Chevalier v. Active Tire - Appeal Dismissed

I increasingly think that this case is a tragic consequence of the bizarre state of constructive dismissal law.

I've posted about it a couple of times before - first after the trial decision in August 2012, in an entry entitled "Can Your Employer Unfire You", and again after the costs decision, where the employee was ordered to pay $50,000 to the employer.

In a nutshell:  Chevalier was a manager with 33 years of service, but after a change in ownership began to have difficulty with his new employer - he was put to new duties and new expectations, and wasn't taking well to the change.  It's not an uncommon situation...until management decided to impose a "lay off".  (I presume it was purportedly a temporary layoff, without a contractual entitlement to do so.)

Chevalier quickly obtained legal advice, and commenced an action for constructive dismissal.

Upon receiving the statement of claim - and this is where the facts become more unusual - the employer offered him his job back.  He declined.

So the entire trial turned on whether or not it was reasonable for Chevalier to have declined.  He was definitely constructively dismissed, and definitely entitled to significant damages...subject to the duty to mitigate.  And if it was unreasonable for him to decline the job, that's a failure to mitigate, disentitling him to damages.

The trial judge concluded that the actions Active Tire had taken, up to the purported layoff, were basically within its rights, that Chevalier's perception that they were trying to "make his life miserable" was a distorted perception, and that had he returned to work he would not have been subject to an environment of hostility or humiliation.  Accordingly, it was unreasonable for him not to return.  His claim was dismissed, and he was ordered to pay $50,000 in costs.

The Appeal

The Court of Appeal just released a short endorsement dismissing his appeal.  Essentially, they held that the trial judge's findings of fact were supported on the record, and therefore there was no basis to interfere with the conclusion that it was unreasonable for Chevalier to decline the employer's offer.

He was ordered to pay another $7,500 in costs.

Constructive Dismissal and the Obligation to Mitigate

As I have said, I think the trial judge's decision is fairly consistent with the existing case law.  But I'm fairly critical of the existing doctrine.  To me, it seems to be fairly absurd in most cases that an employee can be constructively dismissed, and yet be expected to stay in the position nonetheless.  The standard for constructive dismissal is, in principle, similar to the standard for the obligation to mitigate:  An employee whose terms of employment are fundamentally and unilaterally changed can consider himself to be constructively dismissed; the duty to mitigate requires an employee to seek and accept similar employment.

The standard for mitigation, outside of these 'employment with the same employer' cases, has traditionally been very employee-friendly, giving the employee a fair bit of latitude in how to conduct a job search and how to assess which jobs are acceptable.  A look at the general mitigation jurisprudence would suggest that the court is looking merely for a good faith job-search, and that so long as the employee isn't sitting on the couch all day, or going on extended vacations, or doing something else that seems inherently unreasonable as an effort toward earning replacement income...that's okay.  (In fact, for a long-term employee whose skills aren't in great demand, there's sometimes a pretty good rationale for going back to school to update skills.)

In the employment-with-the-same-employer cases - mostly constructive dismissal cases, but not always - the standard seems to be much higher:  The Courts will find that a failure to continue employment with the same employer is unreasonable unless the employee can establish that the working environment would be hostile.  The analysis of the terms and conditions of employment, which would ordinarily be seen in a mitigation analysis, is largely absent.  Instead of a global analysis of the reasonableness of the employee's mitigation efforts altogether, the court narrowly focuses in on the reasonableness of a singular decision.

(By contrast, consider the following scenario:  I am dismissed from a job where I make $100,000 per year, and I am entitled to a 12-month notice period.  I am unemployed for 6 months, before I receive two job offers.  Job "A" pays $100,000, but requires longer hours, a longer commute, and more travel.  Job "B" has reasonable hours, but only pays $90,000.  As a young professional without a family, I might well opt for Job "A", but it is not at all difficult to see why many people would take the pay cut to not be separated from their families.  If I take Job "B" instead of Job "A", am I still entitled to be topped up for the extra $5,000 through the remaining 6 months of the notice period?

I would argue that the tests - wherever they ought to sit - should be consistent; that where a change to employment is sufficient to generate a constructive dismissal, that should, by virtue of the change, have the prima facie result that you are not obligated to accept the job in mitigation.  Likewise, if a change is sufficiently minor that it would be a job you would be required to take in mitigation, the change should not be adequate to generate a constructive dismissal.

But the "temporary layoff" cases are a slightly different class of constructive dismissal, because they look a lot more like actual termination cases.  (If you're put on a temporary layoff, which the employer is not entitled to do, is it necessary to actually resign in the face of it?  What would the point be?  You're not being paid; you're not required to go into work.)  This, functionally, is more similar to the Evans v. Teamsters case, where there was an actual termination followed by an offer of replacement employment.

Why is Mr. Chevalier so sympathetic?

As I said above, I think the case is a tragedy.  Even accepting all of the trial judge's findings of fact - that the employer wasn't trying to drive him out; their discipline was legitimate and sincerely intended to correct his performance; the temporary layoff was sincerely for purely economic reasons; there wouldn't have been an atmosphere of hostility had Mr. Chevalier returned; etc. - we're still left with the conclusion that Mr. Chevalier felt that this temporary layoff, which breached his contract, was simply an extension of other actions intended to drive him out.

So he would have seen their offer of re-employment as saying, "Oops, we crossed the line of clearly inappropriate conduct, so we take it back, because we want to merely skirt that line until you get so fed up that you quit."  Of course he declined.

And regardless of the sincerity of the employer's intentions, it's hard to say that the perception was unreasonable.  A temporary layoff says, at minimum, that they don't need you performing your duties, and that you're first on the chopping block.  Combined with prior discipline and other changes to his duties, the ultimate message that any reasonable person would take is this:  "You don't fit in this organization."  And the re-offer, after being served with a statement of claim, would appear as nothing more than an attempt to evade liability.

The fact is unavoidable that the only reason they recalled him to work was that they learned that they were not legally entitled to lay him off in the first place.  Translation: "We would lay you off if we could, but we can't."  It's hard not to be demeaned by that.

I would argue that the trial judge put too much emphasis on the employer's reasons for engaging in its various actions prior to the layoff:  The question, ultimately, is not whether or not they were entitled to (for example) discipline him.  The question, ultimately, is whether or not an employee's duty to mitigate requires him to take a position where he already (for example) has a disciplinary record.   Active Tire was acting within their rights, yes, but the bottom line is that the relationship was already rocky, and that is important context in evaluating the reasonableness of his decision to turn down their offer.

