Worker claimed 12 months' notice; employer argued for 2 to 4 months
An Ontario court has awarded six months’ pay for wrongful dismissal to a worker who was downsized, but has denied the worker’s claim that he deserved more due to inducement from his previous job.
The 53-year-old worker was employed with GoSecure, a US-based cybersecurity company with its Canadian headquarters in Montreal, as vice-president of sales for Ontario and Western Canada. Before GoSecure hired him in late 2021, he had secure employment in a senior sales position at another company for more than four years. The worker knew a senior GoSecure executive and, after several conversations about career opportunities, GoSecure convinced him to join after telling him he had greater opportunity for advancement.
The worker was initially hired to be a director of sales, but the vice-president position became open and the company placed him in that job. He managed a three-person sales team but had no significant budgetary or autonomous decision-making authority.
GoSecure provided the worker with a letter summarizing his terms of employment that stated “should GoSecure terminate your employment you will be given notice as is stipulated by Ontario Labour Standards.” His compensation included a base salary, commissions, benefits, and a monthly cellphon allowance.
Downsizing leads to dismissal
However, 10 months into his employment, on Aug. 5, 2022, GoSecure went through a downsizing as a result of a downturn in business. The company terminated the worker’s employment without cause, as well as that of several other employees. It provided the worker with one week’s salary.
The worker found some temporary work over a few months and found a similar permanent position at another software company 11 months after his termination from GoSecure.
The worker launched an action for wrongful dismissal, claiming damages equal to 12 months’ notice, including extra notice for inducement and inclusion of commissions. He also applied for application for summary judgment, which was granted.
GoSecure conceded that its termination provision, which referenced Ontario’s minimum statutory standards, was unenforceable and the worker was entitled to common law reasonable notice – which it argued should be two-to-four months.
Inducement
The court first addressed the inducement issue, acknowledging that there was no suggestion that the worker was actively looking to leave his previous employer. However, the court found that he wasn’t actively recruited to join GoSecure – he chose to follow up on an opportunity advised by someone he knew and his compensation package was similar to his previous employer. In addition, the worker was with his previous employer for less than five years and the evidence indicated that he had had several different employers over his career, so moving around was a part of his professional advancement, said the court in finding no inducement.
Turning to the worker’s reasonable notice entitlement, the court applied the Bardal factors, which assess factors such as age, length of service, position, and availability of comparable employment. The court noted that the jurisprudence showed a broad range of notice periods for senior executives with relatively short tenures.
Reasonable notice
While acknowledging the plaintiff’s executive title, the court noted that his role was primarily sales-focused and didn’t include extensive senior management responsibilities. Given his ability to secure a comparable role within 11 months, the court determined that six months’ notice was appropriate.
The court also found that commissions were a regular part of the worker’s compensation package, so his monthly average commission earnings should be included in the notice calculation along with his salary, benefits, and allowances over the six-month notice period.
GoSecure was ordered to pay the worker six months’ base salary, commissions, benefit, and cellphone allowance. After his mitigation income and the one week’s salary that the company already paid, the worker’s total damages before costs were $163,659.92.
