Worker hired away from another employer, then let go in downsizing 10 months later
An Ontario court has awarded an executive six months’ pay in lieu of notice, totalling more than $160,000, after he was downsized after 10 months of service.
The worker, 53, held the position of vice-president, sales, for Ontario and Western Canada, with GoSecure, a US-based security software company.
He joined GoSecure in July 2021, following discussions with a senior executive of the company with whom he was acquainted and occasionally had discussions about career opportunities. At the time, he was working under an exclusive consulting agreement with another company, but the GoSecure executive informed him of an opportunity with GoSecure. The worker applied and was hired to be director of sales, but there was an opening for the vice-president position and he was placed in that role after leaving his other employment.
The worker’s employment agreement included a termination clause stating that “should GoSecure terminate your employment you will be given notice as is stipulated by Ontario Labour Standards.”
Downsizing by company
After about 10 months with GoSecure, the company dismissed the worker without cause on Aug. 5, 2022, during a corporate downsizing in which about 60 employees were let go. The worker had been earning a base salary of $190,000 with potential commissions of up to $190,000, in addition to comprehensive benefits and a monthly cellphone allowance.
The company provided the worker with one week’s salary following his dismissal.
The worker was able to earn some income a short time after his termination, but he wasn’t able to find a regular position with similar pay until 11 months later. He sued for wrongful dismissal, alleging that he was induced to leave secure employment by promises of greater advancement with GoSecure only to be terminated after a short time. The worker claimed 12 months’ reasonable notice, while GoSecure countered that he was only entitled to between two and four months.
The worker also moved for summary judgment, which the court accepted.
Court: No inducement
The court rejected the worker’s claim of inducement finding that the opportunity with GoSecure arose from a conversation with an acquaintance who expressed interest in the worker joining the company. There was no evidence of active recruitment or misleading representations, and GoSecure hired the worker in good faith without any awareness of a likely downsizing, said the court, which noted that movement between jobs was typical in software sales.
In assessing reasonable notice, the court noted a wide variance in precedent cases involving short-tenured executives. It considered that the worker was 51 at the time of dismissal, held an executive position with significant skills and achievements – although not highly specialized - and took 11 months to find similar employment. In addition, although the court didn’t find inducement, it took into consideration the fact that he had given up seniority with his previous employer to joining GoSecure. The court determined that a six-month notice period was appropriate.
The court found that the average monthly commissions the worker earned during his tenure - $13,790.41 - to be a fair estimate for the notice period. As a result, GoSecure was ordered to pay the worker six months’ worth of base salary, commissions, benefits, and cellphone allowance, minus more than $20,000 in mitigation income earned by the worker during the six-month notice period and the one week’s salary GoSecure had already provided.
The total damages, prior to pre-judgment interest, were $163,659.92. See Shelp v. GoSecure Inc., 2025 ONSC 49.
