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In the recent case of Grealy v. XL Tool Inc., 2025 ONSC 4010, the plaintiff, Mr. Grealy, was awarded only $4,600 after a two-day trial, despite seeking over $91,000 plus punitive damages. Although this case is from Ontario, it highlights the complexities and risks of employment litigation, and serves as a reminder that sometimes, both parties end up with less than expected.
Case Background
Mr. Grealy, a 35-year-old machinist, was employed by XL Tool for just 8 months — three months part-time and five months full-time. After his termination due to a work shortage, he was paid only one week's termination pay. Prior to this, Grealy had left a stable job of 14-years to join the defendant.
Seeking 15 months of notice based on common law, Grealy argued that his decision to leave secure employment was induced by XL Tool. The court, however, disagreed, ruling that there was no inducement, and he was entitled to only 12 weeks of notice, less any mitigation earnings.
Fortunately for Grealy, he secured new employment at a slightly lower rate of pay just three weeks after termination. However, the court offset his earnings during the notice period, further reducing his award.
Outcome
In the end, Grealy received only $4,600—far less than the amount he initially sought. This case illustrates a key lesson in employment law: while a plaintiff might aim for a large payout, the outcome is never guaranteed. The court's decision on inducement was a significant blow to Grealy's case, and his mitigation earnings further reduced his compensation.
Missed Opportunity for Settlement
One of the most striking aspects of this case is the length of the trial, which lasted two days. With legal costs likely exceeding the award, this litigation serves as a reminder of the importance of early settlement discussions. If the parties had settled earlier, they could have avoided the considerable legal fees and time associated with the trial.
Bigger Picture: Short-Term Employees and Notice Periods
Grealy's case is also an example of a broader trend: short-term employees sometimes receive longer notice periods than one might expect. While Grealy had only worked for 8 months with the employer, the court awarded him almost 3 months' notice. This demonstrates that, even for relatively short-term employees, common law principles may still dictate generous notice periods, depending on factors like age, position, and the specifics of the employment relationship.
"Everyone Loses"
In the end, the outcome of this case serves as a reminder that employment litigation is unpredictable, and even if a party "wins," the result may not always justify the costs. Both Grealy and the defendant likely incurred significant legal fees, and the trial ultimately cost far more than the award itself.
The real takeaway here is that early settlement discussions can often provide a more efficient and cost-effective resolution for both parties. Litigation should always be a last resort, especially in employment disputes where both sides may find themselves with less than they bargained for.
Key Takeaways:
- Short-term employees may still be entitled to significant notice periods.
- The risks of litigation are high, with potential costs outweighing the benefits.
- Early settlement should always be considered to avoid excessive legal fees and time spent in court.
For employees and employers alike, it's crucial to understand your rights and options before heading to court—and, when possible, seek a resolution outside the courtroom.
If in doubt about employment law matters, feel free to contact us for an initial consultation.
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