COURT FILE NO.: CV-20-00640788-0000
DATE: 20210716
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Susan Garcia Herreros
Plaintiff
– and –
Glencore Canada Corporation
Defendant
Camille Dunbar, for the Plaintiff
Kathryn J. Bird and Jordan D. Simon, for the Defendant
HEARD: April 6, 2021, Written submissions received on April 13 and 21, 2021
VELLA J.
[1] This is a motion for summary judgment by the plaintiff who alleges that she was dismissed without cause by the defendant.
[2] The defendant concedes that the plaintiff was dismissed without cause, and that this matter is appropriate for determination by way of a motion for summary judgment.
[3] Based on the evidence before me, I conclude that there is no genuine issue for trial. Rule 20 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, permits me to make the necessary findings of fact and to apply the law to the facts. This is a proportionate, more expeditious, and less expensive means to achieve a just result.
[4] Therefore, applying the factors articulated in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at para. 82, I find that summary judgment is the appropriate procedure for determination of this matter: see also Arnone v. Best Theratronics Ltd., 2015 ONCA 63, leave to appeal to S.C.C. refused, 2015 43081.
Analysis
[5] There are two primary issues for determination:
(a) what is the appropriate notice period and calculation of damages?
(b) was the “enhanced” severance package offered to Ms. Herreros within the range of reasonable notice, such that the court ought to impose the offer as reasonable notice?
The “Enhanced” Severance Package
[6] By letter dated October 30, 2019, Glencore terminated Ms. Herreros’s employment effective immediately. In that letter, Glencore offered a severance package consisting of 50 weeks’ fixed pay in lieu of notice and other benefits, most of which would be continued throughout the 50-week period, in exchange for a release. When Ms. Herreros rejected the severance package, she was provided with her statutory entitlement under the Employment Standards Act, 2000, S.O. 2000, c. 41.
[7] However, through inadvertence, Glencore continued Ms. Herreros on payroll, benefits, and pension contributions until May 29, 2020, resulting in 30.4 weeks’ pay in lieu of notice and 30.4 weeks’ extension of benefits and pension contributions. No bonus was included in the severance package or as part of the inadvertent continuation of payroll and benefits.
[8] Glencore submits that the original “enhanced” severance package consisting of 11 months and two weeks plus benefits was within a reasonable range of notice and that this court ought not interfere with that assessment. Glencore relies on Gismondi v. Toronto (City) (2003), 2003 52143 (ON CA), 64 O.R. (3d) 688 (C.A.), at para. 47, for the general proposition that courts will not micromanage the reasonable decision of employers. In that case, the Court of Appeal overturned the trial judge’s assessment of reasonable notice which the trial judge extended on the basis of the factors in Wallace v. United Grain Growers Ltd., 1997 332 (SCC), [1997] 3 S.C.R. 701. When those factors were stripped away, the notice period offered by the employer was deemed to be reasonable and was upheld. However, Gismondi is somewhat distinguishable because the trial judge did not provide an assessment of what the reasonable notice period would have been absent the Wallace factors.
[9] Glencore also relies on Duynstee v. Sobeys Inc., 2013 ONSC 2050, at paras. 89-90, where the court held that if the employer’s offer was within the range of reasonable notice, the employee must accept that offer. That case is factually distinct from the case before me. The court found that the employee (who was 48-year-old and the President at the time of termination, with less than two years of employment) was entitled to less than nine months’ notice, and therefore Sobeys’ severance package of six and a half months was in the circumstances of that case reasonable.
[10] Nonetheless, with those principles in mind, Glencore submits that, based on the Bardal factors and case law with comparable facts to the termination scenario presented in this case, 12 months’ notice is reasonable, and therefore its offer of 11.5 months is within the range and ought to be imposed.
[11] Ms. Herreros disagrees and advances case law supporting her position that 18 months is the appropriate length of notice, given the Bardal factors. Therefore, she claims that the “enhanced” severance package offered by Glencore was not reasonable and ought not be imposed.
