In Munoz v Sierra Systems Group Inc, 2016 BCCA 140, the
B.C. Court of Appeal recently considered a notice award of ten
months for an employee with less than three years'
service. The plaintiff was a skilled IT specialist and was
fluent in Spanish. The defendant recruited him to leave his
job, in order to work almost exclusively with one of its large
clients. As part of this arrangement, the plaintiff elected to
change his compensation from a base salary to an hourly
compensation plan, where he would be paid a higher rate for each
hour billed to the client, but would be "benched" (not
paid) for any time that was unbilled. Months later, the client
chose to stop working with the plaintiff, who was then benched for
the next four months before the defendant gave him notice of
The trial judge made a number of findings in favour of the
plaintiff receiving a long notice period of ten months. The
plaintiff's character of employment involved specialized IT
skills and a client-need for fluency in Spanish, and to that end
the trial judge found that the job prospects for someone with the
plaintiff's specialized skills were "very scarce,"
particularly in light of the plaintiff's absence of work during
his benching. In addition, the trial judge noted the presence
of some inducement in the defendant's recruitment of the
plaintiff and emphasized the existence of non-competition and
non-solicitation clauses in the employment contract. Finally,
because the plaintiff was benched and therefore had no earnings at
the time of his termination, the trial judge assessed his damages
based on his annual earnings in the year immediately preceding his
last day before he was benched.
The Court of Appeal disagreed, finding that the trial judge
erred by using the plaintiff's benching as evidence that
employment opportunities for someone with his skills were very
scarce. The Court of Appeal observed that evidence of a lack
of internal work does not logically support an inference that there
was a lack of comparable external work, and reduced the notice
period from ten months to eight months on this basis. However,
the trial judge's findings that there was some inducement in
the recruiting of the plaintiff and that the plaintiff's
non-solicitation clause made it reasonable for him to have regarded
the defendant's clients as off-limits during his job search
were not overturned. With respect to the calculation of
damages, the Court held that the trial judge erred by using only
the 12 months before the plaintiff was benched. The plaintiff
had agreed to benefit from periods of increased pay and accepted
the risk of periods of without pay, and could not expect to avoid
his part of the bargain by receiving only the higher pay during the
notice period. Therefore, damages were assessed using the 12
months immediately before his notice of termination, which
encompassed eight months of "bountiful work" and four
months on the bench.
Looking forward, while the Court of Appeal's trimming of the
notice period in this case could signal a more rigorous examination
of rising notice entitlements for short service employees, the
award was still significant and did not curb the general
trend. Employers who wish to limit their exposure to longer
notice periods for skilled, short service employees should ensure
that they have well-drafted termination clauses in place, and
consider a provision allowing for restrictive covenants to be
waived when their harm outweighs their benefit.
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
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