A popular legal issue in recent years concerns the employment status of workers in the “Gig” economy, such as Uber drivers. Currently these drivers do not enjoy the benefits provided under the Employment Standards Act because they are not yet defined as “employees”. Instead, Uber drivers are currently classified as independent contractors and therefore are excluded from the Employment Standards Act benefits.

A recent Ontario decision, however, might provide Uber drivers with the opportunity they need to be given employee status.

Different Employment Relationships

There are three types of workplace relationships that currently exist in Ontario. These are:

1. The Employer-Employee Relationship;
2. The Contractor-Independent Contractor Relationship; and
3. The Contractor-Dependent Contractor Relationship.

The distinction is vitally important. As stated, employees enjoy the benefits of the Employment Standards Act in Ontario. Independent contractors do not. As Uber drivers are currently classified as independent contractors, they do not have these benefits.

The classification of “dependent contractor” exists as an intermediate category between employee and independent contractor. Dependent contractors are not employees, but they nevertheless benefit from an implied agreement not to terminate the arrangement without reasonable notice. According to the Ontario Court of Appeal, dependent contractor relationships are “non-employment work relationships that exhibit a certain minimum economic dependency, which may be demonstrated by complete or near-complete exclusivity.”

Although the parties may define their relationship in the contract as that of contractor-independent contractor or employer-employee, this is not dispositive of the issue. What the parties choose to call themselves may be relevant, but it is not determinative.

Determining Employment Status

Instead of taking the parties at their word, the nature of the employment relationship at issue will be determined by the courts based on the conduct of the parties. This determination involves a two-step process. Firstly, the court must determine whether the worker is an employee or a dependent contractor. If the worker is an employee, the analysis ends. If the worker is a contractor, the court must move to the second step of the process: is the worker an independent contractor or a dependent contractor?

   a) Employee or Contractor?

In distinguishing between employee and contractor, there is unfortunately no universal test to be applied. The central question, according to the Supreme Court of Canada, is whether or not the worker is providing services as a person in business on his or her own account. Key to this question is the degree of control the employer has over the worker’s activities. Other factors, however, include:

• a) Whether the worker provides his or her own equipment;
• b) Whether the worker hires his or her own helpers;
• c) The degree of financial risk taking by the worker;
• d) The degree of responsibility for investment and management held by the worker; and
• e) The worker’s opportunity for profit in the performance of his or her tasks.

Key indicia of “control”, the most traditional and frequently used method of determining employee status, include:

• a) The ability to decide when, where, and by what method the employee will perform his or her work;
• b) The ability to determine which customers can be served or sold goods, and which cannot;
• c) The employee’s ability or inability to attend meetings; and
• d) The employer’s ability to discipline the employee for breaches of company policy.

The more control a worker has, the more likely the worker is a contractor. If the worker provides his own equipment, hires his own helpers, has financial risk and an opportunity to profit, that worker will more likely be a contractor.

   b) Independent Contractor or Dependent Contractor?

If it is decided that the worker is a contractor, it must then be decided whether the worker is an independent contractor or dependent contractor. Factors to consider in making this determination include:

1. a) The extent to which the worker was economically dependent on the particular working relationship;
2. b) The permanency of the working relationship; and
3. c) The exclusivity of the worker’s relationship with the enterprise.

The more permanent and exclusive the contractor relationship, the more likely the worker is a dependent contractor and consequently is entitled to reasonable notice.

Significance on Uber Drivers and the “Gig” Economy

In the recent Ontario decision Uber v Heller, Justice Perell certified a class action wherein Uber drivers are seeking a declaration that they are employees. The opportunity to obtain employee status is therefore quite real. This would be quite huge, and would be a serious problem for Uber. A finding that Uber drivers are indeed employees would make Uber liable for their obligations under the Employment Standards Act. Uber drivers would be entitled to all the same minimum rights as other employees in Ontario, including such benefits as receiving minimum wage. Given the remarkably high number of Uber drivers (i.e. over 360,000), this would be a very, very serious problem for the company.