And the trial judge went so far to acknowledge that "it may well be that it was beyond his capacity" to follow the procedures set out by the new owners..."However, as set out in Mr. Chevalier's employment agreement, it was a term of his employment that he follow those procedures."  And that is where I would respectfully suggest the trial judge goes significantly wrong.  At the relevant time, being when the offer of re-employment was made, Mr. Chevalier did not have an employment agreement.  He was being offered an employment agreement, including terms with which the trial judge acknowledges Mr. Chevalier may not have been able to comply.  It seems absurd to suggest that Mr. Chevalier was obligated to accept a position which included requirements that he couldn't satisfy.

Not to mention the fact that they were already in litigation.  There's a debate among some employment lawyers:  Can lawyers save an employment relationship?  Or, when lawyers get involved, does that signal that the employment relationship is on death row?

The trial judge considered this to be relevant, but not determinative.  The Court of Appeal characterized this conclusion as a finding of fact, resistant to appellate review.  Respectfully, I find this troubling.  It's straightforwardly a statement of pure law, and while it's likely correct, I can't help but feel that the Court of Appeal is applying a bit too much deference in employment law cases.  (Not just in this case, either:  See my comments regarding the Bennett v. Cunningham case, too.)  Whether or not the reasonable person would have turned down Active Tire's offer is not a purely factual issue: The Supreme Court in Evans v. Teamsters expressly held that this question is one of mixed fact and law, and is subject to appellate intervention in the appropriate case (as it was in Evans), without needing to supplant the trial judge's assessment of credibility or the individual underlying facts.

Ripe for SCC Intervention

I was troubled by the Evans decision when it came out, for broader concerns about contractual relations:  Termination without notice, or constructive dismissal, is a breach of contract.  Lawyers and sophisticated businesspeople may not generally consider breaches to be morally bad, or worthy of punishment, but most people don't like it when their contracts are breached, for a couple of reasons:  (1) People like to be able to rely on another person's word.  They think that if you've promised to do something, they should be able to expect you to do it.  For most people, having to sue on a breach of contract will fall squarely into the realm of "Fool me once shame on you, fool me twice shame on me", or "Once bitten, twice shy". (2) Legal fees, for most people, are not just the cost of doing business.

But even operating within the Evans framework, the doctrine has gone way too far, with a case like Chevalier.  There is some debate over whether or not employment with the same employer is limited to the 'rare' case.  The majority chose not to characterize it in that way, instead conceptually streamlining mitigation in wrongful dismissal and constructive dismissal cases, and describing the test for mitigation in 'employment with the same employer' cases as turning on the absence of an atmosphere of hostility, embarrassment, or humiliation, including consideration of the nature and conditions of employment, and of non-tangible elements:  Work atmosphere, stigma, loss of dignity.

However, as in the trial decision in Chevalier, the courts seem not to consider the impact of the termination (or constructive dismissal) itself on the work environment, often not even mentioning stigma or dignity, and instead find failure to mitigate in the absence of evidence of an objectively hostile working environment.  Which, in my humble opinion, is a failure to take into account the multi-factored and contextual analysis endorsed by the Supreme Court, and often amounts to a reversal of the onus as well.

I don't really expect this case to make it to the Supreme Court, but I think there's a real need for the SCC to refine the doctrine, and provide guidance regarding the obligation of employees in these scenarios.  Because you can rest assured that we will see a lot more of them, as lawyers recommend that employers follow Active Tire's lead.

Here's an Exercise...call it food for thought

Imagine you make $100,000 per year, and your company is struggling financially, and dismisses you for economic reasons.  Assume that you are entitled to a 12-month notice period.  You search for a new job for 6 months, and then...

Scenario 1:  You receive a job offer from Company "A".  They are offering $100,000 per annum, but the position requires longer hours and more travel than you are used to, keeping you away from your spouse and small children more than you would like.  At the same time you receive a second offer from Company "B", which only pays $90,000 per annum, but entails time commitments more in line with what you are used to.  As well, Company "B" is a growing company in a promising market, with great long-term advancement potential.  Had you only received (and accepted) the offer from Company "B", you would straightforwardly have continuing entitlements against your old employer through the remainder of the notice period (i.e., to be topped up).  However, if you take Company "B"s offer and decline Company "A"s, have you failed to mitigate?

Scenario 2:  You receive the above offer from Company "A", and no other offer at the same time.  If you decline it, have you failed to mitigate?  Does the analysis differ from Scenario 1?  Should it?

Scenario 3:  You receive the above offer from Company "B", and also an offer from Company "C", offering $100,000 per annum, for a very similar job to your old employer, but it's only a 6-month contract.  By taking Company "B"s offer, have you failed to mitigate?

Scenario 4:  You receive only the 6-month contract offer from Company "C".  You decide to continue searching for something permanent.  Is this a failure to mitigate?

Scenario 5:  Your old employer, now aware that it has to compensate you through the reasonable notice period, offers you a six-month contract on the same terms and conditions as before.  At the same time, you receive the above offer from Company "B", which is a permanent position, with a growing company in a promising market.  By declining your old employer's offer and accepting the offer from Company "B", have you failed to mitigate?

Scenario 6:  Your old employer offers you a six-month contract on the same terms and conditions as before.  You decide to keep searching for a permanent job instead.  Have you failed to mitigate?

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This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.

Small Claims Court: Costs of a Successful Defendant

As increasing employment litigation is going through the Small Claims Court, let's consider the costs exposure of the plaintiff.

Since the costs provisions of the Small Claims Court were changed some time ago, there's been a bit of controversy, particularly surrounding the effects of offers to settle.

The Old Rules

Prior to July 2006, there were fixed amounts of costs to be awarded:  If you went to Small Claims Court with a lawyer, and you succeeded at trial, you could get $500 to your lawyer's fees.  This was set out in Rule 19.

There's also s.29 of the Courts of Justice Act, which - with certain exceptions - restricts costs awards to 15% of the amount claimed.  So if you sued for $1000 and succeeded, you could only get $150 toward legal fees.

