COURT FILE NO.: 1258/16
DATE: 2019-02-04
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
MARK MENARD
Plaintiff
– and –
THE CENTRE FOR INTERNATIONAL GOVERNANCE INNOVATION
Defendant
Andrew H. Monkhouse and Stephen LeMesurier, for the Plaintiff
Seann D. McAleese, for the Defendant
HEARD: November 26 – 28, 2018
gray J.
[1] The plaintiff, Mark Menard, was terminated from his employment with the defendant on March 7, 2016. The defendant resists the action on the basis of “after-acquired” cause, being circumstances that it discovered after Mr. Menard’s employment was terminated, but which occurred during the term of his employment.
[2] Commendably, the parties cooperated in expediting the trial. The direct evidence of each witness was furnished by affidavit, and deponents were cross-examined at the trial. What otherwise would have been a lengthy trial was thus shortened considerably.
Background
[3] Mr. Menard commenced employment with the defendant on March 8, 2010. He was terminated on March 7, 2016. Thus, he was employed for precisely six years.
[4] The defendant, Centre for International Governance Innovation (“CIGI”) is an organisation based in Waterloo. It is an independent, non-partisan think tank founded in 2001, which focuses on international governance. It has approximately 50 employees. Its research programs focus on global economy, global security and politics, and international law. It encourages gifts and donations to be made to it.
[5] Mr. Menard is a chartered professional accountant and, on February 24, 2010, he was offered the position of Senior Director of Finance with CIGI. His first day of work was March 8, 2010.
[6] The offer to Mr. Menard was in the form of an email from Susan Hirst, CIGI’s acting human resources manager. While some of the terms of employment were set out in the email, the following paragraph is found:
If you would like to accept this offer of employment please respond to this email as soon as possible. We would like you to commence employment at CIGI on March 8, 2010. Please advise if this is acceptable to you. If you do accept this offer, CIGI’s standard employment agreement will be drafted for your signature.
[7] On his first day of work, March 8, 2010, Mr. Menard was presented with an Employment Agreement which he signed that day. It includes the following provision:
2.3 Termination of Employment. During the Term, the Employee’s employment may be terminated:
a) By the Employer,
i) For Just Cause at any time by the Employer without notice and without any payment in lieu of notice. “Just Cause” includes, without limitation, misconduct by the Employee, any breach or non-observance by the Employee of any of the conditions or obligations of this Agreement, any neglect or refusal by the Employee to carry out any the Employee’s responsibilities hereunder, any negligent performance of such responsibilities, and any insubordinate or insulting behaviour towards the Employer, its customers, donors, fellows, employees or contractors, the public or any other person, individual, entity or party in the habit or business of dealing with the Employer; or
ii) Without cause, upon providing the Employee with the minimum notice for the time employed as determined under the Employment Standards Act, 2000 (Ontario), as amended or replaced from time to time,
And the Employee specifically acknowledges and agrees to the above and hereby waives any claim to further notice or payment or compensation.
[8] When he was hired, Mr. Menard reported to the Vice-President of Operations. The Vice-President of Operations left the employ of CIGI on December 31, 2011, and Mr. Menard then reported directly to the President of CIGI, Rohinton Medhora.
[9] On April 23, 2013, Mr. Menard’s title was changed to Vice-President, Finance. Evidence has not been presented to show that, apart from the title change, the job itself was significantly different. Mr. Menard was advised of the change in a letter dated April 23, 2013 from Susan Hirst. In that letter, it was noted that his salary would be increased from $150,000 to $160,000 annually. Ms. Hirst also stated “Your title will also be changed from Senior Director of Finance to Vice-President, Finance.”
[10] Both before and after the title change, Mr. Menard was the most senior employee with a specialization in finance. All matters relating to CIGI’s finances were his responsibility.
[11] Mr. Menard’s starting salary in 2010 was $125,000 per year. It was increased over the term of his employment, and at the time of his termination he was receiving the following:
a) Salary of $172,800;
b) An incentive payment or bonus of up to 8 per cent, based on performance;
c) Four weeks of vacation;
d) A matching employer contribution of up to 7.5 per cent of base salary to a group RRSP;
e) Participation in a group health and dental plan;
f) Payment of professional dues as a chartered professional accountant;
g) Eligibility for an annual professional development allowance; and
h) Eligibility for an annual fitness subsidy of $300.
