SUPERIOR COURT OF JUSTICE - ONTARIO

Court File and Parties

COURT FILE NO.: CV-19-00623142-0000

DATE: 20220819

RE: Darryl Morey, Plaintiff

AND:

C.A.T. Inc., Defendant

BEFORE: C.J. Brown J.

COUNSEL: Lluc Cerda, for the Plaintiff

Rachel Goldenberg, for the Defendant

HEARD: January 25-27, 2022

REASONS FOR DECISION

[1] The plaintiff, Darryl Morey (“the plaintiff” or “Mr. Morey”), brings this action against the defendant, C.A.T. Inc. (“the defendant” or “C.A.T.”), alleging that he was constructively dismissed from his employment of over 26 years as a day-cab (short-haul) truck driver with SLH Transport Inc. (“SLH”), which was acquired in an asset purchase by C.A.T. Inc. The plaintiff seeks damages for constructive dismissal in the total amount of $230,236.41, including punitive and aggravated damages.

[2] The summary trial was heard over a three-day period, with evidence in chief given by sworn affidavit and viva voce cross-examination and re-examination evidence given thereon.

[3] It is the position of the plaintiff that upon acquisition of SLH by C.A.T., C.A.T. extended an offer of employment to the plaintiff, promising not to change his position, duties or wages. The plaintiff maintains that a new compensation plan was imposed by C.A.T., which was detrimental to the plaintiff and resulted in a lower compensation. It was the position of the plaintiff that he would not be paid for the same duties as he had been with SLH, and that he would not receive the same number of hours assignment.

[4] Further, the plaintiff submitted that C.A.T. refused to maintain and repair its day-cab trucks, such that the plaintiff was forced to drive vehicles that were not properly maintained and were unsafe. The plaintiff maintains that, as a result of C.A.T.’s conduct, the plaintiff had to take a medical leave of absence, from which he has not been able to return to work.

[5] It is the position of the defendant that the C.A.T. Compensation Plan would not be more detrimental to the plaintiff than under SLH. The defendant maintains that the plaintiff’s compensation under C.A.T. was or would not be less favourable than that under SLH, nor that his hours would be fewer. As with SLH, the plaintiff’s compensation was variable year over year and was based on a combination of mileage and hourly rates. There was no guaranteed level of income.

[6] As regards the allegations concerning health and safety, the defendant denies that it failed to maintain and repair its fleet of trucks. Further, the defendant maintains that the plaintiff was well aware that no driver could be forced to drive a truck that the driver deemed to be unsafe. This was well known to the plaintiff, as he was a member of the Workplace Health and Safety Committee.

[7] The defendant maintains that there is no evidence to establish that the plaintiff’s medical leave of absence was caused by, or due to, the conduct of the defendant.

Background Facts

[8] Mr. Morey had worked as a day-cab truck driver for 26 years and five months, from January 18, 1993 until the time he began his medical leave of absence on May 23, 2019, for what are described as psychosocial issues.

[9] He had been employed by Sears and then SLH, a subsidiary of Sears that provided transportation services primarily for Sears until Sears’ bankruptcy in 2017.

[10] In 2017, C.A.T. Inc. entered an agreement to purchase assets and operations of SLH. The acquisition was completed in May 2019.

[11] The plaintiff was not a salaried employee. The plaintiff’s compensation was a combination of hourly rates and mileage. Based on the T4 forms produced in evidence, he earned $54,079.59 from Sears and SLH in 2017 and $60,170.70 in 2018. In 2019, in the 20 weeks he worked prior to his medical leave, he had earned $21,092.00 from SLH, and after the acquisition was complete on May 12, 2019, he earned $1,605.00 from C.A.T., for a total of $22,742.

[12] Based on Read-ins at trial, Mr. Morey stated that there was an increase in his income from 2017 to 2018 because he “decided to work more”.

[13] The plaintiff described the SLH Compensation Plan as a combination of mileage, hourly, and flat rates for certain tasks. The C.A.T. Compensation Plan was a combination of mileage and hourly rates with an incentive plan. The plaintiff also served on the Workplace Health and Safety Committee.

[14] Following the plaintiff’s leave of absence, which began on May 23, 2019 and continues to the present, his driver’s license was suspended for medical reasons on July 25, 2020 and will remain suspended until at least September 2023, with a medical assessment to be completed by June 23, 2023, pursuant to the evidence. He appealed the decision regarding his license suspension, which was denied.

[15] From the commencement of the medical leave of absence, the defendant had paid the plaintiff’s portion of the premiums for employee benefits, as well as the defendant’s portion, in anticipation of the plaintiff’s return to work.

The Evidence

The Plaintiff’s Case

Darryl Morey

[16] In his affidavit, the plaintiff, Mr. Morey, stated that he had been employed with Sears and then SLH from January 18, 1993, and then had been employed with the defendant, C.A.T., from the date of acquisition of SLH on May 12, 2019.

