Question: Explain what happened in the case. This part should provide an overview of the most important facts of the case, including all of the relevant people, actions and locations.

[1] The plaintiff seeks summary judgment for a wrongful dismissal claim. While there are no allegations of cause, the parties do not agree whether a genuine issue requiring a trial with respect to the claim has been raised nor whether it is in the interests of justice for me to exercise the enhanced fact-finding tools prescribed by s. 20.04(2.1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

Overview of facts

[2] The plaintiff Ms. Farah Rahman was employed by Cannon Design Architecture Inc. (or Cannon Design) as a Principal on February 16, 2016 pursuant to a written employment agreement. Her base salary in her last year of employment was $185,000 plus benefits and eligibility in a discretionary bonus plan allocated at year end and 75% of which was paid in deferred share units themselves vesting over a period of years.

[3] The defendant is a subsidiary of The Cannon Corporation based in the United States. Cannon Design has a single Canadian office in Toronto and is the sole Canadian subsidiary operation of The Cannon Corporation.

[4] Subsequent to the initial COVID-19 lockdown, the parent company of the plaintiffs employer instituted enterprise-wide lay-offs and salary reductions, including at its Canadian subsidiary. In the case of Ms. Rahmans employment category, this resulted in a 10% reduction beginning on April 6, 2020, reducing Ms. Rahmans base salary to $166,500.

[5] On April 30, 2020, Ms. Rahmans employment was terminated. Her employer had been searching for a suitable replacement for several months (there is disputed evidence regarding Ms. Rahmans knowledge of that fact) and her termination was announced when the new hire decision was finalized. Cause has not been alleged. Her period of employment was thus just two months over four years in duration. She was 61 years of age at the time of the termination of her employment. She remained unemployed at the time of the hearing of this motion.

Issues to be decided

[6] The plaintiff named both her Canadian employer and its parent and affiliate (the last two defendants) as co-defendants. The joint employer issue was pursued only in passing in oral argument by the plaintiff and touched upon without much more detail in her factum. The written record as to who her employer was (the first defendant Cannon Design) is crystal clear. Given the involvement of reasonably sophisticated parties on both sides before the employment relationship began and the assistance Ms. Rahman had from counsel prior to signing her employment documents on February 11, 2016, I cannot find that there is a serious issue for trial that any of the last two co-defendants may be considered an employer jointly with Cannon Design.

[7] The mere fact of a corporate structure involving a parent and multiple subsidiaries does not entail a finding of joint employer. Cannon Design was the operating subsidiary in Canada, the entity that offered her employment and the one that paid her. It is a subsidiary within a business grouping that clearly shares a degree of integration in its operation that too is nothing unusual and does not by itself justify a joint employer finding. That aspect of the plaintiffs claim for summary judgment must be dismissed and the claim as regards the first two defendants dismissed. The plaintiff has failed to adduce facts sufficient to justify a finding that either of the last two defendants was her employer and I find no triable issue has been raised in that regard. All references in these reasons to her employer reference the first defendant Cannon Design.

[8] The following issues have been determined by me in connection with this summary judgment motion:

a. Are the termination provisions of the employment agreement valid?

b. Are there any genuine issues raised for trial?

Analysis and discussion

(a) Are the termination provisions of the employment agreement valid?

[9] The plaintiff takes the position that the termination provisions of her written employment agreement are void because they allegedly violate the minimum standards of the Employment Standards Act, 2000, S.O. 2000, c 41. The alleged violations of the ESA arise from (i) a just cause termination provision that allegedly permits termination without notice in circumstances beyond those permitted by the ESA; (ii) the notice provisions purport to pay base salary only during the notice period; (iii) lack of severance pay in the Officers Agreement; (iv) insufficient notice provisions in future; and (v) stripping of bonus entitlement even if fully earned.

[10] Some additional factual background is needed to place these positions in their proper context.

[11] Ms. Rahman was hired by the defendant with a start date of February 16, 2016. Her hiring was preceded by a period of interviewing and negotiations. After a number of interviews, a written first offer letter dated February 3, 2016 was sent to the plaintiff from Cannon Design and attaching a separate more general Officers Agreement that would form a part of the proposed terms of hiring. The Officers Agreement dated September 21, 2015 was the more general policy document while the offer letter was specific to the plaintiff. The offer letter provided that in the event of any conflict between the Officers Agreement and the offer letter, the offer letter would govern.

[12] The offer letter itself provided for payments not less than the advance notice and/or applicable payments, benefits continuation, and severance pay if applicable, equivalent to the minimum applicable entitlements contained within the Ontario Employment Standards Act, 2000, as amended, or any applicable successor legislation. This latter point is repeated in the next sentence in the offer letter which provides [f]or greater certainty, CannonDesign's maximum liability to you for common law notice, termination pay, benefits continuation, severance pay, or payment in lieu of notice shall be limited to the greater of the notice required in your Officer's Agreement or the minimum amounts specified in the ESA.