[12] As the senior finance person in the organization, Mr. Menard was responsible for all of CIGI’s financial activities and transactions. He reported to the President and the Finance Committee, a branch of the Board.
[13] Mr. Menard was a member of the Senior Management Team, which included the President; the Vice-President, Public Affairs; Vice-President, Programs; Director of Human Resources; and the General Counsel. The Senior Management Team approved all employment policies in effect at CIGI.
[14] Included in those policies were the Professional Conduct Policy, the IT Security Policy, the IT Acceptable Use Policy, and the Email and Messaging Policy. Notwithstanding that Mr. Menard approved those policies as a member of the Senior Management Team, he denies that he was bound by those policies. In his evidence, he said he did not recall reading them at the time they were approved. He testified that they were often not followed. He was not sure if he reviewed the minutes that recorded the approval of the policies.
[15] The policies are lengthy, and I will not review them in detail.
[16] Included in the IT Security Policy is the statement “Every user of a CIGI information technology resource must exercise common sense in the use of the resource. If there is any doubt about the integrity of any information technology resource, or there is doubt about the security measures in place, all CIGI users are obligated to contact the IT department or their manager immediately.” One specific rule states “Users must not download, install or run security programs or utilities that reveal or exploit weaknesses in the security of a system.” Also stated is “Users will not introduce viruses, malware, Trojans or other nefarious software onto a CIGI information technology resource under any circumstance.”
[17] The IT Acceptable Use Policy includes “All applications running on CIGI information technology resources must be approved by the IT department” and “Third party copyrighted information or software that CIGI does not have specific approval to store and/or use must not be stored on CIGI information technology resources unless the involved users can provide proof of authorization from the rightful owner(s).”
[18] In 2013 and 2014, CIGI received a $300,000 donation from the Copyright Collective of Canada to support CIGI’s internet governance research. Mr. Menard was involved in processing the donation, but he denied any knowledge of whether the Canadian Copyright Collective has anything to do with copyright.
[19] During his employment, Mr. Menard downloaded certain media files to his CIGI computer. One is called “Azureus/Vuze”. It is used to download materials using “peer to peer” technology. It will allow the downloading of movies, television shows, music and other programs. The user can then view and listen to such material without paying for it. Mr. Menard acknowledged that he used the software to download music, television shows and perhaps movies. He also acknowledged that the software would “upload” material from his computer to others, but insisted that it was only from material that he downloaded.
[20] Mr. Menard testified that he would view or listen to such downloaded material while he was at work, usually on his lunch hour.
[21] Mr. Menard testified that before he installed the Azureus/Vuze software on his computer, he consulted the IT department who assisted him in installing it. He could not remember the name of the person who provided assistance.
[22] During his employment, Mr. Menard had several email exchanges with Alan Miller, CIGI’s IT Manager, about levels of traffic on his computer. Mr. Miller, as IT Manager, was ranked lower in the organization than Mr. Menard.
[23] On November 30, 2012, Mr. Miller emailed Mr. Menard and stated “We noticed an alarming amount of traffic going out from your PC last night. The total transfer was around 45 gigabytes of date which is far and away the largest we have seen over a 24 hour period. You can see below a screen shot of the report showing the end points of the traffic, which appear to be all over the world (USA, Australia, Italy, Brazil, New Zealand, others…).” In response, Mr. Menard stated by email “Thanks for the alert! I accidentally left my computer connected to a music file sharing site as I rushed out of here in a hurry. I noticed it this morning and disconnected immediately.”
[24] In response, Mr. Miller stated by email:
Hey Mark
No problem – and just for the record, in case you were wondering, we don’t’ actively monitor any specific machines or users here. We receive reports every morning from our Network Monitoring software (SolarWinds) on several different metrics. One of them is end point bandwidth usage in the last 24 hours – which your machine was at the top of this morning. It’s my job to ensure the health and security of our network so when an anomaly like this occurs I need to ensure we investigate.
In this particular case, I’m not too concerned over a music sharing site however you should be aware that using the wrong service could result in the download of viruses/Trojans and the accidental sharing of sensitive information off your machine. I’m sure you understand the ramifications so I’m not going to lecture you :-)
Thanks for checking on it.