The Appropriate Notice Period
[12] In Minott v. O’Shanter Development Company Ltd. (1999), 1999 3686 (ON CA), 42 O.R. (3d) 321 (C.A.), the Court of Appeal rejected the proposition that there is a standard default measurement of notice of one month per year of employment. This is because that proposition overemphasized years of service above the remaining factors from Bardal v. Globe & Mail Ltd. (1960), 1960 294 (ON SC), 24 D.L.R. (2d) 140 (Ont. H.C.).
[13] In Paquette v. TeraGo Networks Inc., 2015 ONSC 4189 (“Paquette (ONSC)”), rev’d on other grounds 2016 ONCA 618 (“Paquette (ONCA)”), this court relied on the following four factors set out in Bardal to inform the length of notice warranted when assessing damages arising out of a wrongful dismissal:
(1) the character of employment;
(2) the length of service;
(3) the age of the employee; and
(4) the availability of similar employment having regard to the experience, training, and qualifications of the employee.
[14] This court further observed, at para. 28, that based on more recent case law, the Bardal factors are not exhaustive and that a reasonable notice period will depend on the individual circumstances of each case:
The approach to determining a reasonable notice period is flexible, and each case will turn on its own particular facts. The weight to be given each factor will vary according to the circumstances of each case, and the judge in a wrongful dismissal case is required to exercise judgment in determining what factors are of particular importance. In determining the reasonable notice period, the court should not apply as a starting point any rule of thumb attribution so many weeks or months of notice per year of service, because such an approach privileges length of service above all relevant factors in determining notice, and each case must be considered having regard to its particular facts.
See also Lowndes v. Summit Ford Sales Ltd. (2006), 2006 14 (ON CA), 206 O.A.C. 55 (C.A.), at paras. 9-10; Machtinger v. HOJ Industries Ltd., 1992 102 (SCC), [1992] 1 S.C.R. 986.
[15] In this case, Ms. Herreros was 57 years old at the time of termination, having worked nearly 15 years for Glencore, which was a successor employer. She earned a base salary of $122,474 plus benefits, a defined contribution pension plan, and a “discretionary” bonus.
[16] Ms. Herreros’ age is recognized in the jurisprudence as being in a range that acknowledges that the employee will likely have a more difficult time obtaining comparable employment. Furthermore, the jurisprudence recognizes that a tenure of approximately 15 years is relatively substantial, thus favouring the employee. Ms. Herreros’s base salary is high, reflecting the likelihood that she held a responsible position within the organization. All these factors favour the employee in terms of suggesting a notice period at the upper range of reasonable notice.
[17] There was a debate with respect to the character of the position held by Ms. Herreros. Glencore suggested that it was a “mere” administrative position while Ms. Herreros suggested that it was a senior position with a lot of responsibility. She worked in the information technology services department of Glencore and worked with Glencore’s enterprise resource planning software called Ellipse. During the last three years of her employment she was also in charge of the MAIT system (a metallurgical application) which was an in-house system unique to Glencore. As well, she provided information technology services to various business units within Glencore including administrative support services for various technology platforms in Toronto. She also supported Glencore’s monthly and year-end financial reports. Her title was Senior Business Analyst and she held that title from the inception of her employment.
[18] As I indicated above, the annual salary earned by Ms. Herreros suggests that her position was one that carried considerable responsibility. While she did not supervise any other employees, and was not in a management position, she held a senior position within the organization.
