Reasonable Notice For Termination

Reasonable Notice For Termination

The following is a recent case that involves dismissal of an employee with inadequate notice for their dismissal, and an unfair severance offering. This can happen in work environments when management wants to create a quick change of staff. Regardless of your employer’s motivations, in Alberta your employer must give you reasonable notice for dismissal, allowing enough time for the employee to find comparable work elsewhere. If you are facing employment law issues that are similar to this case, give us a call us today at 1-780-666-8161.

Subject

Name

Phone

Citation: Crimi v. Sun Sun Holding, 2009 ABPC 394

Date: 20091231
Docket: P0890105527
Registry: Calgary
Between:
James Crimi
Plaintiff
– and –
Sun Sun Holding Ltd.
Defendant
Reasons for Decision of the Honourable Norman R. Hess
Assistant Chief Judge
The Background
[1] The plaintiff, James Crimi (“Crimi”), claims that his employment with the defendant, Sun Sun Holding Ltd. (“Contemporary”), was terminated without salary in lieu of the appropriate notice. Contemporary alleges that Crimi was dismissed for cause and as such no notice of termination is required. Contemporary counterclaims for the cost of material purchased by Crimi on Contemporary’s account and for work carried out for Crimi’s benefit by Contemporary’s employees. For the reasons which follow, I am of the opinion Crimi’s claim should succeed and Contemporary’s counterclaim should succeed in part.
The Facts
[2] Contemporary is in the auto body business and prides itself in catering to high end customers and repairing luxury automobiles. Crimi is an auto body technician with considerable experience.
[3] Crimi was 46 years old when the trial of this matter began. Between 1998 and 2002 he was employed by Contemporary as an auto body technician. In 2006, Crimi was employed in the same capacity at Calgary Honda. In June, 2006, Kevin Faria, a Contemporary employee, was asked to contact Crimi to canvas the possibility of him returning to Contemporary. During the discussions that followed, Crimi was told the offer was that of a body man at a new location Contemporary was opening. Crimi was told that he would be given the opportunity of a supervisory position as well as the possibility of profit sharing. Crimi was offered a salary of $80,000, which was commensurate with his salary at Calgary Honda. Crimi accepted Contemporary’s offer and started at the end of July, 2006.
[4] In June or July, 2007, Crimi was promoted to the position of technical shop foreman by Contemporary’s owner, Taylor Sun (“Sun”). The reason for the promotion was a result of a shortage in skilled labour. Sun decided to sponsor Philippine workers with a view to training these workers “in the Canadian way”, according to Sun. Crimi was to be in charge of the training and expressed no reservations about his ability to do the job.
[5] Sun testified that Crimi indicated to him that the foreign workers did not demonstrate sufficient skill to meet the quality standards established by Contemporary. Sun responded that he needed six months to get replacement workers and that Crimi was “to train the guys you got”.
[6] Sun noticed Crimi was at first enthusiastic about his duties as a foreman, but within a week spent less time on the shop floor and more time in his office. At this point in time, and I presume Sun was referring to the summer of 2007, Sun did not believe Crimi was demonstrating the qualities necessary to teach and guide the foreign workers.
[7] In response to the shortcomings in Crimi’s performance, Sun prepared a description of the daily duties of a shop foreman. The list was prepared sometime within the three months following Crimi’s promotion and was reviewed in detail with Crimi. Some of he duties were to inform detail technicians of what they were to do and how long they had to do their work, instruct repair technicians so they understood the work required, being on the shop floor at all times to oversee and check repairs, inspect technician’s work and review repair orders with detail technicians on proper work procedure and repair and to re-instruct as many times as necessary. Sun testified that Crimi had the authority to discipline, hire and dismiss Contemporary’s employees.
[8] Other than the list of duties prepared midway through 2007, I was not told of any discipline or other steps taken to address Crimi’s performance or any further dissatisfaction Contemporary may have had with Crimi’s work habits, performance or abilities.