Alan
[25] Mr. Menard acknowledged that from 2012 through 2016, there was downloaded onto his computer various audio files as well as video files of entire television series, as well as movies and recordings of live performances. The volume of sharing media included 163.76 gigabytes of downloads, 118.40 gigabytes of data and 117.39 hours of total up time. There were approximately 60 gigabytes of media content stored on his equipment, which was entirely unrelated to his employment duties.
[26] Mr. Menard acknowledged that he did not secure authorization from artists, creators, and/or copyright holders to view and download the material, but he testified that he was unaware as to whether any of this material had copyright. He acknowledged that one can purchase this material, and he did not pay for any of the downloaded material.
[27] Mr. Medhora, President of CIGI, testified that for a number of reasons he decided that it would be necessary to terminate Mr. Menard’s employment. While there were a number of issues involving Mr. Menard’s performance, he could not be certain that CIGI had sufficient reasons to terminate him for cause. Accordingly, he decided that the best approach was to terminate Mr. Menard without cause, with a severance package. He asked Susan Hirst and Aaron Shull, the general counsel, to prepare the necessary documents.
[28] On March 7, 2016, Mr. Menard met Mr. Medhora in Mr. Medhora’s office. Mr. Menard was given a letter of termination and a severance package proposal. What was proposed was a lump sum equivalent to seven months’ pay, with continuation of benefits, and CIGI would waive any requirement to mitigate.
[29] A little over a week later, on March 15, 2016, Mr. Menard sent an email to Susan Hirst, which included the following:
I have enjoyed my tenure at CIGI immensely, and I certainly do not want a lengthy or public court battle which could expose certain unflattering information pertaining to the President, the Board, the Board Chair and CIGI in general. Suffice to say, this could be significantly more damaging than the CAUT dispute several years ago. If I am forced to move forward with a civil suit for wrongful dismissal there could be information within the legal documentation that will be subject to the public domain, much of which could be very embarrassing and damaging to CIGI, both now and for the foreseeable future. This information could be of interest to various auditors including both the Provincial and Federal Auditor Generals, federal ministry auditors, and provincial ministry auditors. In addition, this information would undoubtedly be of importance to various news organizations throughout Canada and the World, and could spread like wildfire within the realm of social media. CIGI’s current funding for both the Endowment and the ILRP may be jeopardized, as well as the prospect of any other funding, and perhaps repayment of past KIP funding. I certainly do not want this kind of outcome.
Therefore, I am hoping we can bring this matter to a fast and mutually satisfactory conclusion. For the small additional incremental amount I am seeking, I’m confident experienced outside legal counsel would agree that it is a small price to pay to eliminate the potential reputational damage any protracted court battle, and the resultant information disclosure involved, could result in. [Emphasis added]
[30] To call this communication unwise would be an understatement. Needless to say, rather than encouraging CIGI to enhance the severance package, it caused CIGI to reconsider whether a severance package was appropriate at all.
[31] Mr. Medhora testified that staff had difficulty finding documents that should have been left behind by Mr. Menard. CIGI retained an external firm, Hexigent, to conduct a forensic investigation. Hexigent’s final report was received on July 27, 2016. The report showed that Mr. Menard had downloaded large amounts of copyrighted materials onto CIGI computers.
[32] Mr. Medhora believed that downloading unauthorized copies of copyright material was probably unlawful. Furthermore, this activity might harm CIGI’s reputation and goodwill if it were to be discovered. This would include potentially offending Copyright Collective of Canada which had provided the research grant referred to earlier.
[33] Mr. Medhora testified that had he known about these issues prior to Mr. Menard’s dismissal, he would have terminated him for cause.
[34] Mr. Menard was given a reference letter that merely recited his dates of employment and his responsibilities. There was no suggestion that he had been terminated for cause.
[35] Mr. Menard testified that he has applied to a large number of potential employers. He has had three or four sit-down interviews and about twelve interviews over the telephone. He has told potential employers that he was terminated for cause.
[36] Mr. Medhora testified that it was discovered that Mr. Menard had many corporate documents at home, electronically. There are some that they have not been able to retrieve.
[37] Mr. Medhora testified that Mr. Menard had violated a number of the IT policies, and what Mr. Menard had done was potentially illegal.