[19] In terms of the opportunities to obtain comparable employment, Ms. Herreros urged the court to consider the COVID-19 pandemic as a negative factor reducing her opportunity to obtain other employment, and therefore as justifying a lengthier notice period. I recognize that in some cases the pandemic may be a relevant factor: see Russell v. The Brick Warehouse, 2021 ONSC 4822; Lamontagne v. J.L. Richards & Associates Limited, 2021 ONSC 2133. However, in this case, the pandemic had not yet materialized at the time of dismissal. Given that an assessment of the Bardal factors, and the assessment of compensation, is to take place as at the time of termination, I find that the pandemic is not a relevant factor in my consideration of the fourth Bardal factor: see Yee v. Hudson’s Bay Company, 2021 ONSC 387, at para. 22.
[20] However, I do find that this fourth Bardal factor was a neutral one since Ms. Herreros had IT skills that were transferrable, and other skills that are likely not (i.e., her support of the IT applications unique to Glencore).
[21] I am also guided by the Court of Appeal’s holding in Holland v. Hostopia.com Inc., 2015 ONCA 762, 392 D.L.R. (4th) 650, at para. 61, that the purpose of notice is to provide the terminated employee with a reasonable opportunity to find alternative work, but not to guarantee that the employee will in fact find alternative work.
[22] Having regard to the Bardal factors, the jurisprudence advanced by each party, and the statements by the Court of Appeal and by this court in cases such as Paquette (ONSC), my view is that Ms. Herreros’s circumstances warrant a notice period in the range of 15-16 months. In my view, the offer of 11.5 months falls well short and was not within the “reasonable range” featured in Gismondi and Duynstee.
[23] In addition, the “enhanced” severance package did not include payment of the discretionary bonus which, as will be discussed below, was an integral part of Ms. Herreros’s compensation.
[24] I fix the notice period at the upper end of the range, being 16 months, particularly having regard to Ms. Herreros’s age: see Paquette (ONSC), at para. 31, citing McKinney v. University of Guelph, 1990 60 (SCC), [1990] 3 S.C.R. 229, at para. 92; Caers v. Usborne & Hibbert Mutual Fire Insurance Co., 2000 CarswellOnt 4988 (S.C.), at para. 44.
The Calculation of Damages
[25] In Paquette (ONCA), at para. 16, the Court of Appeal stated that:
The basic principle in awarding damages for wrongful dismissal is that the terminated employee is entitled to compensation for all losses arising from the employer’s breach of contract in failing to give proper notice. The damages award should place the employee in the same financial position he or she would have been in had such notice been given. In other words, in determining damages for wrongful dismissal, the court will typically include all of the compensation and benefits that the employee would have earned during the notice period. [Citations omitted.]
[26] In Taggart v. Canada Life Assurance Company, 2006 53345 (C.A.), at para. 13, the court cautioned that an employer cannot be put in a better position by paying lost wages alone rather than providing the appropriate notice with continued employment, and the associated benefits, during the notice period.
[27] Accordingly, Ms. Herreros is entitled to damages in the equivalent of what she would have received by way of compensation over the course of her notice period, subject to mitigation.
Pay in Lieu of Notice
[28] At the time of her termination, Ms. Herreros was provided with 30.4 weeks’ pay in lieu of notice in the gross amount of $71,592.
[29] The parties agree that at the date of termination, Ms. Herreros’s base salary was $122,474 per year or $10,206.17 per month.
[30] I have fixed the notice period at 16 months.
[31] Accordingly, subject to mitigation, Ms. Herreros is entitled to an additional 8.9 months of pay in lieu of notice.
Benefits
[32] Glencore disputes Ms. Herreros’s entitlement to damages for benefits that she would have been entitled to during the notice period. It notes that a condition in its Benefit Plan provides that a requirement for coverage is that “you are a permanent, full-time salaried employee actively at work when coverage begins”. Glencore asserts that this restricts Ms. Herreros’s entitlement to benefits because, to satisfy the requirement of being “actively at work”, the Benefit Plan requires that an employee must:
be either actually working at the company’s place of business or a place where the company’s business requires you to work, or absent due to vacation, weekends, statutory holidays, or ship variances, and
for purposes of the disability coverage: you must not be disabled according to the STD or LTD definition of disability.
