277 O.A.C. 15, at paras. 22-24. Because of Mr. Rabin’s 30 years of service, his age, and his senior position, he submits he is entitled to a notice period of at least 24 months. The Brick submits that he is entitled to a notice period of 18 months.

[10] Three factors lead me to conclude that he should be entitled to a lengthy notice period:

• Mr. Rabin has been employed with The Brick for over 30 years;

• he was in a very senior position; and

• he was 70 years old at the time of his termination of employment.

[11] On the basis of the jurisprudence the parties have relied on and the factors to be considered in the determination of the appropriate notice that I have referred to above, I agree with the submissions of Mr. Rabin that he is entitled to a notice period equivalent to 24 months, subject to his obligation to mitigate his damages.

Mr. Rabin’s entitlement to damages

[12] Having determined the appropriate notice, this Court must next adjudicate the following issues on this motion for summary judgment:

(i) is Mr. Rabin entitled to damages for loss of bonus during this 24 month notice period? If so, what is the value to be placed on this bonus?

(ii) is Mr. Rabin entitled to his pro rata share of bonus for the year in which he was terminated, 2017?

(iii) has Mr. Rabin fulfilled his obligation to mitigate damages, given that is has been just over one year since the termination of the plaintiff’s employment, but the Court has determined that the plaintiff was entitled to a 24 month notice period

(iv) is Mr. Rabin entitled to compensation for the loss of benefits during the 24 month notice period?

(v) is Mr. Rabin entitled to damages for mental and emotional distress?

(vi) is Mr. Rabin entitled to punitive damages?

Bonus entitlement during the notice period

[13] The plaintiff relies on the general proposition that a “damages award should place the employee in the same financial position he or she would have been in had such notice been given”: Paquette v. TeraGo Networks Inc., 2016 ONCA 618, 352 O.A.C. 1, at para. 16. His claim is for damages for the loss of compensation he would have received had he received reasonable notice of his termination of employment.

[14] Mr. Rabin relies on the Paquette decision to guide this Court in the proper analysis with respect to the “bonus” issue, namely his common law right to damages based on his compensation package, including any bonus he would have received had his employment continued during the reasonable notice period. The question is whether the applicable bonus plan limits or restricts that right. The Ontario Court of Appeal held in Paquette, at paras. 30-31, citing to Taggart v. Canada Life Assurance Co. (2006), 50 C.C.P.B. 163 (Ont. C.A.),

30 The first step is to consider the appellant's common law rights. In circumstances where, as here, there was a finding that the bonus was an integral part of the terminated employee's compensation, Paquette would have been eligible to receive a bonus in February of 2015 and 2016, had he continued to be employed during the 17 month notice period.

31 The second step is to determine whether there is something in the bonus plan that would specifically remove the appellant's common law entitlement. The question is not whether the contract or plan is ambiguous, but whether the wording of the plan unambiguously alters or removes the appellant's common law rights: Taggart, at paras. 12, 19-22.

[15] The Brick argues that the terms of the applicable bonus plan specifically exclude payment of a bonus that would otherwise be payable during the common law notice period, as follows:

"If you terminate or are terminated (regardless of whether it is deemed just cause or wrongful dismissal), no bonus incentive plan will be paid out for that year and subsequent years"

[16] In this regard, the Brick relies on the case of Felice v. Cardinal Health Canada Inc., 2014 ONSC 8419.

[17] Although the Plaintiff claims that he did not accept this language, which was included in his 2014 bonus pan and subsequent bonus plans, he continued to work for The Brick for almost two years after the changes were made. I agree that on this basis, Mr. Rabin has through his acquiescence accepted these changes in his Bonus Plans and the restricting language is therefore applicable.

[18] Mr. Rabin also relies on jurisprudence that has held that a requirement for “active employment” does not disentitle him from receiving bonuses he would have received had his employment continued during the period of reasonable notice.

[19] Based on the test in Paquette, set out above, I find that the wording of Mr. Rabin’s bonus plan, quoted above, is clear and specifically limits his right to receive compensation for lost salary and bonus during the period of reasonable notice. Accordingly, I conclude that Mr. Rabin is not entitled to compensation for any lost opportunity for bonus payments during the notice period.

[20] The Brick also argues that the Plaintiff’s bonus was not an integral part of Mr. Rabin’s compensation, as his previous bonus amounts ranged from 5.8% to 41.3% of his total annual compensation. The extreme variations show that the Plaintiff could not have relied on bonuses as an integral part of his compensation. Given my findings on the language of the bonus plan, I do not need to make a finding on this issue.

Pro-rated bonus entitlement for 2017

[21] Mr. Rabin has also claimed a bonus payment on a pro-rated basis for the months he worked in 2017.

[22] In response, The Brick relies on the case of Chandran v. National Bank of Canada, 2011 ONSC 777, 89 C.C.E.L. (3d) 256. In Chandran, it was held that the Plaintiff was not entitled to a pro-rated bonus because the bonus policy did not provide for a pro-rated bonus payment for part of a year of work.