The federal government passed legislation in June, 2021 recognizing September 30th as the National Day for Truth and Reconciliation. The purpose of the Holiday is to “honour First Nations, Inuit and Métis Survivors and their families and communities and to ensure that public commemoration of their history and the legacy of residential schools remains a vital component of the reconciliation process.” The Holiday is intended to respond to the 80th call to action in the Truth and Reconciliation Commission report.

As with any holiday, an employee may be wondering whether or not they get this day off work. For the majority of employees in Ontario, the answer is no.

Who Gets the Day Off?

The June legislation operated to amend the Canada Labour Code (“Code”) by adding the National Day for Truth and Reconciliation to its definition of “general holidays”. Under the Code, employees governed by the Code are entitled to a holiday with pay on each of the general holidays, which now includes the National Day for Truth and Reconciliation. The Code, however, only applies to employees in certain industries and according to certain employment contracts. For instance, the Code applies to federally regulated private sectors such as banks, airports, and Crown corporations such as the Canada Post, as well as federally regulated public sectors. Employees working in these industries will be entitled to the day off with pay.

Ontario Opts Not to Adopt the Holiday

For employees not regulated by the Canada Labour Code, the National Day for Truth and Reconciliation remains a regular working day. This is because the Ontario government opted not to adopt the holiday as a provincial holiday. Although the Holiday was introduced by the Government of Canada, our Constitution permits individual provinces such as Ontario the power to make their own employment laws. This includes deciding which Holidays will be days off. It is not uncommon for there to be inconsistencies between federally recognized holidays and provincially recognized holidays. For instance, Family Day is recognized in Ontario as a statutory holiday but is not recognized by the federal government. On the other hand, Remembrance Day is a federal holiday, but not a provincial one in Ontario.

The move not to adopt September 30^th as a provincial holiday was met with harsh criticism from opposing political parties. Andrea Horwath, the Official Opposition New Democrat Leader called the decision not to recognize the holiday “shameful”. Mike Schreiner, the Provincial Green Party Leader, likewise urged the Ontario government to “to respect the voices of Indigenous leaders and elders who are calling for the National Day for Truth and Reconciliation to be recognized as a provincial statutory holiday in Ontario.” As of the date of this posting, however, the Ontario government has not changed its position.

What Holidays Are Recognized in Ontario?

As mentioned, most employees in Ontario will not automatically have September 30^th off work. However, all employees in Ontario (with very limited exceptions) are automatically entitled to days off for the following holidays:

• New Year’s Day
• Family Day
• Good Friday
• Victoria Day
• Canada Day
• Labour Day
• Thanksgiving Day
• Christmas Day
• Boxing Day (December 26)

The mentioned exceptions include employees who work in hotels, motels or tourist resorts, restaurants and taverns, hospitals and nursing homes, or continuous operations.

With mandatory vaccine policies becoming more and more common in all different kinds of employment settings and possibly employment contracts in the future, it is interesting to see how the various courts across our country have tackled the issue. Are the vaccines similarly mandatory for judges? Are they mandatory for other court staff? The answers to these questions are not totally clear. This is surprising given that the Canadian judiciary has an institutional obligation of transparency and public accountability. Should Canadians not be made aware of their risks of catching the virus if they were to attend court? Will access to justice be stifled if, absent vaccine mandates, the courts become unsafe settings?

Transparency: Which Judges Are Vaccinated?

Some Canadian courts have been very clear about whether or not their judges have been vaccinated. The Federal Court, for instance, has said all its judges are vaccinated. The Supreme Court of Canada, too, has confirmed that all nine of its judges are vaccinated and that all court stall will be required to be vaccinated as well. The Ontario Superior Court of Justice has also confirmed that judges who conduct in-person courtroom proceedings will be fully vaccinated. Courts in Alberta have also enacted mandatory vaccine policies for judges and court staff. The Alberta Court of Appeal, Court of Queen’s Bench and provincial court will be denying access to secure areas of their courthouses to counsel, service providers and visitors who have not been vaccinated or have not received a negative test no more than 48 hours prior. Finally, the Territorial Court of the Northwest Territories has confirmed that all its judges are fully vaccinated.