[38] Based on the information that had been discovered subsequent to Mr. Menard’s termination, Mr. Medhora instructed CIGI’s solicitors to file a statement of defence and counterclaim based on cause. It should be noted that at the opening of trial, counsel for CIGI advised that CIGI is no longer pursuing the counterclaim.
[39] On cross-examination, Mr. Medhora acknowledged that another employee had, through inadvertence, opened a link that resulted in ransomware being downloaded, and that required CIGI to pay a ransom in order to regain access to its computers. He acknowledged that the employee was not terminated.
[40] Mr. Medhora acknowledged that there is a bonus system in place for CIGI employees. There are three levels – three percent, five percent, and eight percent, indicating performance as being low, medium or high respectively. He acknowledged that Mr. Menard had received bonuses of five percent, and on one occasion eight percent.
[41] Mr. Medhora acknowledged that Mr. Miller should have reported the fact that Mr. Menard had file-sharing software on his computer to someone higher in the organisation. Mr. Medhora testified that Mr. Miller has been “spoken to” about this. In his own evidence, Mr. Miller denied that he had been spoken to.
[42] Mr. Medhora acknowledged that CIGI was not actually exposed to any external viruses. Nor were there any financial losses as a result of Mr. Menard’s conduct. He also acknowledged that the reputation and goodwill of CIGI has not actually been harmed. Specifically, the relationship with Copyright Collective of Canada has not been damaged.
[43] Mr. Miller, in his affidavit, deposed that he was subordinate to Mr. Menard throughout his employment at CIGI. He began reporting directly to Mr. Menard in August, 2015 as the result of an administrative reorganization.
[44] Mr. Miller deposed as to the communications he had had with Mr. Menard regarding the traffic on Mr. Menard’s computer, that was referred to earlier. Mr. Miller states “I had only been an employee of CIGI for approximately three months at that point. I was aware of Mr. Menard’s senior status and was concerned about the consequences of even suggesting to him, let alone his peers and superiors, that this traffic had been the result of inappropriate use of CIGI’s IT resources.” Accordingly, he thought it sufficient to simply advise Mr. Menard that using questionable file-sharing services risked introducing viruses or Trojans into the CIGI network and/or the sharing of sensitive information off his PC.
[45] Mr. Miller acknowledged that he has used peer-to-peer services on his home computer, and he had used it to download movies. He acknowledged that this is probably wrong, but emphasised that he did this on his own time at home.
[46] He said he no longer uses peer-to-peer software.
[47] Mr. Miller acknowledged that after discovering Mr. Menard’s use of file-sharing services, he did not follow up. He said it was not his place to question Mr. Menard.
[48] Mr. Miller acknowledged that it would not be unusual for an employee to seek the assistance of the IT department to install software.
[49] Aaron Shull, General Counsel, in his affidavit, deposed that after Mr. Menard’s departure, it was discovered that there appeared to be gaps in the finance department’s documentary record. Mr. Menard was requested to return any corporate and financial information. Mr. Menard denied having any corporate or financial information in his possession.
[50] Mr. Shull deposed that on account of there appearing to be some missing files, he retained Hexigent Consulting Incorporated to conduct a digital forensic analysis.
[51] Mr. Shull deposed that during the initial stages of its analysis, Hexigent reported finding evidence that file-sharing programs had been installed and used to download copyrighted entertainment media on Mr. Menard’s computer. As a result, Mr. Schull asked Hexigent to investigate that aspect.
[52] Hexigent delivered its report on July 27, 2016. The report indicated that Mr. Menard had stored a large number of CIGI files on various USB drives; deleted a number of CIGI files; sent CIGI data to his personal email accounts; installed and used a file-sharing program (Azures/Vuze) on his CIGI computer; used CIGI IT resources to browse for Torrent files of various copyrighted entertainment media, including films, television shows, and music; and used CIGI IT resources to download unauthorized copies of various copyrighted entertainment media, including films, television shows, and music onto his CIGI computer.
[53] Mr. Shull deposed that during Mr. Menard’s employment his roles and responsibilities remained the same except for the change in title from Senior Director of Finance to Vice-President of Finance.
[54] On cross-examination Mr. Shull testified that he was involved in the decision to terminate Mr. Menard for cause, after the receipt of the Hexigent report.
