Canadian Employment Law Today

©2020 HAB Press Limited, a subsidiary of Key Media KEY MEDIA and the KEY MEDIA logo are trademarks of Key Media IP Limited, and used under license by HAB Press Limited. CANADIAN EMPLOYMENT LAW TODAY is a trademark of HAB Press Limited. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the publisher. The publisher is not engaged in rendering legal, accounting or other professional advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The analysis contained herein represents the opinion of the authors and should in no way be construed as being either official or unofficial policy of any governmental body. GST/HST#: 70318 4911 RT0001 How would you handle this case? Read the facts and see if the judge agrees YOU MAKE THE CALL Published biweekly 22 times a year Subscription rate: $299 per year CUSTOMER SERVICE info@keymedia.com www.employmentlawtoday.com 20 Duncan St. 3rd Floor, Toronto, ON M5H 3G8 President: Tim Duce Editor: Jeffrey R. Smith Email: jeffrey.smith@keymedia.com Production Editor: Patricia Cancilla Business Development Manager: Fred Crossley Email: fred.crossley@keymedia.com Phone: (416) 644-8740 x 236 Marketing Co-ordinator: Keith Fulford Email: keith.fulford@keymedia.com Phone: (416) 649-9585 HAB Press Ltd. THIS INSTALMENT of You Make the Call fea- tures a dispute over a fired employee's notice entitlement. Stéphane Vienneau, 50, worked as a field technician for Mining Technologies Incorpo- rated (MTI) in Bathurst, N.B. from 1998 until 2006. After quitting in June 2006, he worked for another mining company before returning to MTI in August 2007, this time as a technical service representative. MTI decided to recognize Vienneau's past service for the purposes of vacation entitle- ment, medical benefits and the pension plan, but he was given a different employee number than what he had previously. He also signed a new employment contract. The new contract included a termination clause that provided for advance notice of ter- mination without cause "as set out under the Employment Standards Act of Ontario." Vienneau worked in the same position for MTI for the next seven years. In 2014, MTI reached an asset purchase agreement with another mining company, Joy Global. MTI informed Vienneau and other employees that Joy Global planned to hire several past MTI employees and recognize their past service. On May 27, 2014, Joy Global offered Vien- neau a job that was to begin after the asset sale was completed on May 30. It provided him with an employment contract for the job of service technician that stated, "Your date of hire with MTI will be used to determine com- plete years of service and actual vacation ac- crual rates." There was no other reference to his tenure with MTI. The contract with Joy Global also included a termination clause that allowed dismissal without cause "upon the provision of reason- able notice or payment in lieu that meets the requirements of the applicable employment or labour standards legislation." The clause also stipulated that by signing it, Vienneau agreed that upon receiving his entitlements in accor- dance with the legislation, he would give up "any right to claim reasonable notice under common law" — though it allowed the pos- sibility of the company providing pay that ex- ceeded legislative minimums in exchange for signing a release. On May 29, 2014, MTI terminated Vien- neau's employment and issued a record of employment (ROE) stating that his service ran from August 2007 until that day. Vienneau signed the contract with Joy Global and started working for the company on May 30. In July 2018, Joy Global informed Vienneau that it would be relocating all work in Bathurst to Sudbury, Ont. The company gave him two options — relocate to a new position in Sud- bury or be terminated without cause. If he chose the latter, he would be given two weeks' pay in lieu of notice "as per Employment Stan- dards legislation." The company later amend- ed the termination pay to four weeks, the leg- islative entitlement for employees with more than five years of service. Vienneau opted for termination, as he wouldn't relocate due to family obligations and financial reasons. He also insisted he was entitled to severance pay greater than four weeks and refused to sign a release. On Aug. 18, Joy Global terminated Vien- neau's employment, provided him with four weeks' pay in lieu of notice and issued an ROE giving his start date as May 30, 2014. Vienneau responded by beginning an action for com- mon law reasonable notice, arguing that the termination clause in his contract was ambigu- ous and he didn't receive consideration for signing the new contract. YOU MAKE THE CALL Was the worker entitled to common law notice? OR Was the entitlement limited to the legislative minimum? IF YOU SAID the entitlement was limited to the legislative minimum, you're right. The court noted that new consideration wasn't necessary for signing the new contract with Joy Global, as it wasn't a continuation of employment. Vienneau's employment with MTI ended and he started a new job with a new employer and a new employment con- tract. As for the termination clause, the court said that, in order for a restriction of the notice en- titlement to be enforceable, it had to be "clear and unambiguous." In this case, the court found that Vienneau's employment contract was clear — the termination clause specifically stated that he agreed that accepting it limited his ability to claim common law reasonable notice. "The termination clause clearly provides 'you are giving up any right to claim reasonable notice under common law,'" said the court. "That sentence simply cannot be reconciled with [Vienneau's] argument." The court noted that it was "somewhat puz- zled" as to why Joy Global included the sen- tence about extra severance pay under certain conditions, but that was its prerogative and didn't change the effect of the limit on reason- able notice. "It is my conclusion that the termination clause did, in fact, convert the 'floor' of the leg- islated minimum notice period into a 'ceiling,' and that Mr. Vienneau was therefore entitled to four weeks' notice and nothing else," said the court in dismissing the claim. For more information, see: • Stéphane Vienneau v. Joy Global (Canada) Ltd., 2020 NBQB 76 (N.B. Q.B.). Statutory minimum notice: floor or ceiling?

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