[33] I reject this submission for two reasons. First, I find on the evidence that Glencore did not draw this provision specifically to Ms. Herreros’s attention: see Dawe v. The Equitable Life Insurance Company of Canada, 2019 ONCA 512, 435 D.L.R. (4th) 573, at para. 74. Second, and in any event, on a plain language reading of the above provision relied upon by Glencore, the provision only requires that the employee be “actively at work” when coverage begins in order to be eligible under the Benefit Plan. There is no suggestion on the face of this language that the employee must be “actively at work” when termination occurs or that the coverage will otherwise be revoked during the course of the notice period.
[34] Ms. Herreros is entitled to damages for the loss of benefits during the balance of her notice period of 8.9 months, subject to mitigation, calculated at ten percent of her base salary: see Ruston v. Keddco Mfg. (2011) Ltd., 2018 ONSC 2919, at paras. 115-117, aff’d 2019 ONCA 125.
Bonus
[35] There was controversy regarding whether Ms. Herreros’s annual compensation included a bonus. Ms. Herreros asserts that the bonus was an integral part of her compensation, whereas Glencore asserts that the bonus was entirely discretionary and therefore not an integral part of Ms. Herreros’s compensation.
[36] Glencore undisputedly paid Ms. Herreros a bonus each year from 2016 to 2018, in a substantially similar amount, averaging $22,187.67. Glencore admitted that all of its Senior Business Analysts received the equivalent of 15 percent of their base salary as a bonus for their work in 2019 and 2020. On this latter formula, Ms. Herreros would have been entitled to 15 percent of her base salary for 2019 and 2020 had she been working through the notice period.
[37] The fact that there is no written bonus policy means that Glencore cannot now say that Ms. Herreros had to be actively working to qualify for the bonus: see Matthews v. Ocean Nutrition Canada Ltd., 2020 SCC 26, at paras. 55 and 59.
[38] In addition, Ms. Herreros received a bonus every year she was employed with Glencore from 2014 onward. Glencore admits that the bonus amount was based on whether the individual employee had met their annual objectives and whether Glencore had met its annual objectives. Furthermore, it was Ms. Herreros’s understanding that her bonus formed a part of her salary.
[39] Glencore also admits that the company met its objectives for paying out bonuses in 2019 and 2020, and that Ms. Herreros was on track to meet her personal objectives in 2019 before her termination.
[40] Accordingly, the evidence supports the finding that, had Ms. Herreros continued working through her notice, she, like all the other Senior Business Analysts, would have received a bonus of 15 percent of her base salary.
[41] Moreover, I find that the bonus was an integral part of Ms. Herreros’ compensation package because:
(a) she received a bonus each year although in slightly differing amounts;
(b) bonuses have been historically awarded by Glencore and Glencore never exercised its discretion against Ms. Herreros; and
(c) the bonus constituted a significant component of her overall compensation, measured by a percentage of her base salary (the bonus ranged between 14.29 percent and 19 percent of her base salary): see Bain v. UBS, 2016 ONSC 5362, at para. 83, aff’d 2018 ONCA 190.
[42] The amount of the bonus that Ms. Herreros would have received in each of 2019 and 2020 was $18,371.10 (15 percent of the base salary). The three-year historical average of Ms. Herreros’ bonuses was $22,187.67. While courts have relied upon historical averages when calculating the bonus entitlement during a notice period, as I have evidence as to what the bonus would actually have been, since it was standard for all Senior Business Analysts, I am setting the bonus at 15 percent of Ms. Herreros’s base salary for each of 2019 and 2020.
Pension
[43] Glencore also disputes Ms. Herreros’s claim for loss of employer contributions to the defined contribution pension plan and its savings plan over the course of her notice period. Glencore was required to pay the equivalent of five percent of Ms. Herreros’s base salary towards her pension. However, there was also a voluntary component. In the event Ms. Herreros made a contribution towards her pension (capped at four percent), then Glencore was also required to match those voluntary contributions at 50 percent of Ms. Herreros’s contribution.
