Court File and Parties
COURT FILE NO.: CV-20-00644673
DATE: 20210521
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
PAWEL (PAUL) SKOWRON
Plaintiff
– and –
ABC TECHNOLOGIES INC.
Defendant
COUNSEL:
Matthew A. Fisher, for the Plaintiff
Greg McGinnis, for the
HEARD: May 20, 2021
BEFORE: FL Myers J
REASONS FOR JUDGMENT
Summary Judgment
[1] The plaintiff moves for summary judgment in this wrongful dismissal action. Cause is not alleged. No facts are in dispute. The defendant agrees that there is no genuine issue requiring a trial. Both sides have given full testimony as if they were at trial. Witnesses have been thoroughly cross-examined. As the facts are not in dispute, I find that this is an appropriate case in which I can find the facts and apply the law in a fair, efficient, affordable, and proportional process.
[2] I say this considering as well issues surrounding the litigation as a whole. Counsel have identified essentially two narrow issues – two issues of mixed fact and law (the length of employment and the availability of future bonuses) on which the outcome turns. This is not a “trial in a box.” It is a case in which the outcome turns on two clearly delineated issues that are readily resolved on unchallenged facts. See: Griva v Griva, 2016 ONSC 1820, at para. 19. I have no concern with the quality of evidence nor any need for a lengthier trial narrative.
[3] This case is to be distinguished for the usual cases that appear in Civil Practice Court each week in which wrongful dismissal actions are brought forward for summary judgment on contested facts, with claims of bad faith firing, damages for breach of the Human Rights Code, aggravated damages, and mitigation in issue. Although the vast bulk of those cases truly turn on the notice period alone, the risk of dismissal of a motion for summary judgment and a consequent costs award against a vulnerable plaintiff is high. When the action is under the Simplified Procedure in particular, a motion is a problem because cross-examination on affidavit evidence is presumptively unavailable. However, Rule 76.12 solves the problem by allowing (mandating) a summary trial. Summary trials can be held in a day or two as quickly as a long motion. The main difference is that the plaintiff and perhaps a witness for the defendant will likely be cross-examined in court or live before the judge.
[4] As had been written many times before, civil procedure is not a one-size-fits all approach. See: George Weston Limited v. Domtar Inc., 2012 ONSC 5001 at paras. 35 to 54. Counsel are encouraged to customize their process for the needs of each case and confirm their agreement at a case conference under Rule 50.13. Civil cases should have the process that they need for fair resolution; no more and no less.
The Issues
[5] There are two principal issues in this proceeding. First, what is the length of the plaintiff's employment? The second issue involves the calculation of the defendant's entitlement to bonus during the notice period.
The Notice Period – the Bardal Factors
[6] Chief Justice McRuer’s seminal words from Bardal in 1960 remain controlling today:
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.
Bardal v. Globe & Mail Ltd., 1960 294 (ON SC).
[7] Mr. Skowron immigrated to Canada in 1989. He is a professional engineer and holds a master’s degree in engineering.
[8] The defendant is a Canadian company that manufactures parts for the automotive industry here and elsewhere around the world.
[9] The defendant hired the plaintiff in November, 1994 as a plant engineer. He became a Technical Manager thereafter.
[10] Mr. Skowron’s duties involved mainly providing engineering advice and oversight for construction of the defendant’s factories here and abroad.
[11] Mr. Skowron was employed as a Technical Manager with professional engineering skills. He performed a significant role with substantial responsibility in his area of expertise. But he was not part of senior management.
[12] Mr. Skowron was 61 years old when the defendant terminated his employment.
[13] At the time that the defendant terminated Mr. Skowron’s employment, his base salary was $146,960.
Length of Employment
[14] In 2000, Mr. Skowron resigned from his position with the defendant to pursue a career as a consultant. After 11 months, the defendant invited Mr. Skowron to return to work on a particular project under contract. Mr. Skowron admitted in cross-examination that this was a specific project. There was not then any deal for later work after the project ended.
[15] In 2002, the parties agreed that the plaintiff would enter into another contract for a specific project.
[16] In 2003, the parties agreed that the defendant would re-hire the plaintiff. He entered into a new contract of employment. The contract was for a fixed term and included a three-month probationary period. The fixed term has long since come and gone with Mr. Skowron remaining employed for an indefinite term.
