Whether the trial judge made a palpable and overriding error of fact in finding that the plaintiff
Question:
Whether the trial judge made a palpable and overriding error of fact in finding that the plaintiff was out of work for two weeks before commencing new employment after his dismissal from the defendant;
b. Whether the trial judge erred in law in declining to "back-fill" the plaintiff's earnings after he commenced new employment such that his increased earnings in his new job would be used to cover a two week period without earnings;
c. Whether the trial judge erred in law in calculating damages for wrongful dismissal on the basis of the hourly rates of pay rather than on the basis of gross earnings for the period of reasonable notice;
d. Whether the trial judge erred in awarding the plaintiff damages for discrimination on the basis of age.
[2] For the reasons that follow I would dismiss the appeal subject to a minor adjustment in the damages awarded for wrongful dismissal: the trial judge's conclusions respecting mitigation were available to him, excepting only that he could not award damages for reduced hourly wage without also considering overtime income in all the circumstances of this case. In respect to the damages awarded for discrimination, since there was a valid claim for wrongful dismissal, the discrimination claim was properly before the Small Claims Court and the trial judge did not err in making the damages award that he did.
Facts
(a) Mitigation Issue: Basic Facts
[3] Mr Kideckel was employed by Gard-X as a delivery driver from June 2006 to May 30, 2014. His hourly rate was $12. He worked 37.5 hours per week, resulting in weekly remuneration of $450. He did not work overtime for Gard-X.
[4] Gard-X gave Mr Kideckel notice on February 21, 2014 that his employment would terminate effective May 30, 2014: the parties agree and the trial court found that Mr Kideckel received three months' working notice.
[5] Mr Kideckel found replacement employment. His start date at this new employment was disputed and is addressed below. In this new employment, Mr Kideckel worked as a driver, with similar responsibilities to those in his former employment with Gard-X.
[6] Mr Kideckel was paid $11 per hour in his new job. Mr Kideckel also worked some overtime in his new employment, for which he was paid time-and-a-half ($16.50 per hour).
[7] When taking his regular and overtime hours into account, the trial judge found that Mr Kideckel earned more at his new employment than he had at Gard-X: in 2014, "one or two thousand dollars more" and in 2015, more than $3,000 in excess of what he would have made at Gard-X. These findings are not challenged on appeal.
(b) Mitigation Issue: Date of Start of New Employment
[8] In his claim, Mr Kideckel pleaded that he "immediately" found new employment after he left Gard-X. At trial, he testified that he started work two weeks after leaving Gard-X.
[9] Mr Kideckel did not provide a copy of his first pay stub showing the date on which he commenced his new employment. He did produce one later pay stub from his new employer, dated September 25, 2014. Gard-X argues that it should be inferred from the information on that pay stub that Mr Kideckel started his new job on June 2, 2014, the next business day after his employment ended at Gard-X. This reading of the pay stub was not put to Mr Kideckel in cross-examination nor was it argued to the trial judge.
(c) Age Discrimination Behind Mr Kideckel's Termination
[10] Mr Kideckel was not terminated for cause. The trial judge found as a fact that Mr Kideckel was required to retire because he reached the age of 65. This finding was available on the evidence and is reasonable. The trial judge found that this forced retirement was discrimination on the basis of age within the meaning of the Ontario Human Rights Code and awarded general damages for this discrimination fixed at $8,000. These findings are not challenged on appeal: rather, the appellant says that the discrimination claim was not properly before the Small Claims Court, and had to be pursued before the Ontario Human Rights Tribunal.
Decision of the Trial Judge
(a) Period of Unemployment
[11] The trial judge found that Mr Kideckel was unemployed for two weeks before starting his new job. He awarded damages for wrongful dismissal for two weeks' lost wages ($900) for this brief period of unemployment. I would not disturb this finding.
[12] Mr Kideckel testified that he was out of work for two weeks before starting his new job. The trial judge accepted this evidence. Mr Kideckel was cross-examined on his pleading and on his failure to produce a copy of his first pay stub. The trial judge took this into account in weighing whether to believe Mr Kideckel and accepted his evidence nonetheless. This he was entitled to do.
[13] Inferences that could be drawn from the pay stub dated September 25, 2014, were not matters the trial judge considered. That is because Mr Kideckel was not cross-examined on that issue, and that issue was not argued to the trial judge. It is not obvious on the face of the pay stub that Mr Kideckel commenced his new employment on June 2, 2014, rather than two weeks later.
[14] The trial judge was entitled to decide the case on the basis on which it was presented to him. He was not required to conduct his own forensic inquiry into the documents filed at trial to see if there was further information within those documents that was not brought to his attention during evidence or argument. Indeed, it could be unfair for a trial judge to do such a thing without alerting the parties to his concerns and giving them a chance to address them in argument and, possibly, with further evidence.
[15] I conclude that the trial judge made no palpable and overriding error in concluding as he did on this issue. Even if it was thought that the pay stub of September 25, 2014 was a basis to infer that Mr Kideckel did not miss a day of work - this would be, at most, an overriding error. It is not palpable - it is not obvious on the face of the record, and is not a proper basis for this court to intervene.
(b) Calculation of Damages After Mr Kideckel Obtained New Employment
[16] Mr Kideckel's earnings at his new employment count as mitigation of his damages: the new job was comparable to and replaced his job at Gard-X.[1] He argues that his overtime wages should not be included, an argument that the trial judge accepted.