[55] Mr. Shull testified that there were some CIGI documents that had not been recovered.
[56] Ryan Duquette, the author of the Hexigent report, prepared an affidavit. Counsel for Mr. Menard objected to the affidavit and the report being admitted into evidence. I ruled that the affidavit and report would be admitted, and I will set out my reasons for the ruling later.
[57] In the report, there are listed dozens of television programs, movies, and video recordings, as well as audio recordings, that were downloaded onto Mr. Menard’s CIGI computer through the use of Aureus/Vuze software. The total data downloaded was 163.76 gigabytes; the total data uploaded was 118.40 gigabytes; and the total up time was 117.3 hours.
[58] Mr. Duquette testified that it was not his task to determine whether this was unacceptable. His task was to provide the evidence to CIGI, and CIGI would determine whether any unacceptable behaviour had occurred.
Submissions
[59] Mr. Monkhouse, counsel for Mr. Menard, submits that it should be determined that Mr. Menard was not terminated for cause. Further, the provision in Mr. Menard’s employment contract, purporting to limit the amount payable on termination, should not be given effect for three reasons: the provision is not binding, as there was no consideration for it; the provision is unlawful, in that it purports to deny the employee the benefit of certain provisions in the Employment Standards Act; and that upon the change of job, the provision became no longer binding.
[60] Mr. Monkhouse submits that Mr. Menard should be awarded damages based on a notice period of 12-15 months. Furthermore, he should be awarded punitive damages in the amount of $50,000 based on the conduct of the employer.
[61] With respect to the issue of cause, Mr. Monkhouse submits that there is no evidence that there was copyright in any of the downloaded material. Furthermore, he submits that Mr. Menard’s use of peer-to-peer software was known to CIGI, and his conduct was condoned. There is no evidence that there was any actual harm to CIGI’s interests and there was no evidence of any financial loss.
[62] In the final analysis, Mr. Menard’s use of peer-to-peer software was incidental only, and at most could be considered breach of one or more of CIGI’s policies. There was no intent to cause CIGI harm.
[63] Mr. Monkhouse submits that the reaction of CIGI was disproportionate. A warning or other form of progressive discipline would have been more appropriate, and there can be little doubt that if a responsible person within CIGI had told Mr. Menard to cease using peer-to-peer software, he would have done so.
[64] Mr. Monkhouse points out that Mr. Menard signed the contract of employment after he had already agreed to the terms that had been outlined to him in the offer from Ms. Hirst. Accordingly, when he subsequently signed the contract of employment there was no consideration for it and the termination provision is not binding.
[65] Mr. Monkhouse submits that the wording of the termination clause is clear. It specifically sets out exactly what the employee will receive on termination, and it does not include a number of the requirements of the Employment Standards Act, 2000. It then states that the employee “hereby waives any claim to further notice or payment or compensation.”
[66] Mr. Monkhouse submits that upon promotion to a higher job, Mr. Menard must be considered to be no longer bound by the termination provision in the original contract of employment.
[67] In the result, Mr. Monkhouse submits that the termination provision in the contract of employment is void and of no effect, and Mr. Menard is entitled to damages based on common law principles.
[68] Mr. Monkhouse submits that based on Mr. Menard’s age, length of service, his responsibilities, and the period it would likely require to secure alternate employment, Mr. Menard should be entitled to a period of notice of between 12 and 15 months. Because cause was alleged, it can affect Mr. Menard’s ability to secure alternate employment, and thus the notice period should be at the higher end.
[69] Mr. Monkhouse submits that based on the heavy-handed, egregious conduct of CIGI, Mr. Menard should be entitled to punitive damages in the amount of $50,000.
[70] I did not call upon counsel for CIGI to respond to the claim for punitive damages.
[71] Mr. McAleese, counsel for CIGI, submits that Mr. Menard was terminated for cause, and his action should be dismissed.
[72] Mr. McAleese submits that Mr. Menard was part of the senior team at CIGI, and thus knew or should have known what the relevant policies were. Indeed, he was part of the team that formulated the policies. In his position, Mr. Menard was in a position of trust.
[73] Mr. McAleese submits that that is clear from the evidence that Mr. Menard, over several years, had downloaded a large quantity of copyright material without paying for it through the use of peer-to-peer software that had been installed on his computer. Furthermore, he had in his possession, after his termination, material that belonged to CIGI.
