Court File and Parties

COURT FILE NO.: CV-20-00640071-0000

DATE: 2021-11-16

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: TRENT FLACK, Plaintiff/Moving Party

AND: WHITEOAK FORD LINCOLN SALES LIMITED o/a WHITEOAK FORD LINCOLN, Defendant/Responding Party

BEFORE: S.F. Dunphy J.

COUNSEL: Gurlal Kler and Stephanie McDonald, for the Plaintiff/Moving Party Trent Flack and the Plaintiff/Moving Party Michael Ewach Alvin W. Leung and Ben Brillantes for the Defendant/Responding Party

HEARD at Toronto (Video): October 29, 2021

REASONS FOR DECISION

[1] This case considers the period of reasonable notice applicable to a without cause termination of employment of a 61-year-old employee with nine months of service and no written employment agreement. Both parties have agreed that the issues raised in this case can appropriately be dealt with by way of summary judgment. In the course of reviewing the materials filed and listening to the submissions of counsel, I found no issues arising that appeared to require a trial in order fairly to determine them.

[2] This case raises a single issue: what is the period of reasonable notice to which Mr. Flack was entitled when his employment was terminated without notice on January 10, 2020. The defence raised an issue regarding mitigation but for the reasons outlined below, it did not prove necessary to delve deeper into that question on which the defendant employer bears the burden at all events.

[3] To their credit, counsel on this case have collaborated on ensuring an efficient hearing of the motion. Two similar cases involving the same employer and employees in similar circumstances were presented back to back with their common issues and distinct issues clearly demarcated. Both counsel assured me that I need only fix the applicable notice period – they will calculate the resulting damages amount based on that input and their own agreed facts regarding remuneration and benefits. To avoid duplication, the parties adopted their arguments on similar issues on the first case (this one) when presenting their argument on the second (Ewach v. Whiteoak Ford Lincoln Sales Limited, 2021 ONSC 7206). In consequence, the two sets of reasons delivered today should be read as a single decision subject only to the different circumstances of each.

[4] For the past sixty years, our courts have adopted the analytical framework for determining reasonable notice laid down in the following frequently-cited passage from Bardal v. The Globe & Mail Ltd. (1960), 1960 294 (ON SC), 24 D.L.R. (2d) 140 (O.H.C.) at p.145:

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.

[5] The first two sentences are the key. The assessment of reasonable notice is made on a case-by-case basis in a process which has much in common with the process of devising a fit and proper sentence in the criminal law sphere. It is built from the ground up having regard to the unique circumstances of each case and after applying the broad principles established in the jurisprudence to those circumstances. While like cases should be treated alike, cases invariably present with enough unique circumstances to make that a process to be approached with caution. It is not a process undertaken untethered from principle or precedent, but it is one that requires the application of these with a proper appreciation for the individual nature of the endeavour.

[6] The foregoing is not intended to disparage the use of database searches and the ranges of outcomes they produce – a process that the defendant undertook in this case with the resulting tables being incorporated into its factum. It is merely intended to ensure that the ranges emerging from such a process are applied as a tool to assess the outcome of an individualized process rather than as a primary source. Such tables are useful, for example, in identifying outliers and in gaining a general view of appropriate ranges. They do not dispense one from building a view of reasonable notice from the ground up rather than the top down.

[7] While non-exhaustive, the listed Bardal factors do continue to provide a helpful list of factors to be considered that lends at least an initial structure to the process and I shall accordingly use them as my guide here.

(a) Character of employment

[8] There were no serious disagreements as to the objective facts concerning the character of Mr. Flack’s employment even if the parties emphasized different aspects of the evidence on the subject. The importance of “character of employment” has diminished in recent times primarily because it was once applied in a fashion to create implicit assumptions that certain types of employment required a longer notice period than others where higher paid executive roles tended to receive more generous treatment than more traditional working-class jobs. Rigid almost class-driven assumptions have no place in the process. Nevertheless, character of employment can provide important information relating to an appropriate notice period. The more “custom” the fit of employee to employer, the more likely that a longer time frame will be needed to find the right combination of job openings and demand. Even that generic observation must be ventured with a weathered eye to avoiding re-introducing through the back door the very assumptions that are being shown out through the front.

[9] Mr. Flack was employed as a “Finance Manager” at the defendant car dealership. The plaintiff emphasizes his fairly senior position in the sales organization. He was responsible for selling financial products to customers of the dealership rather than the cars themselves. He had to work closely with the sales team and with providers of financing. Recognizing the integral role of finance in contributing to the ability of the dealership to clinch a sale, Mr. Flack was paid on a pure performance basis and earned a handsome income: approximately $156,000 per annum annualized (he worked there less than a year).

[10] The defendant does not dispute these facts so much as adding other facts that round out the picture. Mr. Flack was one of five Finance Managers and reported both to the General Manager and the Sales Manager. He had no direct reports of his own. The defendant places this information in the context of a description of the auto sales industry where turnover among such individuals is relatively high.

