In yet another summary judgment wrongful dismissal ruling, the
Ontario Court of Justice has determined that the time of year when
a dismissal occurs, may result in a greater notice period.
Mr. Justice Sean Dunphy's decision summarizes the
party's positions neatly:
plaintiff's position is that he was induced to leave a secure,
long-term position at another firm to accept employment with the
defendant and, as such, the period of reasonable notice ought to
have regard to that fact. In addition, he participated in an
executive bonus program with the defendant and seeks compensation
for the amount of bonus he alleges was accrued to the date of his
termination as well as any bonus amounts that might have accrued
during a reasonable notice period since bonus entitlement was an
integral part of his compensation package. The plaintiff
claims twelve months would be a reasonable notice period in the
defendant disputes the characterization of the hiring process as
constituting inducement of any kind and takes the position that its
bonus program was entirely discretionary, payable only to active
senior employees at the time of assessment and award of bonus each
year (February) and in the circumstances of this case, no amount of
bonus would be payable to the plaintiff whether for his period of
actual employment in 2014 or for any reasonable notice period
thereafter. The defendant had offered to pay three
month's salary to the plaintiff on termination of his
employment in return for a release which proposal was rejected by
the plaintiff before the commencement of litigation.
Although the employment agreement was silent on inducement, and
therefore vulnerable, the Court held that, on the facts, the
employer should not be liable for a notice period inclusive of the
plaintiff's prior work elsewhere. The employer prevailed
also on the question of whether a discretionary bonus –
normally not paid where a person left employment before the bonus
period ended – had to be included in the notice period:
Neither the discretionary nature of this bonus program, the past
history of its application within this company nor Mr. Fraser's
own employment history would have given him any reasonable basis to
expect that he was eligible for bonus for a partial year were his
employment to be terminated during the year. There is
no basis in the relationship between the parties or the application
of the bonus program in the past to infer an understanding that
bonus entitlements accrued to the level of a contractual
entitlement to any amount prior to the annual review process.
However, after removing inducement and bonus elements from the
notice period, the Court then ventured into the interesting
question of whether the time of year, when dismissal occurred,
could affect what constituted reasonable notice.
Noting that notice is intended to enable an individual to find
work, the Court said that being fired at the outset of summer made
it much more difficult to land an appropriate job in the weeks
immediately following discharge:
I find that for a man of Mr. Fraser's age and level of
responsibility but relatively short years of service, I must also
account for the time of year when his employment was terminated in
assessing reasonable notice. Mr. Fraser's employment was
terminated in June and it was quite foreseeable that hiring
decisions at his level might have needed to be delayed somewhat due
to the summer months in order to account for vacation schedules of
key decision-makers. While his term of service might normally
suggest a relatively shorter period of notice, timing plays a
bigger role where notice is short. While timing in fact was
no impediment in this case (Mr. Fraser having found new employment
by August), that is a conclusion enabled by hindsight.
The Fraser v Canerector case offers useful guidance on
the questions of inducement and discretionary bonuses, and novel
direction about timing a termination.
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