[9] I am satisfied that Contemporary allowed its employees to order parts, equipment and supplies on its account. I am satisfied that Crimi disclosed and reported all of his purchases to Contemporary, which in turn he paid directly to the supplier or which were deducted from his pay cheque by Contemporary. I find that at the time of his termination, a total of $117.76 was outstanding and due by Crimi to Contemporary for three purchases, which had been incurred by him during his last pay period and which Contemporary had not had an opportunity to recover. Crimi acknowledged his responsibility for this amount.
[10] Crimi testified that approximately ten times a year he brought his own vehicle or parts into Contemporary’s shop to do perform work. I was also told that Crimi would ask Sun for approval to do the work and at one point Sun indicated it was not necessary for Crimi to request approval, and that he could treat the shop as his own.
[11] I also find as a matter of fact that the practice of Contemporary’s employees working on their own motor vehicles and parts on weekends, lunch hours and after hours was common practice and was both known and condoned by Contemporary. I also find it was not out of the ordinary for employees to assist one another and work on their own projects during working hours when the shop was not working to full capacity. I find the evidence of Crimi that Sun specifically authorized Contemporary’s employees to work on their motor vehicles during business hours, as long as the shop was not busy, to be compellable, reasonable and in keeping with evidence of other employees.
[12] The incident which precipitated Crimi’s summary dismissal occurred on November 13, 2008. It is common ground that Crimi was working on some wheels which he brought into the shop. On the day in question, Crimi enlisted the help of one of the preparation technicians to sand the wheels and then to have them painted by another employee. I heard various versions of the events of the day from the witnesses called by each of the parties. I was told that the shop was very busy and I was told by one of Contemporary’s witnesses, Arnold Rosales, that the shop was not very busy. I heard that part of the work in question was done over the lunch hour and in total took less than an hour. I was also told that the work was done completely during working hours and that the work took three hours to complete. I was told Sun saw the work being carried out and from Sun that he did not become aware of the work until late that day. In any event, the work came to Sun’s attention and he did not take any steps to discipline Crimi or the others involved, and offered as the reason that he was waiting for Crimi to come to him and offer an explanation about the incident.
[13] After waiting until November 26, 2008, Contemporary terminated Crimi’s employment. On termination, Crimi was paid $3,154, or three weeks salary. This payment was explained by Sun as a good will offering, and not as an admission that Crimi was entitled to any notice, or salary in lieu, on the termination of his employment. Crimi testified that when Sun handed the envelope containing the record of employment and severance cheque, Sun told him he was being dismissed because Contemporary could no longer afford him. I was also told that when Crimi came in to pick up his tools and inquired as to the designation of dismissed on the record of employment and the amount of severance pay, he was told by Sun that he wanted to keep Crimi happy and offered an additional week of severance. This evidence is believable and compelling in view of the actions of Contemporary in not disclosing what was then known to Sun about the alleged dishonesty which subsequently became an allegation of dismissal for cause, failing to act in a timely basis in terminating Crimi’s employment, and the gratuitous, good will severance paid by Contemporary.
[14] Within a few days, Crimi advised Sun that he was not happy with the amount paid as severance and that he was seeking legal advice. The next step taken by Sun was to contact the Calgary Police Service and to have himself and two employees fill out witness statements for the purpose of having Crimi investigated for the theft of $360, plus g.s.t. These statements were dated December 2, 2008. The amount claimed to have been converted by Crimi is the amount Sun calculated to be the value of the time spent and materials used by Crimi in the preparation and painting of the wheels on November 13, 2008. I find this to be an abuse of the criminal justice system and solely intended by Sun and Contemporary to dissuade Crimi from pursuing the claim I have been asked to consider. I gather that no charges were preferred against Crimi. The alleged conversion of Contemporary’s labour and materials is a civil matter and is now the subject of a portion of the counterclaim advanced in these proceedings.
[15] Crimi immediately started looking for employment. He applied at his former employer, Calgary Honda, and approximately 25 other potential employers in the automotive business as well as a driver/delivery person, sheet metal worker, transit operator and sales representative. On February 7, 2009, Crimi commenced employment with Woodridge Auto Body Ltd. at an hourly wage of $15, plus commissions. This is significantly less than Crimi was earning at Contemporary.