On the other hand, but still in the spirit of transparency, the Nunavut chief justice has declared that although all judges are encouraged to become vaccinated, there are currently no plans to enact a vaccine mandate for judges. Likewise, Saskatchewan’s provincial courts, Queen’s Bench and Court of Appeal have no vaccine mandates. The Newfoundland and Labrador Supreme Court also has no mandate, but is encouraging judges to get the vaccine in any event. In New Brunswick, although no mandate exists, all judges of the Court of Appeal and Court of Queen’s Bench have been vaccinated.

 Lack of Transparency: Refusal to Disclose Vaccination Policies    

Other Canadian courts have been less transparent. Many courts have refused to provide particulars about how many judges have been vaccinated and whether or not vaccination mandates will be implemented. Their refusal to provide answers is based on the idea that disclosing possible vaccine mandates, or otherwise discussing the vaccination status of their judges, would bring into question the impartiality of the court. In correspondence with The Lawyers’ Daily, communications director Jennifer Stairs said, on behalf of Nova Scotia’ judiciary:

“It would be inappropriate for the judiciary or a specific court to disclose its views or institutional policies on vaccinations, regardless of what those are, given that it is an issue that may come before the courts for adjudication. With that in mind, there are no plans to publicly disclose the vaccination status of Nova Scotia judges, or the position of any court on mandatory vaccination for judges.”

The Federal Court of Appeal has taken the same approach. Chief Justice Marc Noël, also in correspondence with The Lawyers’ Daily, argued that:

“To preserve the actual and apparent impartiality of the court on this issue and related issues — as the court must — the court will not disclose whether it has any personal views or institutional policies on this issue, one way or the other. The court’s paramount responsibility, especially on an issue as controversial and unprecedented as this, is to ensure that Canadians are confident in this court’s capacity and commitment to decide cases on the facts and the law and nothing else — not even any personal views and institutional policies we may happen to have.”

The Federal Court of Appeal and Nova Scotia judiciary are joined by the Manitoba Court of Appeal, who likewise believe that disclosing vaccination policies would bring into question the court’s impartiality.

This is a very curious argument. It is hard to see how a vaccine mandate instituted by a court, and applied uniformly to all its judges, could be used as evidence to question a particular judge’s lack of impartiality on the issue of COVID-19 vaccines. As time goes on, it will be interesting to observe how the courts change in policy and approach regarding mandatory vaccines.

Secure Resources Inc., the employer in a recent Alberta Court of Queen’s Bench decision, had been granted an Anton Piller order as well as an interim injunction against a former employee (Mr. Wilson) who had allegedly – according to the employer – resigned from their position. This was the result of an ex parte application, which means that the court heard submissions only from the employer and not the former employee.

The fact Mr. Wilson had resigned was a key consideration for the court in granting these orders. If there was any doubt that Mr. Wilson resigned, the employer likely would not have obtained the orders they sought. This might be the case where, for instance, the resignation was actually a constructive dismissal.

Following the granting of these orders, Mr. Wilson brought a comeback application. The goal was to dispute whether or not the Anton Piller order and interim junction should have been granted in the first place. After hearing from Mr. Wilson, the court held that it should not have been and consequently overturned their previous orders.

The reason for overturning those orders? The employer’s disclosure on the ex parte application was insufficient. The employer failed to provide a full and fair account of the material events.