[11] All of the foregoing observations draw an accurate portrait of the character of Mr. Flack’s employment sufficient for the purposes of this exercise. These suggest a market that is relatively active for the services of employees with the right combination of experience and a proven track record – both of which describe Mr. Flack’s role to a T. Mr. Flack’s performance drove his income with the defendant and provided a yardstick by which his prospects might readily be assessed by another industry participant looking to tap into that skill set.

(b) Length of Service

[12] Mr. Flack was employed by the defendant for about nine months. The plaintiff suggested – in my view in error – that shorter service is tending to attract lengthier notice periods in recent times. All of the Bardal factors - including length of service – need to be appreciated in their proper context and applied in the conceptual framework Bardal describes.

[13] Common sense suggests a number of ways in which shorter service can impact the period of reasonable notice. In a very basic way, length of service measures the degree of investment employer and employee have made and are making in each other. Everything depends on the circumstances with this as with any factor and generalizations are always risky if undertaken without an eye to the circumstances that warrant exceptions to every rule.

[14] I cannot find that Mr. Flack’s relatively brief service period was a major factor in his “employability”. His three prior positions were comparatively short in duration without any lengthy intervening periods of unemployment. While there is no evidence as to whether he left any of them involuntarily, his personal history corroborates the defendant’s evidence of a fluid job market characterized by relatively frequent turnover.

[15] Impact on re-employment prospects is not the only reason length of service is relevant. The reasonable expectations of employer and employee evolve over time such that the longer an employee’s service endures, the greater degree of “investment” each makes in the other. Where the contract comes to an early end, the degree of investment impacts the analysis of the degree of responsibility the employer will reasonably be required to undertake to see the employee through the period of time expected to be needed to secure a reasonable landing. However, time is not the only form of “investment” an employee might make in a position. The employee may have been enticed away from a stable, long-term position in which he or she was considerably invested, to name but one alternative type of “investment”.

[16] The case of Love v. Acuity Investment Management Inc., 2011 ONCA 130 was heavily relied upon by the plaintiff as a salutary reminder of the dangers of placing over-reliance on a formulaic approach (at para. 19):

First, it overemphasizes the appellant’s short length of service. While short service is undoubtedly a factor tending to reduce the appropriate length of notice, reference to case law in a search for length of service comparables must be done with great care. The risk is that while lengths of service can readily be compared with mathematical precision that is not so easily done with other relevant factors that go into the determination of notice in each case. Dissimilar cases may be treated as requiring similar notice periods just because the lengths of the service are similar. The risk is that length of service will take on a disproportionate weight.

[17] In Love, the plaintiff literally made an investment in his employer having deliberately selected a position with the potential for equity investment in mind in contrast to other prospects not pursued by him.

[18] In the present case, there are no strong factors present that would tend to tilt the needle away from the range of reasonable notice that Mr. Flack’s short period of service would normally suggest. He was not enticed away from a long-term employer with whom he had considerable security. He was not a high-level executive in a position that would require a careful search to find another “fit”. To the contrary, he was one of several individuals performing a similar task in a position with a tradition of relatively high turn-over and the performance-driven pay structure provides potential new employers with a ready-made and objective view of his skill in converting sales prospects to closed transactions.

(c) Age of the employee

[19] Mr. Flack was 61 years of age at the time his employment was terminated. There is no question that age is a relevant factor in assessing the period of reasonable notice for a given employee. However, it is undoubtedly dangerous to rely on generalizations not rooted in the evidence and the particular circumstances of the case when applying this factor. Age is primarily relevant as one of several factors to be plugged into the overall assessment of the likely time needed to secure alternative employment.

[20] It cannot be said that older employees are for that reason alone entitled to a greater notice period than younger employees. Indeed, there are very strong policy reasons that would militate against such a principle. Such a principle would quickly become a self-fulfilling prophecy. If hiring older employees brings along greater risk and greater commitment to a potential employer, the rational employer will discount applications from older employees in favour of younger ones unless other advantages outweigh that additional risk.

[21] Age has advantages. Maturity, experience, judgment being but three that spring quickly to mind. Changes to mandatory retirement rules and the aging of the Baby Boom generation have also caused considerable social changes to the expectations of employers and employees alike: outside of the shrinking defined-benefit plan but non-union universe, the once automatic assumption of retirement at age 65 is at best a guideline with many remaining in the workforce for years after that age.

[22] Looking at this employee in this industry, I can find little support for the idea that age has played a significant role in Mr. Flack’s recent experiences in the job market. He spent about a month between jobs when moving from his prior job to this one (there is no evidence as to why he left the prior position and I draw no inference on that subject at all). He spent a “Covid-adjusted” period of about two or three months between jobs on this occasion. I so characterize the time period because Mr. Flack was re-employed by the end of June after being put on the market in mid-January and his work universe was effectively shut down in whole or in substantial part between mid-March and early to mid-June.

