Jun 1, 2019

BLANEY’S APPEALS: ONTARIO COURT OF APPEAL SUMMARIES (MAY 27 – 31, 2019)

Ariss v. NORR Limited Architects & Engineers, 2019 ONCA 449 (CanLII)

[Juriansz, Brown and Roberts JJ.A.]

COUNSEL:

A. Miller, for the appellant

A. Formosa & C. Steven, for the respondent

FACTS:

The appellant is an architect. In 1986, he commenced work for an architecture firm, which was later purchased by the respondents, NORR Limited Architects & Engineers (“NORR”)in 2002. The appellant worked continuously for the firm from 1986 until 2002 when he was dismissed as a result of the sale to the respondents, but was re-hired by the respondents the same day.

In 2006, the appellant wanted to increase his weekly hours. A new employment contract was signed to reflect this change and to increase his wages. Attached to this contract, and undoubtedly agreed to by the appellant, was “Pay Code 3”. Pay Code 3 was a document that provided that notice of termination without cause and severance pay would be determined exclusively with reference to the Employment Standards Act, 2000, S.O. 2000, c. 41 (“ESA”), and provided a chart outlining the weeks’ notice and severance pay an employee was entitled to, based on years of service.

In 2013, the appellant wanted to transition to part-time employment. After a series of negotiations, NORR reluctantly agreed to allow him to transition to part-time work. However, their acceptance was contingent upon the appellant first resigning his position, and then being re-hired as a part-time employee. He would also have to waive his right to notice and severance pay for all his previous years of service. After seeking legal advice, the appellant accepted this offer and commenced his part-time employment.

In January of 2016, the appellant’s employment was terminated on 3.5 weeks’ notice with no severance pay. The appellant brought an action for wrongful dismissal based on NORR’s failure to give him common law notice.

On NORR’s summary judgment motion, the judge determined that the resignation and rehiring in 2013 was ineffective, as it would represent “an entirely artificial attempt to create an interruption in employment when in fact there was none”. Instead, she found the events in 2013 to be an amendment to the 2006 agreement. She determined that the appellant had been continuously employed since 1986, and so was entitled to the maximum of 8 weeks’ notice provided in the ESA. The motion judge also found that the appellant had waived his common law right to notice in 2006, as the terms in Pay Code 3 were sufficiently clear and lacking any ambiguity so as to warrant judicial intervention in their application.

The appellant appealed on the ground that 2013 agreement was unenforceable. NORR cross-appealed on the ground that the appellant failed to mitigate his losses.

ISSUES:

(1) Did the motion judge err in finding that “the events in 2013” served to amend his 2006 agreement of employment such that he was still bound by his 2006 waiver of his common law reasonable notice entitlement?

(2) If so, was there consideration for the new terms?

(3) Did the appellant fail to mitigate his damages?

HOLDING:

Appeal and cross-appeal dismissed.

REASONING:

(1) No. The Court deferred to the motion judge’s factual finding that there was no resignation in 2013, and therefore no new agreement. Under ss. 5(1) and 9(1) of the ESA, the agreement in 2013 was an invalid attempt to create a break in an employment relationship when there never was one. Subsection 5(1) invalidates attempts to contract out of minimum protective standards in the ESA, including the 2016 agreement in this case. The 2013 agreement simply served to amend the 2006 agreement to reflect his change from full-time to part-time work, such that the appellant’s waiver of common law reasonable notice was still valid and active.

Machtinger v HOJ Industries Ltd, [1992] 1 S.C.R. 986 laid out that absent a clear rebuttal to the contrary, employees are to be afforded the common law standard of reasonable notice. However, in this case, Pay Code 3 was a very clear and unequivocal waiver of this right. It laid out exactly what notice the appellant could expect based on his years of service. At all times, he was aware that his termination rights were the minimums provided under the ESA.

(2) Yes. The Court dismissed this argument fairly quickly. Both the 2006 and 2013 amendments were made at the request of the appellant. In 2006 he wanted to work more hours, and in 2013 he wanted to scale those hours back. In 2013, his hourly wage was kept the same as when he was a full-time employee. Many benefits accrued to Mr. Ariss under both the 2006 and 2013 agreements and so sufficient consideration is easily established.

(3) No. While it was not in dispute that a terminated employee must make reasonable efforts to find a new job and thus mitigate their losses, consideration of the factual context must guide the finding of ‘reasonable’. In Carter v. 1657593 Ontario Inc., 2015 ONCA 0823, the Court stated that a terminated employee must seek to find ‘comparable employment’, having regard to status, hours and remuneration. The appellant canvassed the area in which he lived and attempted to find a new job. A terminated employee is not required “to uproot himself far from home in order to pursue any possible employment opportunity”. In this case, the appellant made reasonable attempts to find new employment