The courts have dealt with another case involving Canac Kitchens termination of its employees as a result of a slowdown and subsequent cessation of the business in Ontario.  In this action the Plaintiff, Mr. Contreras was 49 years of age.  He was 46 at the time he was terminated and had been with Canac for 30 years.  He remained on unemployment since his termination.  There are several important issues to be dealt with in this case that are often questions asked by clients.  They are as follows:

1. What was the period of reasonable notice for Mr. Contreras?
2. Did he take reasonable steps to mitigate his damages (find another job)?
3. Are the long-term disability benefits that he received for his termination deductible upon any severance?
4. Was he entitled to a pay increase or bonus during the notice period?
5. Did Cancac properly deduct $1,700.00 from his vacation pay at the time of his termination?
6. Was he entitled to vacation pay during the notice period?
7. Was he entitled to overtime compensation during the notice period?
8. What compensation should Mr. Contreras receive for benefits during the notice period?

It is important to note that Mr. Contreras had injured himself twice during the period of employment before his termination.  He was out once for 5 months because of injuries sustained in a car accident and once for 9 months because of a slip and fall accident.  He would return to accommodated duties and he was terminated soon after.

At the time of termination he was offered 9 months payment in lieu of notice which he did not accept.  He began litigation.

With respect to reasonable notice, Mr. Contreras submitted based on past Canac decisions that he was entitled between 18 and 21 months reasonable notice.  The Judge went through the 4 cases which dealt with terminations of supervisors at Canac.  One case dealt with a supervisor that was 46 and had been with the company for 17.5 years.  He was awarded 17.5 months.  The second dealt with a supervisor that was 59 years and was terminated after 19.25 years of service.  He was entitled to 18 months.  The third dealt with a supervisor that was 52 and was terminated after 21 years of service.  He was entitled to 21 months.  The last supervisor was 43 at the time of termination and had 27.5 years of service.  He was entitled to 26 months of notice.

The Judge advised that Mr. Contreras was 46 at the time he was terminated, and he was with Canac for 20 years.  He was a supervisor.  Although he had been performing modified duties for 9 months prior to his termination, the Judge still found he was a supervisor.  Having regard to his position of employment, his age and his years of service, and his prospects for re-employment, which were not great in the current economy and job market, the Judge awarded him 18 months.

With respect to mitigation, the Judge was not prepared to find that Mr. Contreras failed to mitigate his damages.  He applied to other jobs but this issue rested on Canac failing to meet its onus to establish that Mr. Contreras failed to make reasonable steps to mitigate.  It is important to note that it is up to the Defendant lawyer to prove this part of the case.

With respect to the long-term disability benefits, the Judge went through several key cases including Supreme Court of Canada cases.  He was of the view that the long-term disability that Mr. Contreras received for his injuries, should not be deducted from the amount that Canac was required to pay in lieu of notice.  The Judge based his decision on several cases.  The seminal case of Sylvester v. British Columbia where the court held that in certain circumstances, where an employee was dismissed while not working but receiving disability benefits which had been paid for by the employer, it was inconsistent for the employee to receive both disability benefits and wrongful damages under the employment contract.  It was a double recovery that wasn’t seen well.

Following Sylvester v. British Columbia, the issue of an employer was relieved from its obligation to pay damages for wrongful dismissal had been considered by the Court of Appeal.  There are a few cases that found that Sylvester v. British Columbia did not stand for the proposition that an employer was relieved from its obligation to pay damages from dismissal by virtue of the existence of the disability plan.  It merely provides that disability benefits are deductible from damages in certain circumstances.  The question of deductibility is to be decided based on the terms of the employment contract and the intention of the parties.  In this case the Judge felt there was no evidence or express provision on the employment agreement preventing double recovery.

With respect to increases in salary or bonuses during the notice period, the Judge found that Mr. Contreras was not entitled to receive any amounts on account of a bonus prior to the termination or during the notice period.

With respect to vacation pay, the Judge found that there was no evidence before him as to what the terms of employment were with respect to the entitlement of vacation pay.  In fact Mr. Contreras received vacation pay over and above his salary according to Canac’s records.  In short, Mr. Contreras was not entitled to claim repayment of $1,776.01 deducted by Canac.

With respect to overtime, the Judge found that Mr. Contreras had consistent overtime.  He went through the 2005, 2006, and 2007 overtime records and he found that Mr. Contreras should be entitled to receive $4,500.00 in respect of overtime to be calculated on a prorated basis to the notice period.

With respect to out-of-pocket expenses, the Judge found that Mr. Contreras was entitled to $810.00 for a dental bill, drug bill and physiotherapy bill.

Therefore the Plaintiff was entitled to 18 months based on his salary of $58,300 plus $6,750 on account of overtime ($4,500 ÷12 x18) for a total of $94,250.  From that sum was deducted ESA payment of $31,615.58 which was paid to Canac immediately upon termination.  The amount owing was approximately $62,000.00 plus incidentals discussed above.

This case is good to read and contains a numerous amount of issues that are often dealt with by employment lawyers.  If you have any questions, please do not hesitate to contact Matt Lalande at matt.lalande@haber-lawyer.com or (905)-639-8894.  This is not legal advice.  We are not your lawyers unless a formal retainer has been executed.