[16] After taking what I find to be reasonable steps to obtain employment, Crimi was unemployed for a period of 9½ weeks. He has received three weeks salary from Contemporary on termination.
[17] Although raised in argument, I am disregarding Crimi’s earlier term of employment with Contemporary between 1998 and 2002, as this period of service is not raised in the Civil Claim.
The Issues
[18] I have been asked to answer the following questions:
1. did Contemporary have grounds to summarily dismiss Crimi, and
2. if not, what is the appropriate period of notice of dismissal?
The Reasons
Summary Dismissal
[19] The grounds for Crimi’s dismissal without cause is based upon his alleged dishonesty in using the time of Contemporary’s employees and its materials and shop time for his personal benefit. Contemporary alleges this conduct is tantamount to theft and justifies summary dismissal. It is well settled that an employer may summarily dismiss an employee for dishonesty or theft. I am of the view that the terms of the contract of employment, the employer’s practices and policies as well as the employee’s conduct must be carefully examined.
[20] The Alberta Court of Appeal, in Poliquin v. Devon Canada Corp., [2009] 9 W.W.R. 416, in allowing summary judgment dismissing the plaintiff’s statement of claim, placed significance on the terms of the defendant’s Code of Conduct and the plaintiff’s cumulative breaches of that code. The plaintiff was found to have violated the clear terms of the code with which he was well acquainted. The court found the plaintiff to have ignored and abused the trust placed in him by his employer. The court went on to consider the cumulative effect of the breaches. The court took the number of instances of misconduct into consideration for two reasons, namely the cumulative effect and the plaintiff’s display of bad judgment. The Court expressed its reasons in the following terms: a) “two wrongs are worse than one” (paragraph 73); and b) the various and multiple breaches of the code amounted to a violation of the “essential conditions of the employment contract and breached the trust required in that relationship” (paragraph 75).
[21] I have found the allegation of ordering parts and failing to account for the purchases to be unproven and, might I add, completely without merit. Contemporary’s employees were allowed to purchase equipment and parts from Contemporary’s suppliers and a system was put into place to identify those purchases made by employees and to have the cost of those purchases deduced from their pay cheques. Crimi owned up to all of his purchases made throughout the term of his employment, with the exception of those made immediately prior to his dismissal and which would, in the normal course, been deducted from the next pay cheque. This conduct does not give rise to justification as part of a cumulative course of conduct giving rise to grounds for dismissal for cause.
[22] The only remaining conduct which might be used to justify summary dismissal is Crimi’s conduct on November 13, 2008. There was no written policy concerning the use of Contemporary’s facilities by employees. There was no written contract of employment. I have found as a matter of fact that the use of Contemporary’s shop for personal projects was commonplace and condoned by Contemporary, as long as the work did not interfere with scheduled work for customers. I am unable to find that the one isolated event which took between one and three hours and which may have taken place in part over the lunch hour, in the absence of any evidence that work in the shop was disrupted, to be justification for dismissal without reasonable notice or salary in lieu thereof.
[23] Sun tried to impress upon me that the reason he did not take immediate steps to terminate Crimi was that he was waiting for Crimi to come to him with an explanation. This simply does not make sense. I am unsure as what prompted Sun’s failure to act in a timely fashion. He admitted he was aware of Crimi’s conduct that day and by most accounts saw the work in progress. Crimi was not made aware that his conduct was inappropriate and did not appreciate that an apology or explanation was necessary. Thirteen days later Sun took steps to terminate Crimi’s employment and tendered three weeks salary, with an explanation that Contemporary was experiencing a downturn in its business. This conduct is not consistent with summary dismissal for cause.
