Top courts threaten feds with legal action over new IT rules

Top courts threaten feds with legal action over new IT rules

December 31, 2007

Toronto labour and employment lawyer John De Vellis says a recent summary judgment motion in a wrongful dismissal action highlights the increasing trend of wrongful dismissal actions being decided prior to the conclusion of the notice period awarded to the plaintiff.

“The Supreme Court has made it easier to obtain summary judgment, which means that cases may be getting to court before the expiry of the notice period,” says De Vellis, a partner with Shibley Righton LLP. “In the past, if you had a wrongful dismissal action, by the time you actually got to court chances are the notice period had already expired.”

In Drysdale v. Panasonic Canada Inc., 2015 ONSC 6878 (CanLII), plaintiff Charles Drysdale brought a motion for summary judgment against his former employer to fix the appropriate notice period in his action for wrongful dismissal. Drysdale, a shipper who worked at a warehouse, was seeking the equivalent to 22 months’ payment in lieu of notice.

His former employer, Panasonic Canada, took the position that the motion was not appropriate for summary judgment because it raised issues with respect to mitigation efforts that can’t be resolved adequately based on the available evidence.

In the alternative, Panasonic argued the notice period sought by Drysdale was excessive and that an appropriate reasonable notice period would be in the range of 10-14 months. Further, Panasonic claimed Drysdale was terminated from employment in an industry where alternate employment is readily available but he failed to take reasonable steps to mitigate his loss and thus, the notice period should be reduced accordingly or the action dismissed.

At the time of termination, Drysdale was 58 years old and had worked for the defendant for almost 23 years.

In dismissing Panasonic’s position and finding in favour of the defendant, Justice Sidney N. Lederman stated it was appropriate to have the matter decided summarily in accordance with the directions provided by the Supreme Court of Canada in Hryniak v. Mauldin.

As well, taking into consideration the plaintiff’s age, length of service, level of compensation, and jurisprudence where the circumstances were similar, Lederman found the appropriate notice period to be 22 months. He concluded that the defendant did not discharge its burden and the plaintiff has taken ample steps to mitigate his loss.

In terms of damages, Lederman took a trust and accounting approach but structured it along the following lines:

“(a) The defendant will pay to the plaintiff all monies owing for the respective notice period up to the date of the motion; (b) The balance of the monies owing for the notice period will be paid to the plaintiff’s counsel in trust. The plaintiff’s counsel will invest the monies into a separate trust account; (c) The monies will be paid out to the plaintiff in equal monthly installments in arrears on the 15th day of the following month, subject to any income earned by the plaintiff during each month; (d) On the last day of each month, the plaintiff’s counsel will be required to deliver to defendant’s counsel a statement indicating whether the plaintiff has earned any income during that month and if so, how much; and (e) If income is earned, the amount of the income will be deducted from the amounts held in trust and returned to defendant," the decision states.

De Vellis tells AdvocateDaily.com the judge took an interesting approach to damages, which could be part of a developing trend.“The approach the judge took is essentially the same approach that parties often take when they settle out of court before the notice period has expired — i.e. the court built in a mechanism to deal with potential earnings during the remaining notice period," he says. "But the way the judge did it, making the plaintiff's lawyer the custodian of the funds, will create ongoing costs for both sides.

"It would be interesting to know whether the parties followed the court's order or subsequently agreed to some other arrangement," he says.