[17] C.A.T. offered to employ him if and when the acquisition was effected and approved pursuant to correspondence he received on October 19, 2017, which stated as follows:

C.A.T. has completed an agreement to purchase assets/operations of SLH; the company will continue your employment. You will be employed pursuant to similar terms and conditions of employment (in the aggregate) that you presently enjoy. Duties and wage or salary will remain unchanged. You will also be entitled to participate, subject to the terms of applicable policies, in the health, welfare, insurance and employment benefits the company provides to its employees. Your years of service with SLH will be recognized by the Company for all purposes including determination of the company’s benefits in accordance with the company’s human resources policies and applicable law.

[18] It was the plaintiff’s position that his duties and wages/salary were to remain the same. On May 1, 2019, C.A.T. requested that he accept the new terms of employment (a new domestic driver compensation program) to take effect on May 12, 2019when the acquisition would be complete.

[19] He signed the contract agreement with C.A.T. “under protest” given his concerns about the new compensation plan as follows.

[20] He maintained that under the new program, he “risked” being paid less than SLH had paid for all of his time, including downtime, worktime, delay, city shunts, and driving time. He stated that he had been paid for non-driving tasks, such as refuelling, time spent looking for empty and loaded trailers, time spent on scales, time waiting for a plan of dispatch, sweeping the trailer, and other tasks which he did not enumerate.

[21] He stated in his affidavit that he was convinced that C.A.T. no longer wished to employ him. He stated that prior to 2019, he had worked 12 to 13 hour days, but starting in 2019, the hours were reduced typically to seven hours per day, and some days there was no work.

[22] He stated that he “feared” that he would experience a reduction in pay.

[23] He “did not believe” that C.A.T. would compensate him for time in terminal, dropping a trailer, sweeping a trailer, and doing a circle check.

[24] He “feared” that C.A.T. would not continue to employ day-cab drivers because their routes were unprofitable.

[25] In cross-examination, he conceded that his hours had fluctuated at SLH. He acknowledged that in 2017, he would have 5.7 hours per day on some weeks and 9.5 hours on another week. The only driver’s logs produced to document the hours were for 2017, so there were no records for 2018 or the time that he worked in 2019, before his leave of absence, with which to compare the 2017 hours, as logged. He did concede that he had been unable to work for several days in 2019 due to injuries.

[26] He stated that it was confusing what rate he was being paid at C.A.T.

[27] He described the compensation plans at SLH and C.A.T., as follows.

[28] He stated that the SLH Compensation Plan had set fees for individual tasks. For example, the set fee to fill a gas tank was 15 minutes or $4.00. To move wheels to the back of the trailer was 10 minutes; to sweep the trailer, 15 minutes; to drop the trailer, 15 minutes; to refuel, 15 minutes plus the time to get off and back onto the highway. C.A.T. did not have set fees for individual tasks. He stated that he did not think that C.A.T. compensated for time in the terminal, dropping the trailer off, sweeping the trailer, or doing a circle check.

[29] Under the C.A.T. Compensation Plan, he stated that C.A.T. paid for under 160 kms or 100 miles “something like that”, and from what he had read, C.A.T. did not pay for the time to refuel. He acknowledged that it was confusing on the basis of which rate one was paid, hourly or mileage. He stated that for trips under 100 miles, a driver was paid by the hour.

[30] He had no idea what the C.A.T. Compensation Plan was regarding rates for wait time and load/unload. He stated that with C.A.T., a driver had to travel more than 160 kms to be on mileage pay. He agreed that at C.A.T., on the mileage rate, regardless of whether a driver had a wait time of 30 minutes or two hours, they would be paid $25.00 since the compensation plan stipulated that for wait time, a driver was paid $25.00 for up to two hours.

[31] The plaintiff stated that C.A.T. wanted him to do long-haul routes, which he refused. He had always done short-haul routes.

[32] With SLH, he had to report to work at 9AM and would be given his assignment for the day at that time. Under C.A.T., he was given an arrival time at the customer’s warehouse and had to plan the trip himself to arrive at the customer’s warehouse at the time given, which he did not like to do.

[33] He alleged numerous health and safety issues as regards the maintenance and repair of the short-haul trucks which he said made driving unsafe. He alleged that there had been a truck fire which he believed was due to the brakes seizing. There was no evidence to establish that the fire was due to poor maintenance. In attempting to put out the fire, the fire retardant blew into his eyes, and he had to be hospitalized. He was not wearing his safety goggles, as instructed, at the time.

[34] He further alleged that he was forced to drive a truck with a cracked windshield, which he did not refuse to do, as he needed the money and there was no other vehicle available at the time. He further stated that on May 23, 2019, he was forced to drive a rusted trailer which he felt was unsafe. He had contacted the dispatcher and ultimately spoke with the Maintenance Coordinator, John Stevenson. He sent pictures of the vehicle and the rusted trailer to Mr. Stevenson, who reviewed them and authorized him in writing to drive the vehicle the 5-6 kms to the depot on city streets.

[35] The plaintiff stated that he was familiar with the right to refuse unsafe work, but did not want to refuse, because if someone put enough pressure on him, he would do anything due to his past history and problems with pressure. Based on all of the evidence adduced at trial, I do not find that anyone had put any pressure on him at that time, but he also appeared to attempt to avoid any such problems or situations.