[24] In McFarlane v. Westfair Foods Ltd. 1994 CanLII 9048 (AB QB), (1995), 24 Alta. L.R. (3d) 170, Power J. said the following at page 184:
Westfair states that the Plaintiff’s employment was terminated for cause. The test to define the type of conduct which is capable of justifying summary dismissal is found in the judgement of Schroeder J.A. in Port Arthur Shipbuilding Co. v. Arthurs (sub nom. R v. Arthurs; Ex parte Port Arthur Shipbuilding Co.) [1967] 2 O.R. 49 [at page 55, [reversed] 1968 CanLII 29 (SCC), [1969] S.C.R. 85, 70 D.L.R. (2d) 693:
If an employee has been guilty of serious misconduct, habitual neglect of duty, incompetence, or conduct incompatible with his duties, or prejudicial to the employer’s business, or if he has been guilty of wilful disobedience to the employer’s orders in a matter of substance, the law recognizes the employer’s right to summarily dismiss the delinquent employee.
The degree of misconduct required to establish cause in a given case is described by Lord Evershed M.R. in Laws v. London Chronicle (Indicator Newspapers) Ltd., [1959] 1 W.L.R. 698 at 700 (C.A.):
… if summary dismissal is claimed to be justifiable – whether the conduct complained of is such as to show the servant to have disregarded the essential conditions of the contract of service. It is, no doubt therefore, generally true that wilful disobedience of an order will justify summary dismissal, since wilful disobedience of a lawful and reasonable order shows a disregard – a complete disregard – of a condition essential to the contract of service, namely, the condition that the servant must obey the proper orders of the master, and that unless he does so the relationship is, so to speak, struck at fundamentally.
The onus is on the employer to prove beyond a balance of probabilities that there was just cause. Mere dissatisfaction with the plaintiff’s performance is not sufficient. The employer must show real misconduct or incompetence.
[25] Power J. went on to cite and approve the comments of Levitt, in his text, The Law of Dismissal in Canada, where at page 75 he wrote:
Willful disobedience is, of course, a ground upon which an employer may dismiss without notice. In order to justify the dismissal on those grounds there is an onus upon the defendant to establish there were acts willfully carried out by the employee in defiance of clear and unequivocal instructions of a superior or refusal to carry out policies or procedures well known by the employee as being necessary in the fulfilment of the employer’s objectives. [Heyes v. First City Trust Co. (1981), 12 A.C.W.S. (2d) 104 (B.C.S.C.)].
[26] The foregoing comments of Lord Evershed in Laws were also cited by Andrekson J. in Campbell v. J. I. Case Canada, a Division of Tenneco Canada Inc. 1990 CanLII 5582 (AB QB), (1990), 75 Alta. L.R. (2d) 292, where at paragraph 56 he said:
… Simply put, if the misconduct of the servant is such as to amount to a fundamental breach of the contract of service, the master is entitled to, in effect, rescind that contract without notice. An essential characteristic of any conduct which justifies summary dismissal is its wilful nature, for it is this feature of the conduct which gives rise to the inference that the servant intends no longer to be bound by the contract of service, with the result that the relationship is “struck at fundamentally”.
[27] In this case, Contemporary has failed to establish on a balance of probabilities that Crimi demonstrated conduct to warrant dismissal for cause. The conduct complained of was not, in my judgment, a breach of the contract of employment. If I am wrong, then in my view the nature of the breach was not of sufficient import to constitute a serious or fundamental breach. Furthermore, the breach was not acted upon immediately and I am of the view that Contemporary cannot now argue it had the right to dismiss Crimi without notice if he was left in his supervisory position for almost two weeks without any steps being taken to discipline him or bring the employment relationship to an end.
Notice Period
[28] The remaining issue is to determine, under the circumstances of, the appropriate period of notice which should have been given to Crimi.
[29] At the time Crimi’s employment was terminated he had been in Contemporary’s employ for approximately 36 months. He had been induced to leave his former employment with the prospect of opening a new shop and the possibility of profit sharing. During the course of his employment he was promoted to the position of a supervisor. Crimi was told his employment was being brought to an end because of a shortage of work. Almost three weeks after the termination of Crimi’s employment, Sun reported the incident to the police with the view to having a criminal investigation initiated and charges laid for what was at best a civil matter. As I have already said, the involvement of the police was in response to Crimi’s advice that he intended to seek legal advice concerning the amount paid to him on termination, and for no other purpose. All of the foregoing matters are to be taken into consideration in determining the appropriate period of notice.