[17] It is Mr. Skowron’s evidence that while under contract, he performed the same work as he used to perform and as he subsequently performed for the defendant. He worked for the defendant alone and was subject to its control. Prior to rejoining the defendant as an employee, Mr. Skowron says that he received accounting advice that he should not continue to declare his income as income from business for tax purposes when it was, in substance, income from employment.
[18] The plaintiff’s resume to this day shows a clear break in his employment record from 2000 to 2003 in which he characterizes his experience as a consultant.
[19] I do not see how the actions of Mr. Skowron in resigning to try out another opportunity can be seen as anything other than a break with his prior employment. He was not at home ill or deflected from attending work due to some unrelated purpose which could have kept him connected to the defendant in his own mind, in the defendant’s mind, or objectively speaking.
[20] But, I also do not see this as impactful as the defendant argues. After 11 months, Mr. Skowron was invited to continue his work with the defendant. In carrying out his duties, he was fully dependent on the defendant. His consultancy had little to no independent effect apart from taxation. Mr. Skowron worked as instructed by the defendant; with the defendant’s tools; and reported to the defendant. He had no employees or other indicia of independence. Nothing turn son this finding, but, if necessary, I would have found Mr. Skowron to have been a dependent contractor for the 2001-2002 period.
[21] Overall, the plaintiff tried to leave to be sure. He could not or did not make a go of it and after 11 months he essentially found himself back with the defendant at the invitation of the defendant.
[22] Mr. Skowron worked for the defendant from 1994 to 2000; was a contractor with it in 2001-2002; and was employed again from 2003 to 2020. He is now unemployed. I am trying to assess the reasonable period of notice implied into his contract of employment that will allow Mr. Skowron a reasonable opportunity to obtain new employment.
[23] The defendant would have me characterize the Mr. Skowron’s career as consisting of a six year job, then a three year consultancy, and then he became an employee of the defendant for the past 17 years.
[24] While the defendant is both technically and legally correct, the strict legalities of the situation do not address the issue. I am called to weigh factors. It is not a reductionistic inquiry as suggested by the defendant. Rather, the court takes a holistic approach to review all the relevant circumstances to try to arrive at an appropriate assessment of the amount of time reasonably required for the plaintiff to obtain new employment.
[25] In my view, in the real world, a reasonable prospective employer looking at Mr. Skowron’s employment experience would see that for his whole career, since 1994, the plaintiff has been working for the defendant with the exception of a year in which he tried to go out on his own. In his 27 year career, he spent 26 with the defendant; 24 as an employee and two as a contactor. He did the same things for the same employer from 1994 to 2000 as he did upon his return after a short break. Mr. Skowron did not have three careers with three different sets of job duties or three different employers. His entire working experience is with the defendant with a break when he tried to be a consultant.
[26] The court has discretion to overlook a break in the period of a plaintiff’s employment for the purposes of assessing the reasonable notice period. See: Hefkey v. Blanchfield, 2020 ONSC 2438 at para. 82. I essentially go through the factors mentioned by Bawden J. in that case at paras. 19 to 25 above.
[27] But I do not see myself as overlooking a clear break in the defendant’s employment. On these facts, I do not see the decision about the plaintiff’s length of employment as being quite as binary as the parties argued. The point is not to punish the plaintiff for leaving or to reward the defendant for papering its file properly. The goal it to characterize the length of the plaintiff’s employment with the defendant for the purposes of applying the Bardal factors to decide on the proper notice period.
[28] I accept that there was a legal break in Mr. Skowron’s employment with the defendant. I do not think that finding that the plaintiff has been an employee of the defendant for just 17 years fairly encapsulates the length of employment from the perspective of a sixty year old man who is now unemployed and is looking for a new job however. I do not think it matters if I find the length of service to be specifically 22, 24, or 26 years. The Bardal process is not mathematically precise. Nor is it intended to be so.
The Reasonable Notice Period
[29] The parties have provided me with numerous precedents with a variety outcomes for similarly situated employees. The defendant’s factum suggests a reasonable notice period around 18 months. Orally, counsel submitted 20 to 21 months. The plaintiff submits that he should be entitled to 24 months.[^1]
[30] In addition to the Bardal factors, it is relevant that we are in difficult economic times at present. I have no indication that the job market for sixty-plus year old project engineers is particularly buoyant in Toronto during the third wave of the pandemic. The defendant also has not provided a reference letter for Mr. Skowron. Moreover, under cross-examination, Mr. Skowron’s supervisor indicated that, if asked for a reference by a prospective employer, he would level some serious criticisms.