[13] The offer letter thus provides in clear and unambiguous terms that payments the employee shall receive on termination will be no less than the minimum amounts required under the ESA even if the Officers Agreement might purport in some circumstances to provide for a lower payment. The offer letter is neither unconscionable nor contrary to public policy in any way. It was freely entered into between two reasonably sophisticated parties in the absence of any particular disparity in bargaining power.

[14] Ms. Rahman was urged to seek independent legal advice to consider the terms of the offer of employment made to her and she followed that advice. As I shall relate in somewhat more detail below, the legal advice she received focused particularly upon the termination provisions in the offer letter and clearly underlined the contrast between the mandatory minimum provisions of the ESA which cannot be waived, the more generous implied terms under the common law and placed the proposed terms of employment offered to Ms. Rahman in this context.

[15] In the context of this case and the contract between these parties, the clearly expressed priority of the offer letter relative to the Officers Agreement and the twice repeated express affirmation of the mandatory requirement to pay the ESA minimum amounts on termination at all events is a complete answer to all but the first of the five objections raised by the plaintiff to the enforceability of the written employment agreement in this case. Even if hypothetical circumstances might be posited where the Officers Agreement might provide for a lower payment than the required ESA minimum, the agreement was quite clear that the ESA minimum would at all events be paid. There is no ambiguity at all on that account, particularly in the case of a plaintiff who had independent legal advice.

[16] The plaintiffs position is that the language governing termination of employment for cause violates the ESA by reason of the potential to interpret such provision so as to permit termination without notice in situations where the ESA would not authorize it. The relevant provision of the offer letter reads as follows:

CannonDesign maintains the right to terminate your employment at any time and without notice or payment in lieu thereof, if you engage in conduct that constitutes just cause for summary dismissal.

[17] As noted, Ms. Rahman sought independent legal advice regarding the terms of the offer of employment made to her. While there is dispute as to whether Ms. Rahman waived privilege with respect to the advice obtained, there is no such dispute with regard to the February 8, 2016 letter her lawyer wrote raising particular issues regarding the termination language of the proposed employment agreement. This letter was forwarded Ms. Rahman to Cannon Design as part of the pre-employment negotiations and resulted in material improvements to the proposed terms of employment as regards severance within the first five years.

[18] Among other things, the lawyers letter contained a summary of the termination entitlements under the ESA and a caution that the ESA provisions represent a statutory minimum that the parties can neither contract out of nor waive. The lawyers letter raised no concerns regarding the just cause termination language contained in the offer letter.

[19] There can be no suggestion that Ms. Rahman was not adequately informed of both the nature of the statutory and common law rights that were the subject of the negotiations and the impact of the contract proposed by the employer on those rights. It is clear that Ms, Rahman sought and received legal advice about her rights at common law and under the ESA in relation to the possible future termination of her employment. It is clear that she knew or ought to have known of the binding nature of the minimum standards in the ESA which cannot be reduced or waived by contract and that she understood that the common law standards in relation to termination of employment are potentially much more generous than both the ESA minimum standards and the termination benefits proposed in the offer letter. She was being hired into a reasonably senior role at a significant salary and was a woman of experience and sophistication. Her situation on reviewing and signing the employment agreement was poles apart from the situation that more commonly obtains in circumstances described by the Court of Appeal in Wood v. Fred Deeley Imports Ltd., 2017 ONCA 158 at para. 28.

[20] Perfection is certainly not the standard required of legal advice in this context. Given the privilege objections raised by the plaintiff on her examination, I cannot infer that the information she had when negotiating and ultimately signing her employment agreement was anything less than complete and thorough. While the plaintiff took objection to a generalization in the letter regarding common law notice periods, the letter correctly qualified that generalization as a rule of thumb only and described the broader context-driven approach of the common law. In these circumstances, it was reasonable for her employer to infer that she had access to and received competent legal advice regarding the contract she was being asked to consider and sign including the nature of her statutory and common law rights in the absence of such contract and the impact of the proposed contract on those statutory and common law rights.

[21] As originally drafted, the Officers Agreement provided for one months working notice with an enhanced notice period applying only after five years of employment and subject to certain conditions including the provision of a release. The lawyers letter noted that the enhanced benefit only applied after five years, was ambiguous as to whether working notice was intended in that case and contained ambiguous restrictions regarding applying for reemployment elsewhere. Alternative language was suggested to deal with these concerns, proposing notice of one month per year of service in exchange for a full release in the event of termination by the company for any reason at any time and clarifying the reemployment restrictions.

[22] While not accepting Ms. Rahmans proposed changes, Cannon Design did amend the offer letter to include an enhanced benefit of two months notice in the event of termination by the company within the first five years conditional upon receipt of a release. The changes were not all that Ms. Rahman requested, but they did represent a material improvement to the terms of the initial offer and, potentially, a benefit significantly beyond the minimum notice provisions of the ESA.