[36] He stated that the integration with SLH and C.A.T. occurred on May 12, 2019. On May 13, 2019, his counsel sent a letter to C.A.T. alleging constructive dismissal. He began his medical leave on May 23, 2019.

[37] He stated that since taking medical leave on May 23, 2019, no one had ever told him that he could return to work. The medical doctor has told him that he cannot work, so there is no point in looking for any other work. As regards whether the medical leave was caused by C.A.T., he stated that he did not say that the medical leave was 100% caused by C.A.T., because he also had underlying medical and mental problems. He stated, nevertheless, that his medical leave had to do with actions of C.A.T. that triggered prior issues. He has not submitted any medical records or other evidence that would indicate that the leave was related in any way to C.A.T. However, he believes that he lost his driver’s license because of the actions of C.A.T., which triggered his PTSD that he has been living with all of his life. He agrees that he cannot work as a driver without a license.

[38] He testified that he had applied for LTD in 2016, and that when he went on medical leave in May 2019, he did not apply for or request LTD forms until June 2020. He initially stated that he did not know that he was entitled to the LTD after switching to C.A.T., and that the LTD was “not on my radar” due to his mental issues. He testified that his lawyer had suggested two or three times that he apply for LTD, but that with the mental issues and PTSD, he was trying not to put himself in a position of being labelled a victim and was not ready to request the LTD forms or to face things. The LTD claim was finally approved in March of 2021, retroactive to September 6, 2019, and paid $1.481.00 per month.

Defendant’s Case

Julie Laurendeau

[39] Julie Laurendeau was, at the material time, the Vice President of Human Resources (“HR”) at C.A.T. In that position, she oversaw all HR activities in Canada, the United States, and Mexico. She is currently an HR consultant with C.A.T. and has been in that position since November 2021. She has authority to represent them in this action.

[40] She joined the company in October 2018, after C.A.T. acquired SLH. The integration of SLH and C.A.T. only started in 2019; prior to that time, SLH was functioning autonomously.

[41] She stated that C.A.T. trucks are all bunk trucks, whether they are used for long-haul or short-haul (day trip) assignments.

[42] She testified that the plaintiff was employed with Sears Canada Inc. from January 8, 1993, and transferred to SLH Transport Inc., a subsidiary of Sears Canada that provided transportation services primarily for Sears, which was one of its biggest customers.

[43] In 2017, Sears Canada commenced bankruptcy proceedings and closed its doors throughout Canada. The bankruptcy was effective December 2017. SLH had been created to provide transportation services primarily to Sears. C.A.T. acquired the assets of SLH. The nature of the work and business changed after Sears’ bankruptcy and acquisition by C.A.T.

[44] C.A.T. worked diligently to maintain the employment of as many employees as possible and to obtain new contracts and grow existing business to ensure viability.

[45] On October 19, 2017, correspondence was sent by C.A.T. to its employees, stating that once the assets of SLH were purchased by C.A.T., the plaintiff’s employment would continue “pursuant to similar terms and conditions of employment (in aggregate)”. The plaintiff accepted this continuation of employment on October 26, 2017.

[46] The plaintiff was originally employed out of the SLH Belleville terminal. In the spring of 2018, when that terminal closed, the plaintiff was transferred to the Kingston terminal. The Kingston terminal became too large and was not needed. Therefore, it was closed, and the drivers were transferred to Napanee. She believes 10 to 15 employees were transferred. Extra trucks are not kept in the Napanee terminal, which is not owned by C.A.T. Extra trucks are kept in Mississauga and Coteau-du-Lac.

[47] The plaintiff was not a salaried employee. His compensation was always variable and subject to fluctuation. He was not guaranteed a minimum number of hours, a specific daytime schedule, or a certain level of compensation.

[48] The transportation business is driven by the needs of the customers, who dictate the frequency, timing, and other terms of delivery of products. The transportation business is cyclical and the volume of available work fluctuates.

[49] In 2018, the Sears assets were being liquidated due to the bankruptcy, so this was a record year for SLH due to the extra work generated by the liquidation of assets. The transportation contract terminated once all assets had been liquidated. SLH was used during the liquidation process to transport the liquidated assets. In July 2021, C.A.T. lost the Canada Post contract, which also had a significant economic impact on it.

[50] The plaintiff did not work regularly 12 to 13 hours per day prior to 2019, as he had suggested. His hours fluctuated based on the needs of the business. The driver’s logs from 2017, produced in the action, indicate that the plaintiff worked 213 days in 2017. He only worked a total of 12 or more hours on 29 occasions that year. On the average, the plaintiff worked 8.4 to 9 hours per day. There were 46 occasions when he worked eight hours or less.

[51] The plaintiff was not salaried, nor was he guaranteed a set compensation per year. At SLH and at C.A.T., a driver was compensated through a combination of mileage rates, hourly rates, and/or incentives. His compensation was variable and fluctuated throughout his employment.

[52] At SLH, a driver was compensated by a combination of mileage and hourly rates (a mileage rate of 0.299 cents per km and an hourly rate of $20.40).