(d) Availability of similar employment

[23] For the sake of convenience, I consider a number of disparate factors in this general basket. These include a consideration of the general and specific market environment into which the termination of employment thrust the unwilling plaintiff, the reasonable income expectations of the plaintiff to the degree that these had an impact on the universe of potential job openings available to him and similar matters.

[24] The plaintiff did indeed earn a fairly significant income prior to the termination of his employment. This consideration alone must be approached with some care for the same reasons that “character of employment” called for careful consideration in Minott v. O'Shanter Development Company Ltd., 1999 3686 (ON CA). Mr. Flack’s income was entirely performance-based.

[25] I shall not repeat my earlier comments regarding the evidence of relatively high turnover in this industry and Mr. Flack’s personal job history that corroborates this to a material degree.

[26] Mr. Flack’s discovery evidence read in at the hearing was consistent with this view. His initial job hunt began very swiftly and positively with an early offer received for a position in Hamilton that he felt very likely unsuitable for him and another very “warm” job prospect that he felt he was close to landing just as the pandemic hit. As I noted earlier, Mr. Flack jumped back into the job market almost the minute the lights began to come back on and was re-employed by the end of June. In the circumstances, I would consider his experience to be indicative of an attractive employee making the best of the obstacles that subsequent events placed in his path. The market conditions for his skill set was robust and open when his job search began. Both employer and employee would reasonably have expected a brief interlude of searching only to have interrupted Mr. Flack’s career. COVID-19 threw a wrench in the works about six to eight weeks later, but this was not something either party could have reasonably contemplated at the time.

[27] This brings me to perhaps the most significant bone of contention between the parties that arose at the hearing: What weight, if any, should I attribute to the souring of market conditions caused by COVID after Mr. Flack’s employment was terminated?

[28] In my view, this factor is not rationally entitled to weight in the form of lengthier notice. Subsequent events do of course impact my assessment of the reasonableness of mitigation. As might readily be inferred from my comments above, I found no merit at all to suggestions that any alleged lack of diligence on Mr. Flack’s part contributed to the length of time between his positions. He appeared on the verge of securing a solid new position just before COVID hit and hit the bricks to resume his job search in earnest almost the day its grip on the economy loosened enough for his job marketplace to begin to re-open. The period of reasonable notice is logically something that must be determined at the point in time where the notice was required to be given or, if no notice was given, when the obligation to compensate for the failure to give notice arises.

[29] COVID was doubtless a hardship to Mr. Flack and the defendant both. I cannot allow sympathy for the plight of one party or another sway my impartial assessment of the facts. COVID was clearly a subsequent event in this case and ought not to impact the determination of the period of reasonable notice.

(e) Period of reasonable notice

[30] The plaintiff urged me to set the period of reasonable notice at eight months requiring an accounting for the income earned by the plaintiff from his new position in the final weeks of that time frame. Naturally, the plaintiff had a number of cases that suggested outcomes in this range are supportable. These were reviewed in his factum (and potential distinguishing features were emphasized in the defendant’s).

[31] The defendant for its part relied quite heavily on statistical tables comparing large numbers of broadly similar cases suggesting a range about 2.24 months’ notice for salespeople in the 58-70 age bracket with less than one year of service.

[32] In my view, the range suggested by databases such as the “Fisher Database” can provide a useful view of the general range applicable, but this is only a starting point and not an end point.

[33] I cannot view the factors present in this case as permitting a finding of reasonable notice anywhere near as high as the eight months suggested by the plaintiff. His relatively high income does not push the needle towards a higher notice period on these facts. The income was derived entirely from results delivered to his employer (i.e. commission from sales), a track record that was not a liability but an asset that he can and did use to his benefit in securing employment as soon as he did.

[34] Mr. Flack’s brief period of service tends to push the needle towards the lower end of the range without there being particular individual factors such as narrow, specialized market or inducement to compensate or push in the other direction. The industry and market conditions in which his job search commenced was reasonably robust and he appears to have been actively working his connections with success up until COVID knocked his industry on its back. His age played only a very modest factor if at all in his employment prospects.

[35] In the circumstances, I find that two months represents a reasonable assessment of the notice that ought to have been given to Mr. Flack when his employment was terminated.

[36] The parties have advised that they would be able to convert the notice period I have prescribed into a dollars and cents judgment and I shall leave it to them to do so. If there is any difficulty (and I expect none), I would ask each of the parties to prepare their competing form of judgment and calculations along with a brief written argument explaining their position.

[37] I ordered the parties to exchange outlines of costs with each other and, if possible, to arrive at a common position on who would get what amount of costs based upon the notice period found by me. If they are unable to settle costs between them based on these reasons, the same process is to be followed: the parties are to submit their outlines of costs, relevant settlement offers if any and a brief written argument (limited to five pages) to my assistant. If no submissions regarding costs are received prior to December 31, 2021, then no order as to costs shall be made and I shall conclusively assume that the parties have settled the matter of costs between them. The date of uploading such submissions to Case Lines will be determinative but my assistant should be notified to bring the upload to my attention.

S.F. Dunphy J.

Date: November 16, 2021