[17] The precise treatment of income earned during the period of reasonable notice is discretionary, depending on a wide range of circumstances. However there is no need to undertake a broad review of these principles to demarcate the lines of principle and discretion at issue here: there is simply no reason to exclude the overtime earnings from mitigation income in the overall circumstances of the case. Mr Kideckel's opportunity to work the overtime hours arose because of his new employment: there is no basis for finding that he would or could have worked these additional hours in his former employment, or in addition to the regular hours he was working at his old job (that is, this is not a case where an employee is or decides to "moonlight" - holding a second position to earn more money - which augments rather than replacing the previous income). And while it is true that Mr Kideckel lost additional time to make up his lost income, it is clear from subsequent events that he was not doing this just to recover his old earnings: he has continued to work overtime after the expiry of his reasonable notice period, and has continued to earn materially more in his new job. This is not a case where the variation in hours and rates of pay is so marked that there is material "extra toil" required by Mr Kideckel. There is no evidence that it worked a hardship on him, deprived him of other remunerative opportunities, or diminished his opportunity to do other things of interest to him.
[18] I see nothing in the circumstances of this case to warrant a departure from the general principle that all earnings from replacement employment should apply as mitigation of loss of employment earnings from wrongful dismissal. I would reverse the trial judge's conclusion to the contrary as an error in principle, unsupported by any findings of fact that would take this outside the general principles of mitigation. This aspect of the appeal is allowed, and the trial judge's award of damages of $742 for the reduction of $1 per hour in Mr Kideckel's base rate of pay is set aside.
(c) The Trial Judge's Decision Not to "Backfill" Mitigation Is Sound
[19] The issue is thus: a wrongfully dismissed employee is out of work for a period of time and then finds replacement employment from which he earns more than he had been earning at his former employment. Do the surplus earnings from the new employment serve to reduce the damages for the period of unemployment?
[20] Gray J. has summarized this issue as follows:
In Bremner v. Trend Housewares Ltd (1985), 1985 CanLII 2115 (ON SC), 51 OR (2d) 101 (Ont. H.C.), Keith J. held that if the plaintiff becomes reemployed partway through what the Court ultimately decides is the appropriate notice period, and earns more during the totality of that period than he or she would have earned with the defendant, the plaintiff's damages are zero.
However, in LeBlanc v. Eurodata Support Services Inc. (1998), 1998 CanLII 19470 (NB CA), 204 NBR (2d) 179 (N.B. C.A.), the New Brunswick Court of Appeal, after reviewing the competing authorities, held that the period for assessing the plaintiff's damages ends upon his finding a new job at the same or higher rate of pay, regardless of whether the Court might regard a longer period of notice to be more appropriate.[2]
Gray J. did not find it necessary to decide which line of authority he preferred, given his other findings in the case.
[21] Although cases seem to go both ways on this point, the weight of authority, both academic and judicial, comes down on the side of the view expressed by the New Brunswick Court of Appeal, with which I am in respectful agreement.[3] As noted by Professor Waddams in his leading text, if the employer gave adequate working notice for the entire notice period, the worker would have been paid while he continued work up until commencing new employment, with no duty to account back to his old employer for his increased wages.[4]
(d) The Discrimination Claim
[22] The appellant's argument on this issue has two components:
a. a claimant may join a human rights claim to a bona fide wrongful dismissal claim. Here, however, there was no bona fide wrongful dismissal claim: the plaintiff fully mitigated his damages. If he wished to pursue a discrimination claim, he had to do it at the Human Rights Tribunal and not joined to a meritless wrongful dismissal claim in Small Claims Court; and
b. if the wrongful dismissal claim was dismissed, then the human rights claim had to be dismissed as improperly joined in the action.
[23] The trial judge accepted the second premise of the appellant's argument. That is, the trial judge accepted that, if he dismissed the claim for wrongful dismissal, he would have to dismiss the claim for discrimination.
[24] The trial judge was in error in respect to the second premise of the appellant's argument. The correct principle was stated by Karakatsanis J.A. (as she then was) in Jaffer, as follows:
Although a person may not commence an action based solely on an infringement of a right under Part I of the [Human Rights] Code, breach of the Code may be properly raised in an action if the claim is otherwise properly before the court. Thus, whether or not a claim for breach of the duty to accommodate disabilities can proceed in the Superior Court depends upon whether or not the pleading discloses a reasonable cause of action that does not arise solely from a breach of the Code.[5]
[25] Of course, this is not to say that a frivolous claim can be a proper basis for joining a claim under the Human Rights Code: if the predicate claim is doomed to fail and is advanced, in bad faith, solely as a prop to bring a human rights claim into court, then the human rights claim may not be properly before the court pursuant to s.46.1 of the Code. However that situation clearly does not arise in this case: the trial judge held for the plaintiff on wrongful dismissal. This court has upheld part of the trial judge's award, and the portion of the decision that was set aside cannot be said to have been doomed to fail: there was an argument available worthy of adjudication on that issue, an issue that was "properly before the court" and "disclose[d] a reasonable cause of action".
[26] Whether the plaintiff prevailed in his wrongful dismissal claim or not, it was not a claim without merit, doomed to failure. It was arguable on both bases advanced, only one of which succeeded. The discrimination claim was therefore properly joined pursuant to s.46.1 of the Human Rights Code.
Disposition
[27] The appeal is allowed in part, to reverse the trial judge's award of damages of $742 for wrongful dismissal for the reduction of $1.00 per hour in the appellant's new employment. The balance of the judgment below is upheld in the amount of $8,900, plus interest and costs as awarded by the trial judge.
[28] Mr Kideckel has prevailed on most issues in this appeal and on the most significant issues financially. He shall have his costs of the appeal fixed at $5,000, inclusive.
What areas of HRM and/ or HR policies are relevant or impacted by this case? What are the takeaways for HRM?
Smith and Roberson Business Law
ISBN: 978-0538473637
15th Edition
Authors: Richard A. Mann, Barry S. Roberts