COURT FILE NO.: CV-21-00659271-0000

DATE: 20220922

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

AFTIM NASSAR

Plaintiff

– and –

ORACLE GLOBAL SERVICES ULC

Defendant

Ryan Edmonds and Christopher Gibson, for the Plaintiff

Maciej Lipinski, for the Defendant

HEARD: February 22, 2022; supplementary written submissions received September 20 and 21, 2022

vella j.

REASONS FOR JUDGMENT

[1] The Plaintiff, Mr. Nassar, seeks summary judgment for damages arising out of his termination without cause by the Defendant, Oracle.

[2] Oracle states that this really is a motion for partial summary judgment, and this matter is not suitable for partial summary judgment. In the alternative, Oracle relies on the termination provisions of Mr. Nassar’s employment contract and states that it has complied with the “without cause” provision and therefore the dismissal was not wrongful. In the further alternative, if the dismissal was wrongful, due to the alleged unenforceability of the termination provision, then Mr. Nassar failed to mitigate his damage.

Issue 1: Is this matter suitable for summary judgment?

[3] This matter is suitable for summary judgment.

[4] I reject Oracle’s submission that this is actually a motion for partial summary judgment. Mr. Nassar abandoned his claims with respect to breach of the Ontario Human Rights Code, R.S.O. 1990, c. H. 19 and breach of the Ontario Occupational Health and Safety Act, R.S.O. 1990, c. O.1. The only remaining issue before me is whether Mr. Nassar was wrongfully dismissed, and if so what the appropriate measure of damages are.

[5] If judgment is granted in favour of Mr. Nassar, the action will have been disposed of in its entirety.

[6] While Oracle raises Mr. Nassar’s performance as a reason justifying termination, it agrees that it dismissed Mr. Nassar without cause.

[7] Furthermore, the lateness of Mr. Nassar’s total abandonment of the remaining causes of action under the OHRC and OHSA may be a factor to be considered in the assessment of costs.

[8] Accordingly, there is no genuine issue raised that requires a trial. I am satisfied that the summary procedure process provides for a fair and just adjudication of the case. I am able to make the necessary findings of fact, based on the evidence before me, and to apply the law without the need to resort to the enhanced fact-finding powers under rr. 20.04(2.1) and (2.2). A summary judgment is the proportionate response in this matter, and the expense and delay of a trial is not warranted or necessary in order for me to reach a fair and just result (see, generally, Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87; and Drysdale v. Panasonic Canada Inc., 2015 ONSC 6878, at para. 10 with respect to wrongful dismissal matters).

Issue 2: Is the Termination Clause of Mr. Nassar’s Employment Contract with Oracle Enforceable.

[9] Mr. Nassar started his employment with Oracle on March 5, 2018. According to the offer of employment dated February 14, 2018, Mr. Nassar became the Applications Sales Representative IV with Oracle Canada ULC. Oracle is a software company. Mr. Nassar was the only Canadian in this role at Oracle Canada ULC.

[10] Mr. Nassar accepted the offer and entered into an Employment Contract signed by him on February 20, 2018. It is a 19-paragraph contract but what is most germane for this motion is the following termination provision:

6. Termination of Employment:

(a) For Cause: Oracle Canada may terminate your employment at any time, for just cause, without any notice or pay in lieu of notice.

(b) Without Cause: Oracle Canada may terminate your employment in your present position or any other position that you may occupy at Oracle Canada as a result of a promotion, reassignment or any other change at any time, without just cause, by providing you with only the minimum statutory notice or termination pay, minimum entitlement to benefit continuation and statutory severance (if applicable) in accordance with the employment standards legislation of the province in which you are employed, as well as accrued wages and vacation pay, in full satisfaction of all entitlements or claims you may have of any kind whatsoever.

[11] Oracle terminated Mr. Nassar “without cause” effective February 9, 2021.

[12] Mr. Nassar states that the termination provision, as a whole, is invalid because the contract’s definition of “for cause” is broader than the equivalent provision reflected in the Employment Standards Act, 2000, S.O. 2000, c. 41. Therefore, there are scenarios in which he could be dismissed “for cause” within the meaning of the common law in which he would still be entitled to benefits under the ESA under its narrower definition of “for cause”.

[13] Under s. 5(1) of the ESA, an employee cannot contract out of the minimum standards prescribed by that Act.

