Sunday, 15 November 2020

Dismissed “Vice President” Awarded Just Two Months Pay in Lieu of Notice – Despite Title, COVID-19 Pandemic

Is the title “Vice President” sufficient to move the needle in the calculation of reasonable notice?

In George v. Laurentian Bank Securities Inc., 2020 ONSC 5415 (CanLII), counsel for the dismissed employee urged the court to find that there is a presumption at common law that senior management or executives who are wrongfully dismissed are entitled to a minimum of 12 months’ notice irrespective of the length of service. He cited Mulrooney v Terra Nova Brokers Ltd., CanLII 3970 (NL CA), Felice v. Cardinal Health Canada Inc. 2014 ONSC 1190 (CanLII) and Lovely v. Prestige travel Ltd., 2013 ABQB 467 (CanLII), for this proposition.

For reasons given and summarized below, the Honourable Madam Justice Susan Vella of the Ontario Superior Court of Justice disagreed – awarding only two months’ pay in lieu of reasonable notice or $11,359.98 gross of taxation.

Facts

The case proceeded by way of motion for summary judgment. The relevant factors for determining reasonable notice were stipulated by the defendant employer:

  1. Mr. George was hired on November 5, 2018 pursuant to a contract of indefinite hire;
  2. Mr. George’s title was “Vice President, Equity Trading”;
  3. Mr. George’s salary (gross) was $100,000 per annum;
  4. Laurentian Bank paid $325.14 per month in benefits on behalf of Mr. George;
  5. Mr. George was eligible to participate in an Equity bonus pool if he met certain criteria;
  6. Mr. George was dismissed without cause by Laurentian Bank on March 26, 2019 at the age of 58;
  7. At the time of termination, Laurentian Bank paid Mr. George $5,769.23 which is the equivalent of three weeks’ pay in lieu of notice, plus 2.5 weeks of benefit continuation ($187.73).
  • Somewhat unusual for cases considered by this blog, no mention was made of an employment agreement – this was a straightforward notice case.

    Although Justice Vella made express reference that “at the time of the hearing of this motion, Ontario continued to be coping with the economic realities of COVID-19” no further reference is made to such fact in the court’s reasons for decision.

    As noted in the introduction to this post, on the hearing of the motion Mr. George’s lawyer urged the court to find that there is a presumption at common law that senior management or executives who are wrongfully dismissed are entitled to a minimum of 12 months’ noticeirrespective of the length of service.

    Decision of the Ontario Superior Court

    In awarding Mr. George only two months’ pay in lieu of notice, Justice Vella provided the following reasons for decision:

    [14] Based on the largely uncontested evidence, I find that Mr. George was neither a senior manager nor executive within the meaning of the caselaw for several reasons including:

    1. he did not have any role in supervising coworkers in his department;
    2. he was not responsible for the oversight or strategic decision making in his department;
    3. all employees in the Equity Trading division held the title of “Vice President, Equity Trading” in order to give the employees clout when dealing with Laurentian Bank’s institutional clients, not to denote senior management or executive positions within the bank;
    4. Mr. George was not part of Laurentian Bank’s Executive Team. Mr. George reported to the Director within the Equity Trading department and was 3 levels removed from the executive team level.

    [14] Mr. George’s primary duties were to develop business, establish and manage relationships with existing and new institutional clients, and execute equity transactions and trading strategies to generate trade flow and deepen the Laurentian Bank’s reach in Canada.

    [15] Mr. George placed much stock in the fact that his title, Vice President Equity Trading, was sufficient to satisfy the characterization of his position as being at the senior management or executive level. However, the title, in this case, is not sufficient in and of itself to warrant that characterization in light of what his role and responsibilities actually entailed.

    [16] In applying the Bardal factors to the facts of this matter, I find that Mr. George’s age is a factor that warrants particular attention. At the age of 58, Mr. George’s job opportunities are less promising than for a younger person with his experience, training and qualifications, as might be suggested by his inability to obtain new employment over the past 15 months.

    [17] Laurentian Bank submitted that courts, when assessing the adequacy of the notice period provided, must first determine whether or not the employer’s severance arrangements were fair and reasonable. If they were, then courts should not interfere with the result; Perry v. Gulf Minerals Ltd., [1985] O.J. No. 1041 (Ont. H.C.). However, I find that providing Mr. George with three weeks’ pay, 2.5 weeks’ continuation of benefits, and no letter of reference and/or outplacement counselling assistance (despite requests for same) was unfair and unreasonable in the circumstances of this case.

    [18] Much of the caselaw relied upon by the parties is not of particular assistance to determining the reasonable length of notice in this case where the terminated employee is in his late 50’s and worked less than a year. The closest case provided to me was Asgari v. 975866 Ontario Ltd.. That wrongful dismissal case considered a situation in which the (younger) employee was terminated without cause after approximately 13 months employment. was awarded 3 months’ pay in lieu of notice.

    [19] In applying the Bardal factors to the particular facts of this case, I find that the reasonable notice period to be 2 months.

    Commentary

    The first observation to make is that the saying that “you can’t judge a book by its cover” translates well into the world of employment law, whereby you can’t judge an employee’s character of employment solely by his title. In a world where everyone is a “Vice President” no such Vice President can properly be labelled a "senior manager" or "executive."

    The second thing to revisit is the fact apparently the COVID-19 pandemic played no part in the court’s assessment of the reasonable notice period, despite same being acknowledged by the court, which heard the motion on July 7, 2020 and issued its decision on September 10, 2020.

    What the case demonstrates is that calculating reasonable notice is an art – not a science. There is no mathematical formula by which same can be calculated and there is never any telling what any one particular judge will do with a fact pattern and set of arguments. Litigation always bears risk.

    --

    As always, everyone’s situation is different. The above is not intended to be legal advice for any particular situation. It is always prudent to seek professional legal advice before making any decisions with respect to your own case.

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