Ontario Superior Court upholds wrongful dismissal due to unenforceable termination provisions

The Ontario Superior Court of Justice ruled in favour of the plaintiff in a wrongful dismissal case, finding the termination provisions in her employment agreement unenforceable under the Employment Standards Act (ESA).

The plaintiff, Barbara Wilds, was an executive assistant for Gibson, a corporation that provides roofing and exterior building supplies. She was employed from June 15, 2020, until her termination without cause on October 29, 2020. At the time of her dismissal, Wilds was 52 years old.

Wilds received a written offer of employment from Gibson, which included a probation period and sections on bonuses and expenses. The agreement stipulated that upon termination without cause, Wilds would receive two weeks' notice or pay in lieu, along with any applicable notice and severance requirements under the ESA.

Upon her termination, Wilds was offered three weeks' pay and accrued vacation pay, contingent on signing a full and final release, which she did not sign. As a result, Gibson did not pay the amounts set out in the termination letter.

Wilds sought summary judgment, arguing that the termination provisions in her employment agreement violated the ESA. She claimed damages for reasonable notice, reimbursement of business expenses, mental distress damages, and punitive damages. Gibson argued that the case was unsuitable for summary judgment and that Wilds was not entitled to additional damages.

The Superior Court found that summary judgment was appropriate. It ruled that the termination provisions in Wilds' employment agreement were unenforceable because they violated the ESA. Specifically, the provisions did not comply with the ESA’s requirements for notice and pay in lieu, including the continuation of all benefits and proper calculation of wages.

The court concluded that Wilds was entitled to reasonable notice under common law, setting the notice period at two months. The court awarded Wilds damages totaling $9,923.85, which included lost salary, benefits, earned bonus, accrued but unpaid vacation pay, and reimbursement for expenses.

Additionally, the court granted Wilds punitive damages of $10,000, citing Gibson’s repeated failures to comply with the ESA and its flagrant breaches of statutory employment standards. The court noted that Gibson’s conduct, including the late issuance of Wilds’ Record of Employment and failure to reimburse business expenses, was reprehensible and a marked departure from ordinary standards of decent behaviour.

Ultimately, the court dismissed Wilds’ claim for mental distress damages due to a lack of supporting evidence.