Canadian Employment Law Today

November 7, 2018

Focuses on human resources law from a business perspective, featuring news and cases from the courts, in-depth articles on legal trends and insights from top employment lawyers across Canada.

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GST #897176350 Published biweekly 22 times a year Subscription rate: $308 per year CUSTOMER SERVICE Tel: (416) 609-3800 (Toronto) (800) 387-5164 (outside Toronto) Fax: (416) 298-5082 (Toronto) (877) 750-9041 (outside Toronto) E-mail: customersupport. Website: Thomson Reuters Canada Ltd. One Corporate Plaza 2075 Kennedy Road, Toronto, Ontario, Canada M1T 3V4 Director, Media Solutions, Canada: Karen Lorimer Publisher/Editor in Chief: Todd Humber Editor: Jeffrey R. Smith E-mail: Sales Manager: Paul Burton Email: Phone: (416) 649-9928 Emplo y ment Law Today Canad ad a ian How would you handle this case? Read the facts and see if the judge agrees YOU MAKE THE CALL 8 YOU MAKE THE CALL Was the employee entitled to more pay in lieu of notice? OR Did the employment agreement restrict notice to employment standards minimums? IF YOU SAID Bergeron was entitled to more pay in lieu of notice, you're right. e court found that while Bergeron hired and fi red employees on behalf of Movati, she may not have been aware of the conse- quences of her termination clause when she signed her employment agreement and she was in a weaker negotiating position than Movati at the time. As a result, the termina- tion clause must have "a high degree of clar- ity" to ensure both parties' intentions were the same. However, the termination clause wasn't clear and presented ambiguity, said the court. It allowed for termination with notice or pay in lieu of notice "pursuant" to the Employment Standards Act, but nowhere did it limit notice or pay in lieu thereof to just the act's minimums. A few well-placed words would have changed that, but the agreement lacked those, and, as a result, Bergeron was entitled to common law notice, said the court. " e use of the term 'only' would clear- ly indicate to the prospective employee that she would only be entitled to a no- tice period as per the (Employment Stan- dards Act)," the court said. "Based on the reason above, I fi nd that Movati cannot rely on the termination clause in Ms. Bergeron's employment agreement to contract out of its obligations under the common law. e court found that Bergeron was rela- tively young and lacked formal post-sec- ondary qualifi cations for similar senior managerial roles, but her experience with Movati and previous similar man- agerial positions showed her education hadn't hampered her ability to fi nd such positions. In addition, Movati waived the non-competition agreement and Ber- geron found work within one month, so the court determined three months was an appropriate notice period. In addition to the three months' pay in lieu of notice, Movati was ordered to pay Bergeron more than $15,000 for her 2016 bonus and the prorated amount of her 2017 bonus to the end of her notice period in early March 2017. For more information see: Bergeron v. Movati Athletic (Group) Inc., 2018 CarswellOnt 1659 (Ont. S.C.J.). Fitness company loses some managerial weight THIS EDITION of You Make the Call fea- tures a dispute over a termination clause for a general manager at an Ontario fi t- ness centre. Catherine Bergeron, 39, was hired on Aug. 4, 2015, by Movati Athletic Group to be the general manager of Movati's fi tness facility in Orleans, Ont. Movati operates 13 health and fi tness facilities across Ontario. At the time of hiring, Movati provid- ed her with two agreements to sign — an employment agreement and a "non- compete, nonsolicitation, confi dentiality and invention agreement." e former in- cluded a termination clause that allowed Movati to terminate Bergeron's employ- ment without cause at any time "upon providing you with notice or pay in lieu of notice, and severance, if applicable, pursuant to the Employment Standards Act, 2000 and subject to the continuation of your group benefi ts coverage, if applic- able, for the minimum period required by the Employment Standards Act, 2000, as amended from time to time. e non-competition agreement re- stricted Bergeron from seeking employ- ment with another company in the fi tness fi eld for six months after termination of her employment with Movati. As a general manager, Bergeron super- vised 90 full- and part-time employees and received an annual incentive bonus of up to 20 per cent of her base salary to a maximum of $18,000. On Dec. 5, 2016, Movati terminated Bergeron's employment. e company meant to pay her two weeks' pay in lieu of notice, as stipulated under the ESA for 16 months' service, but an error led to Ber- geron receiving four weeks' pay. She still received two weeks of benefi ts coverage and outstanding vacation pay. Bergeron found another job as a mort- gage representative on Jan. 1, 2017, and Movati waived the non-competition agreement. However, Bergeron fi led a claim for wrongful dismissal, claiming the termination provision in her employ- ment agreement wasn't enforceable and it wasn't her intention to waive her com- mon-law notice entitlement when she signed the agreement. The termination clause allowed for notice pursuant to the ESA, but didn't limit it to just that.

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