Milwid v. IBM Canada Ltd. , 2023 ONSC 490

COURT FILE NO.: CV-20-644995-0000

DATE: 20230126

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Gregory Milwid

Plaintiff

– and –

IBM Canada Ltd.

Defendant

Chris Foulon and Daniel Hunter, for the Plaintiff

John MacDonald and Aislinn Reid, for the Defendant

HEARD: June 20, 2022

A. P. RAMSAY J.

REASONS FOR DECISION

A. Overview

[1] The plaintiff, Gregory Milwid (“the plaintiff”) was employed with IBM Canada Ltd. (“the defendant”) for much of his working career when he was terminated without cause in May 2020 in the midst of the global pandemic, with only 11 weeks’ notice. At the time of termination, the plaintiff was in a managerial position. The defendant offered him a separation package which was rejected by him. Thereafter, the defendant paid him severance under the Employment Standards Act, 2000, S.O. 2000, c. 41 (the “ESA”), as well as his accrued vacation.

1. Nature of the Motion

[2] The plaintiff commenced an action for wrongful dismissal and brings this motion for summary judgment under r. 20 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, for damages during the reasonable notice period including salary, incentive compensation, pension, group health and other benefits.

C. Background

[3] The plaintiff was employed with IBM for 38 years. The plaintiff was employed with IBM from July 28, 1998, until August 7, 2020. Prior to that, he was employed by IBM South Africa, having started with the company in early 1982. The defendant recognized his service in South Africa. The plaintiff has only worked for the defendant company since immigrating to Canada.

[4] The defendant provides technology-based solutions at the business enterprise level. Prior to his termination, the plaintiff was a Band 10 Offering Manager in IBM’s Cloud and Cognitive Software Business Unit in the Internet of Things Offering Management Sub-Unit.

[5] On May 21, 2020, the defendant gave the plaintiff 11 weeks working notice. The plaintiff received an additional week of pay in lieu of notice. There is no dispute between the parties that the plaintiff received approximately $41,516.02. Thereafter, the defendant paid the plaintiff 26 weeks of severance, or $87,806.70, which the plaintiff suggests is the minimum amount required under the ESA.

[6] At the time of termination, the plaintiff’s annual base salary was $169,695.00. His compensation package also included an annual contribution by his employer to his pension based on 6% of his salary, and a comprehensive group insurance plan. In the few years preceding his termination, the plaintiff had received an average annual discretionary bonus of $1,497.00.

[7] In November 2018, the plaintiff was granted IBM equity in the form of Restricted Stock Units (“RSUs”) under the terms of IBM’s Long Term Performance Plan (the “LTIP”). Under the LTIP, the plaintiff received 888 RSUs, half of which were to vest on November 14, 2020, and the other half scheduled to vest on November 14, 2022. The defendant cancelled the RSUs on August 14, 2020. The plaintiff accepts this date as the valuation date. The shares were valued at $125.27 USD per share.

[8] The court takes judicial notice that on March 11, 2020, the World Health Organization (the “WHO”) declared the outbreak of the coronavirus, commonly referred to as COVID-19, a pandemic. The court also take judicial notice that on March 17, 2020, the Government of Ontario declared a provincial emergency under s. 7.0.1 (1) of the Emergency Management and Civil Protection Act, R.S.O. 1990, c. E.9, which led to restrictions on commerce and gatherings.

[9] The parties agree that the plaintiff’s pension continued for only the 12 weeks of notice. The parties agree that the defendant’s annual contribution to the pension was $10,178.

[10] The parties also agree that the plaintiff is participating in the defendant’s Retiree Flexible Benefits Plan (RFBP) and Retiree Life Insurance Benefit (RLIB).

D. Issues to be Determined

[11] The following issues are raised on this motion:

1. Is this an appropriate case for summary judgment?
2. If summary judgment is appropriate, what is the appropriate period of common law notice?
3. Is the plaintiff entitled to damages for RSUs during the reasonable notice period?
4. Is the plaintiff entitled to an award of damages for the unvested RSUs regardless of the notice period?
5. Is the plaintiff entitled to compensation for a discretionary bonus during the period of reasonable notice?
6. Is the plaintiff entitled to continue to participate in the Employee Flexible Benefits Plan (EFBP) or, alternatively, is he entitled to an award of damages for the loss participation in the EFBP?
7. Has the plaintiff mitigated his damages?
8. Is the plaintiff entitled to damages for loss of pension contribution during the reasonable notice period?
9. Should a contingency be applied for any award of damages?

E. Analysis

Issue 1 – Is this an appropriate case for summary judgment?

[12] The parties do not dispute that this is an appropriate case for summary judgment. Though the court is not bound by the agreement, in this case, I would agree. There are no controversial factual issues in dispute. Credibility is not an issue on the record before me. Pursuant to r. 20.04(2)(a) of the Rules of Civil Procedure, the court shall grant summary judgment if the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence.

[13] The court shall grant summary judgment if the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence (Hryniak v. Mauldin, 2014 SCC 7, 366 D.L.R. (4th) 641, at para. 34.

[14] The Supreme Court of Canada has stated that the motion judge, on a motion for summary judgment, should first determine if there is a genuine issue requiring trial based only on the evidence before the court, without using the new fact-finding powers: Hryniak, at para. 66.

[15] Rule 20.04(2.1) and (2.2) provide the motions judge with additional powers that may be used to determine whether there is a genuine issue that requires a trial. Rule 20.04(2.1) provides as follows:

In determining under clause (2)(a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial:

1. Weighing the evidence.

2. Evaluating the credibility of a deponent.

3. Drawing any reasonable inference from the evidence.

[16] If there appears to be a genuine issue requiring a trial, the court should determine if the need for a trial may be avoided by using the new powers under Rules 20.04(2.1) and (2.2), Hryniak, at para. 66.

[17] In exercising his or her power under subrule 20.04(2.1), the judge may weigh the evidence, evaluate credibility of any deponent, and draw any reasonable inference from the evidence.

[18] However, the court’s fact-finding powers are discretionary under rules 20.04(2.1) and (2.2) and should not be exercised where it would be against the interest of justice to do so: Hryniak, at para. 44.

[19] There is no genuine issue requiring a trial under r. 20 when the judge can reach a fair and just determination on the merits. To do so, the process must:

i. allow the judge to make the necessary findings of fact;

ii. allow the judge to apply the law to the facts; and,

iii. is a proportionate, more expeditious and less expensive means to achieve a just result (Hryniak, at para. 49)

[20] The jurisprudence establishes that wrongful dismissal cases are well suited to summary disposition: Arnone v. Best Theratronics, 2015 ONCA 63, 23 C.C.E.L. (4th) 148, at para. 12; Edmond v. Algonquin College, 2018 ONSC 1898; Aylesworth v. The law Office of Harvey Storm, 2015 ONSC 6242, at para. 15, aff'd 2016 ONSC 3938 (Div. Ct.); Asgari v. 975866 Ontario Ltd, 2015 ONSC 7508, 28 C.C.E.L. (4th) 86, at para 4.

[21] The record before me is extensive and includes cross examinations of the deponents on their affidavits in support of, or in response to the motion. There is no genuine issue requiring trial based only on the evidence before the court. There are no real issues of credibility. The material facts are not in dispute. The parties have made several concessions on the facts. In the result, the court need not resort to the fact-finding powers statutorily provided under r. 20.04(2.1) and (2.2) and as contemplated in Hryniak at para.66. In this case, the evidentiary record provides the court with the evidence necessary to reach a fair and just determination in a process that is timely, proportionate, and affordable. The evidentiary record permits the court to make the necessary findings of fact, apply the law to the facts and, is a proportionate, more expeditious and less expensive means to achieve a just result Hryniak, at paras 43-49.

Issue 2 - What is the appropriate period of Notice?

[22] The plaintiff submits that a reasonable notice period is 30 months. The plaintiff argues that the fact that he has unsuccessfully attempted to mitigate his damages supports his position that he has been forced into retirement. He argues that he has held several different management and director positions with the company. He held the position of Program Director of Operations Optimization up until 2019. Approximately five employees reported directly to him in that role. He became the Program Director Go to Market for Asset Performance Management, after a restructuring, reporting to another director.

[23] The plaintiff argues that there are exceptional circumstances which warrants a departure from the so-called cap of 24 months at common law for reasonable notice. The plaintiff points to the unprecedented shutdown of the economy due to the COVID-19 pandemic as an exceptional circumstance, or alternatively, a factor in justifying a longer notice period in excess of the 24 months. In support of his argument on the court taking judicial notice of the impact of COVID-19 on the reasonable notice period, the plaintiff relies on: Holland v. Hostopia.com Inc., 2015 ONCA 762, 392 D.L.R. (4th) 650, a decision which pre-date the pandemic; Lamontagne v. J.L. Richards and Associates Limited, 2021 ONSC 2133, 70 C.C.E.L. (4th) 216, and Kraft v. Firepower Financial Corp., 2021 ONSC 4962.

