We wrote last week about court disagreements, regarding how to interpret the Ontario Infectious Disease Emergency Leave (IDEL), which temporarily changed the Employment Standards Act (ESA). What we determined was that the courts can make different decisions based on similar facts and statutes, particularly when they address new issues or legislation, as they are currently with various issues related to the pandemic. This week, we have yet another example of courts arriving at different rulings in cases that are similar in fact. This time, the issue concerns reasonable notice in light of the Canada Emergency Response Benefit (CERB). In a decision released months ago, Iriotakis v. Peninsula Employment Services Limited (Iriotakis), an Ontario court ruled that any CERB benefit the employee received should not reduce the employee’s entitlement to damages in lieu of reasonable notice. However, a new case has been released, this time in British Columbia, with a different result. Let’s have a closer look at this new case.
Employee Seeks Damages for Wrongful Dismissal
In Hogan v 1187938 B.C. Ltd., the employee had worked for the employer, an automotive dealership, since the late 1990’s. He had initially been employed as a technician mechanic. The employer promoted him to service advisor ten years later. Afterwards, the employer promoted him to assistant service manager. The employer’s business was substantially affected by the COVID-19 pandemic. Its business dropped substantially from March 2020, with all but essential appointments being cancelled, mostly by customers.
The employer issued a temporary layoff notice to the employee. The employer also temporarily laid off other employees. All parties thought this was only a temporary layoff at the time.
The employer informed the employee, five months after the initial temporary layoff, that the termination would be permanent. The employer provided the employee with termination pay and the employee brought a claim for wrongful dismissal. The employee took steps to mitigate his losses by seeking alternative employment, however, he was unsuccessful. The employee received Employment Insurance (EI) benefits in the amount of $3,459. He also received CERB benefits in the amount of $14,000.
The General Manager (GM) of the employer was prepared to offer the employee the position of service advisor during the pandemic. This was conditional on the settlement of the employee’s action. In addition to the job offer, the employer was also prepared to make payments to the employee. The employee did not accept the job, because it was conditional on settling the litigation. The employee also believed that this offer constituted a significant demotion from his previous role.
Court Grapples with Whether to Deduct the CERB Benefit from the Total Damages Awarded
The Supreme Court of British Columbia found in favour of the employee, awarding him 22 months’ notice. The Court considered the Iriotakis case in deciding whether or not to deduct the CERB benefits from the damages award. What the Court found that there were some differences between the Ontario case and the current case. Those differences warranted that the $14,000 CERB be deducted from the employee’s final award.
First, there was a difference in service periods between the current case and Iriotakis. In Iriotakis, the employee was terminated after only 28 months service. The Court found that the reasonable amount of notice was three months. In Iriotakis, there was a disparity between the payments and the employee’s loss of salary and significant loss of commission. The Ontario court found it would not be equitable to reduce his entitlement to damages by the CERB payments. The employee’s lost wages award was also reduced by more than half. This was due to the employment contract. For the employee, retaining the CERB payments would not have put him in a better economic position than he would have been but for the breach.
In the current case, the employee’s damages per month were based on the income the employee would have earned if he had continued to work during the reasonable notice period. So, the employee will be compensated for the income lost. He also did not suffer additional losses due to a commission. Here then, there was a large disparity between the employee’s actual loss and the amount of damages to which he was entitled. In this case, if the employee’s CERB payments were not deducted, the employee would be in a better economic condition than he would have been otherwise.
The Court concluded that there was no basis to depart from the general rule that contract damages should place the plaintiff in the economic position he would have been in had the defendant performed the contract.
Courts will often tailor their judgment based on the specific facts of a case. Even where two cases are similar, some differences can result in two different outcomes, as can be seen from these cases.
Contact Toronto Employment Lawyers Grosman Gale Fletcher Hopkins LLP for Assistance with Terminations During COVID-19
For advice on wrongful dismissal disputes, termination letters and other employment or labour law matters, contact the offices of Toronto employment lawyers Grosman Gale Fletcher Hopkins LLP. We regularly advise workplace parties on a wide range of legal workplace issues. Contact us online or by phone at 416-364-9599 to schedule a consultation.
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