[14] If any portion of the termination provision of an employment contract is unenforceable, as running contrary to the ESA, then the entire termination clause falls (Waksdale v. Swegon North America Inc., 2020 ONCA 391, 446 D.L.R. (4th) 725, at para. 10; Perretta v. Rand A Technology Corporation, 2021 ONSC 2111, 70 C.C.E.L. (4th) 85).

[15] I agree that the common law concept of “for cause” is broader than the statutory definition of “for cause” contained in the ESA.

[16] Under the ESA (ss. 54 and 55), an employee is entitled to statutory notice, or pay in lieu of notice, and severance pay if the dismissal is without cause. The employee will be disentitled from such benefits, however, when the employee is “guilty of wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer” (Termination and Severance of Employment, O. Reg. 288/01, s. 2(1)(3)).

[17] At common law, the concept of just cause for dismissal can include acts of incompetence or negligence in certain situations. It does not require that the employee have intentionally committed misconduct or dishonesty or an intentional breach of a duty owed to the employer.

[18] However, Oracle submits that (a) the rationale set out by the Court of Appeal in Waksdale is not a “one size fits all manner” rationale and (b) in any event, “[t]he fact that the Contract did not expressly mention what would occur in circumstances where the Plaintiff engaged in conduct amounting to just cause but not amount to ESA wilful conduct standard does not in itself render the termination provision void”.

[19] Oracle relies on this court’s respective decisions of Alarashi v. Big Brothers Big Sisters of Toronto, 2019 ONSC 4510, 57 C.C.E.L. (4th) 321, at paras. 35-41; and Rahman v. Cannon Design Architecture Inc., 2021 ONSC 5961, at paras. 29 and 30.

[20] Since hearing argument in this matter, the Ontario Court of Appeal decided Rahman v. Cannon Design Architecture Inc., 2022 ONCA 451. The Court overturned the motion judge’s decision.

[21] Accordingly, I invited counsel to provide me with brief written submissions regarding the OCA decision, which I have reviewed.

[22] In Rahman, the Court of Appeal considered the following termination clause:

CannonDesign maintains the right to terminate your employment at any time and without notice or payment in lieu thereof, if you engage in conduct that constitutes just cause for summary dismissal.

[23] The Court also stated, at para. 28, that under the ESA “the wilful misconduct standard requires evidence that the employee was ‘being bad on purpose’”.

[24] The Court, at para. 24, stated that it is not appropriate to import the subjective intentions of the parties to comply with the ESA, the sophistication of the employee and the fact an employee received independent legal advice, (factors relied upon by Oracle) to save a termination provision that otherwise violates the ESA on its plain language reading.

[25] The Court also reiterated, at para. 30, that it has “repeatedly held” that if any termination provision within the termination clause is in violation of the ESA, then the entire termination clause is invalid. Accordingly, even though the without cause provision complies with the ESA and is the one being relied upon, the whole termination clause will be declared void if the just cause provision violates the ESA.

[26] The impugned “for cause” provision of Oracle’s termination clause clearly states on its face that no benefits will be paid if Mr. Nassar is dismissed for “just cause”. The phrase, “just cause” is not defined anywhere in the employment contract. The contract does not qualify the concept of just cause to mirror the definition under the ESA Regulation.

[27] By now, employers have had plenty of notice from our Court of Appeal to ensure that termination clauses are written in such a way as to comply with the ESA and its regulations. Our courts demand that such clauses be clear and unambiguous in how they are written. There should be no room for guess work by the employee in understanding when terminated, be it for just cause or not, what entitlements they will receive, and it must be clear that those entitlements at least meet the minimum requirements of the ESA and its regulations.

[28] Accordingly, the “for cause” provision of Oracle’s employment contract with Mr. Nassar is overbroad as it purports to deprive him from the statutory minimum benefits under the ESA and its Regulation in a situation in which the employee might justifiably be terminated at common law for “just cause” but would still be entitled to the prescribed statutory benefits.

[29] This means that the entire termination clause in Mr. Nassar’s employment contract, including the “without cause” provision, is void and unenforceable.

[30] Mr. Nassar is entitled to reasonable notice at common law, subject to the duty to mitigate.

Issue 3: What is the reasonable length of notice?

[31] The court will apply the Bardal factors in determining the common law notice period (Bardal v. Globe & Mail Ltd. (1960), 1960 CanLII 294 (ON SC), 24 D.L.R. (2d) 140 (Ont. H.C.)). In addition, the court will consider other factors that are particularly relevant to the dismissed employee’s and employer’s specific situation.