[24] The defendant submits that given the plaintiff’s position in the hierarchy of the company and his non-executive status, a 20 to 22 month notice period is appropriate, subject to a reduction for unreasonable mitigation efforts and a contingency. The defendant argues that although the plaintiff had some leadership responsibilities, he did not directly manage any employees, and did not hold a senior or executive role. The defendant submits that at the time he was terminated, the plaintiff reported to an executive director. The defendant argues that based on his experience, training and significant business experience, the plaintiff has transferable skills not limited to the information technology sector. The defendant points to the significant demand in the marketplace for the type of job the plaintiff would be suitable for given the number of jobs he has applied for since his termination.

[25] The defendant submits that the plaintiff’s character of employment militates against an award at the high end of the range and argues that a range of 22 months and above is reserved exclusively for senior executive positions and relies on Dawe v. Equitable Life Insurance Company of Canada, 2019 ONCA 512, 435 D.L.R. (4th) 573.

[26] The appropriate notice period must be determined by a case-by-case basis and having regard to the factors set out in Bardal v. Globe & Mail Ltd. (1960), 1960 CanLII 294 (ON SC), 24 D.L.R. (2d) 140 (Ont. H.C.J). The list of factors is not closed. A reasonable notice period is determined by considering such relevant factors as the character of employment, the length of service, the age of the employee and the availability of similar employment having regard to the experience, training, and qualifications of the employee: Bardal, at p.145; Honda Canada Inc. v. Keays, 2008 SCC 39, [2008] 2 S.C.R. 362.

[27] I agree with the defendant that that the COVID-19 cases relied upon by the plaintiff do not stand for the proposition that the COVID-19 pandemic constitutes an exceptional circumstance. On the other hand, some of my colleagues have taken the pandemic into account in extending the notice period beyond the “non-pandemic” notice period. However, economic circumstances can be considered a relevant factor in determining the appropriate reasonable notice. In Paquette v. TeraGo Networks Inc., 2015 ONSC 4189, Perell J. commented, at para. 27 as follows: “Economic factors such as a downturn in the economy or in a particular industry or sector of the economy that indicate that an employee may have difficulty finding another position may justify a longer notice period”: Paquette v TeraGo Networks Inc., 2015 ONSC 4189, at para. 27, rev’d on other grounds, 2016 ONCA 618, 352 O.A.C. 1; O’ Reilly v. Imax Corporation, 2019 ONSC 342, at para. 15, aff’d 2019 ONCA 991, 59 C.C.E.L. (4th) 175.

[28] A body of jurisprudence now exists where the court has taken judicial notice of the pandemic in the context of a wrongfully terminated employee. The court has been uniformed in taking judicial notice of the pandemic. In some cases, the court has grappled with whether the emergence of the pandemic is a relevant factor on the impact on a terminated employee’s ability to find alternative employment, whether actual evidence is required to show a causal relationship between the employee’s ability to find alternative employment, or, in other cases, whether it was a relevant factor (even in the absence of actual evidence in those case) in consider in extending the reasonable notice from a “non-pandemic” reasonable notice, recognizing the uncertainty created in the job market by government shut downs and measures taken by the government to manage the spread of the virus.

[29] Thus, in Miller v. Ontario Potato Distribution Inc., 2022 ONSC 1490, at para. 51, D. A. Broad, J. noted that he was taking judicial notice of the fact that the plaintiff’s ability to find equivalent alternate employment was adversely affected by the COVID-19 pandemic.

[30] In Pavlov v. The New Zealand and Australian Lamb Company Limited, 2021 ONSC 7362, 75 C.C.E.L. (4th) 144 aff’d 2022 ONCA 655, 81 C.C.E.L. (4th) 202, at para. 16, Stewart J. noted that at the time the plaintiff was dismissed, the initial effects of the global pandemic were being experienced by industries of all sorts. She indicated it was a reasonable inference to draw from the evidence and the timing of the dismissal that the effects and uncertainties of the pandemic were obstacles to the plaintiff’s efforts to obtain alternate employment. In the current case, the plaintiff’s unchallenged evidence is that, at the time of the hearing, 14 months into termination, he had applied to over 122 jobs, and received no interviews.

[31] In Yee v. Hudson's Bay Company, 2021 ONSC 387, 68 C.C.E.L. (4th) 296, the plaintiff had been terminated in August 2019. There was also no evidence that the pandemic impacted his job search. Dow J. held that as the plaintiff was terminated prior to the pandemic, the pandemic related economic downturn could not be considered in determining the period of reasonable notice. However, I note Dow J.’s comment at para. 22 of Yee wherein he stated: “It seems clear terminations which occurred before the COVID pandemic and its effect on employment opportunities should not attract the same consideration as termination after the beginning of the COVID pandemic and its negative effect on finding comparable employment”. Unlike the plaintiff in Yee, the plaintiff’s termination in this case occurred a couple months after the start of the pandemic and much of the notice period has run concurrently with the effects of the pandemic on the economy.

[32] In Kraft v. Firepower Financial Corp., 2021 ONSC 4962, Morgan J. considered the impact of the pandemic on the economy, the shutdown during the first half-year, the uncertainty in the job market, and the fact that there were fewer employers looking to fill positions, on the plaintiff’s ability to find alternative work. He noted, at para. 18: “…the point is that the economy was already shutting down and remained closed during the Plaintiff’s inevitably prolonged job search. A global pandemic does not just emerge on the day of the government’s emergency decree.” He went on to state, at para. 19: “But as a number of my colleagues have commented, “[t]his degree of uncertainty, which existed on February 19, 2020, is one of the many factors that I consider in assessing the reasonable period of notice applicable to the circumstances of this case”: Lamontagne v. J.L. Richards & Associates Limited, 2021 ONSC 2133, 70 C.C.E.L. (4th) 216, at para 64. In this case, Morgan J. increased the plaintiff’s notice period by one month more than the average during non-pandemic times.

[33] In Iriotakis v. Peninsula Employment Services Limited, 2021 ONSC 998, 154 O.R. (3d) 373, the plaintiff was terminated in late March 2020, at the very beginning of the pandemic. Dunphy J. noted, at para. 19, that “the impact of the pandemic on the economy in general and on the job market, in particular, was highly speculative and uncertain both as to degree and to duration at the time Mr. Iriotakis' employment was terminated”. He made reference to being “alert to the dangers of applying hindsight to the measuring of reasonable notice at the time when the decision was made to part ways with the plaintiff.” He went on to state, at para. 22:

I do agree that the plaintiff's age and the uncertainties in the job market at the time of termination both serve to tilt the period of reasonable notice away from the fairly short period of notice that his short period of service might otherwise indicate. However, these factors do not apply to the exclusion of the others. A balanced approach is what is called for.

[34] Notice must be determined by the circumstances existing at the time of termination and not by the amount of time that it takes the employee to find employment: Holland v. Hostopia.Com Inc., 2015 ONCA 762, 392 D.L.R. (4th) 650, at para. 61.

[35] The plaintiff’s substantial average annual compensation and the possibility of equity participation in his employer’s company are relevant considerations in assessing similar employment opportunities: Love v. Acuity Investment Management Inc., 2011 ONCA 130, 277 O.A.C. 15, at para. 22, citing Belzberg v. Pollock (2003), 2003 BCCA 71, 10 B.C.L.R. (4th) 255. As noted by the Ontario Court of Appeal in Love, these “considerations suggest that obtaining similar employment would be harder rather than easier. This Bardal factors therefore clearly points to a longer period of reasonable notice.”

[36] The plaintiff relies on Keenan v. Canac Kitchens Ltd., 2016 ONCA 79, 29 C.C.E.L. (4th) 33, in support of its position that the plaintiff’s age, and lengths of service, and the character of the position support a lengthy notice period in excess of the cap. In Keenan, the two plaintiffs had lengths of service of 32 and 25 years, were 63 and 61 years of age at the time of termination and held supervisory, responsible position. The Court of Appeal did not interfere with the trial judges award of 26 months though there was no express finding of exceptional circumstances made. The plaintiff also relies on Dussault v. Imperial Oil Limited, 2018 ONSC 1168, 45 C.C.E.L. (4th) 262. The employees were each awarded 26 months; neither had supervisory roles, but each had significant responsibilities, and had similar length of services and ages to the plaintiff.