Then there's Rule 14, which deals with offers to settle:  Essentially, it says that, if you make an offer to settle which meets certain conditions, and you do better than your offer at trial, you can get double costs - i.e. up to $1,000 toward your legal fees.  The wording is kind of important, so more specifically, it says this:  If a plaintiff makes an offer to settle (under certain circumstances) and obtains a judgment more favourable than the offer, double costs may be applied; conversely, if a defendant makes an offer to settle, and the plaintiff obtains a judgment less favourable than the defendant's offer, the defendant can get double costs.

However, Rule 14 remained subject to s.29 of the CJA, meaning that if you successfully sued for $1000, you were still capped at $150.  If you successfully sued for $6000, and had offered to settle for $5000, then doubling your costs brings you up to the 15% cap at $900.

The New Rules

The only thing that changed materially, for the sake of this discussion, was Rule 19.  (The Court's jurisdiction has increased significantly, too, which has important repercussions.)  Basically, the fixed costs were removed, and the Court was given jurisdiction to award a "reasonable representation fee", subject to s.29 of the CJA.

However, when we're talking about legal fees at the Small Claims Court, 15% of the amount claimed is seldom if ever more than a reasonable representation fee.  So what's the point of Rule 14, if you're already likely to get 15% or close to it?

A few Deputy Judges found creative ways of applying the s.29 exceptions.  But the 2010 Barrie Trim case was really the one that, thus far, has held the day.  The plaintiff had obtained judgment at the Small Claims Court, but the defendant successfully appealed to the Divisional Court.  Justice Healey, having dismissed the plaintiff's claim, then had to determine costs of trial, and determined that Rule 14 simply was not subject to s.29, and awarded double-costs because the defendant had served an offer to settle.

The Plaintiff applied for leave to appeal both the merits of the case and the costs award; the Court of Appeal was prepared to hear the costs appeal, but refused to hear the merits.  The Plaintiff decided not to pursue the appeal if they were only talking about costs.  Until the Divisional Court or Court of Appeal says differently, therefore, Justice Healey's conclusion is binding on the Small Claims Court.  However, the particular facts raise another problem in the case law.

The Remaining Controversy - S & A Strasser Ltd. v. Richmond Hill

The Strasser case was a 1990 decision from the Court of Appeal dealing with similar language to that in Rule 14, in context of a defendant seeking elevated costs where it had served an offer to settle.  And here's the crux:  The wording of Rule 14 (and its analogous language in the Rules of Civil Procedure at the time) tells us that the defendant gets higher costs where the plaintiff obtains judgment less favourable than the defendant's offer.

Deputy Judge Winny has consistently relied upon the Strasser decision as standing for the proposition that, where the plaintiff's claim is altogether dismissed, and the plaintiff therefore cannot be said to have obtained judgment, Rule 14 has no application.  (See, for example, Lockrey v. Kay).

I have been unable to find any cases decided by other Deputy Judges dealing with the question; however, this is not surprising.  There are relatively few Deputy Judges with any significant number of reported decisions; by contrast, Deputy Judge Winny is very prolific.

Justice Healey, in Barrie Trim, did not address this question.  (Incidentally, when he decided that the 15% cap did not apply to Rule 14, he was accepting reasoning put forward by Deputy Judge Winny in other cases.)  Had he addressed the question, it could have changed the result.

But it seems pretty bizarre, doesn't it?  If I'm being sued for $25,000, and I offer the plaintiff a thousand dollars to go away and the plaintiff refuses...then if the plaintiff only wins $500, then I can get costs of $7500.  Whereas, if I win altogether, I can only get costs of $3750.

Is there a contrary position?

Part of the challenge with Small Claims Court costs is that they're seldom worth fighting over to any significant extent.  How much do you want to pay your lawyer to fight over a couple thousand dollars in legal fees?

Still, I think there may be an answer to the contention that Strasser applies at the Small Claims Court.  The Court in Strasser dealt with other considerations:  In particular, the Superior Court deals with more costs - costs of proceeding from start to finish, rather than the costs of a hearing as at the Small Claims Court - and therefore the language of the Superior Court's equivalent to Rule 14 has a more significant 'timing' element:  Where the defendant serves an offer to settle, and the plaintiff later obtains judgment less favourable than the offer to settle, the plaintiff gets costs up to the date of the offer, which would obviously be absurd if the plaintiff's claim was altogether dismissed.  That's simply not true of representation fees at the Small Claims Court.

Furthermore, there are broad discretionary powers given to the Superior Court in relation to costs, including the power to take into account offers to settle, meaning that the Court can still give consideration to the fact that the successful defendant made an offer to settle, when deciding whether or not to award costs on an elevated scale:  The rules give a successful defendant a different opportunity to seek higher costs.  And that, in fact, happened in Strasser.

The Small Claims Court, by contrast, has very limited discretion to award costs over 15%.  If Rule 14 doesn't apply where a claim is dismissed altogether, then...well, the only other way in would be to argue that other exemptions in s.29 apply.

Further Footnote in Lockrey v. Kay

Deputy Judge Winny noted in Lockrey that "It is sometimes perceived that the Small Claims Court is incapable of hearing multi-day trials on consecutive days.  That perception is inaccurate."  That particular trial was heard over 3 days.

I should look for more of that type of work in Kitchener, if that's the case.  I've been told expressly by staff at other courthouses that they simply will not schedule more than one day for a matter, up front.

In practice, if it requires multiple days, that means that, at the end of the first day, you need to reschedule the second day...but there's a catch:  Deputy Judges are part-time, with certain scheduled sitting days, meaning that you need to get the next open day with the particular judge hearing  your trial.  The last time I had to do that, it was a delay of months.  That's a problem; it means a lawyer needs to spend more time preparing for the second hearing day, re-reviewing documents, and refreshing his or her memory on what happened during the first day of trial (which incidentally also requires preparation of a much more thorough record than would be needed for a consecutive-day trial).  It also changes the presentation of the case, requiring a greater effort to remind the Deputy Judge of the important elements of the case from the previous day.

This has tactical consequences.  I've had multiple matters involving the same parties which, by all rights, should have been heard together, yet ended up proceeding separately because it was a quicker route to a resolution.

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This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.

Resigning and claiming your bonus

One of my most-viewed posts of all time was "How to Quit Your Job", in which, among other things, I cautioned resigning employees that it's better - where possible - to wait until they have their bonus cheque in hand before putting in their resignation letter.

