Employment contract holds notice period to one week

Mesgarlou v. 3XS Enterprises Inc., 2002 CarswellOnt 3834 (Ont. S.C.J.)

Ramin Mesgarlou brought an action against 3XS Enterprises Inc. for damages for wrongful dismissal and for unpaid salary, bonuses and commissions. 3XS conceded it had dismissed Mesgarlou without notice but argued his entitlement to notice was governed by a written employment contract.

The relevant provision of the employment agreement stated: “After the first three months of employment, both parties shall give notice in accordance to the Ontario Employment Standards Act prior to terminating this employment agreement.”

The issue to be determined was whether Mesgarlou was only entitled to one week’s notice pursuant to the Ontario Employment Standards Act or whether he was entitled to reasonable notice determined in accordance with the common law.

Mesgarlou argued the provision in question was too vague to displace the presumption that as an indefinite term employee Mesgarlou was entitled to reasonable notice of termination of employment. The court held the language in the clause was sufficiently clear and unambiguous to rebut the common-law presumption that reasonable notice is required to terminate employment. Mesgarlou was awarded damages equivalent to one week’s notice.

In determining how the amount of compensation with respect to this one week should be calculated, the court decided it would be fairer to calculate it based on his weekly salary at the time of his dismissal, during which time he was earning more, rather than averaging his compensation over the entire period of employment.

This was a more appropriate means of calculation since by the end of his employment Mesgarlou had increased his sales to a healthy level and was therefore earning more money.

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