[74] Mr. McAleese submits that it should have been obvious to Mr. Menard that downloading copyright material without paying for it is unlawful, and if it were discovered it would seriously impact CIGI’s reputation.
[75] Mr. McAleese submits that CIGI is entitled to rely on information discovered after the termination as constituting cause for dismissal.
[76] Mr. McAleese submits that there was no condonation of Mr. Menard’s conduct. Mr. Miller, who knew some of what was going on (although it is clear he did not know everything) was in a junior position to Mr. Menard, and his knowledge cannot constitute condonation.
[77] Mr. McAleese submits that if I find that CIGI did not have cause to dismiss without notice, Mr. Menard is restricted pursuant to the terms of his contract of employment, with the minimum standards prescribed by the Employment Standards Act, 2000. He submits that, properly construed, the contract of employment does not eliminate any of the minimum standards in the Act, and thus the termination provision is not void, and must be given its effect.
[78] Mr. McAleese submits that if I were to find that the termination clause is invalid, I should find that an appropriate range of notice would be between seven and eleven months, based on the usual factors.
Analysis
[79] Before analyzing the issues, I will briefly deal with the objection made by Mr. Monkhouse to the admission of the affidavit of Ryan Duquette and the Hexigent report.
[80] Mr. Monkhouse’s objection is based on rule 53.03(2.1) and (3). He notes that a report, in the form required by rule 53.03(2.1) was not prepared, and an acknowledgement as required by form 53 was not signed by Mr. Duquette. Pursuant to rule 53.03(3), Mr. Duquette is not permitted to testify except with leave, and there is no ground for granting leave here.
[81] Mr. Monkhouse submits that Mr. Duquette was retained after the litigation was commenced, and is clearly a “litigation expert” as opposed to a “participant expert” as discussed in Westerhof v. Gee Estate 2015 ONCA 206, 124 O.R. (3d) 721. Accordingly, rule 53.03 must be complied with before Mr. Duquette’s affidavit and the report can be admitted.
[82] In my view, Mr. Duquette is neither a litigation expert nor a participant expert. While he proffered some very limited opinions in his report, he was retained to examine Mr. Menard’s CIGI computer in order to determine whether any of CIGI’s files had been removed and transmitted elsewhere; and subsequently to determine whether peer-to-peer software had been installed on the computer, and if so, whether any external material had been downloaded to the computer. Any opinions he gave, such as whether the downloaded material was copyrighted, are beside the point.
[83] In my view, I am entitled to have regard for Mr. Duquette’s evidence and his report to the extent that he, and the report, simply recite the facts that are relevant to this case, namely, that information belonging to CIGI had been removed through a USB key, and that peer-to-peer software had been installed and external material downloaded. In that sense, Mr. Duquette is in no different position than an investigator who follows a suspect and makes observations.
[84] I have considered the affidavit and the report for the limited purpose of establishing the facts. I have ignored any opinions related by Mr. Duquette, as limited as they may be. As it happens the issue is moot since I have determined that there was no cause for dismissal.
[85] I am not persuaded that Mr. Menard was dismissed for cause. It has not been established that Mr. Menard’s keeping of some electronic documents at home was improper, or that it had adversely affected CIGI’s interests. While there are a few documents CIGI has not been able to recover, there is no evidence that this has adversely impacted CIGI’s interests. There is no evidence that Mr. Menard had any improper motive in using some of CIGI’s files on his home computer, and specifically there is no evidence that they were placed on his home computer for anything other than work-related reasons.
[86] With respect to the use of peer-to-peer software and downloading material, at the end of the day this does not constitute cause for dismissal without notice.
[87] At most, CIGI can show that this activity violated one or more internal policies of CIGI. There was no nefarious intent on Mr. Menard’s part, and indeed he made no attempt to hide what he was doing. He testified, without contradiction, that someone from the IT department assisted him in installing the peer-to-peer software. When Mr. Miller discovered, in a limited way, that some peer-to-peer software was being used, Mr. Miller did not report it to anyone or take any other action. I am not suggesting that Mr. Miller was in any position to condone the activity, but the fact that Mr. Menard made no attempt to hide the activity from Mr. Miller demonstrates, in my view, that he did not think he was doing anything improper.