I've been asked before:  I want to put in my notice at the start of the month, but there's a big bonus coming up partway through the month.  Am I still entitled to it?  That's a nuanced area of law, and the answer is always going to be "maybe", perhaps weighted more to one side or another, and so, if you can avoid it, don't take the chance.  Wait, if possible, until after you have the cheque before you put in your notice.  Even if you are entitled to it either way, it's still better to have it first than to have to fight for it.

There's a recent decision from the Small Claims Court dealing with an employee who quit six weeks before his previous year's bonus was to be paid.  The case is Patterson v. Hanson Hardscape Products Inc., decided by Kitchener's Deputy Judge Winny (who is not specifically an employment lawyer, but is no stranger to employment law cases, on both sides of the bench), and litigated by two intermediate-level lawyers from boutique employment law firms.

Part of Patterson's remuneration included an annual bonus, payable in mid-March in respect of the previous year.  The employer's bonus policy stated that the bonus was only payable if he was an 'active employee' as at the bonus payment date.  Unfortunately, Patterson didn't realize that, and so when he resigned in early February of 2012, he was shocked when the employer refused to pay his 2012 bonus, worth just under $24,000.

The issue at trial was whether or not the employer had adequately communicated the restriction on bonus eligibility to Patterson:  The employer relied on a pair of emails which had been sent by an employee in the employer's Texas office who Patterson didn't know, attaching the terms of the bonus plan.  Neither email had any text, neither email identified the position of the sender, neither email indicated the significance of the attachment or gave any instructions relating thereto; they were just mass-mailings with nothing beyond an attachment, in amongst the hundred emails per day Patterson generally received.  The Deputy Judge found that Patterson was not aware of the contents of the policy, and therefore could not be held to the restrictions on eligibility.

Actually, the Deputy Judge went a step further, and appeared to conclude that it was reasonable that Patterson didn't know about the policy, reasonable that he didn't prioritize the no-text email from someone he didn't know over his other hundred emails per day.

I accept that the defendant attempted to communicate the limiting terms of the bonus policy to the plaintiff’s attention by means of these two emails.  But I find that it failed in that attempt because the combination of the method and manner of the putative communication rendered it ineffective.  In the absence of contractual terms providing otherwise, responsibility for such ineffective communication lies with the sender.

Patterson did, however, have actual discussions with his superiors about the bonus, focusing on the targets to be achieved to be eligible for the bonus.  There was no discussion of the policy or the limitations in the policy.  This, fundamentally, is why a contractual entitlement can vest:  He knew that he was eligible to earn a bonus if he met certain targets; he worked to achieve those targets, and succeeded; then he's told that he doesn't get a bonus because he stepped awry of a provision in the policy he didn't know about?  That would be nonsense.

So Patterson won the bonus.  And got costs, too.  But I'm surprised by how modest the costs award was.

Early in the process, Patterson offered to settle for a little over half the amount of the amount he was awarded.  The fact that he did better than his settlement offer means that there's an ostensible doubling of his cost entitlement.  Plaintiff's counsel sought a reasonable representation fee of $3750, doubled to $7500, plus disbursements of $505.  To me, this makes sense.  The case law is reasonably clear at this point that the face-value reasonable representation fee can be doubled, and $3750, for a mid-level lawyer to argue a full-day trial, seems pretty conservative to me.

However, the Deputy Judge concluded that a reasonable representation fee was only $1500.  So he doubled that and added the disbursements, for an overall costs award of only $3505, all-inclusive.

Strictly, the representation fee can likely be interpreted to apply only to the hearing and hearing prep, though.  Rule of thumb:  Each day of hearing takes approximately 1.5-2 days of prep.  This being Kitchener and an intermediate level lawyer, if you assumed a very conservative billing rate of $200 per hour plus HST, then a day-long trial and 1.5 days of prep would be over $4500 (this does not include documentary disclosure and review, settlement conferences, preparing and reviewing pleadings, initial fact-gathering and provision of opinions...the actual hearing is just the tip of the iceberg of legal fees) - so even on a partial indemnity calculation that should come reasonably to $2800.

Lesson for Employers

When you implement a new policy, or apply an existing policy to a new employee, you need to give the policy to the employee, give them an opportunity to read it, and have them sign an acknowledgement of having received it and having read and understood it.  I can provide assistance with this process if necessary.

Lesson for Employees

This issue can be fact-specific.  The fact that Patterson won...doesn't necessarily mean that you will.  The fact that you don't know the details of your bonus policy isn't necessarily going to protect your entitlement to a bonus.

And as much as this is a win for Patterson, it's still probably not as good as if he'd just stuck it out a few more weeks:  He gets his bonus, plus $3505 in costs, but he presumably had to pay a lot more than that to get that result.  And it took a year and a half to get judgment.

So, wherever it's an option, if there's an important bonus date coming up, hold your resignation letter until you get the cheque.

Food for Thought:  What happens if you give notice that carries you past the bonus date, but the employer waives the notice earlier?

This is conceivable:  Let's say your bonus is paid on June 1.  On May 18, you give two weeks' notice.  Your employer then sends you home, and takes the position that, because you weren't actively employed on June 1, you don't get your bonus.

It could well depend on the terms of the contract, and certainly on the specific circumstances, but it would be a difficult argument to make for the employer.  The trouble is that an employer would often be ill-advised to take the position that waiving notice actually terminates the employment relationship, because that may trigger additional obligations for the employer.

Nonetheless, I stand by my quotation from my earlier entry:  Even if you are entitled to it either way, it's still better to have it first than to have to fight for it.

Additional Thoughts:  Is 'active employment' language often void?

This is a thought I've toyed with in a couple of prior entries, such as this one.  It has been held that a bonus which is payable during the statutory notice period, following termination of employment, is payable regardless of 'active employment' language.  I think it's a very small stretch from there to say that language purporting to disentitle an employee to a bonus under those circumstances is void ab initio, regardless of the actual circumstances under which employment ends.

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This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.

Bernier v. Nygard supplement

I posted recently about the Bernier v. Nygard decision, involving a plaintiff who won a summary judgment motion, and was awarded 18 months' pay in lieu of notice, only 7 months into the notice period.

