Canadian Employment Law Today

Canadian HR Reporter, 2021 Canadian Employment Law Today Canadian Employment Law Today | | 7 More Cases More Cases cause, Peninsula was absolved from all liabil- ity, including accrued but unpaid wages. The employment agreement allowed for payment of up to 10 per cent commission of the net value of all new business secured, paid on a monthly basis. However, under Penin - sula's sales, commission and bonus scheme rules, commissions were calculated and paid after nine months because they depended on the payment and cancellation history of the client to whom the sale was made. The rules also stipulated that someone had to be "ac - tively employed" to qualify for any commis- sion or bonus payment and such entitlement "will cease immediately upon termination of your employment." The sales, commission and bonus scheme rules were changed in 2019, mostly to clarify some of the language. The new rules stated that there would be "no entitlements upon termination for any reason." Iriotakis signed the revised rules and acknowledged that he had received and read them. Peninsula terminated Iriotakis' employ - ment without cause on March 25, 2020 — 28 months after the company hired him. It paid him four weeks' worth of his base salary plus benefits but no amount for any commis- sions. The company felt that he didn't earn any commissions following his termination, so there was no entitlement for a reasonable notice period. Iriotakis found another job in October 2020, seven months after Peninsula dis - missed him. The base salary was slightly less than what he had earned with Peninsula. He sued Peninsula for wrongful dismissal, claiming he was entitled to common law rea- sonable notice of at least six months, given his title of business development manager. He also claimed entitlement to commissions for the notice period on sales made prior to the termination of his employment, claiming that the provision preventing entitlements upon termination for any reason in the re - vised commission rules wasn't brought to his attention. Peninsula acknowledged that the termina- tion clause of the employment contract was unenforceable, since it could potentially vio- late employment standards minimums by de- nying Iriotakis payment of accrued wages in the event of termination for clause. However, it argued that he was entitled to no more than two to three months of reasonable notice. The court agreed that the employment contract was unenforceable and Iriotakis was entitled to common law reasonable notice of termination. As a result, the issue was the appropriate period of notice and whether Iri - otakis was entitled to any commission pay- ments. Experience, role not factors for notice entitlement The court found that Iriotakis' experience wasn't a significant factor in determining notice, as it wasn't specialized — he had a lot of sales experience but only a couple of years in the HR consultancy and compliance industry. In addition, he found another sales job seven months later that was in a different industry again. The court also found that Iriotakis' job ti - tle of business development manager didn't reflect the true nature of his job. He had no employees reporting to him and didn't have the authority to make significant decisions. His main responsibilities were to nurture customer relationships and sell Peninsula's services. As a result, the character of his em - ployment didn't boost to his notice entitle- ment. However, Iriotakis' age and the uncertain- ties of the job market at the time of his termi- nation were factors that pushed the reason- able notice period away from a short period "that his short period of service might other- wise indicate," said the court. The court noted that the COVID-19 pan- demic likely had some influence over Iriota- kis' job search, but it found that "the impact of the pandemic on the economy in general and on the job market, in particular, was highly speculative and uncertain to both as to degree and to duration at the time Mr. Iriota- kis' employment was terminated." The court also found that payments that Iriotakis re- ceived from the Canada Emergency Response Benefit (CERB) should not be deducted from any damages because CERB wasn't an entitle- ment that either the employer or the employ- ee paid into and was significantly lower than the base salary Iriotakis would have earned during the notice period. The court determined that Iriotakis was entitled to three months' reasonable notice. As for Iriotakis' entitlement to commis - sions for the notice period, the court found that there was no doubt he read and was aware of the revised 2019 rules, as he signed and acknowledged them. The revision also provided him with enhanced earning oppor - tunities, which was enough consideration for the changes to his terms of employment. However, employment standards legislation requires employers to pay all "earned" wages upon termination — which could include some commissions on sales from before his termination, said the court. The court found that, given the nine- month period for calculation of commis - sions, Iriotakis would have earned com- missions on sales he made between six and nine months prior to his termination, had he been given three months' working notice. Therefore, he was entitled to those commis- sions. "Having deprived the employee of the no- tice to which he was entitled, the employer must put the employee in the same position — as far as money can do — as the employee would have been in at the end of the work- ing notice he or she failed to receive," said the court. "The amount so determined is not commission under the [Peninsula commis- sion rules] per se but damages calculated as the amount of money that [Iriotakis] would have received under the rules but for the breach of contract by the employer." Peninsula was ordered to pay Iriotakis the equivalent of three months' base salary, ben - efits and accruing commission minus what he had already been paid. For more information, see: • Iriotakis v. Peninsula Employment Services Limited, 2021 ONSC 998 (Ont. S.C.J.). « from MANAGER on page 1 Commission and bonus rules allowed 'no entitlements upon termination' The job title of business development manager didn't reflect the true nature of the job. Employment law blog Canadian Employment Law Today invites you to check out its employment law blog, where editor Jeffrey R. Smith discusses recent cases and developments in employment law. The blog features topics such as discriminatory hiring practices, accommodating mental health issues, and managing hybrid workplaces. You can view the blog at www.employmentlawtoday.com.

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