[37] On evidence before me, there are factors which support a lengthy notice. An employee’s length of service is an important factor in the determination of reasonable notice: Bullen v. Proctor & Redfern Ltd., 1996 CanLII 8135 (ON SC), [1996] O.J. No. 340 (Ont. Gen. Div.), at para. 21. The plaintiff had worked for company for 38 years, most of his working life, and it was the only company he had worked for in Canada. The court has recognized that that the fact that an employee has worked for a long time with the same employer may impact the person’s employability. As observed by this court: “having served one employer for such a lengthy period of time, a potential new employer may view that individual as rather set in his ways and not as adaptable to change”: Drysdale v. Panasonic Canada Inc., 2015 ONSC 6878, at para. 14; Stephanie Ozorio v. Canadian Hearing Society, 2016 ONSC 5440, at para. 16.

[38] The plaintiff was terminated at the age of 62, two months into the pandemic. Based on the evidence before me, I accept that the plaintiff’s job had been technical but specialized and geared towards the defendant’s company. The courts have found that a plaintiff with “highly skilled and moderately specialized” deserve a higher award: see, Teitelbaum v. Global Travel Computer Holdings Ltd. (1999), 41 C.C.E.L. (2d) 275, at para 16 (Ont. Gen. Div.); Bernier v. Nygard International Partnership., 2013 ONSC 4578, 9 C.C.E.L. (4th) 41, at para. 57. He had significant responsibilities and was thought to be a valued member of the team, leading his former department through significant changes and transition in 2018 and 2019. As noted by Morgan J. in Bernier, at para. 58: “The courts have found that notice periods should lean toward the higher side where the employee's position is "one of considerable responsibility in a comparatively specialized industry [internal citation omitted]”.

[39] Notice is to be determined by the circumstances existing at the time of termination and not by the amount of time that it takes the employee to find employment: Holland, at para. 61; Panimondo v. Shorewood Packaging Corp. (2009), 2009 CanLII 16744 (ON SC), 73 C.C.E.L. (3d) 99 (Ont. S.C), citing Harper v. Bank of Montreal (1989), 27 C.C.E.L. 54 (Ont. Div. Ct.). In the seminal Bardal case, Chief Justice McRuer of the Ontario High Court of Justice was of the view that as the purpose of reasonable notice was to enable the employee to find alternative employment, the appropriate notice period was necessarily linked to the employee’s prospects of obtaining new employment.

[40] The plaintiff argues that the pandemic has impacted his ability to mitigate as he was terminated shortly after the pandemic was declared and his entire attempt to mitigate took place during the pandemic. He posits, however, that there are other factors such as his advanced age, an industry that was technical, and working with the same company. The plaintiff’s uncontradicted evidence is that he has applied to 122 positions during a 14-month period up to the time of the hearing and that he received no interviews. Against this backdrop, is the unprecedented effect of the COVID-19 pandemic on the economy and the available job market acknowledged by my colleagues.

[41] The Ontario Court of Appeal has commented that the time it takes to find a new job goes to mitigation of damages, not to the length of notice: Holland, at para. 57. It bears reverting to first principles for the purpose of the reasonable notice. In Lin v. Ontario Teachers' Pension Plan, 2016 ONCA 619, 402 D.L.R. (4th) 325, at para. 54, van Rensburg J.A., writing for the Court of Appeal stated:

At its foundation, reasonable notice is the period of time it should reasonably take the terminated employee to find comparable employment: Ahmad v. Procter & Gamble (1991), 1991 CanLII 7225 (ON CA), 1 O.R. (3d) 491 at p. 496; Wallace (per McLachlin J. dissenting in part), at paras. 115 and 120; Michela v. St. Thomas of Villanova Catholic School, 2015 ONCA 801, 392 D.L.R. (4th) 341, at paras. 12-13.

[42] However, I cannot accept the plaintiff’s argument that 30 months is appropriate in the circumstances. The Ontario Court of Appeal has held that an employee’s difficulty in obtaining replacement employment should not have the effect of increasing the notice period unreasonably: see Michela v. St. Thomas of Villanova Catholic School, 2015 ONCA 801, 392 D.L.R. (4th) 341, at para. 20. Huscroft J.A., speaking for court, clarified that the Court’s earlier comments in Bohemier v. Storwal International Inc. (1983), 1983 CanLII 1956 (ON CA), 44 O.R. (2d) 361 (C.A.), at p. 362, leave to appeal to SCC refused, [1984] S.C.C. No. 343. He indicated that: “It does no more than to hold that difficulty in securing replacement employment should not have the effect of increasing the notice period unreasonably. That is what this court should be taken to have meant when, in its brief endorsement in Bohemier, it said that the lower court judge was right to “tak[e] into account economic factors when considering the case for each of the parties”.

[43] While my decision was under reserve the Ontario Court of Appeal handed down the decision of Currie v. Nylene Canada Inc., 2022 ONCA 209, 76 C.C.E.L. (4th) 171, in which the Court upheld a 26-month notice period. After Ms. Currie was terminated, she retired in order to access her pension, and subsequently accepted a new offer of employment. The Court of Appeal upheld the award of 26 months. She was 58 at the time of termination and held the position of Chief Operator. Her work experience was limited to working for Nylene and its predecessors in one manufacturing environment. Ms. Currie had worked at Nylene’s for forty years after leaving high school; her skills were not easily transferable; she had limited computer skills; she had specialized skills, not easily transferrable. The trial judge had concluded that given Ms. Currie’s age, limited education and skills set, the termination “was equivalent to a forced retirement”.

[44] Counsel for the defendants submit that unlike Ms. Currie, the plaintiff in this case has transferrable skills, he was university educated, had a Project Manager Master Certificate, his experience was grounded in leading edge IT technology, and there was a demand in the marketplace for his role because he had applied to 122 positions by seven or nine months. In my view, the fact that the plaintiff has applied to over 122 jobs without even a single interview being accorded tells its own story. No two cases will be the same.

[45] However, I would agree with the plaintiff in this case that his termination was tantamount to a “forced retirement”. There is simply no evidence before me to support that conclusion in the face of the social reality that there is no longer a mandatory retirement age, at age 65. Notwithstanding that, no statistical or other evidence was placed before me to show the average working life expectancy of a male in the plaintiff’s circumstances. I do agree with the plaintiff though that there are points, in common, between the two. The plaintiff in this case, was 62 years old, four years older than Ms. Currie at the time of his termination. The length of service is comparable, with the plaintiff having 38 years of service and Ms. Currie having 40. Both the plaintiff and Ms. Currie worked for the same employer and in the same sector for all their working career. The plaintiff has only worked for the defendant since immigrating from South Africa.

[46] The jurisprudence establishes that a longer notice period may be justified for senior management employees or highly skilled and specialized employees: Cronk v. Canadian General Insurance Co. (1995), 1995 CanLII 814 (ON CA), 25 O.R. (3d) 505 (C.A.); Waterman v. IBM Canada Limited, 2010 BCSC 376, at paras. 20-22, aff’d on other grounds 2011 BCCA 337, aff’d 2013 SCC 70, [2013] 3 S.C.R. 985; Teitelbaum v. Global Travel Computer Holdings Ltd. (1999), 41 C.C.E.L. (2d) 275 (Ont. Gen. Div.); Bernier v. Nygard International Partnership, 2013 ONSC 4578, 9 C.C.E.L. (4th) 41, at para. 58.

[47] An employee’s length of service is an important factor in the determination of reasonable notice: Bullen, at para. 21. The plaintiff had 38 years of service, led a team, had management duties and significant responsibilities justifying a longer notice period. It is noteworthy that when the defendant terminated him, he was considered to be “retired”, and rolled over into certain retiree benefits.

[48] This court has recognized that the fact that an employee has worked for one employer for so long may impact his or her employability. As observed by this court: “having served one employer for such a lengthy period of time, a potential new employer may view that individual as rather set in his ways and not as adaptable to change”: Drysdale, at para. 14; Stephanie Ozorio at para. 16. Having worked for the same employer for 38 years, I accept that, on a balance of probability, this consideration may indeed impact the plaintiff’s employability. At the time of the hearing, having already sent out 122 job applications, he had received zero interviews.

[49] The character of the plaintiff’s employment is also an important factor in the determination of an appropriate notice period. The plaintiff was not in an executive role with the company, but was a management employee at the director level, or a Band 10 employee. The defendant relies on Waterman v. IBM Canada Ltd, 2010 BCSC 376, aff”d 2011 BCCA 337, 336 D.L.R. (4th) 481, aff’d 2013 SCC 70, [2013] 3 S.C.R. 985. I agree with the plaintiff that Waterman is distinguishable. In that case, the plaintiff was dismissed at the age of 65, without cause with two months notice, after forty-two years of service with IBM. At the time of his termination, Mr. Waterman was an Advisory Software Services Specialist, and considered a Band 7 employee. The Court described Waterman’s position as that of an IT Specialist. In Waterman, the motion judge indicated that there were no exceptional circumstances which would lead to an increase in the upper limit. She set a notice period at 20 months (not 18 as indicated by the defendant). Waterman was appealed, and ultimately upheld, on the issue of the deductibility of pension benefits, which is not an issue before me.

