Wrongful Dismissal Trends for 2016

One of the last wrongful dismissal decisions of 2015, Drysdale v Panasonic Canada Inc., 2015 ONSC 6878 (“Drysdale”), provides some useful insights into the judicial trends that will likely continue into 2016 when deciding wrongful dismissal actions.

Summary Judgment Motions

Drysdale was decided by way of a summary judgment motion. The use of summary judgment motions to decide wrongful dismissal where the employee was terminated from his or her employment without cause has become the norm in Ontario. A summary judgment motions offers a faster and more cost efficient resolutions of a wrongful dismissal resolution of a wrongful dismissal claim than a trial.

Character of Employment

Another judicial trend in Ontario that picked up speed in 2015 is for the courts to place less emphasis on the character of employee when determining the reasonable notice period for lower skilled employees.

Justice Lederer, in awarding the 58-year-old warehouse ship with 23 years of service a notice period of 22 months, wrote at para. 15 of Drysdale:

The character of the plaintiff’s employment is for the most part one of physical labour. He held a non- managerial position and was responsible along with 30 or 40 other material handlers in moving product in and out of and within the defendant’s warehouse. Of note, is the fact that his hourly wage was $28/hour which would appear to be considerably higher than the wage earned by other shippers in the industry. Even if the plaintiff could be considered a low level unskilled employee, it does not mean that he would necessarily have an easier time finding alternative employment than would a person in a managerial position. It has been held that the character of employment as being one of a rather low level is today a factor of declining relative importance: see DiTomaso v. Crown Metal Packaging Canada LP, 2011 ONCA 469 (CanLII) at paras. 27 and 28.

Other 2015 decisions in which the court held that the character of employment is a factor of declining importance in the Bardal analysis include Arnone v. Best Theratronics Ltd., 2015 ONCA 63 at paragraph 11 and Zoldowski v Strongco Corporation, 2015 ONSC 5485 at paragraph 14.

Mitigation

Drysdale is also instructive of how incredible high a hurdle employers now face if they hope to successfully argue that a dismissed employee’s notice period should be reduced because the employee failed to take reasonable steps to look for new employment to mitigate his or her damages. The employer will likely be required to lead evidence that it actively assisted the employee with his or her job search. Justice Lederer wrote at paragraphs 21 and 22:

Further, the standard for mitigation is reasonableness, not perfection. The plaintiff’s obligation in this regard was not simply to find a job in the industry. He is not expected to pursue low paying jobs simply to find a job but to find a comparable position reasonably adapted to his abilities.

The defendant offered the plaintiff no assistance in searching out these job postings and therefore it does not lie readily in the defendant’s mouth to criticize the plaintiff afterwards for not pursuing these specific job opportunities. As stated by Taylor J. in Maxwell v. United Rentals of Canada Inc., 2015 ONSC 2580 (CanLII) at para. 40 “… if an employer intends to argue the failure to mitigate on the part of the former employee, it would be well advised to present evidence of assistance that was offered to the terminated employee during his or her job search.” Here, the defendant raised the issue of available job postings after the fact and only in the course of this litigation. Prudence would have dictated that the employer make this information available to the employee in a timely way to assist him in his transition.

Awarding Wrongful Dismissal Damages Prior to the Conclusion of the Notice Period

The use of summary judgment motions now means that many wrongful dismissal actions are being decided prior to the conclusion of the notice period awarded to the plaintiff. This raises the question of how to deal with the plaintiff’s ongoing duty to mitigate his or her damages during the balance of the notice period.

To date Ontario courts have not applied a consistent method when dealing with this ongoing obligation. Justice Lederer dealt with the issue as follows at paragraphs 26 and 27:

In some cases, partial summary judgment was given were, as here, the notice period was found to be substantial (for example, Markoulakis v. SNC-Lavalin Inc. 2015 ONSC 1081 (CanLII); Russo v. Kerr Bros. Ltd. 2010 ONSC 6053 (CanLII)). In other cases, the trust approach was taken in circumstances where the employee was relatively young with many years of future employment ahead and eager to get on with his or her career (for example, Paquette v. Terago Networks Inc. 2015 ONSC 4189 (CanLII); Zoldowski v. Strongco Corporation 2015 ONSC 5485 (CanLII)).

Nevertheless, I prefer the trust and accounting approach but structured along the following lines:

(a) The defendant will pay to the plaintiff all monies owing for the respective notice period up to the date of the motion;

(b) The balance of the monies owing for the notice period will be paid to the plaintiff’s counsel in trust. The plaintiff’s counsel will invest the monies into a separate trust account;

(c) The monies will be paid out to the plaintiff in equal monthly instalments in arrears on the 15th day of the following month, subject to any income earned by the plaintiff during each month;

(d) On the last day of each month, the plaintiff’s counsel will be required to deliver to defendant’s counsel a statement indicating whether the Plaintiff has earned any income during that month and if so, how much; and

(e) If income is earned, the amount of the income will be deducted from the amounts held in trust and returned to defendant.