The Employer’s Mischaracterization of the Facts

According to the employer, Mr. Wilson resigned after becoming furious over a warning letter related to his performance at work. The employer, in its initial materials to the court, conceded that Mr. Wilson might argue his resignation should instead be understood as a constructive dismissal.  The employer explained that Mr. Wilson, without providing details, alleged that the employer failed to pay him wages. The employer claimed that Mr. Wilson did not specify precisely what he was referring to.  Based on the above, and as a consequence of Mr. Wilson’s inability to point to specifics, it was clear that Mr. Wilson had resigned.

            Providing Clarity: The Evidence of the Employee

Mr. Wilson’s evidence painted a very different story. Despite the employer’s assertions that Mr. Wilson did not provide details and did not specify what pay was owing to him, it was evidence that Mr. Wilson had actually been very specific. As it turns out, the employer failed to disclose to the court a great number of details that came to light through Mr. Wilson’s evidence, including:

• The employer had held back from Mr. Wilson his tonnage bonus, which was an integral part of his compensation in the neighborhood of $60,000;
• Wilson had met with the employer and had outlined very clearly his unpaid-salary and outstanding-bonus concerns;
• The employer ha mischaracterised Mr. Wilson’s salary-related concerns as being vague and unspecific despite Mr. Wilson presenting “crystal-clear accounting of the outstanding salary amounts”;
• The employer, contrary to its suggestion that any salary rollback was “temporary”, offered no evidence to support that claim.

            The Court’s Findings: Resignation or Constructive Dismissal?

Based on the above revelations, among others, the court concluded that the employer had tried to portray a clear resignation by making insufficient disclosure, where full disclosure would have given the court “considerable uncertainty” over the issue of resignation and constructive dismissal. Given the “critical importance” of full and fair disclosure on ex parte applications, the court opted to set aside the earlier Anton Piller and injunctions orders.

Although the court did not use this comeback application as an opportunity to actually decide the question of resignation versus constructive dismissal, it is clear to see that the determination of such an issue depends quite significantly on there being adequate and honest disclosure. The employer here, unwisely, attempted to circumvent such a finding by providing dishonest disclosure. This error came back to bite them.

Over the past two years, Canadians have seen much larger and more frequent protests than in previous years. In 2020, Canadians saw protests erupts across cities in the wake of George Floyd’s death. We also saw COVID-19 related protests, where Canadians gathered to protest mandatory mask mandates, mandatory vaccines, and lockdown protocols. Not everyone, however, agrees with the politics associated with these different protests. Although Canadians have a right to protest, does this right protect you from facing consequences at work?

The Canadian Right to Protest

It is a matter of fact that all Canadians have a right to protest. This is thanks to Section 2(b) and 2(c) of our Charter of Rights and Freedoms, which provides for the fundamental freedom of express and peaceful assembly, respectively. These rights also exist in the Canadian Bill of Rights and the United Nations’ International Covenant on Civil and Political Rights. According to the Canadian Civil Liberties Association, “The right to protest is crucial to a free democracy and important to creating a more equitable society.”

Employees, too, are entitled to their beliefs and opinions. Generally speaking, an employee should not be concerned about losing their job as a consequence of a belief they hold.

Protests: Trouble at Work

Despite the above, your right to free expression and peaceful assembly will not protect you from consequences at work. Other than in unionized workplaces, employers are generally free to terminate their employees for any reason or no reason at all provided that reasonable notice or pay in lieu of notice (i.e. severance pay) is given. However, in some cases, an employer can terminate an employee “for cause”, meaning that no severance pay or notice is required.

Can attending a protest, then, amount to just cause for termination such that the employer does not have to pay their employee any severance?

The answer will always depend, but yes – in some cases, attending protests can amount to just cause. This is generally a difficult standard for employers to meet, but becomes easier depending on the content of the protest itself. If the employee is involved in a protest where the content of which is particularly egregious (e.g. supporting/promoting hate speech), this could reflect poorly on the employer, be damaging for their reputation, and could justify termination. Additionally, if that employee were to bring the content of their protest into the workplace by, for example, distributing flyers, posting pictures or otherwise advertising such protests to their co-workers, they may be deserving of termination without severance pay.

