Garreton v Complete Innovations Inc., 2016 ONSC 1178 (CanLII) was an appeal of a Small Claims Court decision. The plaintiff was dismissed after grabbing a fellow employee by the wrist over a bagel. The employer suspended the employee for 2 days. Upon return from the suspension the employer fired her for cause for the “bagel fight.”
The dismissed employed sued in Small Claims Court and won a $25,000 award (reasonable notice).
The employment contract provided:
[5] The Agreement provided, among other things, that it could be terminated immediately without notice or payment in lieu thereof for a number of enumerated events including failure to discharge duties to CI and “for cause under common law or statute law or for breach of the terms of the Agreement.”
[6] The Agreement further provided:
Otherwise Complete Innovations Inc. may at any time terminate this agreement by providing the Employee with (1) one week notice if their duration of continuous employment with the Company is more than 3 months but less than 1 year. (2) weeks prior written notice of intention to terminate if the Employee duration of continuous employment with the Company is more than 1 year but less than (3) years. If the duration of continuous employment with the Company is more than 3 years each additional year will entitle the Employee to (1) one additional week of notice to a maximum of 8 weeks. … Complete Innovations Inc. shall maintain on your behalf your employee benefits for a period of not less than the period required by applicable statute.
The issues before the Divisional Court were, in the main: the trial justice alleged failure to consider whether the termination clause was void ab initio, and just cause.
The Court agreed with the employer and “the Trial Judge erred in law in failing to deal with the issue of whether the Agreement was enforceable.” However, referring to the Employment Standards Act, 2000, the Court noted:
[22] Sections 64 and 65 of the Act provide that where an employee has 5 or more years employment and the company has a payroll of $2.5 million or more, the employee is entitled to effectively a further week for each year of employment for severance pay over and above termination pay. CI has a payroll of more than $2.5 million. Clearly therefore, the termination provision, which limits pay in lieu of notice to 8 weeks maximum and the above provision which includes severance pay in the notice are contrary to the Act in that they limit an employee who is terminated and entitled to severance pay to less than he or she is entitled to under the Act.
[27] …. In my view, the employment contract must be considered at the time it is executed. If the termination provision is not onside with notice provisions and severance provisions (if applicable) of the Act at the outset, then it is void and unenforceable. Potential violation in the future is sufficient. As Low J. states, “It is not that difficult to draft a clause that complies completely with the Act, no matter the circumstance.”
The Divisional Court also disagreed with the employer with respect to cause. First, the employer’s response to the “bagel fight” was out of proportion. The “wrist grabbing,” while not trivial was not serious enough and did not constitute “work place violence.” Second, based on the wording of the suspension letter provided to the plaintiff following the bagel incident, the suspension represented its discipline for the incident and that to subsequently dismiss her from employment constituted double jeopardy. The Divisional Court agreed with that as well. Relying on arbitral jurisprudence, the Court stated ” An employee can only be disciplined only once for the same offence.”