Recent changes to the law in Ontario may now offer better protection and more expeditious resolution to those that have been wrongfully dismissed. These changes are well-illustrated in a recent decision of the Ontario Superior Court of Justice: Zoldowski v. Strongco Corporation.
Ms. Jennifer Zoldowski worked for Strongco for 17 years before she was dismissed in February 2015. Her dismissal was necessitated by improvements to the Defendant's electronic inventory management system, which rendered Ms. Zoldowski's role obsolete. At the time of termination, Ms. Zoldwski was 39 years old and employed as a Parts Administrator. Following termination, Ms. Zoldowski applied to many jobs around the GTA without success.
Six months after Ms. Zoldowski lost her job, this case was heard as a summary judgment motion. Ms. Zoldowski argued that she was entitled to 15 months of pay. Strongco, on the other hand, asserted that the correct amount was 10 months. Ultimately, Justice Hood ordered Strongco to pay 14 months' worth of compensation to Ms. Zoldowski.
Lessons for Individuals
Beyond being a successful outcome for Ms. Zoldowski, this case is good news for anyone in Ontario who, through no fault of their own, becomes unemployed. There are four principal lessons for individuals:
1. If Wrongfully Dismissed, Proceed to Summary Judgment
Previously, in the case of a wrongful dismissal action, individuals had to proceed by way of a trial - which is both costly and takes a considerable amount of time.
This, however, is no longer necessary nor appropriate. Instead, if you lose your job, and the only dispute is the amount of severance owing, you should proceed directly to a Summary Judgment motion. This process is generally faster and considerably cheaper than a trial (as illustrated in Strongco, Ms. Zoldowski received summary judgment within 6 months of losing her job).
2. The Trust and Accounting Approach Should be Applied
Both Strongco and another recent decision, Paquette v. TeraGo Networks, have confirmed that when an individual is successful at Summary Judgment, the Trust and Accounting Approach should be applied.
This approach mandates that an individual should receive the full amount of severance at the time of judgement but must account for any earnings should re-employment be found before the expiry of the notice period.
Practically, it means that individuals will receive the full amount of severance regardless of whether the notice period has expired. In Strongco, by way of example, Ms. Zoldowski was awarded 14 months of pay despite the fact she had been unemployed for only 7 months at the time of judgment.
3. Economic Downturn May Increase Your Severance Entitlement
Strongco is also useful as it confirms that courts may take into consideration the impact of an economic downturn on an individual's ability to find comparable re-employment. In fact, the presence of a demonstrable economic downturn may be used to increase the amount of severance to which an individual is entitled.
Justice Hood observed that "if there is an economic downturn, then it may make it more difficult to find a job and may justify a longer notice period...I believe I can take judicial notice of the general economic downturn in the GTA and Southern Ontario for the first half of 2015."
4. Low-level Employees Do Not Deserve Less Severance
A common misconception had been that people employed in low-level or unskilled positions have an easier time finding re-employment. As such, it was generally accepted that they should receive less severance than those who work in professional or managerial roles. Fortunately, the courts have now confirmed that this assertion is wrong.
In Strongco, Justice Hood relied on an earlier decision, Di Tomaso v. Crown Metal Packaging Canada LP, to reject the proposition that junior or low-level employees will easily find re-employment. This was well-illustrated in the case of Ms. Zoldowski: she held a relatively low-level position yet struggled to find a new job.
If you have recently lost your job and want to further discuss the issues raised in this article, please contact us at: 613-238-4430, or by email at:info@vwlawyers.ca