[44] It is undisputed that Glencore paid the equivalent of five percent of Ms. Herreros’s base salary into her pension plan and that Ms. Herreros had a history (in the prior three years) of contributing the voluntary four percent per year, giving rise to Glencore’s further matching contribution of two percent of her base salary.
[45] In this case, the evidence supports a finding that Ms. Herreros made a voluntary contribution of four percent of her base salary to the pension, thereby obliging Glencore to make a matching contribution of two percent of her base salary. This is in addition to the mandatory five percent contribution made by Glencore towards Ms. Herreros’s pension.
[46] As this matter was not fully addressed during argument, I requested and received written submissions.
[47] Ms. Herreros relies on Dussault v. Imperial Oil Limited, 2019 ONCA 448. In Dussault, the Court of Appeal held that an employee is entitled to the value of the matching contributions that the employer would have made to a savings plan over the reasonable notice.
[48] Glencore continues to assert that it is not liable to pay the voluntary contributions with respect to Ms. Herreros’s pension plan or its contributions to the savings plan. However, Glencore does acknowledge that Dussault is binding.
[49] In my view, Dussault has application to Glencore’s matching contributions for the defined pension plan and the savings plan over the course of the notice.
[50] However, Ms. Herreros did not offer any evidence demonstrating that she made any voluntary payments to the savings plan program, or that Glencore made any contributions. Therefore, Ms. Herreros has not proven this claim.
[51] On the other hand, the record indicates that Ms. Herreros participated in the pension plan. Accordingly, Ms. Herreros is entitled to the equivalent of seven percent of her base salary over the remaining 8.9 months of her notice period (beyond the 30.4 weeks during which her pension was extended), subject to mitigation.
Mitigation
[52] Ms. Herreros has mitigated her damages by finding employment 15.5 months following termination, albeit apparently at a somewhat reduced salary. Glencore did not argue that Ms. Herreros failed to mitigate her damages, but submits that her notice period must be capped at 15.5 months.
[53] I do not have any evidence of Ms. Herreros’s current employment package with her new employer and therefore I do not know what the shortfall, if any, is.
[54] Accordingly, Ms. Herreros’s damages must be capped at the 15.5-month notice period. This means that the notice period over which damages are to be calculated is reduced from 8.9 months to 8.4 months to account for mitigation. The figure of 8.9 months already takes into account the extension of Ms. Herreros’ pay and certain benefits for 30.4 weeks beyond the effective date of termination.
Disposition
[55] Accordingly, Ms. Herreros is entitled to damages for wrongful dismissal as follows:
(a) base salary for 8.4 months in the sum of $85,731.80;
(b) bonus for 2019 and 2020 in the total sum of $36,742.20 (i.e. $18,371.10 per year);
(c) loss of pension matching contributions calculated at seven percent of base salary prorated over 8.4 months in the sum of $6,001.23; and
(d) loss of benefits calculated at ten percent of the base salary prorated over 8.4 months in the sum of $8,573.18.
The total damages amount to $137,048.41.
[56] Prejudgment and postjudgment interest will follow under the Courts of Justice Act, R.S.O. 1990, c. C.43.
[57] If the parties cannot agree as to costs, the plaintiff will provide her cost outline and written submissions by July 30, 2021, and the defendant will provide its cost outline and written submissions by August 6, 2021. The written submissions are not to exceed three pages double spaced. These documents should be provided to my judicial assistant.
Justice S. Vella
Released: July 16, 2021
COURT FILE NO.: CV-20-00640788-0000
DATE: 20210716
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Susan Garcia Herreros
Plaintiff
– and –
Glencore Canada Corporation
Defendant
REASONS FOR JUDGMENT
Vella J.
Released: July 16, 2021