[30] The calculation of an appropriate period of notice cannot be carried out with mathematical certainty. In the leading case of Bardal v. The Globe & Mail Ltd.(1960), 24 D.L.R. (2d) 140, McRuer C.J.H.C. said at page 145:
There can be no catalogue laid down as to what is reasonable notice in particular classes of cases. The reasonableness of the notice must be decided wit reference to each particular case, having regard to the character of the employment, the length of service of the servant, the age of the servant and the availability of similar employment, having regard to the experience, training and qualifications of the servant.
[31] In Crisall v. Western Pontiac Buick GMC (1999) Ltd., 2003 ABQB 255 (CanLII), [2003] 6 W.W.R. 644, a decision of the Alberta Court of Queen’s Bench, Johnstone J. rejected the notion of a three month minimum notice period and the existence of a general rule which would set one month’s notice for each year of service. Rather, at paragraph 43, Johnstone J. said:
One of my colleagues has held that the formula may not be appropriate in the context of an extended service of 20 years when the weight of authority supported a notice period of twelve months: Hourie v. Joseph E. Seagram & Sons Ltd. 1990 CanLII 5886 (AB QB), (1990), 106 A.R. 231 (Alta. Q.B.).
Given the short duration of the Plaintiff’s employment I am of the view that this “rule of thumb” would be inappropriate but rather a more accurate assessment of the reasonable notice period should be governed by the factors set forth in Bardal, supra and those additional factors established by subsequent jurisprudence: Wallace, supra at pgs. 737 -738, including whether the employee had been induced to leave previous secure employment (at page 738).
[32] In Crisall Johnstone J. awarded the plaintiff, an employee with five months of employment, three months salary. Johnstone J. took into consideration the bad faith she determined to have occurred when the plaintiff was told her employment was terminated for economic reasons and then another was hired almost immediately to fill the vacancy. She also took into consideration the fact that the plaintiff was induced to join the defendant and at paragraph 59 said:
It is well settled law that a plaintiff who was enticed to accept the current position from which he or she was terminated is a factor which can increase the reasonable notice period owed to the plaintiff in the event of wrongful dismissal: Wallace, supra; Zylawy, supra; Hannibal, supra.
And further at paragraph 62:
I am mindful of the fact that there is some element of persuasion utilized by a new employer in every situation when an employee working for someone else agrees to leave the employment and come to work for the new employer. However, to affect the length of notice period something beyond the ordinary degree of persuasion must be shown: Kuntz v. Road King Truck Shop Ltd., [2002] A.J. No. 539 (Alta. Q.B.)
[33] In this case, Crimi was induced from his position at Calgary Honda with the prospect of profit sharing. In my view, this fits within the category of being “beyond the ordinary degree of persuasion” and consequently entitles Crimi to greater notice of termination than might otherwise be the case.
[34] Taking the factors set out in Bardal into consideration, I am of the view Crimi is entitled to three and ½ months notice of termination of his employment. Based upon Crimi’s reported gross salary of $80,000 per annum, I calculate three and ½ months salary in lieu of the required notice of termination to be equal to $23,300. I did not see evidence of the gross payment made to Crimi’s on termination. I heard the amount was three weeks salary, which I have calculated to be a gross payment of approximately $4,600. In addition Crimi received gross salary of $3,200 from Woodridge Auto Body Ltd. for the period ended March 13, 2009. This date coincides with the end of the notice period. The amount received from Woodridge Auto Body Ltd. was also earned in mitigation and is to be deducted from the amount to be paid by Contemporary in lieu of notice.
The Result
[35] Crimi will have judgment for three and ½ months gross salary in lieu of notice, less the gross amounts received by him during the notice period in mitigation, for a net judgment of 15,500. Contemporary shall have judgment on its counterclaim for $117.76.
[36] In the event counsel are unable to agree on the matter of costs, they are invited to contact the trial coordinator to arrange a date convenient for them to attend before me to present their submissions.
Heard on the 10th day of July and the 9th and 10th days of December, 2009.
Dated at the City of Calgary, in the Province of Alberta this 31st day of December, 2009.
Norman R. Hess
A Judge of the Provincial Court of Alberta

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