[32] One of those particular factors is the timing and gravity of the COVID-19 pandemic. Other courts have observed that the pandemic can have an effect on a terminated employee’s ability to seek and obtain new employment, in part due to the Stay-at-Home Order, O. Reg. 11/21 that was in force on the date of Mr. Nassar’s termination. There were also restrictions placed on some businesses during the relevant time frame of termination: Steps of Reopening, O. Reg. 363/20 and Rules for Areas in Shutdown Zone and At Step 1, O. Reg. 82/20. See, for example, Pavlov v. The New Zealand and Australian Lamb Company Limited, 2021 ONSC 7362, 75 C.C.E.L. (4th) 144, at paras. 15-20. While the court can and will take notice of the restrictions that the government put in place in the context of wrongful dismissal matters, there must be some evidence that demonstrates that Mr. Nassar was in fact hampered in his efforts to obtain new employment as a result of these restrictions. In my view, it is not enough to suggest in a general way that the pandemic hampered employment efforts without supporting evidence on behalf of the wrongfully dismissed employee in order to lengthen the notice period beyond what it would otherwise be.

[33] To the contrary, the fact that Mr. Nassar secured alternative employment within approximately five months of termination leads to the reasonable inference that the pandemic likely did not have a significant impact with respect to his particular job search.

[34] On the other hand, the employer has not cited the pandemic in its evidence or argument as a reason for having decided to terminate Mr. Nassar. Its position was that Mr. Nassar was terminated without cause because of his alleged repeated poor performance and his documented failure to reach sales targets. Accordingly, the pandemic is not a mitigating factor in this case from the perspective of the employer.

[35] Mr. Nassar worked for nearly three years with Oracle. He was a salesperson. He was 44 at the time of termination and is now re-employed at the age of 45. His skills as a commissioned salesperson are transferrable as evidenced from his employment prior to Oracle, and the position he secured after termination which provides a slightly higher base salary plus a commission component. Mr. Nassar was not employed at Oracle in a “niche” industry that greatly reduced the opportunities for re-employment. This is in part evidenced by the number of jobs he applied for leading to his successful effort (approximately 2.4 applications per week). Mr. Nassar reported to a supervisor and it cannot be said that he was employed in a managerial or supervisory capacity.

[36] I have reviewed the various caselaw submitted by the respective parties to justify their respective positions concerning what constitutes a reasonable notice period.

[37] In my view, having regard to all of the circumstances, including the Bardal factors and the fact that his employment contract contained a restrictive clause that could have hampered his ability to find new employment, and recognizing that a reasonable notice period is intended to provide the terminated employee a reasonable opportunity to find new comparable employment, I find that five months is the length of a reasonable notice period for Mr. Nassar.

Issue 4: Did Mr. Nassar reasonably mitigate his damages?

[38] The burden is on Oracle to prove that Mr. Nassar failed to take reasonable steps to mitigate his damages.

[39] On July 6, 2021, Mr. Nassar secured new employment as a regional sales manager with a software company.

[40] Mr. Nassar was cross examined by Oracle on his efforts to mitigate. While there was initially a discrepancy in Mr. Nassar’s mitigation journal regarding the number of job applications he made, he corrected that information. I am not satisfied that Oracle has discharged its burden of demonstrating that Mr. Nassar failed to take reasonable steps to locate comparable employment.

Issue 5: Quantum of Damages

(a) Base Salary

[41] Mr. Nassar earned a monthly base amount of $10,000 as base salary at Oracle. Five months of notice amounts to $50,000.

[42] Oracle submits that I should reduce the damages payable by deducting the higher base salary that Mr. Nassar now earns in his new job, sometimes referred to as “backfilling”. In short, the employer seeks to backfill the damages by applying the surplus earnings from the terminated employee’s new employment to reduce its obligation to pay damages in lieu of notice. In my view, Oracle is only entitled to four days’ credit (July 6 to July 9, 2021), and then only with respect to the actual base salary Oracle paid to Mr. Nassar. I am not deducting the earnings of Mr. Nassar from his new job which are in excess of the base salary he was earning at Oracle (Kideckel v. Gard-X Automotive Refinish Inc., 2020 ONSC 37, 2020 C.L.L.C. 210-026 (Div. Ct.), at paras. 19-21). The per diem amount of base salary earned by Mr. Nassar was $120,000 divided by 365 for an amount of $328.77 per day. There will be a deduction of $1,370.00

[43] Accordingly, Mr. Nassar will receive damages in the sum of $48,630.00 on account of his base salary reflecting five months less four days.

