Canadian Employment Law Today

September 22, 2021

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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Canadian Employment Law Today Canadian Employment Law Today | | 3 Cases and Trends Cases and Trends Canadian HR Reporter, 2021 AN ONTARIO worker is entitled to 16 months' reasonable notice — including salary, benefits, and bonus payments — after she rejected a sev- erance package of slightly less than one year's salary and benefits, the Ontario Superior Court of Justice has ruled. Susan Herreros, 59, was employed as a se - nior business analyst in the information tech- nology department for Glencore Canada, a To- ronto-based company with interests in metals mining, agriculture, and consulting. She started working for Glencore around 2004 and, before that, worked for a related company of which Glencore was a successor employer. Herreros' job duties included working with Glencore's enterprise resource planning soft - ware, providing information services to vari- ous business units within the company, and administrative support services for technology platforms at the Toronto office. She also sup- ported Glencore's monthly and year-end finan- cial reports. In 2016, she was put in charge of the company's in-house metallurgical system. She didn't supervise any other employees, but her role was a senior one within the company. Herreros' compensation included a six-fig - ure base salary, benefits, and a defined contri- bution pension plan. She also received a bonus each year from 2014 onward, when Glencore paid all of its senior business analysts a bonus of between 14.29 and 19 per cent of their base salary. Rejected severance package Glencore terminated Herreros' employment without cause on Oct. 30, 2019. The termina - tion letter included an offer of a severance package of 50 weeks' pay in lieu of notice plus a continuance of her benefits for 50 weeks. The offer was contingent upon her signing a release disentitling her to any further benefits related to her termination. Herreros declined to sign the release and re - jected the severance package, so Glencore paid her the statutory minimum entitlement under the Ontario Employment Standards Act, 2000. However, a clerical error failed to remove her from the payroll, so she continued to receive her salary, benefits, and pension contributions until May 29, 2020 — more than 30 weeks af - ter her termination. Herreros sued for wrongful dismissal, claim- ing damages for 18 months' reasonable notice, given her age and senior role with Glencore as important factors. She also raised the COV- ID-19 pandemic as a factor negatively affecting her job search as there were fewer opportuni- ties for work, justifying a longer notice period. She found a new job in February 2021, about 15.5 months after her termination from Glencore. Glencore acknowledged that it should have provided pay in lieu of common law reason - able notice, as it terminated Herreros' employ- ment without cause. However, it argued that 12 months' notice was reasonable in the circum- stances. Since the severance package it offered provided almost that amount of pay in lieu of notice, it was within the reasonable range and should be imposed, the company said. It add- ed that her role was more administrative with no direct reports. Glencore also argued that Herreros was not entitled to damages for benefits during the no- tice period, as its benefit plan required some- one to be "a permanent, full-time salaried em- ployee actively at work when coverage begins." The court recognized that Herreros' tenure of 15 years with Glencore was "relatively sub- stantial and her six-figure salary reflected the fact that her position likely had a significant amount of responsibility," despite what Glen- core claimed. Although she didn't supervise anyone and wasn't in a management position, she was responsible for software and systems that were important to the company's opera- tions and supported technology and platforms in several business units. These factors suggest- ed an entitlement to a longer notice period, the court said. However, the court disagreed with Herreros that the pandemic should be factored into the notice period calculation. The assessment of the factors must consider the circumstances at the time of termination, and the pandemic didn't hit Canada until several months later, said the court in finding that the pandemic was "not a relevant factor" in determining the dif - ficulty in finding similar employment. The court found that, given Herreros' age, length of service, character of her employment, and the likelihood of finding comparable em- ployment, a notice period of 16 months was appropriate. As such, Glencore's severance package offer of 11.5 months was not within a reasonable range. However, since Herreros found work 15.5 months after her termination, the notice period was reduced by half a month. Bonus an 'integral' part of compensation The court added that the severance package of - fer didn't include payment of the annual bonus, which, although characterized as discretion- ary by Glencore, was "an integral part of Ms. Herreros' compensation" each year from 2014 until her termination with no discretion from Glencore. There was also no written bonus policy stating that Herreros had to be actively working to qualify. The evidence showed that the company's business analysts were paid the 15-per-cent bonus in 2019 and 2020, so Her - reros would have been entitled to those bonuses had she been working during the notice period. The court rejected Glencore's argument that Herreros was entitled to damages for benefits, as the benefit plan only required someone to be actively at work "when coverage begins." There was nothing suggesting that coverage would be revoked if the employee wasn't ac - tively at work when termination occurs, the court said. Since Herreros had already received more than 30 weeks' pay and benefits because of the clerical error, the court ordered Glencore to pay Herreros damages equivalent to 8.4 months' salary, pension contributions, and benefits, plus the bonus she would have earned for 2019 and 2020. The total damages amounted to $137,048.41. For more information, see: • Herreros v. Glencore Canada, 2021 ONSC 5010 (Ont. S.C.J.). Ontario company's severance package of 11.5 months' pay and benefits not reasonable for worker with 16-month notice entitlement: court BY JEFFREY R. SMITH An offer that can be refused CREDIT: MARLON TROTTMANN iSTOCK

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