[50] However, in determining the appropriate reasonable notice for Mr. Waterman, the motion judge noted: “In British Columbia, the character of employment remains an important factor in determining the length of notice.” The motion judge indicated: “Mr. Waterman’s position fell under the “Product Support Services” job family and was considered a “Band 7” position in the IBM job hierarchy. Within IBM, a Band 7 position is considered a lower-level staff position. Managerial positions at IBM begin at the Band 8 level and go up to Band 10. Executive positions begin after Band 10 and are segregated into Levels A, B, C and D. Band A positions are the most senior executive positions at IBM.”

[51] In contrast, at the time the plaintiff was terminated, he was a Band 10 employee, just below an executive, responsible for leading a business unit, though no one reported directly to him. He assumed significant responsibilities, working with the company’s partners to develop and implement market adoption strategies and supported the company’s marketing team and user-end marketing teams. In the two years before he was terminated (for 2018 and 2019), he was responsible for overseeing a group of offering managers.

[52] I agree with counsel for the plaintiff that that while character is relevant factor in Ontario in considering the reasonable notice period, unlike British Columbia is not of predominant importance. I agree with the plaintiff. Indeed, in Di Tomaso v. Crown Metal Packaging Canada LP, 2011 ONCA 469, 337 D.L.R. (4th) 679, at paras. 27 – 28, MacPherson J.A., writing for the Court, commented that the employee’s character of employment is of declining relative importance, “particularly so if an employer attempts to use character of employment to say that low level unskilled employees deserve less notice because they have an easier time finding alternative employment.” At para. 26, MacPherson J.A. stated:

With regard to the appropriate weight to be given to the character of employment, I am also mindful of McRuer C.J.H.C.’s statement in Bardal at p. 145, that “[t]here can be no catalogue laid down as to what is reasonable notice in particular classes of cases.” Bastarache J., writing for the majority of the Supreme Court in Honda Canada Inc. v. Keays, 2008 SCC 39, [2008] 2 S.C.R. 362, cited this statement with approval at para. 31 and went on to caution that “[n]o one Bardal factor should be given disproportionate weight.”

[53] In Di Tomaso, at para. 27, MacPherson J.A. went on to cite authority in another Canadian jurisdiction in support of the declining importance of the character of employment. He stated:

Crown Metal would emphasize the importance of the character of the appellant's employment to minimize the reasonable notice to which he is entitled. I do not agree with that approach. Indeed, there is recent jurisprudence suggesting that, if anything, it is today a factor of declining relative importance: see Medis Health and Pharmaceutical Services Inc. v. Bramble (1999), 1999 CanLII 13124 (NB CA), 175 D.L.R. (4th) 385 (N.B. C.A.) and Vibert v. Paulin (2008), 2008 NBCA 23, 291 D.L.R. (4th) 302 (N.B. C.A.).

[54] The Ontario Court of Appeal revisited the issue in Strudwick v. Applied Consumer & Clinical Evaluations Inc., 2016 ONCA 520, 349 O.A.C. 360, making it clear that there is no cap on what constitute’ reasonable notice for clerical and unskilled employees. Epstein J.A., speaking for the Court stated at para 41:

This court has rejected the argument that there should be an upper limit on notice periods in wrongful dismissal cases. In Di Tomaso v. Crown Metal Packaging Canada LP, 2011 ONCA 469, 337 D.L.R. (4th) 679, at para. 23, MacPherson J.A. declined to set a cap for the quantum of reasonable notice for clerical and unskilled employees. This court has noted, however, that courts should strive to ensure that notice periods are consistent with the case law: Kotecha v. Affinia Canada ULC, 2014 ONCA 411, at para. 8.

[55] The defendant also relies on Quinn v. IBM Canada Ltd., (2016, Unreported) [Quinn]. This case is also distinguishable. At the time of termination, Mr. Quinn was considered a Band 7 as a Security Delivery Specialist. His job was described as a “technical position” with “no managerial functions.” Moreover, as of the date of his termination, Quinn was fifty-five (55) years old and had no formal education or certifications.

[56] I have considered the cases relied upon by both parties. I agree with the plaintiff that a reasonable notice period for the plaintiff is in the upper end of the range is appropriate, which is consistent with the survey of cases provided by the plaintiff, and consistent with the cases below, which are more in line with the plaintiff’s circumstances (non-pandemic), as follows:

Case	Notice	Summary
Currie v. Nylene Canada Inc., 2022 ONCA 209, 76 C.C.E.L. (4th) 171.	26 months	Started straight out of high school; 40 years’ service; 58 years old; specialized skills; termination was “equivalent to a forced retirement”.
Kennan v. Canac Kitchens Ltd., 2016 ONCA 79, 29 C.C.E.L. (4th) 33.	26 months	Mr. Keenan was 63; Mrs. Keenan was 61; they worked at Canac for 32 and 25 years, respectively; they held supervisory positions
Lowndes v. Summit Ford Sales Ltd. (2006), 2006 CanLII 14 (ON CA), 206 O.A.C. 55 (C.A.).	24 months	28 years’ service; 59 years old at time of termination; general manager.
Dawe v. The Equitable Life Insurance Company of Canada, 2019 ONCA 512, 435 D.L.R. (4th) 573.	24 months	There were no exceptional circumstances.
McLean v. Dynacast Ltd., 2019 ONSC 7146.	28 Months	Long term employee who worked hard and was valued by their employer; faced serious challenges finding replacement position.
Cowper v. Atomic Energy of Canada Ltd. 1999 CanLII 14853 (ON SC), 1999, 43 C.C.E.L. (2d) 276 (Ont. S.C.).	27 Months	He was 60; 35 years of service; had a senior management position; limited employment market for him, for someone of his age, experience, qualification, and training.
Markoulakis v. SNC-Lavalin Inc., 2015 ONSC 1081.	27 months	Over 65; more than 40 years of service; defendant was his only employer.
Maasland v. Toronto (City) 2015 ONSC 7598	26 months	57 years old; 25 years of service; had a position of responsibility and was a manager; was a specialist
Dussault v. Imperial Oil Limited, 2018 ONSC 1168, 29 C.C.E.L. (4th) 144.	26 months	Both plaintiffs had significant responsibility; one having worked for 39 years and was 63 years old and, the other for 36 years and was 57 years old; skills were geared towards one employer.
Mikelsteins v. Morrison, 2018 ONSC 6952.	26 months	Appealed on other grounds.
Cardenas v. Kohler Canada Co., [2009] O.J. No. 1570 (Ont. S.C.)	26 months	26 years was awarded to one of the plaintiffs; 43 years old; 27.5 years as a shift supervisor.

[57] There is no absolute upper limit on what constitutes reasonable notice: Lowndes; Strudwick, at para. 42.

[58] However, exceptional circumstances must exist to support a notice period in excess of 24 months: Lowndes, at para. 11; Keenan, at paras. 30-32; Dawe v. The Equitable Life Insurance Company of Canada, 2019 ONCA 512, 435 D.L.R. (4th) 573. In my view, such circumstances exist in this case.

[59] On the evidence, I cannot accept the defendant’s position that a notice period of 20 to 22 months is appropriate. However, I do not accept the plaintiff’s position that a notice period of 30 months’ notice is appropriate. Given the plaintiff’s age, lengthy service, the exclusivity of his employment with the defendant, the character of his employment and specialized nature of his work, a reasonable notice period (non-pandemic) is 26 months. I find that there are exceptional circumstances in this case which warrants a notice period in excess of 24 months. The plaintiff’s age (62), his length of service with the same employer (38 years), the managerial position he held at the time of termination, his compensation and benefit package (which includes the equity awards) in an uncertain economy, the technical/skilled nature of his skills geared towards the defendant’s business, all support an award of 26 months.

[60] However, there is no doubt that the timing of the plaintiff’s termination, two months into the pandemic, with a province under a state of emergency, a province wide shut down, precipitated by measures taken by the provincial government to manage the spread of the coronavirus, coinciding, as it did, around the time the plaintiff was terminated, would have impacted the plaintiff’s ability to mitigate his damages. As some of my colleagues have acknowledged, the economic uncertainty caused by the pandemic is a factor that may lengthen an employee’s notice period: Kraft at paras. 19 and 22; Williams v. Air Canada, 2022 ONSC 6616, at para. 27.

[61] As the purpose of the notice period is to afford a terminated employee an opportunity to mitigate damages, having taken judicial notice of the declaration of the pandemic in March 2020, the emergency measures put in place by the provincial government to manage the spread of the virus, including the shutdown, resulting in restrictions on commerce and gatherings, arguably, this would have impacted the plaintiff’s ability to mitigate his damages. However, absent more from the plaintiff, I would increase the notice period by only an additional month, on account of the pandemic and the timing of his termination, for a total notice of 27 months.