[88] While I accept, with some reservations, Mr. Menard’s evidence that he did not know that copyright material was being downloaded, I think his evidence should be taken with a grain of salt. Any reasonable person would likely agree, if asked, that there is copyright in a current television program such as “Game of Thrones”. Any reasonable person would know that one can purchase, in electronic form, a movie, a television program, or music, and if one can obtain it through computer software without paying for it there is likely a problem.
[89] However, it is well known that this sort of software is ubiquitous, and indeed Mr. Miller acknowledged that he had used it himself on his home computer.
[90] Even in cases of dishonesty, it is necessary to determine whether the misconduct is compatible with a continuation of the employment relationship: McKinely v. BC Tel, 2001 SCC 38, [2001] 2 S.C.R. 161. At para. 57, Iacobucci J. stated “Based on the foregoing consideration, I favour an analytical framework that examines each case on its own particular facts and circumstances, and considers the nature and seriousness of the dishonesty in order to assess whether it is reconcilable with sustaining the employment relationship.”
[91] If this is the standard for analysis in a case involving dishonesty, I see no reason why it should also not be applied in a case where lesser forms of misconduct are alleged. Here, it is contended that Mr. Menard breached policies of the employer that puts its interests in jeopardy, and kept corporate documents at home.
[92] I agree with Mr. Monkhouse that if Mr. Menard had been spoken to about using peer-to-peer software on his computer and keeping corporate documents at home, there is little doubt that Mr. Menard would have complied. I am not persuaded that Mr. Menard’s delinquencies were incompatible with a continuation of the employment relationship.
[93] While not determinative, it is also relevant to note that the interests of the employer were not, in fact, affected. There is no evidence of any financial loss. CIGI’s reputation has not been affected. The relationship with Copyright Collective of Canada has not been harmed.
[94] For these reasons, I conclude that CIGI did not have cause to terminate Mr. Menard without notice.
[95] I conclude that the termination provision in the contract of employment is unenforceable.
[96] I do not accept that upon the change in job title, the original contract of employment became unenforceable. There was no real change in Mr. Menard’s duties and responsibilities, and the title change was nothing more than that.
[97] Nor am I persuaded that the contract is unenforceable on account of any lack of consideration. In the email from Ms. Hirst, containing the offer of employment, it was clearly stated that Mr. Menard would have to sign CIGI’s standard employment contract before commencing work. He made no inquiry as to what were the terms of the standard employment contract. Having accepted the offer with notice that a formal written contract would be forthcoming, and having made no inquiry as to its terms, he is not in a position to complain.
[98] I conclude, however, that the termination provision is void on account of its non-compliance with the Employment Standards Act, 2000.
[99] For ease of reference, I will reproduce the termination provision again:
2.3 Termination of Employment. During the Term, the Employee’s employment may be terminated:
a) By the Employer,
i) For Just Cause at any time by the Employer without notice and without any payment in lieu of notice. “Just Cause” includes, without limitation, misconduct by the Employee, any breach or non-observance by the Employee of any of the conditions or obligations of this Agreement, any neglect or refusal by the Employee to carry out any the Employee’s responsibilities hereunder, any negligent performance of such responsibilities, and any insubordinate or insulting behaviour towards the Employer, its customers, donors, fellows, employees or contractors, the public or any other person, individual, entity or party in the habit or business of dealing with the Employer; or
ii) Without cause, upon providing the Employee with the minimum notice for the time employed as determined under the Employment Standards Act, 2000 (Ontario), as amended or replaced from time to time,
And the Employee specifically acknowledges and agrees to the above and hereby waives any claim to further notice or payment or compensation.
[Emphasis added]
[100] The relevant principles are discerned from two cases in the Court of Appeal: Wood v. Fred Deeley Imports Ltd., 2017 ONCA 158, 134 O.R. (3d) 481, and Nemeth v. Hatch Ltd. 2018 ONCA 7, 418 D.L.R. (4th) 452.
[101] In Wood, the termination clause in issue required the employer to provide an employee, on termination without cause, two weeks’ notice of termination or pay in lieu for each completed or partial year of employment. The clause went on to say “If the company terminates your employment without cause, the company shall not be obliged to make any payments to you other than those provided for in this paragraph…The payments and notice provided for in this paragraph are inclusive of your entitlements to notice, pay in lieu of notice and severance pay pursuant to the Employment Standards Act, 2000.”
