When Ontario courts assess whether an employee has been wrongfully dismissed, they often start by referencing the 1960 decision of Bardal v. Globe & Mail Ltd., 1960 CanLII 294 (ON SC).
Bardal directs courts to consider several factors specific to the employee when determining appropriate severance, including: 1) character of the employment; 2) length of service; 3) age at the time of termination; and 4) availability of similar employment.
In this article, we are principally concerned with the first Bardal factor: character of employment. As the name implies, character of employment focuses on the position held by the worker at the time of dismissal, as demonstrated by their specific duties and job title.
Character of Employment: The Two-Tier System
Ontario courts operated for many years on the (often implicit) premise that the more skilled, and/or managerial, the position held by the worker, the greater the notice of dismissal they ought to receive. Conversely, unskilled, non-managerial, employees were accorded less severance on the theory that they could more readily secure re-employment. As such, by the 1990s, Ontario had effectively developed a two-tier severance system.
This two-tier severance system was finally ended by the Ontario Court of Appeal through its 2011 decision in Di Tomaso v. Crown Metal Packaging Canada LP, 2011 ONCA 469. Di Tomaso made clear that:
There is no lesser, automatic, limit on the amount of severance that can be provided to a worker solely on the basis of their role being skilled/unskilled or managerial/non-managerial;
Character of employment is Bardal factor of declining importance in the determination of wrongful dismissal damages; and
The frequently asserted proposition that unskilled workers will have an easier time finding re-employment cannot be taken as a given when assessing severance.
Illusory Job Titles
Despite how far the courts have come in their consideration of the character of employment Bardal factor, it remains a fact that managerial and executive employees still garner higher notice periods than most other types of workers. As such, employees have a strong incentive in wrongful dismissal litigation to play up their duties, and emphasize lofty sounding job titles, in a bid to secure maximum severance.
This was the exact scenario that played out recently before the Ontario Superior Court of Justice in the case of George v. Laurentian Bank Securities Inc., 2020 ONSC 5415. George centred on a man who had been employed as a “Vice President, Equity Trading” at Laurentian Bank, worked for only 5 months and was 58 years old at the time of dismissal.
George argued that, despite his short tenure, the fact that he had been employed as a “Vice President” should entitle him to 12 months of severance. Laurentian Bank, however, countered that George was owed at most 2.5 weeks of severance. The difference between the parties’ positions amounted to approximately $100,000.00.
The Court rejected the submissions of both sides. For George, Justice Vella noted that his job title of “Vice President” was misleading. Indeed, when Justice Vella examined George’s actual job duties, she concluded that:
He did not have any supervisory responsibility;
He lacked any oversight or strategic decision-making authority;
All employees in the Bank’s equity trading division held the title of “Vice President, Equity Trading” in a bid to given them “clout” when dealing with clients; and
He was three levels removed from the Bank’s executive team.
Relying on these facts, Justice Vella firmly rejected George’s submission that he was owed hefty severance due to his senior sounding job title. To that end, the Court concluded:
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.
George’s failure was not the Bank’s automatic gain. Justice Vella also concluded that 2.5 weeks of severance was insufficient in the circumstances, ordering that a notice period of 2 months ought to have been provided. As such, Justice Vella concluded that George had been wrongfully dismissed and was owed an additional $11,359.98 in unpaid severance.
Lessons Learned
The George decision reflects the need for parties to avoid overplaying their hand in wrongful dismissal litigation. By placing too much emphasis on his job title, the case law presented to the Court by George was easily distinguished. Likewise, it was obvious that the Bank’s position of 2.5 weeks of severance was indefensible, to the point Justice Vella considered such a minor payment as “unfair and unreasonable.”
Through their extreme (albeit opposite) positions, both sides in George lost their best opportunity to influence the outcome of the case. The determination of proper severance is highly subjective. Employers and employees should therefore strive to present reasonable severance calculations and avoid overreliance on any single Bardal factor.
Vey Willetts LLP is an Ottawa-based employment and labour law firm that provides timely and cost-effective legal advice to help employees and employers resolve workplace issues in Ottawa and across Ontario. To speak with an employment lawyer, contact us at: 613-238-4430 or info@vwlawyers.ca.