Issue 3 - Is the plaintiff entitled to damages for the damages for the loss of the value of the RSUs during the reasonable notice period?

[62] The court has recognized that RSUs are part of a delayed bonus which, when vested, become freely trading shares of the corporation. The plaintiff is seeking damages equal to the fair market value of the lost share units on a quantum meruit basis. Half of the RSUs were scheduled to vest three months after the plaintiff’s departure from the company, and the other half was scheduled to vest two years after that.

[63] The plaintiff submits that the language “no longer employed” in the Terms and Conditions is ambiguous as it is unclear at what the plaintiff is “no longer employed” or when he “ceases to be an employee”. The plaintiff relies on Matthews v. Ocean Nutrition Canada Ltd., 2020 SCC 26, 449 D.L.R. (4th) 583, in support of his position that the defendant could not legally terminate his employment without providing notice at common law, and as such, this provision means the plaintiff did not cease to be an employee until the end of the common law reasonable notice period.

[64] The plaintiff argues that the defendant cannot rely on the termination as the defendant had a duty to bring to his attention, the harsh and oppressive provisions at the time the agreement was signed. The plaintiff argues that the three plan documents are complex and each have different termination clauses, which includes the direction that “by clicking below you confirm you’ve read and understand all the terms and conditions of the plan”. He submits that this was not enough or sufficient to show the employer has adequately brought to the attention of the employee the harsh termination provisions or is it unfair to the employee to lose their common law right.

[65] The defendant submits that the plaintiff is not entitled to compensation for the RSUs issued, but not vested prior to August 7, 2020. The defendant submits that the RSUs were not integral to the plaintiff’s compensation and did not form part of the plaintiff’s compensation. The defendant argues that the plaintiff had notice of the terms of the equity award, which he accepted. The defendant argues the agreement was not with IBM Canada but rather with another IBM corporation. The defendant submits that all three termination provisions, read together, referred the plaintiff to a country specific termination clause. The defendant submits that the award agreement documents unambiguously disentitle the plaintiff to any amount of the RSUs following the termination of his employment at the end of the ESA notice period. The defendant submits that the LTIP and Equity Awards Terms and Conditions expressly provide that all unvested RSUs are cancelled on the termination of the plaintiff’s employment.

[66] Because of the number of tangential issues raised by the parties, I will address a) the notice of the terms; b) a separate company from the defendant offering the equity award and c) the plaintiff’s entitlement to the RSUs.

a) Notice of termination provisions

[67] On the evidence before me, the plaintiff had notice of the termination provisions and was provided with a copy of the documents. Battiston v. Microsoft Canada Inc., 2021 ONCA 727, 74 C.C.E.L. (4th) 115, leave to appeal to SCC denied, is the controlling authority on this issue.

[68] Counsel for the parties made further submissions on Battiston, released, while my decision was under reserve. I agree with the defendant that the plaintiff had notice. The Ontario Court of Appeal, in reversing the trial judge’s decision, rejected Mr. Battiston’s argument that he did not have notice of the terms of the agreement in that case. Mr. Battiston had to scroll through a drop-down window and then certify that he had read the terms. The Court found he made a conscious decision not to read the Agreement, despite clicking a box to indicate that he had read it. The Court noted that Mr. Battiston had misrepresented his assent to those terms when he clicked on the check box. The Court concluded that it cannot be said that it was not brought to his attention.

[69] In the present case, the plaintiff acknowledged he made a cursory review of two of the documents and could not recall if he had read the LTIP document. The plaintiff was required to click on a link to accept his award and to click on a link certifying that he had read the terms and conditions. The plaintiff’s Equity Award (RSUs) was conditional on his acceptance of the terms and conditions. After the plaintiff clicked a link accepting his equity reward, he received a “Confirmation” document which included the following information: “Your accepted equity award agreement(s) can be located in your Processed Formwave folder.” On cross examination, the plaintiff admitted that he received electronic copies of the documents. Just as in Battiston, similarly, in this case, the plaintiff then made a conscious decision not to read the terms and conditions and, just like Mr. Battiston, the plaintiff cannot benefit from his own wrongdoing, in representing that he had read the documents and misrepresenting his assent to the terms and conditions.

b) Separate Companies

[70] In my view, the fact that the LTIP document was from a separate company is irrelevant. The plaintiff received the award as an employee to retain his services. He had no relationship with any other company. Moreover, the LTIP document in fact describes IBM and its subsidiaries, which would include IBM Canada. The awards documents which set out the terms and conditions defined "Participant" -- An individual to whom an Award has been made under the Plan. Awards may be made to any employee of, or any other individual providing services to, the Company. However, incentive stock options may be granted only to individuals who are employed by IBM or by a subsidiary corporation …”

c) Entitlement to RSUs

[71] The termination of employment provision applicable to the RSUs are set out in three documents: (1) an LTPP prospectus filed with the United States Securities and Exchange Commission, the regulator of the LTPP Plan (the “LTIP Prospectus”); (2) the International Business Machines Corporation ("IBM") Equity Award Agreement (“Equity Award Agreement”); 3) a document entitled “Terms and Conditions of Your Equity Award: Effective October 1, 2018” (the “LTIP Terms and Conditions” (collectively, “the award agreements”). The defendant argues the three documents constitute the entire agreement. By virtue of the award agreements, the plaintiff was granted 888 RSUs, half of which would vest on November 14, 2020, and the other half on November 14, 2022.

[72] The plaintiff submits that the termination clauses in the three award documents do not meet the test in Matthews. In Matthews, the Supreme Court agreed with the trial judge that Mr. Matthews was entitled to receive damages equal to what he would have received for an incentive bonus pursuant to an LTIP. The trial judge relying on a series of Ontario Court of Appeal decisions, found that Mr. Matthews had a common law right to damages for the loss of the payout he would have received under the LTIP, as the language of the LTIP did not unambiguously limit or remove his common law right.

[73] On the other hand, the defendant relies on Kieran v. Ingram Micro Inc. (2004), 2004 CanLII 4852 (ON CA), 189 O.A.C. 58, leave to appeal refused, [2004] S.C.C.A. No. 423, arguing that the terms in the termination provisions are similar to the provisions in Kieran. The Ontario Court of Appeal found in that case that employee’s stock options had been cancelled because of Mr. Kieran’s termination.

[74] For the reasons below, I reject the defendant’s argument that the terms in the termination provisions are similar and conclude that the RSUs which have vested in November 2020, would have vested during the common law notice period and, as such, would, prima facie, form part of the plaintiff’s common law damages. As for the second part of the inquiry, whether the terms of the termination provisions, unambiguously altered, removed, or otherwise abrogated the plaintiff’s common law rights, I conclude that none of them did so, also for the reasons below.

[75] An employee terminated, without cause, is entitled to damages representing “what the employee would have earned during the notice period”: Matthews, at para. 43; Paquette, at para. 16; Peet v. Babcock & Wilcox Industries Ltd. (2001), 2001 CanLII 24077 (ON CA), 53 O.R. (3d) 321 (C.A.), at para. 34.

[76] The purpose of damages in lieu of reasonable notice is to put employees in the position they would have been in had they continued to work through to the end of the notice period: Matthews, at para. 59. The remedy for a breach of the implied term to provide reasonable notice is an award of damages based on the period of notice which should have been given, with the damages representing what the employee would have earned in this period: Matthews, at para. 49.

[77] The defendant’s argument that the equity award (RSUs) was “extraordinary compensation” and was not integral to the plaintiff’s compensation cannot stand. That was the same argument advanced by the employer in Matthews. The Court noted, at para. 57, that: “Ocean maintains that the LTIP payment was not integral to Mr. Matthews’ compensation since he did not have a vested right at the date of termination”. In response, the Supreme Court noted, at para. 58:

The trial judge confronted this submission and concluded that Ocean was attempting to introduce an extra requirement into the analysis that is not supported by the jurisprudence (para. 387). I agree. The test of whether a benefit or bonus is “integral” to the employee’s compensation assists in answering the question of what the employee would have been paid during the reasonable notice period (see, e.g., Brock v. Matthews Group Ltd. (1988), 20 C.C.E.L. 110 (Ont. H.C.J.), at p. 123, aff’d (1991), 34 C.C.E.L. 50 (C.A.); Paquette, at para. 17). Thus, in Paquette and Singer, where the bonuses at issue were discretionary, the Court of Appeal for Ontario considered this so-called “integral” test since there was doubt as to whether the employee would have received those discretionary bonuses during the reasonable notice period.