[31] Recognizing that there is no mathematical certainty in this decision but remaining cognizant of the importance of consistency with precedent where possible, I am inclined to view the plaintiff’s situation as analogous to those set out in the chart at para. 54 of the plaintiff’s factum. There is no basis to believe that Mr. Skowron’s 25 or so years of experience participating in engineering aspects of designing and building domestic and foreign auto parts plants will lead him readily to reemployment at his age and with the substantial salary that he enjoyed commensurate with the professional engineering elements of his duties. His age, length of service, and high salary combined with the factors in the preceding paragraph suggest to me that this is a case that calls for a notice period closer to the top of the range of reasonable outcomes.
[32] In my view a reasonable notice period of 24 months is an appropriate amount of time for Mr. Skowron to find “similar employment, having regard to [his] experience, training and qualifications”.
Bonus
[33] There are two issues. First, should a bonus be considered and, if so, how should it be calculated.
[34] Starting with the simpler question, in my view, the bonus should be calculated without reference to 2020. The purpose of averaging is to try to find a reasonable estimate of the bonus to which the plaintiff would likely have become entitled had he remained employed during the reasonable notice period. I my view, an employer who decides to pay a bonus will likely build on what it paid previously. Calculating with a zero year skews the average and does not yield a realistic figure. An employer who wants to recognize good results with a bonus and generally gives out X% or a range of percentages is not reasonably likely to factor a year in which results were so poor that no bonus was paid in to the equation. The employees have already suffered that loss. There is no reason to expect an employer who has decided to resume paying a bonus to further penalize the employees by double counting the zero year in its decision-making.
[35] Accordingly, if Mr. Skowron is entitled to bonus, it will be the three year average before 2020 or $11,822 annually.
[36] But, in assessing damages one need look to reasonable predictions about the future. There is no evidence to suggest that the results of the defendant’s business have rebounded from the pandemic in fiscal 2021. There is no evidence supporting a finding that the plaintiff is likely to pay a bonus this year or next year. While bonuses were regularly paid, the fact they were stopped last year demonstrates that they remain discretionary. I cannot ignore that we are still deeply in the third wave of the pandemic in the defendant’s 2021 fiscal year. The plaintiff has not proved on a balance of probabilities that he would likely have become entitled to a bonus had he remained through the notice period.
Two Quick Issues
[37] The plaintiff concedes that he is not entitled to the 4% RRSP contribution made by the employer in 2020. It was a new program and was discontinued months after it began.
[38] The plaintiffs is entitled to the cost to the employer of benefits that he would have been entitled to receive. The employer cost of benefits for 2020 was $248.42 per month. For 2021 and 2022, the figure to be used is $305.
Accounting for the Future
[39] The notice period has many more months to run. Some cases provide that a plaintiff be required to hold his award in trust to account for the possibility of future mitigation. If Mr. Skowron gets a new job tomorrow at his old salary or more, he will have mitigated his loss down to the amount that he suffered to the date of judgment. If that were to occur, Mr. Skowron would be overcompensated by the court’s award. By holding the award in trust pending the end of the reasonable notice period, the plaintiff remains accountable for future mitigation.
[40] In response to questioning from the bench, counsel agreed that if the plaintiff remains accountable for future events, then the defendant should also remain accountable. The defendant could then become liable to pay more damages if it implements across-the-board raises, resumes giving bonuses, or if its costs of benefits increase during the reasonable notice period.
[41] This would mean that in all wrongful dismissal cases where damages are assessed before the reasonable notice period has fully run, damages can be reassessed at the end of the reasonable notice period. Or, perhaps, should the damages issue just be deferred until then? That would be more than another year before the plaintiff sees any recovery on salary in lieu of notice that he has been due since 2020. Ought the defendant to pay monthly? Will the court police this? If damages are paid in advance but in trust, are there limits on the plaintiffs’ entitlement to invest the funds? Would he be accountable for gains or losses if he subsequently mitigates?