It looks like the parties had some difficulties agreeing on the calculations, and so had to seek the further assistance of the Court.  In particular, the employer argued that there should be a 'present value discount' applied to the amounts yet to be earned.  This is essentially the opposite of interest, and is commonly awarded in personal injury cases where the plaintiff can never work again and so is awarded significant income replacement benefits in a lump sum.

The plaintiff's lawyer (who, as I noted, is an experienced employment lawyer) argued that the damages flowing from a wrongful dismissal are not a 'future debt' in the same sense as a personal injury award; they are immediately owing by virtue of the breach of contract.  I see the logic to the argument - he pointed out that an order of wrongful dismissal damages is not an attempt to force compliance with the implied requirement to give reasonable notice; rather, it is an attempt to compensate for losses because of the breach.  Therefore, it is incorrect to perceive that damages as a 'future debt'.

That much is true.  (Though this is a little confusing, when you bear in mind that after-acquired mitigation earnings can affect the amount owing.)  But the attempt to compensate an employee for the breach means putting the employee into the same position she would have occupied but for the breach, and there's value in getting the money now instead of next year - the lump sum was calculated to account for her full compensation over 18 months, and so receiving money now instead of next year means that she gets to earn interest on the money...and that's a windfall.

Personally, I think there's a better reason why a discount was unnecessary in the circumstances:  Interest on wrongful dismissal awards is often calculated on the whole amount from halfway through the notice period - because the loss accrues incrementally, one would think that interest would start accruing on the first pay cheque as at the first pay day, and so on...but mathematically, because prejudgment interest doesn't compound, that works out the same way.

And this supplementary decision was released just before the halfway point of the notice period.  Granted that the calculations in this case would be a little bit muddier:  On the one hand, the statutory minimums (21.3 weeks salary and benefits) were paid at the outset; on the other hand, the amount of the judgment is weighted toward the front end because no pay in lieu of bonus was included for the last 6 months.

The decisions don't provide quite enough information to run all the numbers, but one can estimate that, if a lump sum were paid today, and if you were to calculate interest on all the late payments and a present value discount on all the early payments, the overall effect on the number would be very small - i.e. a difference of a few hundred dollars, on an award into the hundreds of thousands.

The judge accepted the plaintiff's position and decided against applying a discount.

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This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.

Stranger than Fiction: The Joys of Psychiatric Patients

Here's a fun one:  K. v. B.

(I'm using initials for the sake of some anonymity here; even though the decision is actually published online with full names, I nonetheless feel inclined to exercise a bit of sensitivity here.)

Background

K. has a long history of litigation:  She has commenced a number of actions against the police, the attorney general of Canada, and various doctors and psychiatrists based on a variety of applications.  In dismissing one of her actions, the Court remarked that "The Statement of Claim is incomprehensible.  It appears to stem from alleged experimentation with the plaintiff as a subject, involving the implanting of some unidentifiable device."

In another action against a psychiatrist, she alleged negligence in that, when she explained that her issue was that she had been affected by brain waves and probably had a microchip embedded in her body, he diagnosed her with a psychotic illness, and failed to recognize that the cause of her symptoms was that she was the victim of "psychotronic attacks".  (Some kind of "directed energy" weapons...sigh.  No, I don't make these things up.)  She led evidence from, among others, a hypnotherapist from California, a psychotherapist from New York, and a psychologist from Pennsylvania.  Justice Perell dismissed the action on the purely legal analysis that there was no evidence that the defendant psychiatrist had failed to meet the requisite standard of care in Ontario, and noted that the case was not about "whether...the whole discipline of psychiatry is wrong in disregarding psychotronic weapons as a possible cause of mental disturbances."

Dr. B.

Though she has always been self-represented, it seems that she understood that she needed a supporting opinion from someone qualified to speak to standards of Ontario psychiatrists (as opposed to professionals of other disciplines in other jurisdictions), so she went to see Dr. B. to try to get an opinion from him that the previous psychosis diagnosis was incorrect.  (Incidentally, Dr. B. was one of 1500 Ontario psychiatrists she tried to contact.)  Dr. B. administered some standard psychiatric diagnostic tests, and concluded, consistent with the findings of the previous psychiatrists, that she suffered from a delusional disorder.  Needless to say, she wasn't happy with that result.

Likewise unsurprisingly, the Court dismissed her resulting action against Dr. B.

Commentary

This is a real challenge for the system.  As a lawyer, I get a couple of calls per month from people who have stories which raise questions as to mental health - most frequently involving some large conspiracy of people who are out to destroy them.

I can't assume that a person is delusional.  That is neither my expertise nor my job.  But I'm not about to humour them, either.  The question, "What do you hope that I can do for you?" is an important tool:  One of the common features of these conspiracies involves an inability to identify the conspirators and/or specific actions which would ground legal action.  Which would pretty much tie my hands, even if I were willing to be retained, and assuming that the person had the money to retain me.

But, particularly in more 'accessible' venues, it is very common to see self-represented litigants launching claim after claim against myriad people for perceived wrongs.  It causes the responding parties to hire lawyers and incur costs, and such costs will usually not be recoverable, whether because of the venue, or simply because the plaintiff lacks the resources to satisfy a costs award.

But, while it's a small part of my job, I can't imagine how challenging it would be to make a full career out of dealing with mental illness.

*****

This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.

Summary Judgment Motion Fails for Mitigation Question

The Superior Court recently released a decision on a motion in Anderson v. Cardinal Health Canada Inc., where a dismissed employee sought summary judgment.

Lillian Anderson worked for Cardinal for 22 years until she was dismissed on October 1, 2012.  At the time of her dismissal, she was 55 years old, and her role was that of Accounting Manager.  Her remuneration package was worth nearly $80,000 per year.

There were two reasons the motion failed:  Mitigation, and availability of replacement employment.

Mitigation

This is actually really tricky to understand in the context of a motion for summary judgment.

Ordinarily, there's a reverse-onus on mitigation.  The onus is on the plaintiff to prove dismissal without notice (which in most cases isn't that difficult), and if the defendant employer wants to argue that the plaintiff failed to mitigate, the onus is upon them to prove it on a balance of probabilities.

And it's a really high test:  The employer needs to prove that the employee's efforts to find alternative employment were 'unreasonable in all respects'.  Unless there's something very specific to be pointed to, such as "The employee started his own business" or "The employee spent two months in Europe" or "The employee declined this equivalent job offer", the Courts are very reluctant to second-guess an employee's job search.  When a dismissed employee comes to Court with some meaningful evidence of a job search, that's often going to be sufficient; it's a rare case indeed where the Courts will say "Yes, you looked for a job, but you didn't try hard enough."