[78] In Wallace v. United Grain Growers Ltd.,), 1997 CanLII 332 (SCC), [1997] 3 SCR 701, at para. 67, Iacobucci J., speaking for the majority noted the broad interpretation given to the term “salary, wages or other remuneration” by the cases, and quoted, with approval the following comments by Smith J., in Re Giroux (1983), 1983 CanLII 1731 (ON SC), 41 O.R. (2d) 351, (S.C.), in support of that observation, as follows:

Speaking generally, one should experience no difficulty including in the definition of salary, wages and other remuneration virtually all benefits accruing to employees. Unless the context requires a restricted meaning, any reward should normally qualify, if not as “salary, wages”, at least as “remuneration”, whether the reward takes the form of sick pay allowance, bonuses, vacation with pay or pay in lieu of notice. [Emphasis omitted]

[79] A long line of Ontario Court of Appeal decisions have established that a wrongfully terminated employee is entitled to compensation for the loss of benefits, bonuses, stock options, and other incentives, that they would have earned during the reasonable notice period: O'Reilly v. IMAX Corporation, 2019 ONCA 991, 59 C.C.E.L. (4th) 175 ; Kieran; Taggart v. Canada Life Assurance Co., 2006 C.L.L.C 210-007 (Ont. C.A.); Paquette; Veer v. Dover Corporation (Canada) Ltd. (1999), 1999 CanLII 3008 (ON CA), 120 O.A.C. 394; Lin; and Gryba v. Moneta Porcupine Mines Ltd. (2000), 2000 CanLII 16997 (ON CA), 139 O.A.C. 40, leave to appeal refused, [2001] S.C.C.A. No. 92 .

[80] I find that the RSUs bonus/equity award was an integral part of the plaintiff’s compensation or remuneration package. The plaintiff had accepted the equity award. There were target dates for the RSUs to vest. The first target date fell within the common law notice period.

[81] But that does not end the inquiry. In Matthews, the Supreme Court endorsed the two-step approach articulated by the Ontario Court of Appeal in the decisions of Lin, Paquette and Taggart in determining the appropriate damages where an employee is dismissed without cause. At para. 55, in Matthews, the court stated the two questions to be asked by the court are:

i. Would the employee have been entitled to the bonus or benefit as part of their compensation during the reasonable notice period?

ii. If so, do the terms of the employment contract or bonus plan unambiguously take away or limit that common law right?

At para. 52 of Matthews, the court endorsed the comments of van Rensburg J.A in Paquette, commenting: “The question”, van Rensburg J.A. explained, “is not whether the contract or plan is ambiguous, but whether the wording of the plan unambiguously alters or removes the [employee’s] common law rights”.

[82] The defendant argues that each termination of employment provisions in the Equity Award, the Terms and Conditions, as well as the LTPP Prospectus, when read together, extinguished the plaintiff’s common law right. The defendant argues that the termination of employment provisions in these award agreements are subject to the country-specific termination of employment provision in the Equity Award Agreement.

[83] Turning to the termination provisions in each document, the termination provision in the LTPP Prospectus, under clause 12 of the document, deals with termination of employment. The clause does not deal expressly with unlawful termination. This termination provision does not unambiguously alter or remove the plaintiff’s common law right. The relevant clause reads:

12. Termination of Employment.

If the employment of a Participant terminates, other than as a result of the death or disability of a Participant, all unexercised, deferred and unpaid Awards shall be canceled immediately, unless the Award Agreement provides otherwise. In the event of the death of a Participant or in the event a Participant is deemed by the Company to be disabled and eligible for benefits under the terms of the IBM Long-Term Disability Plan (or any successor plan or similar plan of another employer), the Participant’s estate, beneficiaries or representative, as the case may be, shall have the rights and duties of the Participant under the applicable Award Agreement.

[84] Clear language is required to rebut the presumption, established in the jurisprudence, that the parties intended that a triggering event which extinguishes a terminated employee’s rights would be lawful (see Veer). As noted by van Rensburg J.A. in Paquette, at para. 41:

Recognizing that the loss of the right to exercise stock options during the notice period is compensable in wrongful dismissal actions, the stock option cases have required clear language to limit the right to exercise stock options on termination. In a number of cases, the courts have found that the time for the exercise of stock options following the “termination” or “cessation” of employment was extended by the reasonable notice period: see Gryba v. Moneta Porcupine Mines Ltd. (2000), 2000 CanLII 16997 (ON CA), 5 C.C.E.L. (3d) 43 (Ont. C.A.), leave to appeal refused, [2001] S.C.C.A. No. 92 (the “effective date” of termination occurred at the end of the notice period); Veer v. Dover Corporation (Canada) Limited (1999), 1999 CanLII 3008 (ON CA), 45 C.C.E.L. (2d) 183 (Ont. C.A.) (“whether such termination be voluntary or involuntary” not sufficient to oust presumption that termination would be lawful); and Schumacher (recovery of damages for lost opportunity to exercise stock options was permitted under a “phantom” stock option plan referring to cessation of employment, but not in respect of a second plan providing for the exercise of options within 60 days following the employee’s termination “without cause”). By contrast, in Brock v. Matthews Group, this court held that there was no recovery of damages for the lost opportunity to exercise certain stock options where the plan required the exercise of options within “15 days from the date notice of dismissal is given”.

[85] As for the remaining two documents, it makes sense to first set out the relevant provisions. First, the Equity Award Agreement, referenced in the LTPP Prospectus above, includes the following information on termination of employment:

Termination of Employment

For the purposes of the Plan and this Agreement, you shall be considered to be terminated from your employment with IBM or its affiliate on the later of the following dates:

a. The date you cease to provide services to the employer or any affiliated company, regardless of whether such date is the last date upon which the employer is required by common law, agreement, policy, or otherwise to pay you termination pay in lieu of notice of termination of employment; or

b. The date upon which the employer is required by statute (i.e. applicable provincial employment/labour standards legislation) to pay you termination pay in lieu of notice of termination of your employment. [Emphasis added]

[86] Second, the LTPP Terms and Conditions contained a termination of employment provision, clause 6.a.i., which applies to all RSUs. The relevant provision reads:

a. Restricted Stock Units (“RSUs”) including Cash-Settled RSUs

i. All RSUs

Termination of Employment including Death, Disability and Leave of Absence

Termination of Employment

In the event you cease to be an employee (other than on account of death or are disabled as described in Section 12 of the Plan) prior to the Vesting Date(s) set in your Equity Award Agreement, all then unvested RSUs under your Award shall be canceled.

[87] Dealing specifically with the termination of employment provision in the Equity Award Agreement, it is somewhat confusing. An employee is considered “terminated” the date the employee “cease to provide services” to the employer. However, the use of the word “regardless” and the placement of it, the date the employee “cease to provide services” appear to extend to the end of the notice period. The provision indicates that the employee is considered “terminated” on “the later” of any of the dates set out in subclause (a) and (b). Subclause (b) is not relevant.

[88] Under clause (a), an employee is considered terminated on the “date (the employee) cease to provide services to the employer”. With the introduction of the word “regardless”, after this phrase to explain the date that the employee ceases to provide services, in my view, the clause suggests that an employee may be considered to be terminated, when the employee ceases to provide services to the employer, which may be the last date of the common law notice period. There is no other interpretation from the provision which state that an employee can be considered to be “terminated” on the date the employee “cease to provide services to the employer” “regardless of whether such date is the last date upon which the employer is required by common law, ….to pay termination pay…..” The reference to “such date” refers back to the date the employee “cease to provide services”, and contained, as it is, in the same sentence, and the sequence of the words, “such date” is also tied to the “last date” that the employer is required to pay “termination pay”. What the clause does not clearly do, is exclude the common law notice period from consideration in establishing the employee’s date of termination. Accordingly, the date the employee “cease to provide services” extends to the “last date” of the common law notice period.

[89] I therefore disagree with the defendant that the language of the award agreements is similar to the language in the agreements that were considered in Kieran. The relevant contractual language was as follows:

If Participant’s employment with Micro or any Affiliate is terminated for any reason other than death, disability … or retirement… prior to the time when all Shares have become Unrestricted Shares …, Restricted Shares… shall be repurchased by Micro at the lower of (x) the Purchase Price and (y) the Fair Market Value of such Shares on the Repurchase Date. … [A]ny termination of a participant’s employment for any reason shall occur on the date Participant ceases to perform services for Micro or any Affiliate without regard to whether Participant continues thereafter to receive any compensatory payments therefrom or is paid salary thereby in lieu of notice of termination. [Emphasis added].

[90] The Equity Plan in Kieran contained the following language:

Except as the Committee may at any time otherwise provide or as required to comply with applicable law, if the Participant’s employment with Micro or its Affiliates is terminated for any reason other than death, disability, or retirement, the Participant’s right to exercise any Non-Qualified Stock Option or Stock Appreciation Right shall terminate and such Option or Stock Appreciation Right shall expire, on … the sixtieth day following such termination of employment. [Emphasis added].

