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EMPLOYMENT STANDARDS LEGISLATION - Contracting out

Wednesday, February 05, 2020 @ 6:25 AM  


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Appeal by the defendant, St. Joseph Communications (St. Joseph), from summary judgment. The plaintiff, Karen Cormier, worked for St. Joseph as a wardrobe stylist and then fashion studio manager for 23 years until she was dismissed without cause. She brought an action seeking damages for wrongful dismissal and sought reimbursement for amounts deducted from her wages while she was still employed. Cormier brought a motion for summary judgment. The motion judge found that the termination clause in the employment agreement was void because it attempted to contract out of the minimum standards provided for under s. 5 of the Employment Standards Act. He granted summary judgment in favour of Cormier and awarded her 21 months' pay in lieu of notice, 10 per cent of her base salary for loss of benefits, and $2,373 owing under her cellphone allowance, less any amounts that had been paid to date. The judge also held that St. Joseph made unlawful deductions from Cormier's wages beginning in 2016, contrary to s. 13 of the Act, and awarded her compensation for the lost wages. On appeal, St. Joseph argued that it was not an appropriate cause for summary judgment because there were material facts in dispute and credibility was in issue. St. Joseph also claimed that the judge erred in concluding that Cormier was a dependent contractor from 1994 to 2004. St. Joseph suggested that the judge erred in finding that the termination clause in the employment agreement was unenforceable and in calculating the amount of damages based on the duration of employment.

HELD: Appeal dismissed. It was an appropriate case for summary judgment. There were only two factual issues in dispute which turned largely on non-disputed facts. The remaining issues were focused on contractual and statutory interpretation. There was no error in the motion judge's conclusions that there were no significant issues of credibility to be determined and that the quality and the quantity of the record would not appreciably change at trial. The pleadings were clear as to what was being claimed. The judge’s conclusion that Cormier was not a dependent contractor was correct. The judge clearly concluded that she was not only in an exclusive relationship with St. Joseph but an economically dependent one. The judge did not err in calculating the damages for wrongful dismissal. Considering Cormier’s 23-year work history, 21 months of common law notice was reasonable. St. Joseph’s contribution to benefits could not reduce the typical percentage of base salary awarded in lieu of benefits during the notice period. There was no error in the judge's approach towards cell phone expenses. The judge did not err by concluding that the employment agreement was unenforceable. The termination clause allowed St. Joseph to provide Cormier with only some of the employee benefits she received before termination and even then, only subject to the consent of St. Joseph's insurers. That constituted contracting out of and fell short of the benefit protections under the Act. There was no error in the judge's conclusion that St. Joseph's conduct in making wrongful deductions from Cormier's wages breached s. 13(1) of the Act. Cormier did not authorize the reductions in writing.

Cormier v. 1772887 Ontario Ltd. (c.o.b. St. Joseph Communications), [2019] O.J. No. 6189, Ontario Court of Appeal, K.N. Feldman, J.M. Fairburn and M. Jamal JJ.A., December 6, 2019. Digest No. TLD-February32020006