Court File and Parties

Newmarket Court File No.: CV-18-137927-00 Date: 2020-03-23 Superior Court of Justice – Ontario

Re: Horace Dias, Plaintiff And: Acrylic Fabricators Ltd., Defendant

Before: The Honourable Mr. Justice P.W. Sutherland

Counsel: Daniel Camenzuli, for the Plaintiff Kevin Fox, for the Defendant

Heard: March 13, 2020

Endorsement on Motion

Re: Section 97(2) Employment Standards Act

Introduction

[1] This is a motion brought by the defendant for an order dismissing the action of the plaintiff due to the plaintiff electing to file a claim under the Employment Standards Act, 2000 (ESA). The plaintiff opposed this motion on the basis that he did not have “adequate/capable legal representation” at the time of filing the claim under the ESA and that he withdrew his claim prior to an investigation by the Ministry of Labour (MOL) or the MOL rendering a decision. The plaintiff requests that the court exercise its inherent jurisdiction to allow him to prosecute his claim under his Statement of Claim.

Background

[2] The plaintiff was an employee with the defendant as a fabricator/installer. He commenced employment with the defendant in the summer of 1995. He was terminated on June 21, 2017. He was not recalled from a layoff within the thirteen weeks allowed per the ESA. His employment therefore rolled into a termination. The plaintiff was employed with the defendant for nearly 23 years.

[3] There is no written employment agreement between the parties.

[4] Throughout the plaintiff’s employment with the defendant, he has been laid off several times. Each time of the previous layoffs, he was recalled to employment.

[5] The plaintiff filed his claim under the ESA on June 12, 2018, through his paralegal, Mr. Iacopini. The plaintiff contends that he was not advised by Mr. Iacopini of his options to commence a claim under the ESA or commence a civil action in the Superior Court of Justice and the ramification to his right to claim damages in a civil case if he filed a claim under the ESA.

[6] The plaintiff further contends that the paralegal did not review with him the complete claim under the ESA before the plaintiff signed the claim documents. The claim documents were signed, according to the plaintiff, in the parking lot of a gym.

[7] In June 2018, the paralegal sent letters to the defendant. On June 12, 2018, the paralegal sent a letter advising the defendant that the claim under the ESA has been filed. In a letter dated June 27, 2018, two weeks and one day from the date the claim was filed, the paralegal sent a further letter to the defendant that if the matter is not resolved, the plaintiff would commence civil legal proceedings.

[8] The paralegal advised the plaintiff to retain a lawyer to commence a civil suit against the defendant after the letter of June 27, 2018.

[9] A civil action for wrongful dismissal claim and damages for discrimination is commenced on October 30, 2018.

[10] On June 28, 2018, the defendant paid to the plaintiff his statutory entitlement in lieu of notice based on a 40 hour week, his outstanding vacation pay and vacation pay on his notice period. The payment did not provide any payment to the plaintiff in lieu of notice pursuant to the common law only per the ESA.

[11] The plaintiff withdrew his claim under the ESA on August 2, 2018, after retaining counsel to prosecute a civil action.

Should the action be dismissed as statute barred per sections 97(2) and 97(4) of the ESA?

Legal Framework

[12] Section 97(2) of the ESA prohibits an employee from commencing a parallel civil action for wrongful dismissal where the employee has initiated a claim under the ESA.

[13] Section 97(4) of the ESA permits an employee to withdraw the claim initiated under the ESA and commence a civil proceeding within two weeks of filing but does not permit an employee to proceed to a decision under the ESA and/or obtain an order and then proceed with a civil proceeding. In effect, there is a prevention that an employee cannot forum shop to attempt to obtain a best result and that an employee cannot maintain parallel proceedings.

[14] However, this limitation on parallel proceedings is not absolute, a court may utilize its inherent jurisdiction to extend the statutory limitation contained in section 97(4) of the ESA if “special circumstances exist”.

[15] The question for the court to answer is, in the circumstances of this proceeding does special circumstances exist wherein the court should exercise its discretion and extend the statutory two-week period under section 97(4) of the ESA?

Position of the Parties

[16] The defendant argues that the court should not exercise its inherent jurisdiction and extend the statutory time period and should dismiss the action. The defendant submits that the plaintiff had legal advice through the paralegal he knew was specialized in employment related matters. The plaintiff did not form an intention to commence civil action until he retained counsel to commence a civil procedure, more than two weeks after he initiated his ESA claim. The plaintiff received payment of the statutory notice. The clear wording of the ESA compels the court to find there are no special circumstances and not exercise its inherent jurisdiction and extend the limitation period. The plaintiff clearly missed the two week period. The action must be dismissed.

[17] The plaintiff argues that there does exist special circumstances and that the motion of the defendant should be dismissed. The plaintiff did not receive competent proper legal advice. He was not aware of his options of filing an ESA claim or commencing a civil action. Nor was he aware of the consequences of initiating a claim under the ESA. He was not able to form an intention to commence a civil proceeding when he was not aware of his legal rights nor the legal consequences of initiating an ESA claim on his right to commence a civil proceeding. Once the plaintiff was properly advised of his legal rights, he immediately withdrew his ESA claim and commenced his legal action months thereafter. His withdrawal of his ESA claim was a mere five weeks after the expiry of the two-week period. The defendant has not suffered any prejudice. The defendant was well aware of the claim of the plaintiff. The court should extend the limitation time period and permit the plaintiff to seek relief from the improper termination of a 23 year career with the defendant.