[53] C.A.T. noted that the processes implemented by SLH for servicing one primary customer, namely Sears, were no longer efficient from a business point of view when servicing a larger, more varied, group of customers and took steps to integrate SLH into the general C.A.T. compensation process. On May 1, 2019, C.A.T. provided to its domestic drivers, including the plaintiff at the Kingston terminal, a letter and memorandum entitled “Domestic Driver Compensation– Kingston”, which advised that on May 12, 2019, the compensation structure would be integrated into that of the C.A.T. compensation package.

[54] Ms. Laurendeau explained that the C.A.T. compensation package included the following. Mileage rate was 0.44 cents per mile or 0.27 cents per km. There was a six-month guarantee of an additional 0.03 cents per mile to bring the total mileage rate to 0.47 cents per mile or 0.29 cents per km. The plaintiff’s hourly rate for a trip less than 100 miles increased from $20.40 to $22.50 per hour. An additional 0.04 cents per mile was paid for hazardous loads. There was a flat rate of $25.00 for each live load and unload; a flat rate of $25.00 up to two hours of wait time at a customer site, with an hourly rate of $22.50 up to $75.00 thereafter. For all time spent dealing with a breakdown or maintenance issue, an hourly rate up to $75.00 was earned. There was an incentive pay of an additional 0.02 cents to 0.04 cents per mile where certain targets were reached. The domestic driver compensation package was set forth and explained at para. 21 et seq. of the affidavit of Ms. Laurendeau.

[55] The compensation of the plaintiff from 2017 onward is set forth at paras. 32 to 35 of the affidavit of Ms. Laurendeau.

[56] In her affidavit, Ms. Laurendeau contested the allegations of the plaintiff that the C.A.T. compensation structure would result in a material decrease in his compensation. She pointed out the following: The hourly rate was increased from $20.40 to $22.50. Although the base mileage rate was adjusted slightly from 0.29 to 0.27 cents, C.A.T. offered a six-month transition payment of an additional 0.03 cents per mile to maintain the current SLH rate. Thereafter, the incentive plan came into effect to raise the mileage rate by an additional 0.02 to 0.04 cents per mile, which would keep the mileage rate at or above 0.29 cents per km. By providing a flat rate for each load or unload, the drivers could be paid $25.00 for less than an hour of unloading. A load or unload would often take one hour or less. This represents a significant increase to their SLH hourly rate of $20.40 for all loads or unloads. By providing a flat rate for the first two hours of wait time at a customer’s business, the drivers could be paid $25.00 for a minimal wait time. It was not uncommon for a driver to wait one hour or less at a customer’ s business. The targets set in the incentive bonus program were attainable.

[57] Ms. Laurendeau stated that one cannot compare compensation earned over a period of four months in 2019 with the four months of the previous year as contracts with companies and driver compensation fluctuate during the course of the year.

[58] C.A.T. offered the plaintiff and other drivers in the Belleville terminal, which was closing, long-haul work if they wanted it. The plaintiff refused and resisted working evenings or weekends. He had always been a day-cab driver and wanted to remain in that position.

[59] The plaintiff took a medical leave of absence from May 23, 2019 to the present. C.A.T. provided two ROEs (Records of Employment), one in May, showing his migration from SLH to C.A.T.; and a second showing the plaintiff was off work for “Illness or Injury”. C.A.T. had mistakenly assumed that the ROE sent in May was the one indicating the plaintiff’s medical leave and had to send the second one indicating “Illness or Injury” afterward, when this was brought to their attention.

[60] The plaintiff received EI for the first 15 weeks of his medical leave, COVID relief benefits, and thereafter, LTD.

[61] When an employee is on a medical leave of absence, LTD forms are not sent automatically to the employee. It is the employee’s responsibility to contact the employer, C.A.T., to request forms. The employee goes on EI first. Mr. Morey requested LTD forms on June 20, 2020 and was sent them by C.A.T. on June 24, 2020.

[62] During the plaintiff’s medical leave, C.A.T. had switched LTD providers from SunLife to Manulife Insurance. When the plaintiff requested LTD forms in 2020, the defendant sent the forms from Manulife, which was their then-LTD provider. Because the disability had begun before Manulife became the LTD provider, the plaintiff was apparently covered under the SunLife plan, rather than the Manulife plan, and had to resubmit the LTD forms to SunLife. The LTD was approved, retroactive to September 6, 2019 at $1,418.00 per month. C.A.T. continues to pay for the plaintiff’s benefits, including employee paid premiums, and has paid $3,867.56 from the time of the plaintiff’s leave of absence to maintain the plaintiff’s benefits.

[63] In or around March 2021, the plaintiff received a lump sum payment from SunLife, including LTD benefits retroactive to September 2019 and life insurance premiums from May 2019. C.A.T. paid the full cost of both LTD premiums and life insurance premiums from June 2019 to the date the premiums were waived by SunLife because of the plaintiff’s medical leave. SunLife will not release the breakdown of payments to C.A.T. outlining the value of the premium reimbursements without the consent of the plaintiff, which has not been given.

Jeff Lefebvre

[64] Jeff Lefebvre is, and was at the material time, the National Customs and Compliance Manager, a position which he had held since 2013, with SLH and then with C.A.T. He works at the Kingston office, although there is no terminal there.