[23] The Brick relies on the same provision of the bonus plan I have referred to above that “no bonus incentive plan will be paid out for that year and subsequent years” if the employee is terminated. The Brick also relies on requirement in the bonus plan that the Plaintiff must “be employed and actively at work on the bonus pay date” in order to receive a bonus. The 2017 bonus was payable well after the Plaintiff's termination. I agree with these submissions and find that the Plaintiff is not entitled to a pro-rated payment for loss of the 2017 bonus.

Mitigation of damages

[24] The Brick argues that Mr. Rabin has not produced evidence that he has properly mitigated his damages and submits that the amount of notice awarded should be reduced by reason of his failure to properly mitigate his damages. The defendant asserts that Mr. Rabin has not fulfilled his duty to mitigate his damages.

[25] Alternatively, The Brick urges this Court to follow the approach taken in the case of Markoulakis v. SNC-Lavalin Inc., 2015 ONSC 1081. The Plaintiff in that case had claimed an appropriate period of reasonable notice of 30 months but only 34 weeks had elapsed since his termination of employment when the motion for summary judgment was heard. The Defendant argued that an award to compensate the Plaintiff for more than 34 weeks would have the practical effect of removing the Plaintiff's obligation to mitigate his damages. The Court held at paras. 38-41, that the Defendant had a continuing obligation to pay the Plaintiff the monthly amount it had found to be equivalent to damages for failure to provide reasonable notice going forward, throughout the remainder of the notice period subject to the Plaintiff’s obligation to mitigate damages.

[26] As cited in Markoulakis, at para. 8, the Ontario Court of Appeal dealt with this issue in Cronk v. Canadian General Insurance Co. (1995), 1995 CanLII 814 (ON CA), 25 O.R. (3d) 505, when it upheld a 20 month notice award granted on a summary judgment motion only 9 months after termination. The appellant in that case had argued that it was inappropriate to render judgment before the expiry of the notice period. The Court rejected this argument:

I reject the appellant's submission that the judgment unfairly releases the respondent from her obligation to mitigate her damages by seeking other employment. That obligation continues during the period of notice set by the court, even if it extends beyond the date of the judgment. The respondent remains accountable to the appellant for any income earned during that post-judgment period.

[27] This motion for summary judgement was heard on January 16, 2018. I have already determined that the appropriate period of notice for Mr. Rabin should have been 24 months. It has been 13 months since February 21, 2017, when Mr. Rabin was terminated. The balance of the appropriate period of notice which occurs after the hearing of this motion date is 11 months. Mr. Rabin has a continuing duty to mitigate his damages for these 11 months.

[28] I find that the evidentiary record before this Court does not allow me to make a finding on whether the Plaintiff will have any employment income during the balance of the notice period. There is no evidence of what mitigation efforts he will make and the results of such efforts.

[29] This Court has determined that the reasonable period of notice for Mr. Rabin is 24 months. The Brick has the obligation to ensure that Mr. Rabin receives the proper monthly compensation during the period of reasonable notice. If these amounts are greater than the payments already made to Mr. Rabin, The Brick must pay Mr. Rabin a lump sum to compensate him to the date of this award and make appropriate monthly payments for the balance of the notice period, subject to Mr. Rabin’s obligation to mitigate his damages, and to a deduction for any of Mr. Rabin’s earnings from employment or business.

[30] I do not accept the Plaintiff’s submission that such an approach is not appropriate. I find that this approach, absent an agreement by the Employer, is the fairest way to preserve the rights of both parties in these circumstances. As stated in Markoulakis,

The employee’s right to a determination of the appropriate period of reasonable notice has been satisfied and the employer’s right to challenge the employee’s mitigation efforts has been preserved. As the parties know what their obligations are, the likelihood of the need for further court proceedings is minimized.

[31] If, during the balance of the notice I have referred to above, The Brick challenges the mitigation efforts or earnings of Mr. Rabin, the parties may deal with such dispute, through the appropriate legal procedure.

[32] The Supreme Court directed in Hryniak that: “Where a motion judge dismisses a motion for summary judgment, in the absence of compelling reasons to the contrary, she should also seize herself of the matter as the trial judge.” In my view, if further proceedings are required, this is an appropriate case for me to do seize myself of this matter, but only if it is possible to do without delaying the hearing of the proceeding. I will therefore, subject to the practical requirements of motion and trial scheduling, hear any further motions or a trial of an issue with respect to the employer’s obligation to make payments to the Plaintiff during the balance of the period of reasonable notice.

Entitlement for loss of benefits

[33] Mr. Rabin has argued that he is entitled to damages for loss of benefits during the notice period, but has not provided the Court with any evidence on the value of these benefits and consequently what a proper assessment of his damages would be. I therefore make no award for this claim.

Entitlement for emotional distress and Punitive damages

[34] Counsel for Mr. Rabin did not make submissions on whether he is entitled to punitive or aggravated damages as a result of the manner of termination of employment. I therefore make no award on this claim.

Costs

[35] If the parties are unable to agree on costs, they may make brief written submissions to me no longer than three pages in length. Mr. Rabin’s submissions are to be delivered by 12:00 p.m. on April 20, 2018, and the The Brick’s submissions are to be delivered by 12:00 p.m. on April 27, 2018. Any reply submissions are to be delivered by 12:00 p.m. on May 4, 2018.

Pollak J.

Date: April 11, 2018