So, because the onus is upon the employer to establish this high threshold, it often isn't a big problem for employees.

However, on a motion for summary judgment, there's a different consideration of onus:  There's an onus on the moving party (i.e. Anderson) to prove "that mitigation is not a genuine issue in this case requiring a trial".  Which means that, where the employer is raising mitigation as an issue, the employee is going to need to be able to respond to the employer's evidence in a way that makes it pretty clear that the employer is not going to succeed.

The Court found that she failed to do so.  To be clear:  This is not a finding that she failed to mitigate.  Rather, it's a finding that the interests of justice require a trial of the issue.

Her evidence was that she took courses in writing resumes and cover letters, and in other job search skills, and searched through multiple job resources and applied to 13 jobs in the eight months following termination.

The Defendant pointed out that other cases have involved employees who applied to over sixty jobs in similar time periods.  In my humble opinion, that's a difficult argument to make much out of:  The employee referred to found to have satisfied his obligation to mitigate (meaning that it can't indicate a threshold); the employee referred to was in a completely different type of position (meaning that it can't indicate any meaningful facts about the market), and there's no basis whatsoever for treating this employee as a 'standard'.  Lots of people go above and beyond the minimum requirements for mitigation.  I've had clients who applied for and accepted positions of much less prestige at much lower pay grades, despite that they clearly had no obligation to do so; it would be inappropriate to look to those individuals as an example of a standard to which others should be held.

However, the Defendant also searched through the same sources Anderson had used, and claimed to have found an additional 27 suitable jobs to which she didn't apply.  That could be more compelling, but the judgment reflects an admission that some (it isn't clear how many) involved lower pay grades than what she was receiving at termination.  (The judge doubted the credibility of the employee's explanation that she didn't apply for these jobs because they aren't comparable, because it appeared that she had applied for other jobs that were not comparable.  I think there are problems with that analysis, but I won't go into it right now.)

The judge expressly stated that the "record does not show details about the 13 positions, such as hourly wage, benefits package, work hours, number of direct reports, managerial duties, or required qualifications".  This suggests that there may be a weakness in the evidence.  That being said, for a managerial-level full-time employee, you wouldn't always expect to see details regarding hourly wage and benefits package. and you would almost never see details of work hours or number of direct reports.  At that level, a job ad should have some description of the duties and qualifications required, though.

It's not clear how much detail the employer provided regarding the other 27 positions, either, but from the framing of the judge's description, and the fact that the judge did not herself analyse the nature of the positions, I would infer that they were merely described and/or summarized by an affidavit, without producing the actual job ads.

I have my doubts as to how this issue was addressed:  The judge referred to 'conflicting evidence', but I don't see any on the description of the facts.  The employee applied to 13 jobs.  The details of those 13 jobs aren't clear, one way or another.  The employer found another 27 jobs it thinks she should have applied for.  The details of those 27 jobs aren't clear, either.  But the failure to mitigate, in this context, doesn't altogether turn on the characterization of the 13 jobs for which she did apply; it turns on the 27 jobs for which she didn't apply.  If they're all comparable, then the employee probably needs to provide a reasonable explanation for why she didn't apply to have a chance of succeeding on the motion.  But it's not at all clear to me, and the judge did not find, that the 27 jobs were comparable.  If that's because of deficiencies in the employer's evidence, then that should not hold up a summary judgment.

Still, I have a feeling that the decision is partly informed by the fact that the reasonable notice period isn't over yet.  The employee is seeking a 24-month notice period; the employer is arguing that the appropriate award is somewhere from 12-16 months.  (In the vast majority of cases, you can expect the right answer to fall somewhere between the two positions.)  Right now, we're less than 11 months into the notice period, so judgment would have the effect of relieving her of ongoing duties to mitigate...and given that her efforts thus far appear to have been lukewarm at best, the Court isn't prepared to do that.  Remember my commentary on the Bernier case, where I remarked that the Court might be less willing to give summary judgment partway through the notice period in a borderline mitigation case?

Availability of Replacement Employment

There's some crossover between this issue and mitigation:  How many jobs are out there that are reasonable replacement jobs for the plaintiff?  How qualified is she for the jobs coming up?  How long should her job-hunt reasonably take?

In some ways, I feel that this was a more solid area for the motion to fail:  The plaintiff was under an obligation to lead evidence relating to the Bardal factors, so the failure to lead sufficient particulars on this point is understandably fatal.

On the other hand, I'm not sure I think this should hold up a judgment.  In many cases (including Bernier), availability of replacement employment isn't even remarked upon, because the evidence is almost always weaker and more abstract than the other Bardal factors.  Age is an easily-verified factor, length of service and character of employment are matters between the employer and employee - there's sometimes an issue about them, but they're matters about which the parties have all the relevant facts.  Availability of replacement employment, however, requires the parties to lead evidence about the market, writ large, and without appropriately-qualified experts (which very seldom happens), it amounts to fairly broad and general statements by the parties, often not meeting any real standard of Court-admissible evidence, about their understandings or experience of the applicable job market.  (The number of job postings is only one factor; the number of applicants to such postings is also quite relevant, and there's really no way for the employee to know that in a Court-admissible way.)

"Character of employment" has been described as being of relatively declining importance - the conclusion seems to be rising that it's only important because of the presumptions it raises regarding the availability of replacement employment:  We usually presume that a senior executive will have a harder time finding a new job than a cashier.  This is certainly not true as a universality, and may not even be true as a generality, but it seems to me that the law is moving towards a more practical approach that blends character of employment and availability of replacement employment together.  If the parties can illustrate the availability of replacement employment in a meaningful way, the presumptions arising from character of employment will be less important.  Where availability of replacement employment is in question, it seems to me that character of employment becomes more relevant.

And, quite frankly, when even with employer evidence, there are only 40 relevant job postings that arise in an 8-month period, it suggests against significant availability of employment.  (Though, again, there's a question of how competitive the job market is.)

*****

This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer. 

Another Wrongful Dismissal Claim at Small Claims Court

I recently posted about the difficulties of litigating employment law claims at the Small Claims Court.