[65] He testified in his affidavit that C.A.T. has a comprehensive Health and Safety Policy which was provided to Mr. Morey on a number of occasions throughout his employment. Mr. Morey’s acknowledgement of receipt of the policy dated June 3, 2015 was produced in evidence.

[66] He testified that Mr. Morey was never forced to drive an unsafe vehicle or to violate any applicable laws.

[67] As regards the incidents raised by Mr. Morey as being evidence of unsafe vehicles, Mr. Lefebvre testified that on April 2, 2019, the tractor attached to the truck driven by Mr. Morey caught fire. Mr. Morey was able to extinguish the flames with the fire extinguisher. He did require medical treatment due to injuries sustained when the chemicals blew back in his face. At the time of the incident, Mr. Morey was not wearing the protective eyewear that C.A.T. provided to its drivers. C.A.T. supported Mr. Morey following the incident, including with the WSIB claim which compensated him for two days of lost wages while he recovered from the incident. There was no evidence that the fire was the result of C.A.T.’s negligence or lack of maintenance.

[68] As regards the cracked windshield, Mr. Lefebvre stated in his affidavit that Mr. Morey was not forced to drive an unsafe vehicle with a cracked windshield. The plaintiff was informed that the vehicle had a minor crack in the windshield, reported by the previous driver, that had not obstructed the view of the previous driver. He was asked if he was comfortable making the delivery in the truck with the cracked windshield and agreed to drive the vehicle after completing an inspection. Mr. Morey had to do his circle check and if, at that time, he had deemed the crack to be unsafe, he could have refused to drive the vehicle. Mr. Morey did not refuse or attempt to refuse to drive the vehicle.

[69] As regards the rusted trailer, Mr. Morey was asked if he could transport the trailer about 5 kms back to the yard, via city streets, which he agreed to do. Had he felt that the vehicle was unsafe and refused to perform the perceived unsafe work, in accordance with the Health and Safety Handbook, C.A.T. would have made other arrangements to transport the vehicle back to the terminal. Mr. Morey was well aware of his rights to refuse work which he felt was unsafe. When Mr. Morey raised his concerns about the rusted trailer and sent pictures of the trailer to the Road Service Manager, John Stevenson, at C.A.T., it was determined by the Road Service Manager that the trailer was safe to transport back to the terminal and this was communicated to him.

[70] At the end of the trip, he went into the terminal to speak to Mr. Cox. While he was speaking with Mr. Cox, Mr. Lefebvre came into the office and joined Mr. Cox and the plaintiff. Mr. Lefebvre stated that had Mr. Morey indicated that he felt unsafe to drive the vehicle or was concerned about the implications of attending at a scale during this trip, he could have refused to drive the vehicle.

[71] Moreover, Mr. Morey was not blamed for delivering an unsafe trailer, as he had stated. When he arrived back at the terminal, he spoke with Mr. Lefebvre and Mr. Cox about the trailer. He explained that he had only transported the trailer because he thought he would be reprimanded if he refused. Mr. Lefebvre explained to him that if he felt the vehicle was unsafe to transport, even a short distance, he could refuse the work and escalate the issue to management, as set forth in the Workplace Health and Safety Policy.

[72] In cross-examination, he was asked about the compensation structure of SLH. He did not have a comprehensive understanding of the C.A.T. structure.

[73] The hourly rate of $20.45 per hour at SLH included circle checks. Fuelling and sweeping the trailer were flat rates of 15 and 10 minutes respectively. Delays of up to 15 minutes were built into trip time. Delays due to traffic or waiting at a customer’s business longer than 15 minutes were dealt with as delay time.

[74] Certain times and rates were calculated using a formula and an algorithm.

The Issues

[75] The issues to be determined by this Court are as follows.

1. Whether the plaintiff was constructively dismissed from his employment with C.A.T.

2. If so, what damages are owing to the plaintiff for the constructive dismissal.

3. Whether the plaintiff has failed to mitigate his damages.

4. If not, whether the employment contract has become frustrated by the plaintiff’s inability to work.

The Law

Constructive Dismissal

[76] The test for constructive dismissal, as set forth by the Supreme Court of Canada in Potter v. New Brunswick Legal Aid Services Commission, 2015 SCC 10, [2015] 1 S.C.R. 500, and applied in numerous cases thereafter, has two branches.

[77] The test is set forth, in summary, as follows.

[78] The court must first identify an express or implied contract term that has been breached and then determine whether that breach was sufficiently serious (a “substantial breach”) to constitute constructive dismissal. Under the second branch, an employer’s conduct will also constitute constructive dismissal if, under the totality of the circumstances, it more generally shows that the employer intended not to be bound by the contract.

[79] The first branch of the test for constructive dismissal, has two steps: first, the employer’s unilateral change must be found to constitute a breach of the employment contract and, second, if it does constitute such a breach, it must be found to substantially alter an essential term of the contract. For that second step of the analysis, the court must ask whether, at the time that the breach occurred, a reasonable person in the same situation as the employee would have felt that the essential terms of the employment contract were being substantially changed. Both steps of the test are objective.