It should be noted, further, that employers have duties under various Ontario legislation (i.e. the Occupational Health and Safety Act and the Ontario Human Rights Code) to provide workplaces free from workplace discrimination and harassment. If an employee is contributing to a poisoned work environment by sharing, for example, hate propaganda related to the protests they have attended, this too would be something an employer should be very concerned about and take steps to address.

The “changed substratum doctrine” presents one way an employee can defeat the terms of their employment contract. In a recent Ontario decision, the doctrine was usefully summarized and applied.

Factual Overview

Mr. Celestini co-founded the defendant employer, Shoplogix, in 2002. In 2005, Celestini sold many of his shares in Shoplogix and stepped down from CEO to CTO. As part of this transition, he signed an employment agreement on May 17, 2005. This agreement included a termination clause that allowed for 12 months’ salary continuation with benefits and pro-rated bonus.

In 2017, 15 years after Celestini founded Shoplogix and 12 years after taking on the role of CTO, Celestini was terminated without cause.

The sole issue in this case was whether or not the substratum of Celestini’s contract of employment with Shoplogix changed substantially after the employment agreement of May 17, 2005 such that the contractual notice terms in the employment agreement (i.e. 12 months’ salary and benefits continuation) were unenforceable. If so, Celestini would be entitled to common law reasonable notice, which potentially would be higher than the notice provided in his contract.

Celestini took the position that the substratum of his contract had changed substantially. Shoplogix took the position that it had not, and that any change was minor and incremental.

Substratum Doctrine

The Ontario Superior Court has previously explained that contractual notice periods will not be enforceable if, over the course of an employee’s employment, the important terms of the agreement concerning that employee’s responsibilities and status have significantly changed. This recognizes that contractual terms which are fair at the beginning of the employment relationship may later be unfair when the employee:

• Develops new skills;
• Acquires a new position (although there is no requirement that they assume a new job title);
• Receives greater remuneration; or
• Acquires additional responsibilities.

According to the changed substratum doctrine, significant changes in employment can cause notice provisions in an employment contract to become unenforceable at the time of termination. Where the substratum of the employment contract at the time of hiring has disappeared or eroded sufficiently, it may be implied under the doctrine that the contract could not have been intended to apply to the position held by the employee at the time of their dismissal because the position is not the same as the position the original employment contract related to.

Did the Substratum Change? Is the Contract Enforceable?

When Celestini entered into the contract in 2005 he was CTO. He received his instructions from the CEO, Mr. Dwyer. At the time, Celestini was not responsible for operational programs or other activities related to Shoplogix’s sales or research and development activities. Rather, his role was to explain the business to others at Shoplogix, including its new sales team. He was responsible for internally transferring knowledge to others on the team so they could best understand the Shoplogix product and how to best market it. Significantly, Celestini had no direct managerial or operational responsibilities.

Mr. Dwyer left Shoplogix in 2007. Before a new CEO was hired, Celestini was tasked with managing the transition to a new CEO. His role shifted considerably. He was depended upon for managerial and operational duties that extended well beyond the CTO role he initially performed.

When the new CEO was introduced in 2008, a new manager approach was implemented that departed substantially from the approach of the CEO’s predecessor. Celestini saw his compensation change dramatically: from $300,000 in 2005 to $518,850 in 2016. Celestini was also tasked with significant new duties and responsibilities that fundamentally changed his employment from what it was in 2005 when he started as CTO. He became responsible for all the company’s infrastructure responsibilities, and travel became a significant part of his job despite being non-existent in 2005.

Based on all the above, the trial judge found that the substratum had changed – after the new CEO was introduced, dramatic changes were instituted to revitalize the company. The CEO reduced the senior management team and restructured its remaining roles, resulting in Celestini’s role as CTO fundamentally changing.

