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WRONGFUL DISMISSAL - Dismissal without cause - Reasonable notice period or wages in lieu

Friday, August 02, 2019 @ 6:27 AM  


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Appeal by the defendant employer from the summary judgment in the respondent’s wrongful dismissal action. The 66-year-old respondent was employed as a senior vice president with the appellant. After 37 years, the respondent was terminated without cause following a minor dispute about the purchase and use of promotional sporting event tickets. In 2015, the respondent’s base salary was $249,000 and his 2014 bonus was $379,585. The appellant’s bonus plans contained a termination provision that substantially limited employees’ bonus entitlements if terminated. The respondent was paid eight weeks in lieu of notice and 26 weeks of severance pay. The motion judge found 30 months was the appropriate notice period and found the respondent was entitled to bonus payments over that period.

HELD: Appeal allowed in part. There were no exceptional circumstances that warranted a notice period longer than 24 months. The bonuses were an integral part of the respondent’s compensation package. The respondent was entitled to bonus payments during the notice period. The termination provision was not ambiguous, but it was unenforceable because it was imposed unilaterally and not brought to the respondent’s attention by the appellant at any time before his termination.

Dawe v. Equitable Life Insurance Co. of Canada, [2019] O.J. No. 3217, Ontario Court of Appeal, S.E. Pepall, G.T. Trotter and A.L. Harvison Young JJ.A., June 19, 2019. Digest No. TLD-July292019011