[80] In the words of the Supreme Court of Canada in Potter at paras. 38 and 39:

At the first step of the analysis, the court must determine objectively whether a breach has occurred. To do so, it must ascertain whether the employer has unilaterally changed the contract. If an express or implied term gives the employer the authority to make the change, or if the employee consents to or acquiesces in it, the change is not a unilateral act and therefore will not constitute a breach. If so, it does not amount to constructive dismissal. Moreover, to qualify as a breach, the change must be detrimental to the employee.

Once it has been objectively established that a breach has occurred, the court must turn to the second step of the analysis and ask whether, “at the time of the [breach occurred], a reasonable person in the same situation as the employee would have felt that the essential terms of the employment contract were being substantially changed” (Farber, at para. 26). A breach that is minor in that it could not be perceived as having substantially changed an essential term of the contract does not amount to constructive dismissal.

[81] Constructive dismissal can take two forms: that of a single unilateral act that breaches an essential term of the contract, or that of a series of acts that, taken together, show that the employer intended to no longer be bound by the contract.

[82] The onus is on the employee to establish that he or she has been constructively dismissed. The employee’s perception and sensitivity as to the change are not enough to establish constructive dismissal, particularly in situations where there is evidence to the contrary: Chapman v. GPM Investment Management, 2015 ONSC 6591, 2016 C.L.L.C. 210-017, para. 17, citing Farber v. Royal Trust Co., 1997 387 (SCC), para. 46.

[83] It is the position of the plaintiff that he was constructively dismissed. The plaintiff argues that the defendant breached essential terms of the employment contract to the plaintiff’s detriment, and engaged in a course of conduct evincing an intention not to be bound by the employment contract, as follows.

1. C.A.T. changed the compensation structure introducing material uncertainty in the manner and amount of compensation the plaintiff would receive. The plaintiff relied on Bowie v. Motorola Canada Ltd., [1991] O.J. No. 1927 and Farber v. Royal Trust Co., 1997 387 (SCC), [1997] 1 S.C.R. 846.

2. C.A.T. reduced the plaintiff’s hours and salary.

3. C.A.T. terminated unprofitable short-haul routes, such that the plaintiff could only increase his depressed income by accepting long-haul work, which he did not want to do.

4. The defendant’s treatment of the plaintiff made continued employment intolerable. The plaintiff relies on Potter at para. 33. In this regard, the plaintiff alleges that he was forced to drive unsafe vehicles and was continuously bullied into compliance.

5. The defendant failed to promptly provide to the plaintiff his ROE and his LTD forms.

6. The treatment of the plaintiff by the defendant resulted in the plaintiff having to take a medical leave of absence.

[84] I will deal with the above allegations, seriatim.

[85] Before commencing this portion of the analysis, I note that the plaintiff has contested portions of Ms. Laurendeau’s evidence as constituting hearsay. Counsel for the plaintiff objects to those portions of Ms. Laurendeau’s affidavit which rely on information obtained from others in the corporation as hearsay which, they argue, should not be permitted at trial.

[86] Hearsay evidence is presumptively inadmissible. Numerous common-law exceptions apply to the rule and the courts have urged a greater flexibility in the application of the rule where the focus would be on the principles that underlie the traditional common-law exceptions: necessity and reliability: see R. v. Khelawon, 2006 SCC 57, [2006] 2 S.C.R. 787.

[87] This is a summary trial, with a corporate defendant which has a large operation. It would not be practical, nor likely possible, to have a summary trial, were every corporate employee in every department having information relevant to the case required to testify. Ms. Laurendeau testified as to the information about which she had knowledge. She obtained from her corporate colleagues, data and statistical and other information relevant to the case that they had access to in their departments, and provided that in her affidavit and in viva voce evidence as her information and belief.

[88] In all the circumstances of this case, I accept that information from her corporation, given through her as C.A.T.’s representative in this trial. I am satisfied that it meets the test of admissibility.

[89] Having reference to the plaintiff’s allegations, set forth at para. 87, supra, and the evidence adduced at trial, my analysis follows.

[90] Compensation. The plaintiff spent much time in trial on the compensation plans and how the changes between the SLH and C.A.T. plans affected him. Certain items in one plan were treated or paid differently in the other. The testimony of the plaintiff suggested that he would be or feared he would be paid less for the same amount of work, while the evidence of the defendant indicated that, for the same amount of work, the plaintiff would be paid the same or more under the C.A.T. plan. The plaintiff stated that under the C.A.T. plan, he “risked” being paid less; that he “feared” he would experience a reduction in pay, that he “did not believe” he would be paid for certain work, such as waiting at the terminal, that he had been paid for at SLH. Based on a comparison of his explanations of various aspects of his SLH versus C.A.T. payment plans, with the plans themselves, it appears that he was not sufficiently conversant with either plan. It appears that he failed to take into account certain aspects of each program which made his comparisons of the two plans problematic or incorrect. An employee’s perceptions and sensitivities as to the change are not sufficient to establish constructive dismissal: Chapman v. GPS Investment Management, supra.