Analysis

[18] There is no dispute between the parties that the court has jurisdiction in special circumstances to exercise its inherent jurisdiction and extend the limitation period to permit the plaintiff to proceed with this proceeding. The question becomes should the court do so.

[19] In determining whether the court should exercise that discretion, I have reviewed the cases presented by the parties. I do agree that the court should exercise this discretion sparingly. The legislature has made it clear that the grieving party has to elect a path, the ESA or civil legal action. The employee has two weeks to withdraw an ESA claim without any effect on their right to commence a civil procedure. Failing to withdraw in the two-week period has consequences.

[20] Having said this, I agree with the submission of the plaintiff and find there are special circumstances that the court should exercise its discretion to extend the time period to permit the plaintiff to continue with this civil action.

[21] I come to this conclusion based on the following facts:

(a) The plaintiff did not have proper legal advice. (b) The plaintiff withdrew his ESA claim immediately after receiving proper legal advice. (c) The plaintiff indicated his intention to commence a legal action prior to initiating the ESA claim and thus, within the two-week period. (d) The extension requested is not for an inordinate length of time, just over five weeks after the expiry of the two-week period. (e) The defendant has not suffered any prejudice. The defendant was aware of the plaintiff’s intention to seek redress for his position that he did not receive proper notice of the termination of employment. The defendant knew that the plaintiff intended to seek redress by an ESA claim and by a civil action. (f) No investigation was undertaken by the MOL and thus, no order was made. (g) The defendant has not agreed that the plaintiff may reinstate his ESA claim to contest the calculation of payment by the defendant. (h) The plaintiff had a nearly 23 year career with the defendant. (i) The defendant paid the plaintiff monies in amount the defendant calculated, as the plaintiff’s statutory entitlement, 16 days after the filing of the ESA claim. (j) There is no evidence or inclination by the evidence that the plaintiff was engaged in forum shopping. (k) There is no evidence of bad faith on the part of the plaintiff.

[22] I do not accept the submission that the mere failure of the plaintiff to withdraw his ESA claim within the two-week period ends the analysis. I accept and follow the precedents that the court has the inherent jurisdiction to extend the two-week period, subject to the circumstances of each case.

[23] I am persuaded by the decisions of Wilton-Siegel J. in Scarlett v. Wolfe Transmission Ltd., of Flynn J. in Demelo v. Babcock & Wilcox Canada Ltd., and of DiTomaso J. in Firth v. Cable Bridge Enterprises, 2013 ONSC 6436 (Div. Ct).

[24] The facts of this case compel the court to exercise its inherent jurisdiction. The facts of this case are distinguishable from the decision of the Divisional Court in Firth, particularly the circumstances set out paragraphs 57 and 58.

[25] Having said this, I wish to comment on the role of the paralegal in this case. From the review of the letters sent by the paralegal, it appears that Mr. Iacopini was not aware of the consequences of filing an ESA claim on a civil suit. This becomes apparent after reviewing the letters dated June 1, 12 and 27, 2018 wherein payment for “severance pay” of 6 months is demanded and threat “to proceed with legal action.” In addition, there is the defendant’s response letter dated June 4, 2018. Mr. Iacopini recommends that the plaintiff obtain “legal advice,” and provides the plaintiff with names of two lawyers.

[26] In assessing the circumstances of this case, the defendant has not incurred any costs nor taken any steps to defend the ESA claim of the plaintiff. The plaintiff has commenced an action concerning his claim for severance. The defendant has been served with that claim. The granting of the defendant’s motion will force the plaintiff, if he wishes to obtain relief, to commence an action against the paralegal. A claim that will force the plaintiff to incur further legal costs rather than continue with this proceeding for severance.

[27] In assessing prejudice to both the plaintiff and the defendant and the efficient use of judicial resources, it appears to this court that granting the motion of the defendant would result in prejudice to the plaintiff to commence another action and incur legal costs, delay in receiving a remedy and be an inefficient use of judicial resources. Notwithstanding that the plaintiff did receive advice from Mr. Iacopini, this fact, in this court’s opinion, does not, on its own, preclude the court from extending the time period. Taking all the circumstances into consideration, I am of the view that special circumstances does exist to persuade the court to exercise its discretion and extend the time period to permit the plaintiff to continue with this proceeding.

[28] Consequently, the motion of the defendant is dismissed.

Costs

[29] The plaintiff seeks costs on a full indemnity basis in the amount of $31,370.05. The defendant submits that there should be no order for costs. The defendant submitted a cost outline for costs on a partial indemnity basis in the amount of $6,441. The plaintiff was the successful party. The motion, however, was due to the actions of the plaintiff. The provisions of the ESA are clear. There does exist a statutory two-week period under section 97(4) of the ESA. The position of the defendant was reasonable. There was an arguable position that the action of the plaintiff should be dismissed. Taking that the assessment of costs is not a mechanical exercise and the court should fix an amount that is fair and reasonable for the unsuccessful party to pay, I find that that amount in the circumstances of this case is $7,500 plus HST for fees. In reviewing the disbursements claimed, I find that the request of $800 for photocopying and binding is excessive. There is no evidentiary support for that lump sum figure. Accordingly, I assess disbursements in the amount of $1,453.30. This provides the plaintiff with $200 plus HST for photocopying and binding.

[30] I therefore order that the defendant pay costs to the plaintiff in the amount of $8,475 for fees and $1,453.30 for a total of $9,928.30, to be paid in 30 days.

Justice P.W. Sutherland Released: March 23, 2020