There is an interesting recent decision, Pascua v. Khul-Schachter, decided by Deputy Judge Prattas of the Small Claims Court.  It's a pretty good decision, all in all, where the employer was represented by a lawyer and the employee by a paralegal.

The Facts

Pascua was a full-time nanny and live-in caregiver for the employer's two children.  She started August 20, 2009, initially on a three-year term contract, but on November 30, 2010 the parties signed an indefinite term contract (which appears to have been necessary to obtain a renewal of the employee's work visa to stay in Canada).  She was dismissed without notice on September 30, 2011, allegedly for cause, without a reference letter.

The employer took the position that there was just cause, based on two incidents:  On one occasion, the "elevator incident", one of the children got into the building's elevator alone and took it to the ground floor.  Pascua admitted that this happened, and took the position that it happened in late May or June 2011.  The building's security guard testified that it happened after 5:30pm on July 29, 2011.  However, in a previous statement, he had given the time as 4:15pm.  Likely nothing turns on a difference of 75 minutes, but it hurts a witness' credibility to confidently give conflicting evidence.  Added to the fact that Pascua's passport indicated that she was out of the country on July 29, 2011, the Deputy Judge accepted her evidence on the point.

The second incident, the "hallway incident", involved an allegation, which Pascua denied, that on September 30 2011 the employer's husband had come home to find the children unsupervised and crying in the hallway outside the apartment.

Pascua argued that she was terminated because she had become pregnant.

The questions for the Court were these:
(1)  Did the employer have just cause to terminate Pascua's employment?
(2)  If not, what are the appropriate damages?

The Decision - Just Cause

The Deputy Judge doesn't appear to have reached a finding as to whether or not the Hallway Incident occurred, instead content to conclude that the test for just cause wouldn't be made out even if it did.

His reasoning is very much in line with the established case law on the point.

A central concern is the adequacy of the warning after the Elevator Incident.  There was no written warning, and while there was some evidence about a 'discussion' of the incident, the evidence fell short of establishing the clear and unequivocal warning that recurrence would jeopardize continued employment:

31.              I would accept that the elevator incident was serious, but the defendant had to be unambiguous about her intentions. It was not clear from the evidence whether she informed the plaintiff that the incident was unacceptable; or whether she simply expressed her concern to the plaintiff; or whether she delivered any stern warning that if a similar incident were to happen again that the plaintiff would be fired.

32.              In fact, from their conduct the defendant and her husband may have “forgiven” the plaintiff. The defendant testified that she “discussed” this incident with the plaintiff and emphasized to her that the children’s safety was the number one priority. Something which the plaintiff accepted. In his cross–examination the husband testified that he did not investigate the elevator incident and did not inquire as to how it happened or how his child got into the elevator.

33.              In my view, the defendant should have given the plaintiff a clear-cut warning – with no ambiguity – that if a similar incident of concern were to happen again that she would be fired on the spot. The warning has to be actually conveyed to the employee, and the employer cannot simply rely on an impression that the employee may have received it.

Paragraph 33 is a completely accurate statement of the relevant law.  Many employers, especially in smaller or informal environments, hesitate to expressly threaten termination - it seems heavy-handed and likely to exacerbate existing conflicts - but the reality is that in all but the most egregious misconduct the threat needs to be there before you can fire for cause.

The Deputy Judge took the analysis a step further, finding that "real and escalating warnings" were particularly necessary in light of the "special relationship" that forms between a nanny and family living under the same roof.

The Hallway Incident, if it happened, was serious, but as a standalone incident in a long-standing employment relationship, did not constitute cause.  Even together, the two incidents were "not enough to constitute a shattering of the confidence to the parents so as to constitute just cause."

Side Note:  The Practicalities of Warning Live-In Nannies

A family hiring a live-in nanny really needs to have a great deal of trust in the employee, and keeping a disgruntled employee around while building a case for cause is simply not a realistic option in general.  They usually have unrestricted access to the household and many of the valuables in the household, and while I would not suggest that all employees will start plundering when they see the end coming, the truth is that some employees will act badly when the relationship sours, and that isn't a chance that employers should want to take.

However, this is fundamentally about an abundance of caution - firing somebody because they could, or might, act dishonestly, and not because there's any cogent reason to believe that this particular individual would.  With misconduct that isn't inherently dishonest, that general concern will not justify a termination for cause.  If the relationship is souring due to doubts as to the competence or capability of the nanny, but where the nanny hasn't demonstrated any reason to expect dishonesty, then a prudent employer will terminate the employee with pay in lieu of notice.

Damages - Common Law Notice?

As those familiar with my blog or employment law in general will know, there is a presumption of "reasonable notice of termination" at common law, which can be rebutted by clear contractual language, provided that the contractual language complies with applicable employment standards legislation.

The contract included the following language:

The EMPLOYER must give written notice before terminating the contract of the EMPLOYEE. This notice shall be given at least two weeks in advance. The parties agree to abide by provincial/labour/employment standards regarding written notice of termination of employment.

While the Courts aren't entirely consistent with interpreting this kind of language, I largely agree with the Deputy Judge's treatment of it:  The language is ambiguous and shouldn't be enforced.  I might go a step further, though.

When the contract was executed, more than a year into the employment relationship, two weeks was the statutory minimum.  However, being an indefinite term contract, language which purported to limit notice entitlements to two weeks would not be enforceable, because it would be an attempt to contract out of the ESA...though that isn't what this language does.  This language says "at least two weeks" which basically tracks the language of the ESA itself, and doesn't displace the common law.  The second sentence, likewise, is simply an affirmation of employment standards.  The ESA does not displace the presumption of reasonable notice, and so language which simply affirms the ESA will not do so either.  Contract language needs something more:  If, as here, it's framed in terms of the employer's obligations, there needs to be an exclusion of further obligations beyond the ESA.

It's kind of like the 'warning' issue.  As an employer, you can argue until you're blue that it was 'understood' to have the effect you were going for, but unless you've put it down there expressly, it won't fly.

So I agree with the Deputy Judge's decision to award damages based on common law reasonable notice...however, I should highlight a problem with an alternative finding of his:

53.              More importantly, since the defendant in this case served no notice and relied on just cause which I have rejected, this provision is ineffective and cannot be interpreted so as to cap the damages to the detriment of the plaintiff.