[42] I understand that some cases have imposed a trust over proceeds. Others have declined to do so. I have previously found that damages are assessed-once-and-for-all. This is certainly not the only area of the law that awards damages based on future events. In personal injury cases, the bulk of the damages often relate to assessments of the plaintiff’s projected loss of future income and cost of future case. Parties are not entitled in those cases to come back to court every few years to adjust the damages award because the cost of care was higher or lower than provided in the court’s award.
[43] It makes no different in my view that the award is made on a motion for summary judgment. Currently motions can be heard more quickly than full trials and especially civil jury trials in Toronto. That is not necessarily the same throughout the Province. Moreover, summary trials can be heard as quickly as motions. Default judgment is decided even more quickly. We cannot have separate damage assessment rules based on local timing of different procedure that can result in judgment. There is no legal basis for it and it would be unworkable in practice.
[44] If there was a genuine issue requiring a trial as to the calculation of damages, then summary judgment would not have been available. Once judgment is granted, in my view, the court is functus officio. Its role has expired.
[45] That does not mean that the court ignores that there is some uncertainty as to the amount of damages in light of future events. To take future contingencies into account in cases where uncertain events may result in over-compensation of a plaintiff, the court will consider making a deduction from the damages award for future contingencies. The deduction is intended to be directly proportional to the degree of uncertainty. If there is a very significant likelihood of an event occurring that would render an award over-compensation in retrospect, a large contingency deduction may be appropriate. Where the future likelihood of an event that could lead to a plaintiff being over-compensated is small, then little or no contingency deduction is called for.
[46] A simple example is mortality. If a plaintiff is injured and awarded care costs for the rest of her life, assumptions must be made about how long she is likely to live. Should a plaintiff receive an award based on, say, a 20 year likely lifespan, and she is hit by a car and dies the next day, she will have been over-compensated. Medical and actuarial evidence can be adduced at the trial on likely mortality given the plaintiff’s injuries and population statistics generally. But the court will still likely recognize a degree of contingency in the assumptions and make some deduction.
[47] I have previously deducted 10% from future notice in a wrongful dismissal case for contingencies. See: Peticca v Oracle Canada, 2015 ONSC 2584. Dunphy J. took the risk of future contingencies into account in his setting the reasonable notice period in Patterson v IBM Canada Limited, 2017 ONSC 3067.
[48] Mr. Skowron’s mitigation efforts have been appropriate but have yielded nothing so far. While 60 may be the new 50, I am not aware of any easing on job prospects for 50 year-olds or 60 year-olds. I am aware of no law that provides that people over 60 should be considered particularly re-employable. The defendant offered no evidence of any realistic job prospects available for Mr. Skowron to which he is fit by training and experience without even considering his age. While I am not critical of withholding a reference if an employer truly has little positive to say, that too supports a finding that there is little risk of Mr. Skowron mitigating his damages materially in the reasonable notice period.
[49] Unlike many personal injury cases, wrongful dismissal cases have a finite and rather brief period of time in which contingencies can affect mitigation or exacerbation of damages. Evidence on mitigation is already admissible and is likely much the same as evidence that would be probative of the plaintiff’s reemployment prospects within the known period.
[50] There is nothing before me to indicate that the plaintiff has any significant prospects of mitigating his damages materially in the reasonable notice period. I agree with his counsel that a contingency deduction of two weeks is appropriate in this case.
Costs
[51] The plaintiff may deliver cost submissions no later than May 28, 2021. The defendant may deliver cost submissions no later than June 4, 2021. In addition, the parties may deliver copies of any offers to settle on which they rely. Submissions shall be no longer than three pages. Both parties shall deliver Costs Outlines if they deliver submissions.
[52] All costs material is to be filed through the Civil Submissions Online portal and uploaded to Caselines although counsel will not have received confirmation of the acceptance of their filings from the registrar.
[53] No case law or statutory material is to be submitted. References to case law and statutory material, if any, shall be embedded in the parties’ submissions as hyperlinks.
FL Myers J
Released: May 21, 2021
COURT FILE NO.: CV-20-00644673
DATE: 20210521
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
PAWEL (PAUL) SKOWRON
Plaintiff
– and –
ABC TECHNOLOGIES INC.
Defendant
REASONS FOR JUDGMENT
FL Myers J
Released: May 21, 2021
[^1]: I await the parties’ offers to settle to learn how it could have possibly been worth their while to incur the cost, delay, and distress of this motion given the narrow range at issue.