[91] The compensation plans for both SLH and C.A.T. were based on a combination of mileage and hourly rates. The compensation was not based on a fixed income, but was variable, week to week, and year over year.

[92] The plaintiff had worked under the Sears/SLH Compensation Plan for over 26 years and was familiar with it. He had only worked under the C.A.T. Compensation Plan from May 13-23, which is nine business days, when he went on medical leave. It is understandable that he would feel more comfortable with a plan he had worked under for a long period of time as opposed to a new plan that he had worked under for nine business days due to the unfamiliarity of the new plan.

[93] Both the plaintiff and Mr. Lefebvre testified that trip rates were based on a complex formula including algorithms and, at trial, neither could explain exactly how each trip rate was calculated. There was no evidence that the SLH Compensation Plan was inherently fairer or more intuitive than the C.A.T. Compensation Plan, only that the plaintiff was more comfortable with what he was used to, namely the SLH Compensation Plan.

[94] While the plaintiff compared his average weekly compensation using one week in 2018 and one week in 2019, I do not find this comparison reliable or convincing. The evidence indicates that his hours and compensation varied from one week to the next in each year, such that selecting one week in one year to compare with one week in another year is not a reliable or credible comparison to determine whether, indeed, one compensation plan was more remunerative than another.

[95] Based on the evidence adduced, it was just as likely that his compensation at C.A.T. would have been comparable to that at SLH or better. I find that there is no or no sufficient evidence to establish that the compensation plan with C.A.T. would be detrimental to the plaintiff, or would result in a reduction in his compensation. The plaintiff worked under that plan for only nine business days.

[96] Concrete evidence as regards the comparisons between the compensation structures of drivers at SLH and C.A.T. and how said plans would compare before the same work assignments and tasks was sorely lacking. Had the parties wished to properly present comparisons at trial, they should have done so through expert witnesses in order to provide some reliable statistical comparisons for compensation structures between SLH and C.A.T.

[97] The evidence provided was as to amounts for discrete tasks or segments of tasks and trips which were not possible to compare as regards the plaintiff’s actual work assignments and compensation therefor, which varied from day to day, week to week, and year to year.

[98] On the evidence before me, I am unable to find that the new compensation structure would result in a substantial detrimental change to the plaintiff, nor that a reasonable person would conclude that the employment contract was substantially breached.

[99] Hours of work. I do not find, on the evidence adduced, that the plaintiff’s hours of work were reduced to any significant extent. While the plaintiff stated that from 2017, he worked an average of 12 to 13 hours per day, the driver’s logs for 2017, which were the only logs adduced in evidence, indicate an average number of hours per day of 8.4 to 9 hours. For the five business days that he worked from May 12-23, 2019, there is insufficient evidence to draw any conclusions about average hours per day for 2019. Again, the plaintiff only provided his driver’s logs for 2017.

[100] Termination of short-haul routes. There is no sufficient evidence to establish the plaintiff’s contention that C.A.T. terminated unprofitable short-haul routes such that the plaintiff would have to accept long-haul routes, which he refused to do. The evidence indicates that C.A.T. no longer had the significant Sears business after the bankruptcy and liquidation. The evidence further indicated that the defendant lost the Canada Post contract when it came up for bidding again. At the same time, the evidence of the defendant was that C.A.T. was working diligently to gain new short-haul contracts to keep its business viable. Based on the lack of evidence in this regard, I do not accept that C.A.T. actively terminated short-haul contracts, wanting to only have a long-haul business.

[101] No Intention of Employer Not to be Bound by Contract. Based on the defendant’s conduct, the plaintiff further alleges that a reasonable person in the employee’s situation would have concluded that the employer’s conduct evinced an intention to no longer be bound by the contract. There is no evidence to support this allegation, as set forth below.

[102] No Lack of Maintenance or Repair. In this regard, the plaintiff alleges that he was forced to drive unsafe vehicles and was bullied into compliance in that regard. I do not accept these positions or allegations. I accept the evidence of the defendant as regards the issues of the truck maintenance. I am cognizant of the fact that the plaintiff sat on the Workplace Health and Safety Committee, was conversant with the Workplace Health and Safety Policy, and was familiar with the process of refusing work that the driver felt was unsafe. In all cases raised by the plaintiff, he had agreed to drive the vehicles in question, with knowledge of the issues, such as the cracked windshield which did not obstruct the driver’s view and the rusted trailer. As regards the trailer fire, there was no evidence to suggest that the fire was caused by poor maintenance. As regards the injury to his eyes sustained due to the fire retardant blowback, he was not wearing the safety glasses issued to him, as he should have been.

[103] There was no evidence that the plaintiff was forced to drive unsafe trucks or was bullied into compliance regarding the driving of unsafe vehicles, as the plaintiff argued. I reject this allegation.