Simply put, that is not an accurate statement of the law.  It may be persuasive, given the imbalance of power, that an employer seeking to rely upon a contract should have to show compliance with the contract, but in this context it ignores the first principles of contract law.  The key question is this:  What position would the employee have been put into had the employer complied with its obligations under the contract?  The fact that an employer does not comply with the terms of an otherwise-enforceable written contract does not somehow operate to nullify the written contract and substitute other terms.  In a case of an otherwise enforceable written contract, the contract would be breached, not voided.  And therefore the employee's damages would be calculated on the basis of where they would be had the contract not been breached - i.e. had contractual notice been provided.

However, that's an alternative point made by the Deputy Judge, and in my humble opinion he was nonetheless correct to award common law damages.

He awarded four months pay in lieu of notice, which seems about right to me, but there's a really interesting aspect to the analysis:  The employee had a hard time finding replacement employment, particularly so without a reference letter.

60.              In my view the attempts by the plaintiff to find another job were seriously impeded because of the way her termination of employment was handled by the defendant.

61.              Even though her employment period was just over two years, in my view it would be inadequate to simply give the plaintiff 2.5 months based on the length of service as suggested in the submissions of defendant’s counsel. This approach would unduly emphasize the length of service and under emphasize the availability of similar employment.

62.              Had the defendant given the plaintiff a reference letter and had she terminated the contract without cause, for example, the suggested 2.5 months – or even 3 months – may have been appropriate.

The appellate Courts have sometimes frowned on breaking down the value of certain factors.  Calculation of reasonable notice is really a global assessment, and so it would be incorrect to take from this a valuation of the failure to give a reference letter as 4-6 weeks.  But I think it's an important observation here, because while there's no formal obligation to give a reference letter, it highlights that it is an important step for an employer to take in helping the employee obtain new employment.

Where the Case Starts to Go Wrong

There are a couple of potential problems, however.

Human Rights?

Firstly, while the Deputy Judge notes that the employee claimed to have been dismissed due to pregnancy, he did not dispose of that argument in any way.  The allegation may or may not have been substantiated; the problem is that the Deputy Judge did not accept or reject it.  And that's important, because dismissing an employee due to pregnancy can lead to other damages under the Employment Standards Act or Human Rights Code.

"Wrongful dismissal", in the usual sense, is about breach of contract.  It means that an employer, when lawfully terminating the employment relationship, failed to provide notice required by contract.  And most terminations are lawful:  In a non-union environment, an employer is entitled to terminate an employee for almost any reason, or no reason at all.  As an employer, I can wake up on the wrong side of the bed one morning, decide "I feel like firing someone", and have my employees draw straws to figure out who is going.  It would be bad business, but there's nothing illegal about it, and the employee would be entitled only to notice of termination.

However, there's a reason that I say "almost any reason, or no reason at all".  There are a few reasons for which an employer cannot lawfully terminate an employment relationship, under the Labour Relations Act, the Occupational Health and Safety Act, the Employment Standards Act, and the Human Rights Code.  (Not a comprehensive list, but in the Provincial sphere, that pretty much captures the main ones.)  Firing somebody because they're pregnant would violate both the ESA and the Code.

Either way, the illegality of the termination can give rise to additional damages - it is no longer simply the case that the employer should have given notice; rather, it is the case that the employer should not have terminated the contract at all, and so rather than an estimation of "reasonable notice", it is more appropriate to look at de facto losses.  (My reasonable notice period may have only been 4 months, but if I was actually unemployed for a full year, then I might be able to argue for the full year when the termination itself was unlawful.)

As well, under the Human Rights Code, additional damages are available for injury to feelings, dignity, and self-respect.  The Courts are now empowered by the Code to award these damages.  (Until a few years ago, this was not the case.)

In other words, if there was anything to her allegations that the termination was a result of her pregnancy, the plaintiff may have been seriously shortchanged in terms of damages.

Value of a Month

Secondly, I'm concerned about the calculation of damages.  Pay in lieu of notice is not limited to salary, and it appears that the Deputy Judge took a salary-only approach to damages:

64.              According to the Second Contract the weekly salary of the plaintiff was $410. The amount for the 4 months reasonable notice period would therefore be $6,888 calculated: 410 x 4.2 weeks = 1722 per month x 4 months = 6888.

A domestic worker like Pascua probably isn't getting group health insurance benefits, a company car, pension plan, significant performance bonuses, etc., which is what I'm usually looking for beyond base salary...but likely is getting room and board, and it isn't entirely clear if that value is included in the salary figure.  The Employment Standards Act deems room and board for domestic workers to be worth $85.25 per week, for the purpose of minimum wage calculations.  I might make an argument based on actual damages - if I have to go out and rent a new place at market-value rent for my four month notice period, I'd be arguing for that plus food in terms of common law damages, and on the right facts it would be a pretty sound argument - but at least those deemed wages would be included in wages owing over the notional notice period.

Notice that $410 is $10.25 (the minimum wage) times 40 (the usual hours for a full time contract).  So it may well be that the $410 includes the deemed wages...but even then, there are special rules relating to the wages of residential workers, which aren't discussed at all in the decision, so I can't help but wonder if they were given due consideration and argument.

And finally, I have no idea where the "4.2 weeks" per month comes from.  On average, a month is 4.33 weeks.  The four months following September 30 are closer to 4.4 weeks, on average.  Small difference, though - it only makes a difference of a couple hundred dollars.

Another Interesting Observation:  Conventions of Domestic Servants

In 1931, in a decision in the case of Peidl v. Bonas, the Courts in Saskatchewan upheld a 'common law rule', referencing the 1864 English case of Nicholl v. Greaves, that a dismissed domestic servant is entitled to one month pay in lieu of notice.

Though the 'rule' has occasionally been referred to in other contexts, there is relatively little recent case law actually considering its merits or applicability in 21st-century Canada.

In 2001, the Nova Scotia Court of Appeal summarized the doctrine in Burton v. Howlett, and while they didn't expressly reject it altogether, they expressed serious scepticism about the merits of this 'common law rule'.

Personally, I am unaware of any case law of contemporary relevance which either accepts or expressly rejects the doctrine from Nicholl v. Greaves.  It was not mentioned in the Pascua decision, even though - if it is good law - this probably would have been a case for its application.

That being said, I doubt whether or not it could be held to be enforceable today, and one might reasonably argue that it is, in fact, incompatible with our current employment standards framework.

*****

This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.