(b) Commissions

[44] In addition, Mr. Nassar is entitled to the commissions that would have been payable over the five-month notice period. After considering the various options put forward by the parties, I am persuaded that the best estimate of those earnings is calculated by using the three-year average of commissions actually earned by Mr. Nassar.

[45] I reject Mr. Nassar’s argument that I should eliminate his first year, in which he earned no commission, because, in his view, there was no expectation that he would make his sales targets as it was a “ramp year”. The evidence demonstrates that targets were set in his first year and was expected to reach them.

[46] I also reject Oracle’s argument that I should eliminate the third year in which Mr. Nassar received the highest commission in the sum of $52,975.37, because those commissions came to him by way of an account which was transferred to him by another representative with sales already secured. In other words, Mr. Nassar’s commission that year was “inflated” and an “outlier”. Instead, Oracle submits that I should choose the middle year (2019) in which Mr. Nassar earned $23,445.49 as the most likely indicator of the commissions he would have earned during his notice period.

[47] However, there is nothing in the contract that suggests that Mr. Nassar was not entitled to the commission he received in his third year with Oracle irrespective of the source of his commission. Accordingly, it is appropriate for me to consider his 2020 commission earnings.

[48] In my view, in the circumstances of this case, the three-year average is the most appropriate approach to take (Clark v. BMO Nesbitt Burns Inc., 2008 ONCA 663, 243 O.A.C. 235, at paras. 36-37).

[49] The three-year average amounts to $25,440.29 per year or $2,120.02 per month. Multiplied by five months, Mr. Nassar is entitled to $10,600.10 less four days (he has received commission from his new employer over that same four-day period) by way of lost commission over his notice period.

(c) Benefits

[50] With respect to benefits, Oracle submits that Mr. Nassar’s benefits were extended for a period of 10 weeks following his termination. In her affidavit, Ms. McLean, on behalf of Oracle, deposed that Mr. Nassar was advised verbally and in writing on February 9, 2021 of this fact. However, in the without prejudice letter dated February 9, 2021, that offer was conditional on Mr. Nassar signing a Release which he declined to do. Accordingly, I am persuaded that there was no extension of benefits available to Mr. Nassar.

[51] Accordingly, Mr. Nassar is entitled to damages in the equivalent 10% of his base salary, or $1,000 per month, over the five-month notice period for a total of $5,000 less the four-day mitigation period (Groves v. UTS Consultants Inc., 2019 ONSC 5605, 59 C.C.E.L. (4th) 138, at paras. 94-97; Mikelsteins v. Morrison, 2018 ONSC 6952, 44 C.C.P.B. (2nd) 231, at paras. 21-24; Nemirovski v. Socast Inc., 2017 ONSC 5616, at para. 14).

(d) Lost Pension Contributions

[52] The last category of damages sought by Mr. Nassar is his lost pension contributions. He was entitled to matching pension contributions up to the sum of $600 per month. However, the contributions were dependent upon Mr. Nassar making his own contribution. While it is understood that Mr. Nassar could not make those contributions, as he was unemployed, nonetheless, he has not indicated that he is now prepared to make those contributions retroactively.

[53] Accordingly, this category is denied (Systad v. Ray-Mont Logistics Canada Inc., 2011 BCSC 1202, 94 C.C.E.L. (3d) 175).

Judgment and Costs

[54] Judgment is granted in the terms specified. I have not undertaken the four-day per diem calculations (for deduction of certain categories of damages by way of mitigation) for each category and invite counsel to confer and advise me of same.

[55] I have the respective cost outlines of each party. Mr. Nassar may provide written submissions, no longer than three pages double spaced, within five days of release of this decision. Oracle then has five days to provide its written responding submissions, also not to exceed three pages double spaced. The respective submissions should be sent by email to my judicial assistant.

Justice S. Vella

Released: September 22, 2022

COURT FILE NO.: CV-21-00659271-0000

DATE: 20220922

ONTARIO

SUPERIOR COURT OF JUSTICE

AFTIM NASSAR

Plaintiff

– and –

ORACLE GLOBAL SERVICES ULC

Defendant

REASONS FOR JUDGMENT

VELLA J.

Released: September 22, 2022