The Ontario Superior Court of Justice’s Decision in Stephanie Ozorio v. Canadian Hearing Society, 2016 ONSC 5440
The plaintiff, Stephanie Ozorio (the “plaintiff”) brought a motion on consent for a summary judgement against the defendant, the Canadian Hearing Society (the “defendant”) for wrongful dismissal. The plaintiff was dismissed without cause as a part of the defendant’s restructuring process.
The plaintiff at the time of her dismissal was the defendant’s Regional Director for the Toronto Region and had held this position since 2004. She managed up to sixty-five (65) staff and was responsible for overseeing the defendant’s budget of eight (8) million dollars. The plaintiff was employed by the defendant for thirty (30) years and was sixty (60) years old at the end of her employment with the defendant. The plaintiff’s base salary was $97,309.22 plus benefits and RRSP contributions for an inclusive total compensation of $102,098.86.
The circumstances of the plaintiff’s termination are as follows:
- on November 18, 2015 the defendant’s new President and CEO had a meeting with the plaintiff, where she presented the plaintiff without any warning a ‘voluntary separation offer’ (the “Original Offer”);
- the Original Offer was for a lump sum of $93,000 in exchange for a release;
- on November 25, 2015 the plaintiff rejected the Original Offer stating that it was unfair and inadequate given her lengthy tenure and senior role with the defendant;
- on November 30, 2015 the plaintiff received a termination letter (“Termination Letter”) from the defendant, offering twelve (12) months’ and contributions of benefits for two (2) months; and
- in lieu of acceptance of the Termination Letter offer, the defendant paid the plaintiff her regular salary for the minimal statutory notice an severance pay under the Employment Standards Act, 2000 equivalent to a thirty-four (34) week period, in addition to eight (8) weeks’ benefit converge.
The principle issue on summary judgement was what was the reasonable notice period within the circumstances described above.
ONTARIO SUPERIOR COURT OF JUSTICE’S DECISION
The position of the plaintiff was that the reasonable notice period given the above circumstances is twenty-four (24) months. Conversely, the defendant submitted that the court should find a reasonable notice period of between eighteen (18) to twenty (20) months. The motion judge made a point to note that the defendant’s position had considerably changed since the Original Offer, stating that the change was a “tacit acknowledgment of the inadequacy of the original offers.” (para 12).
At the time of the decision the plaintiff was sixty-one (61) years old and had spent almost half her life working for the defendant. The plaintiff’s persistent attempts to find other employment after her termination were also noted by the motion judge despite the plaintiff’s lack of success to find another position. The motion judge held that “the plaintiff is at a competitive disadvantage given her age in the broader job market, having virtually no work experience outside that of the defendant, a not for profit organization” (para 18). The motion judge also concluded and in consideration of Drysdale v. Panasonic Canada Inc., 2015 ONSC 6878, that the plaintiff’s lengthy tenure with the defendant may deter prospective employers from hiring an older employee. This conclusion also supports “that older and long term employees should receive greater damages because they are at a significant disadvantage competing for work.” (para 14 citing Paquette v. TeraGo Networks Inc. 2015 ONSC 4184).
Ultimately, the motion judge awarded the plaintiff a twenty-four (24) months notice period inclusive of her base salary plus benefits and RRSP contributions.
The above case summary is valuable example of the courts’ treatment of termination of older employees with a long tenure of service.
It is advisable that employers recognize that age can be seen as an impediment to re-employment, which can significantly impact what is considered a fair severance package for older, long tenured employees. Further, it is advisable that an employer’s severance offer to a dismissed employee should be reasonable in both amount and structure of payment. It may also be advisable that employers offer their dismissed employees transitional support such as career counselling to bolster a dismissed employee’s chance of securing new employment and mitigating any losses the former employer would otherwise be responsible for.
It is advisable that older employees with lengthy tenure should be aware of their entitlement both under their employment contract and at common law. It is also advisable to these employees that retirement is essentially a resignation of employment. Therefore if “retirement” is induced or even voluntarily done, the employment contract will govern the entitlement and obligations of both the employer and employee. If the employee agrees to the retirement, they may in effect be agreeing to forgo their entitlement to a severance package and/or reasonable notice period which would otherwise be available if the employee was dismissed instead.