[91] In Kieran, the plan made it clear that “any termination of a participant’s employment for any reason” was in the Restricted Plan and the words for “any reason” was included in the Equity Plan. The Court of Appeal found that the “any reason” language contemplated all terminations, including wrongful terminations. Unlike Kieran, none of the award agreements in this case include the language “any termination”, “any reason” or similar language.

[92] The language is not similar to that in Kieran. In Kieran, the employee can discern that for the purpose of determining when a termination took place, it mattered not whether the employee continued to receive salary or pay in lieu of. Again, the provision stated: “[A]ny termination of a participant’s employment for any reason shall occur on the date Participant ceases to perform services for Micro or any Affiliate without regard to whether Participant continues thereafter to receive any compensatory payments therefrom or is paid salary thereby in lieu of notice of termination.” In the present case, in attempting to define when an employee is “considered to be terminated from …employment”, the introduction of the “later of”, the linking of “the date you cease to provide services to the employer” and connecting that date with the phrase “regardless of whether such date is the last date upon which the employer is required by common law”, and tethered, as it is to “pay termination pay in lieu of notice of termination of employment”, can only mean that “such date” refers back to the “the date you cease to provide services to the employer”, which, in this case, can be the “last date” the employer is required by common law….”, that is to say, the last date of the common law notice period. If anything, there is a lack of clarity, in a situation where the jurisprudence establishes that clear language is required.

[93] Unlike Kieran, which contemplated “any termination” for “any reason”, and contemplated wrongful termination, but excluded, for the purpose of consideration in determining the date of termination, any continuing compensation or salary in lieu of notice (i.e., wrongful termination), there is some ambiguity as to what is meant by the date the employee “cease to provide services”, even if the language contemplated a wrongful termination, which I do not find for the reasons previously stated. That is because, an employer who terminates an employee without just cause has the choice of asking the employee to continue to work for the duration of the reasonable notice period or to compensate the employee by way of pay in lieu of notice: Wallace at para. 65, also citing, David Harris, Wrongful Dismissal, loose-leaf, (Canada: Carswell, 2018), at p. 3-10. Conceivably, in a case of an employee with working notice, the date the employee ceases to provide service to the employer would be the end of the working notice period.

[94] In Veer, at para. 14, Goudge J.A. noted that in the absence of express language, the parties are presumed to intend that a triggering event (under the agreements for the cancellation of stock options) would be lawful. He stated:

Absent express language providing for it, I cannot conclude that the parties intended that an unlawful termination would trigger the end of the employee's option rights. The agreement should not be presumed to have provided for unlawful triggering events. Rather, the parties must be taken to have intended that the triggering actions would comply with the law in the absence of clear language to the contrary.

[95] As for the termination of employment provision in the LTPP Terms and Conditions, “cease to be an employee” does not unambiguously alter the plaintiff’s common law rights. In Matthews, the Supreme Court noted that the exclusion clause “must clearly cover the exact circumstances which have arisen”: Matthews, at para. 66, citing Bauer v. Bank of Montreal, 1980 CanLII 12 (SCC), [1980] 2 S.C.R. 102, at p. 108. That Court also made it clear in Matthews that “for the purpose of calculating wrongful dismissal damages, the employment contract is not treated as “terminated” until after the reasonable notice period expires.”

[96] The court has required clear language to limit the right to exercise stock options on termination: see Gryba; Veer. In Matthews, at para. 65, the Supreme Court summed up that the provisions of the agreement must be “absolutely clear and unambiguous”.

[97] As for the termination provision in the LTIP Terms and Conditions, I find that, for the reasons previously stated, the language did not unambiguously alter or remove the plaintiff’s common law rights. To be clear, singularly, or collectively, the agreement documents do not ambiguously extinguish the plaintiff’s common law right to the RSUs which vested during the common law notice period.

[98] Neither party addressed the recent decisions of Manastersky v. Royal Bank of Canada, 2021 ONCA 458, 156 O.R. (3d) 641, and Mikelsteins v. Morrison Hershfield Limited, 2021 ONCA 155, 457 D.L.R. (4th) 523. Both cases made their way up to the Supreme Court before being remanded to the Court of Appeal “for disposition in accordance with David Matthews v. Ocean Nutrition Canada Ltd., 2020 SCC 26.” In both instances, after reconsideration, the Court of Appeal held that Matthews did not impact their original decision. In Mikelsteins, the Court of Appeal noted Mr. Mikelsteins did not receive his shares as a form of compensation as an employee and had used his own funds to purchase the shares. The Court noted that Mr. Mikelsteins’ rights regarding his shares were to be determined as a shareholder in the company pursuant to the Shareholders’ Agreement. The Court noted, at para. 13:

The respondent’s entitlement respecting his shares falls to be determined by his rights as a shareholder of Morrison Hershfield Group Inc., not by his status as a terminated employee of the appellant. To conclude otherwise would run the risk of interfering with the established law on the rights and obligations of shareholders, much of which is codified in corporate statutes such as the Business Corporations Act, R.S.O. 1990, c. B.16 and the Canada Business Corporations Act, R.S.C. 1985, c. C-44.

[99] In the present case, the plaintiff did not use his own funds to purchase funds in the company. The document accompanying the plaintiff’s equity award indicated that it was a form of compensation, albeit, described as “extraordinary compensation”, and an “extraordinary item of income”. The equity reward was therefore a form of compensation to the plaintiff qua employee. The description notes: “The value of this Award is an extraordinary item of income, is not part of your normal or expected compensation and shall not be considered in calculating any severance, redundancy, end of service payments, bonus, long-service awards, pension, retirement or other benefits or similar payments.” The term does not expressly exclude calculating pay in lieu of notice where the employee is wrongfully terminated.

[100] In Manastersky, the plaintiff had participated in an incentive profit-sharing plan called “carried interest plans”. At the time his employment was terminated, Mr. Manastersky held vested points in two funds pursuant to his employer’s CIP. The payments received by Mr. Manastersky under the Plan had been paid annually and was a significant part of his compensation, as much as fifty percent. The trial judge awarded him 18 months reasonable notice. His employer had wound up the two funds during the notice period and distributed the proceeds. The trial judge had awarded Mr. Manastersky damages of $953,392.50 for the lost opportunity to earn entitlements under plan during the reasonable notice period. The majority of the Court allowed the employer’s appeal regarding the award of damages in respect of the incentive plan, finding that the plan contemplated that the employer could terminate at the end of any investment period. This case turned on whether the employer was obliged to offer an alternate comparable form of compensation. The facts in Manastersky appear to be distinguishable from the present case. In her dissenting reasons in Manastersky v. Royal Bank of Canada, 2019 ONCA 705, 57 C.C.E.L. (4th) 82, Feldman J.A. highlighted at para. 124, certain observations made by the trial judge on the facts, noting:

However, as I read his reasons, the trial judge carefully considered the terms of the CIP in determining whether the appellant's right to terminate the CIP prevented that portion of the respondent's compensation from forming part of his presumptive entitlement to common law damages. He made two cogent observations, at para. 44: (1) RBC's right to terminate the CIP was in no way tied to the termination of the respondent's employment, and (2) that right did not purport to limit or reduce the respondent's common law entitlements [Emphasis added]

[101] Unlike, Manastersky, the defendant’s cancellation of the RSUs is tied to the defendant’s termination of the plaintiff’s employment, and the defendant is relying on the termination clauses in the various documents as having abrogated the plaintiff’s common law entitlement.

Issue 4 - Is the plaintiff entitled to damages for value of the RSUs vesting after the notice period?

[102] Given the 27 months’ notice, the plaintiff is not entitled to damages for the value of the second half of the RSUs which would have vested in November 2022. These are not part of his common law damages.

Issue 5 - Is the plaintiff entitled to compensation for a bonus for 2020 and 2021, during the period of reasonable notice?

[103] Where a bonus is discretionary, the test of whether a benefit or bonus is “integral” to the employee’s compensation assists in answering the question of what the employee would have been paid during the reasonable notice period: Matthews, at para 58, citing Brock v. Matthews Group Ltd. (1988), 20 C.C.E.L. 110 (Ont. H.C.J.), at p. 123, aff’d (1991), 34 C.C.E.L. 50 (C.A.). In other words, the purpose of the so-called “integral” enquiry is to determine whether the bonus would have been earned during a period of reasonable notice and, if so, it forms part of the measure of damages for wrongful dismissal.

[104] In a case where a bonus is discretionary, the court may still consider it was an integral part of the plaintiff’s compensation: Matthews at para. 58, citing, Brock; Singer v. Nordstrong Equipment Limited, 2018 ONCA 364, 47 C.C.E.L. (4th) 218, at para. 21.

