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WRONGFUL DISMISSAL DAMAGES - Occupation - Professional - Notice period

Thursday, July 29, 2021 @ 6:34 AM  

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Remand from the Supreme Court of Canada regarding the award of damages to the respondent in his wrongful dismissal action against his employer, the appellant RBC Dominion. At trial, RBC conceded it terminated the respondent’s employment without cause in 2014. The trial judge found the respondent was entitled to 18 months’ notice. During his employment, the respondent participated in a profit-sharing plan called a carried interest plan. The funds under the plan were wound up after the respondent’s termination. The trial judge awarded the respondent $953,392 for the lost opportunity to earn entitlements under the plan during the notice period and $190,789 in respect of the respondent’s share of investment proceeds under the plan from 2005 to 2013. The Court of Appeal allowed RBC’s appeal regarding the damages award in respect of the incentive plan. The Supreme Court of Canada remanded the case back to the Court of Appeal for disposition in accordance with Matthews v. Ocean Nutrition Canada Ltd.

HELD: The original decision was affirmed. There was no evidence that would enable the determination of whether deferring the process of winding up the funds to the end of the notice period would have resulted in a higher payout to the respondent. The “carried interest” plan clearly did not entitle participants, including the respondent, to annual payments. The respondent was seeking to fundamentally alter the character of his common law, fund-specific entitlement to incentive compensation into a notional annual or annualized entitlement. The terms of the respondent’s employment contract did not entitle him to receive an annual incentive payment. During his notice period, the respondent was only entitled to receive a fund-specific incentive payment upon the end of a fund’s investment. RBC paid the respondent that to which he was entitled at common law. The trial judge erred in concluding otherwise. Dissenting reasons were provided.

Manastersky v. Royal Bank of Canada, [2021] O.J. No. 3461, Ontario Court of Appeal, K.N. Feldman, D.M. Brown and B. Miller JJ.A., June 24, 2021. Digest No. TLD-July262021007