The substratum of Celestini’s employment contract had disappeared. Therefore, the changed substratum doctrine was implicated with the effect that the contract’s notice provisions were unenforceable. As a result, common law would apply. The trial judge awarded Celestini with 18 months’ notice (i.e. 6 months more than allowable under his employment contract of 2005).

An employee who has been wrongfully dismissed and is entitled to reasonable notice at common law will be compensated based on the number of months of notice the court concludes they should have received. The amount of payment they receive in lieu of that reasonable notice will often be determined based on the employee’s compensation in previous years. Sometimes, the parties disagree over what forms of compensation should be considered. For instance, should the employee’s base salary alone be considered? Or should the value of their benefits, bonuses, and car allowances, among other factors, also be considered?

In Koski v Terago Networks Inc., the parties agreed that the employee, Koski, was dismissed without cause and without notice, thus entitling him to pay in lieu of notice. They disagreed, however, on what forms of compensation should be considered in determining the quantum of pay.

Factual Overview

Koski was an employee of the defendant Terago Networks Inc. He worked as a Customer Success Manager, a supervisory position, at the time he was fired. He was 38 years old and had been workingworked with the company for 13 years. The trial judge concluded, based on these factors, that he should have received 13 months’ notice.

Terago did not disagree with the number of months of notice awarded. However, they disagreed on what should be considered in determining his compensation. There was no dispute that his $80,000 base salary would be included. Instead, Terago disagreed that Koski’s incentive bonus should be included. Koski, predictably, wanted his bonus to be included because this would increase his total compensation and entitle him to more pay in lieu of notice.

Therefore, the issue is whether Koski is entitled to compensation for any incentive bonuses he could have earned during the notice period.

The Bonus Plan

Terago submits that its incentive bonus plan excludes Koski from participating in any bonus payments after November 20, 2019 (i.e. the date he was dismissed). The bonus plan in question provides the following provision under the heading “Eligibility”:

Actively employed by Terago on the date of the bonus payout in 2020. For greater certainty, any statutory severance period or reasonable notice period applicable to an employee who has been dismissed by the Company (whether with or without cause) that overlaps with a bonus payout date shall not be considered as satisfying the “actively employed” requirements of the Program. As such, employees who have been terminated … prior to the bonus payout date are not eligible for any bonus payments referenced herein.

On its face, the provision appears to disentitle Koski from receiving his bonus because he was not “actively employed” on the date of the bonus payout. But, is this consistent with the law?

Wrongful Dismissal Damages and Bonuses

According to the Ontario Court of Appeal, wrongful dismissal damages should “place the employee in the same financial position he or she would have been in” had proper reasonable notice been given. Courts will typically include all the compensation and benefits an employee would have earned during that notice period.

This approach was further adopted by the Supreme Court of Canada. According to the Court, whether an employee is entitled to bonus or other benefits during the notice periods depends on two questions:

• Would the employee have been entitled to the bonus or benefit as part of their compensation during the reasonable notice period; and
• If so, do the terms of the employment contract or bonus plan unambiguously take away or limit that common law right.

Mr. Koski Entitled to Bonus

The first question in the above test is easily answered in the affirmative where the bonus is mandatory. However, in Koski’s case, the bonus is discretionary. Where bonuses are discretionary, one must consider whether:

1. the bonus structure is integral part of his compensation, and;
2. whether he would have received the bonus if he remained employed.

The onus is on the employee to affirmatively prove these questions.

Looking at Koski’s previous bonuses, the trial judge found that they were indeed integral to his compensation. Further, trial judge found that had he continued working through the notice period, he would have earned such bonus. Therefore, applying the test laid out by the Supreme Court of Canada, above, Koski would have been entitled to the bonus as part of his compensation during the notice period.

The second question in the Supreme Court’s test asks whether the bonus plan unambiguously removes the employee’s entitlement to the bonus. To accomplish this, the bonus plan must be absolutely clear and unambiguous. According to the Supreme Court, phrases such as “actively employed” and “with or without cause” are not sufficient. Rather, exclusion clauses, including those that exclude entitlement to bonuses, must clearly cover the exact circumstances which have arisen.