[105] The plaintiff submits that he was expecting a bonus based on his average three-year incentive compensation of $1,497 per year. The defendant takes the position that the plaintiff is not entitled to any bonus, which are discretionary and tied, in part, to the company’s overall performance. The defendant’s unchallenged evidence is that no bonuses were paid in 2019 and the 2020. On cross examination, the plaintiff admitted that he had not received a bonus in 2019.

[106] On the evidence before me, the bonus was discretionary. The plaintiff has not satisfied me, on the evidence that he would have received the discretionary bonus during the notice period. In accordance with the two-step approach articulated in Matthews, I find that the plaintiff has no common law entitlement to the bonus. I need not consider whether there is something in the bonus plan that removes the employee’s common law entitlement. Though the court need not resort to whether it was integral to the plaintiff’s compensation package, I find, nonetheless, that it was not as it was discretionary and contingent upon other considerations.

Issue 6 - Is the plaintiff entitled to continue to participate in the Employee Flexible Benefits Plan (EFBP) or, alternatively, is he entitled to an award of damages for the loss participation in the EFBP?

[107] Counsel for plaintiff indicates that there are differences between the two benefit plans but indicated that the plaintiff was not in a position to quantify that loss. The plaintiff concedes that the plaintiff cannot obtain damages for the loss if it cannot be quantified. It is not clear from the evidence if there is even a claim. The defendant admits in its statement of defence, as did counsel for the defendant during oral submissions, that the plaintiff was considered to have retired as of August 14, 2020, and automatically became eligible for IBM Retiree Flexible Benefits Plan, which covers medical benefits, until the end of the calendar year that he turns 65, and age 65.22, in the case of the Retiree Life Insurance Benefit.

[108] Therefore, the relief sought in paragraph 5 of the Notice of Motion appears to be moot.

[109] As for any additional benefits during the notice period, the plaintiff has the onus of putting his best foot forward, and it is not clear what other benefits, and the value of those benefits, are being claimed during the notice period.

Issue 7 - Has the plaintiff mitigated his damages?

[110] The onus is on the defendant to establish a failure to mitigate: Michaels v. Red Deer College, 1975 CanLII 15 (SCC), [1976] 2 S.C.R. 324; Dobson v. Winton & Robbins Ltd., 1959 CanLII 19 (SCC), [1959] S.C.R. 775.

[111] That is, the onus is on the employer to prove that had the employee taken reasonable steps, he would have found “a comparable position reasonably adapted to his abilities”: Link v. Venture Steel Inc., 2010 ONCA 144, 259 O.A.C. 199, at para. 73; H.A. Levitt, The Law of Dismissal in Canada, loose-leaf, 3rd ed. (Aurora: Canada Law Book, 2003), at p. 10-3; Roderick Wood, Geoffrey England, & Innis Christie, Employment Law in Canada, loose-leaf, 4th ed. (Markham: LexisNexis Canada Inc., 2005), at p. 16-89.

[112] The courts are tolerant in evaluating the employee’s efforts at mitigation, and the mitigation efforts need only be reasonable, not perfect: Summerfield v. Staples Canada Inc., 2016 ONSC 3656, 33 C.C.E.L. (4th) 249, at paras. 20-21; Banco de Portugal v. Waterlow & Sons Ltd., [1932] A.C. 452 (H.L.). The employer must show that the employee’s conduct was unreasonable, not in one respect, but in all respects: Furuheim v. Bechtel Canada Ltd. (1990), 30 C.C.E.L. 146 (Ont. C.A.), at para. 3.

[113] As accepted by Laskin C.J. in Michaels, at p. 332:

It seems to be the generally accepted rule that the burden of proof is upon the defendant to show that the plaintiff either found, or, by the exercise of proper industry in the search, could have procured other employment of an approximately similar kind reasonably adapted to his abilities, and that in absence of such proof the plaintiff is entitled to recover the salary fixed by the contract.

[114] The defendant submits that the plaintiff has not taken reasonable steps to obtain similar positions and appears to have applied for few Offering Manager/Product Manager positions. The defendant submits that there should be a one-month reduction for unreasonable mitigation efforts.

[115] In mitigating damages, a terminated employee is only obligated to seek comparable employment, that is comparable in status, hours and remuneration to the position held at the time of dismissal: Lake v. La Presse, 2022 ONCA 742, at para. 19; Carter v. 1657593 Ontario Inc., 2015 ONCA 823, at para. 6. There is no obligation on a terminated employee to seek out less remunerative work: see Lake.

[116] On a summary judgment motion, both sides are obligated to put their best foot forward. The plaintiff has provided extensive evidence, including a spreadsheet, documenting his job search from very early on (with dates), and rejections, where those were received. In response to that, there is secondhand hearsay information about searches carried out by an associate on LinkedIn on two separate dates towards the end of March 2021, and a chart with a job title, company name, description, and link. In response to the plaintiff’s application for 34 Offering Manager/Product Manager position between August 2020 and February 2021, Ross Hamilton, the defendant’s HR Project Executive, deposes that the plaintiff’s position as an Offering Manager for six years, should have supported a larger number of applications to this type of position. The defendant has presented no evidence that these positions were indeed available at the time or, even if they had been, whether the plaintiff would likely have secured a comparable adapted to his abilities: Link v. Venture Steel Inc., 2010 ONCA 144, 79 C.C.E.L. (3d) 201, at para. 73.

[117] As for the list of available jobs on LinkedIn found by the associate, it is a list obtained at a point in time. There are no dates as to when the jobs were posted and whether they were still available. There is no actual evidence under oath to indicate that the jobs are comparable to the plaintiff’s former job. Included in the list are positions for 5+ - 8+, 7+ years, 8+ years, 10+ years, but most fail to provide any such detail. Of the positions listed, only two listed a salary range, and only one, had a range which was above that of the plaintiff’s base salary. None of the jobs on the list provided any details of any other benefit comparable to what the plaintiff had when he was terminated. The obligation of a terminated employee in mitigation is to seek “comparable employment”, which typically is employment that is comparable in status, hours and remuneration to the position held at the time of dismissal: Carter, at para. 6.

[118] I am satisfied, on the evidence before me, that the plaintiff has actively sought to mitigate his losses. The defendant has not discharged the onus of proving that the plaintiff has failed to mitigate to take reasonable steps to mitigate his damages.

Issue 8 -Is the plaintiff entitled to damages for pension benefits during the reasonable notice period?

[119] The plaintiff was entitled to participate in the defendant’s Defined Contribution Pension Plan (the “DC Plan”) at a contribution rate of 6%. On this motion, the defendant agreed that the plaintiff was entitled to a 6% pension contribution during a reasonable notice period, less pension payments already during the notice period. In the result, the parties should be able to quantify this amount.

Issue 9 - Should a contingency be applied for any award of damages?

[120] The plaintiff submits that the court ought to direct a trust and accounting approach. The defendant asks that the court impose a contingency or discount to any award of damages. I prefer the trust and accounting approach. Given the lack of any interviews obtained by the plaintiff in the face of over a hundred job applications, I would adopt the trust and accounting approach, but also make the accounting retroactive since the notice period had not expired at the time oral submissions as concluded in this matter.

F. Disposition

[121] Where there is no genuine issue, summary judgment “must” be granted: Hyrniak, at para 68. For the reasons set out above, summary judgment is granted to the plaintiff, and I make the following disposition:

i. The plaintiff is entitled to 27 months reasonable notice subject to any deductions, for pay in lieu of notice already paid and any severance pay. To the extent that it is necessary, a trust and accounting is imposed with respect to any unexpired term.

ii. The plaintiff is entitled to damages in the amount of $55,619.88 USD for the value of the RSUs which would have vested during the notice period.

iii. The plaintiff is not entitled to damages for the RSUs which would have vested in November 2022, beyond the reasonable notice period.

iv. The plaintiff is not entitled to compensation for the discretionary bonus for 2020 and 2021.

v. The relief sought for a declaration with respect to continued participate in the EFBP or, alternatively, a claim for damages, is moot given the admissions by the defendant.

vi. The plaintiff has mitigated his damages.

vii. The plaintiff is entitled to damages for loss of pension contribution during the reasonable notice period, less any amount received during the notice period.

x. The plaintiff is entitled to prejudgment interest on damages, but if the parties are not able to agree on prejudgment interest, a conference/video call may be scheduled through Ms. Diamante. Similarly, counsel for the parties may schedule a conference call/video conference if the parties are not able to agree on the quantification of the various awards.

G. Costs

[122] If the parties are not able to agree on costs, counsel for the parties may contact my assistant no later than 30 days after the release of this decision, to schedule an appointment to speak to the issue of costs.

A.P. Ramsay J.

Released: January 26, 2023

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Gregory Milwid

Plaintiff

– and –

IBM Canada Ltd.

Defendant

REASONS FOR JUDGMENT

A. P. Ramsay J.

Released: January 26, 2023