Canadian Employment Law Today

6 | January 18, 2017 Canadian HR Reporter, a Thomson Reuters business 2017 Morison's duties included developing sales in his territory with the private and health sector, along with the federal government. It was a narrow market requiring specific knowledge of the demand and proposal process, making his position a long-term one. Sales manager blindsided by dismissal Morison claimed to be a top salesperson for Ergo-Industrial and wasn't aware of any issues with his performance. However, on Oct. 22, 2012, the company's owner and president informed him that his employment was being terminated. e company offered five months' notice, including one month of working notice. Ergo-Industrial claimed Morison had mismanaged a demo chair account, failed to properly market its health care line of products, and didn't co-operate positively with his immediate supervisor, giving it just cause for dismissal. Morison filed a claim for wrongful dis- missal, also claiming aggravated and puni- tive damages for Ergo-Industrial's bad faith in the manner of dismissal from its failure to give him a warning before dismissing him and falsely claiming just cause. e court found that while Ergo-Indus- trial alleged just cause for dismissal, there was no basis for it. e evidence showed Morison consistently met and exceeded his sales targets and he was in fact one of the company's top performers. e company's claim that he failed to market its health care line was also baseless, as it couldn't provide an argument to counter Morison's evidence that he did market to the private and healthcare sectors. ough Morison's immediate supervisor felt Morison "lacked energy" in this area, it wasn't enough to say he didn't market at all and use it as a basis for dismissal, said the court. As for the demo chair account, the court found it may have been mismanaged, but Morison made efforts to address the company's concerns and the responsibility for it was shared between Morison, management, and other employees — also not sufficient to provide just cause. e court determined that alleging cause was a negotiating strategy for Ergo- Industrial with the intention of limiting Morison's claim for reasonable notice. e court found that when Morison was initially hired in 2004, the contractor agreement made it clear it was an exclusive arrangement and Ergo-Industrial had significant control over the products and how they were sold. It also provided company stationery, business cards, training, and policies for Morison to follow, and Morison's only expectation of profit was his commission. is meant Morison was actually an employee at that time, making his service time more than eight years instead of less than seven, said the court. e court considered Morison's age, length of service, expertise, character of his employment, and the low availability of similar employment and determined Morison was entitled to 12 months of reasonable notice. In calculating Morison's monthly income, the court used his base salary of $115,000 from 2012 and his 2012 adjusted commis- sion of $83,191.39. ough Ergo-Industrial argued that Morison's commission should be averaged from the previous three years, the evidence showed Morison's commis- sions increased significantly since 2010 and continued to show an upward trend. ere- fore, averaging 2010, 2011 and 2012 would be undervaluing Morison's commission. Since Morison's commission increased by 9.4 per cent from 2011 to 2012, the court decided to increase his 2012 adjusted com- mission by half that rate — 4.7 per cent — to arrive at a fair amount of commission for the notice period. is resulted in an amount of $87,101.39 for commissions and a total 12-month notice entitlement of $211,551.35. Less the one month working notice offered, Morison's notice entitlement was $193,922.08. Company's handling of termination deserved punitive damages e court found the company's bad-faith conduct in alleging cause for dismissal that didn't exist warranted punitive damages but not aggravated damages. e company's conduct may have caused anguish and stress for Morison, there was no evidence it was any more than what could normally result from being dismissed and caused its own mental stress-related damages. As a result, no aggravated damages were necessary. However, Ergo-Industrial's conduct in dismissing Morison — the lack of any warn- ing or dismissal, falsely alleging cause, delay- ing his statutory pay and record of employ- ment, and failing to give a proper reason for dismissal — was "malicious, oppressive and high-handed" that didn't meet "ordinary standards of decent behaviour." is neces- sitated punishment against the company to send a message that such behaviour is not ac- ceptable, said the court in awarding $50,000 in punitive damages. Ergo-Industrial also argued that Morison didn't make reasonable efforts to mitigate his damages, as he didn't apply for very many jobs, took the first job he was offered at a lower income without trying to negotiate better terms, didn't look outside the industry, and didn't used a job-hunting firm. However, the court found it wasn't unreasonable for Morison to look within the industry first and accept an opportunity given the limitations of the job market, especially for a similar position. e court also noted Morison was under financial pressure and needed to find employment quickly. Ergo-Industrial was ordered to pay Morison $98,939.32 — his 11-month notice entitlement minus his mitigation earnings and statutory amounts already paid — plus $50,000 in punitive damages. For more information see: • Morison v. Ergo-Industrial Seating Systems Inc., 2016 CarswellOnt 17433 (Ont. S.C.J.). Company's allegation of cause was negotiating tactic « from BLINDSIDED on page 1 CREDIT: EVERYTHING/SHUTTERSTOCK

• Cover