Ultimately, the trial judge found that Terago’s exclusion clause did not deprive Koski of his entitlement to his bonus incentive. The bonus plan provided that those who have been terminated are not eligible for the bonus – however, legally, one is not “terminated” until after the end of the notice period. Koski would have earned his bonus during the notice period, during which he would, at least legally, still be employed. Therefore the bonus policy is unclear – he must be terminated to not have the bonus, but he is not terminated, legally, until the end of his notice period, in which the bonus falls. Consequently, the policy does not unambiguously eliminate Koski’s common law right to his bonus payment. It must therefore be considered as part of his compensation for reasonable notice purposes.

In the recent Ontario decision Kraft v. Firepower Financial Corp., a dismissed employee was awarded a higher notice period due to his clear efforts to mitigate in light of the demonstrated difficulty of job searching in the midst of the COVID-19 pandemic.

Factual Overview

The Plaintiff, Mr. Kraft, was terminated from his job with the defendant without cause. He had worked with the defendant for 5.5 years, most recently as a specialized commissioned salesperson in investment banking with special focus on mergers and acquisitions. Mr. Kraft was mid-career and was well-qualified. His job required him to have specialized knowledge of the banking industry. He made a base salary of $70,000, and he also made bonus and commissions.

Of note, Mr. Kraft was involved in a major M&A deal with Arzon Limited (“Arzon”), a deal that closed six months after his termination of employment without cause.

Court Influenced by Employee Efforts, In Spite of Difficulties Arising From the COVID-19 Pandemic

In the circumstances, there was no doubt that Mr. Kraft made significant efforts to mitigate his losses as required by law. During the 13 months following his termination, he applied for over 70 different jobs. This certainly is not an insignificant effort.

Mr. Kraft was dismissed right at the outset of the COVID-19 pandemic. His job search coincided with the general closing of the economy due to COVID-19. Of central concern to the trial judge in this case was the job market at the time of Mr. Kraft’s dismissal and job search, as well as the impact of COVID-19 on that job market. Notably, and especially during the first half of the COVID-19 shutdown, there was much uncertainty in the economy and many employers had no interest in hiring workers in light of that uncertainty.

The employer attempted to argue that because Mr. Kraft was actually dismissed before the official COVID-19 shutdown, as implemented by the government, that this is not much of a consideration. However, regardless of when the government declares an emergency, the economy was already shutting down and remained closed during employee’s “inevitably prolonged search”. According to the trial judge:

“A global pandemic does not just emerge on the day of the government’s emergency decree.”

After reviewing comparable case law, the trial judge found that an employee like Mr. Kraft would, on average, receive around 9 months’ compensation. However, after considering the evidence related to the impact of COVID-19 on his job search, the trial judge felt he deserved slightly more: 10 months (i.e. one month more than if his termination were to occur in “non-pandemic” times).

Employee Awarded Commissions for Deal Closing After Termination

An interesting issue, in this case, is whether or not Mr. Kraft should be compensated for the commissions he would have earned from the Arzon deal had he remained with the employer. According to the Supreme Court of Canada, any commission that would have come due during the notice period is payable to the terminated employee. Furthermore, those commissions are considered wages under the Employment Standards Act and are required to be paid during the notice period.

The Arzon deal closed during the notice period (i.e., 6 months into the 10 month notice period). Therefore, applying the above principles, Mr. Kraft was owed the commission on that deal (which amounted to $77,559).

Employer / Employee Takeaway

For employees, this case reiterates the absolute necessity of keeping track of your job search efforts in order to prove you’ve met your duty to mitigate.

Employers, on the other hand, should consider keeping their own records regarding what jobs are available within a dismissed employee’s skills and qualifications and holding that employee accountable for not applying to such jobs. This would appear to be a failure to mitigate.