[102] Laskin J.A., for the Court of Appeal, held that this language disentitled the employee to any payments under the Employment Standards Act, 2000 other than the requirement to pay two weeks’ notice or pay in lieu for each year of employment. Thus, it would exclude any entitlement to severance pay, and the entitlement to be paid benefits during the notice period. In the result, the clause was deemed to be void.
[103] In contrast, the termination clause in Nemeth, was as follows:
The company’s policy with respect to termination is that employment may be terminated by either party with notice in writing. The notice period shall amount to one week per year of service with a minimum of four weeks for the notice required by the applicable labour legislation.
[104] Roberts J.A. for the Court of Appeal concluded that this language was merely silent on the employee’s entitlement to statutory entitlements, such as severance pay or benefit continuation, and did not purport to exclude entitlement to them. Accordingly, she concluded that the clause was valid.
[105] In the case before me, the language is clearly of the type considered by the Court of Appeal in Wood. It sets up an entitlement to only the minimum notice under the Employment Standards Act, 2000, and thereafter specifically states that the employee “waives any claim to further notice or payment or compensation.” It is clear that statutory entitlements, such as severance pay and benefit continuation, are excluded. Thus, according to the reasoning of the Court of Appeal in Wood, the clause is void.
[106] That leaves, then, the period of reasonable notice that was required in order to terminate Mr. Menard’s employment.
[107] One always starts with the well-known formula set out by McRuer C.J.H.C. in Bardal v. Globe & Mail Ltd. (1960), 1960 CanLII 294 (ON SC), 24 D.L.R (2d) 140 (Ont. H.C.J.):
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.
[108] As noted, counsel for Mr. Menard submits that a range of 12-15 months would be reasonable. Counsel for CIGI submits that a range of seven to eleven months would be reasonable.
[109] Mr. Menard was in his mid-fifties when he was terminated. However, he was only employed for six years. While he was a Vice-President, it was for a small organization, and his actual duties had not changed since the change in his job title. He has had some difficulty in securing alternate employment, and he explains that this may be influenced to some extent by the fact that he has advised prospective employers that he was terminated for cause. This can have an impact on the appropriate notice period: Lin v. Ontario Teachers’ Pension Plan Board, 2016 ONCA 619, 402 D.L.R. (4th) 325.
[110] Having weighed the relevant factors, I think the range proposed by counsel for CIGI is appropriate, but having regard to the impact of his purported termination for cause, I am inclined to take the upper end of the range proposed by CIGI and add one month to it, with the result that the appropriate period of notice in this case is twelve months. I am satisfied that Mr. Menard has made reasonable efforts to mitigate his damages.
[111] As noted earlier, I did not call on counsel for CIGI to respond to the request for punitive damages. As stated in Whiten v. Pilot Insurance Co., 2002 SCC 18, [2002] 1 S.C.R. 5, punitive damages are only awarded in exceptional cases for “malicious, oppressive and high-handed” misconduct that “offends the court’s sense of decency”: per Binnie J. at para. 36.
[112] In this case, CIGI did not terminate Mr. Menard arbitrarily. It had good reason to conduct a forensic examination, and reasonably based its allegation of cause on the result of that investigation. In looking at the whole picture, one must also consider the unfortunate email that Mr. Menard sent CIGI after his termination, in which he effectively sought to blackmail them into a higher severance package. This is simply not one of the exceptional cases that requires a punitive damages award.
[113] CIGI will be given credit for anything actually paid to Mr. Menard after his termination.
[114] I trust that with these determinations, the parties will be able to work out the exact amount payable. If they cannot agree, I will entertain written submissions in accordance with a timetable I will fix. I will also fix a timetable for submissions on costs if they cannot agree.
Gray J.
Released: February 4, 2019
COURT FILE NO.: 1258/16
DATE: 2019-02-04
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
MARK MENARD
Plaintiff
– and –
THE CENTRE FOR INTERNATIONAL GOVERNANCE INNOVATION
Defendant
REASONS FOR JUDGMENT
Gray J.
Released: February 4, 2019