[104] ROEs and LTD Forms. The late issuing of the second ROE was fully explained, as set forth above at para. 59 and I find that it was not sent sooner by inadvertence or error. As regards the LTD forms, the plaintiff admitted that he had previously applied for LTD in 2016 and knew what to do. He stated in testimony that he did not want to deal with the LTD application in 2019, as he was dealing with his mental issues and with the PTSD that he had been dealing with all his life. Even after his lawyer suggested several times that he apply for LTD, he did not want to deal with it. When he finally asked C.A.T. for the LTD forms in June 2020, they were provided to him within four days. When he requested the forms, C.A.T. initially sent him the form for Manulife, the current LTD provider at the time. However, once it was determined that his medical leave and coverage fell under the previous LTD provider, SunLife, C.A.T. sent the proper SunLife forms for completion, which were then sent to SunLife. Thereafter, the LTD benefits were approved. I do not find that the defendant’s conduct in this regard evinced an intention to no longer be bound by the contract.

[105] Medical Leave of Absence: The plaintiff alleges that the treatment he received from the defendant resulted in his having to take a medical leave of absence. However, in his testimony, the plaintiff conceded that he did not attribute his medical leave solely to C.A.T. Based on the evidence adduced, I find nothing in the treatment of the plaintiff by the defendant to be in any way untoward. Further, there is no evidence from medical doctors, treating physicians, or any others to suggest that the plaintiff’s medical leave is at all related to his work. I do not accept this allegation.

[106] I find no evidence to suggest that the defendant demonstrated an intention to no longer be bound by the contract, nor that, on all of the evidence adduced, a reasonable person in the employee’s position would conclude that the employer demonstrated an intention to no longer be bound by the contract.

[107] In fact, I note that the plaintiff has been supported throughout his leave by C.A.T., including C.A.T.’s continuing to pay for the plaintiff’s employee portions of his benefit premiums in order to preserve his benefits in anticipation of his return to work.

[108] In conclusion, I do not find that Mr. Morey was constructively dismissed by C.A.T.

[109] Accordingly, no damages are owing to the plaintiff, and no issue of mitigation arises.

Frustration of Contract

[110] In this action, C.A.T. has asserted that the plaintiff’s employment has been frustrated due to his medical leave of absence from employment since May of 2019, and that his prognosis is such that his return to work is not possible.

[111] Frustration of contract occurs when a situation arises for which the parties made no provision in the contract and the performance of the contract becomes impossible or “a thing radically different from that which was undertaken by the contract”: Naylor Group Inc. v. Ellis-Don Construction Ltd., 2001 SCC 58, 2 S.C.R. 943, para. 53.

[112] Frustration of contract may occur where an employee is unable to work due to illness or disability. In those circumstances, courts will look at the length of illness with respect to the terms and duration of the employment contract, as well as the nature of the illness and the likelihood of a return to work: Fraser v. UBS Global Asset Management, 2011 ONSC 5448, [2011] O.J. No. 6167, para. 18.

[113] Frustration will be established, inter alia, if at the time of the termination, there is no reasonable likelihood that the employee can return to work within a reasonable time: Fraser v. UBS Global Asset Management, 2011 ONSC 5448, [2011] O.J. No. 6167, para. 32; Naccarato v. Costco Wholesale Canada Ltd., 2010 ONSC 2651, [2010] O.J. No. 2565, para. 10.

[114] In the context of an employment contract, the onus is on the employer to prove that frustration of contract has occurred: Dragone v. Riva Plumbing Ltd, 2007 40543 (ON SC), [2007] O.J. No. 3710, para. 17.

[115] Where employment has ended due to the frustration of the employment contract, the employee is not entitled to reasonable notice of termination or pay in lieu thereof: Fraser v. UBS Global Asset Management, 2011 ONSC 5448, [2011] O.J. No. 6167, paras. 12, 34.

[116] In making my determination on this issue, I have considered the cases relied upon by the parties, including those referenced at paras. 111, 113 and 114, supra, and Duong v. Linamar Corp., 2010 ONSC 3159, [2010] O.J. No. 2314, Hoekstra v. Rehability Occupational Therapy Inc., 2019 ONSC 562, 2019 CarswellOnt 2671, and DeLong and ZoomerMedia Ltd., Re, 2020 CIRB 933.

[117] In this case, there was no agreement between the parties as to what would happen in the event of a prolonged illness. The plaintiff had been employed for more than 26 years. He has been on medical leave, and on LTD, for three years. Due to his medical condition, his driver’s license has been suspended through September 2023. In order to have his driver’s license restored, he must successfully pass a medical assessment by June 23, 2023.

[118] As regards medical evidence, there is none that would assist in determining the medical status of the plaintiff and whether he may be able to return to work in the next year. There is evidence, however, of a date for assessment of his ability to drive, which is linked to his medical condition.

[119] In the present case, there is a date upcoming within the next year that will determine whether Mr. Morey’s driver’s licence will be returned, such that he may be able to return to work. Given that there is no medical evidence and no medical or psychological evidence that could be of assistance one way or the other to this Court in understanding his diagnosis and prognosis, the nature of his illness, or the likelihood of his return to work, I am not able to find that there has been frustration of the contract.

[120] This case is dismissed.

Costs

[121] I strongly urge the parties to come to an agreement as regards costs in this matter. Should they be unable to do so, the parties are to provide me with their bills of costs, limited to three pages total within 60 days of release of these Reasons for Judgment.

C. J. Brown J.

Date: August 19, 2022