Bindery worker awarded 10 months' notice

Ontario court says taking advantage of temporary layoff provision in <i>Employment Standards Act</i> does not amount to bad-faith conduct

Taking advantage of a provision in the Employment Standards Act that allows for a temporary layoff is not bad-faith conduct, the Ontario Superior Court of Justice has ruled.

The court made the comments in its decision in Bryson v. Print Key Inc. In that case the employer put a 36-year-old worker on temporary layoff before terminating her employment.

“The (act) provides for a temporary layoff and contemplates such becoming permanent,” the court said. “An employer is entitled to make use of such provisions in uncertain economic times when faced with the necessity of reducing staff. The statutory benefit provided to the employer by making use of the temporary layoff is that it can recall employees within a short time without triggering termination requirements.”

In Bryson, the court said the employer’s conduct did not reach the level of being “deliberately misleading or insensitive” to justify an increase in the reasonable notice period, also known as Wallace damages.

The Bryson case

Janice Bryson worked for The Print Key Inc. for nearly 14 years. She was hired on July 18, 1990, and her employment was terminated on Feb. 18, 2004.

At termination, she was 36 and was working as a binder operator. Her duties included operating various pieces of bindery production equipment. She also performed shipping and receiving duties and production control duties when necessary. She received an hourly wage of $16.27 — based on a 37.5 hour week, her annual income was $31,726.50 plus benefits.

On Feb. 18, 2004, she was told she was being placed on temporary layoff. The employer issued a record of employment on Feb. 19 noting it was a temporary layoff due to a shortage of work. Her benefits were not continued during the temporary layoff.

On May 21, 2004, Bryson was given notice of termination. In a letter, the employer said her employment was being terminated as it was still experiencing a shortage of work. Under s. 56(5) of the Employment Standards Act, Bryson was deemed to have been terminated effective Feb. 18, 2004 — the date she was put on temporary layoff.

Enclosed with the May 21, 2004, letter was an amended record of employment indicating the layoff was now permanent. Bryson also received $3,838.38, representing eight weeks’ pay in lieu of notice in accordance with ss. 57 and 61 of the act. She also received her accrued vacation pay.

On Nov. 22, 2004, she found another job as a binder operator on a contract basis.

Bryson sought 12 months’ notice

Bryson said she was entitled to 12 months’ notice. She was also seeking an extension of the notice period because of the way the employer handled the termination. (But, as stated above, the court refused to grant a Wallace bump.

The court said it is well settled that the reasonableness of the notice period must be decided on the particular circumstances of each case, taking into account the:

•character of the employment;

•length of service;

•age of the employee; and

•the availability of similar employment having regard to the employee’s experience, training and qualifications.

The court said Bryson’s job was not that of a general labourer.

“It takes one month for a person to become proficient on the easiest machine, the collator,” the court said. “(Bryson) learned how to operate all the equipment, eight pieces of machinery in the bindery, and she became proficient in at least six.”

It said no other employee in the bindery department had the totality of the skills of Bryson.

The court said, taking into account the above factors, Bryson was entitled to 10 months’ notice.

The use of temporary layoff

The employer in this case was experiencing a significant economic decline and was in the process of downsizing. The court said there was no doubt about this — it had closed its manufacturing facility in Montreal in November 2003. At one time it had 104 employees and that number had shrunk to 39. In the last few years its sales had dropped $1 million each year and continued to decline.

Mary Colavecchia, the president of The Print Key, said her practice was to follow the provisions of the Employment Standards Act and the company treated Bryson the same as other employees it had laid off.

“The defendant had always put plant staff on temporary layoff if orders were not coming in at a sufficient level,” the court said. “(Colavecchia) stated that they made use of the temporary layoff provisions so that if circumstances turned around it would be able to recall them.”

Robert Goodhall, a vice-president who made recommendations to Colavecchia about layoffs, said the decision on layoffs did not turn on seniority. Rather, he would look at the various departments and see whether they were running efficiently. He felt the bindery department was overstaffed.

Goodhall said he didn’t offer Bryson a position as a continuous collator that was given to a new employee because she was overqualified and had asked for an advancement from that position before.

“He felt that, in all likelihood, she would be unhappy resuming that work,” the court said. “Moreover, and more importantly, the fact was that (the new employee) was hired to do the specific task at $4 an hour less than (Bryson) was earning.”

Employer hoped to call Bryson back

Goodhall said he had every intention of calling Bryson back if work picked up, but it simply didn’t.

He said he had a hope the company’s fortunes would improve, but conceded that expectation wasn’t very realistic.

“Even though the defendant was attempting to broaden its product line and to increase its share of the marketplace, the fact was that its line of computer products was quickly being overtaken by advances in computer technology and the prospect of recovery was grim,” the court said.

Counsel for Bryson argued that telling her the layoff was temporary was misleading and dishonest. But the court disagreed.

Beyond the use of the word temporary, she was never given any assurance or guarantee that she would be recalled, the court said.

No duty to mitigate

The court said Bryson had no duty to search for another job during her temporary layoff.

“Since the defendant had placed (Bryson) on temporary layoff, there was no obligation on (her) part to look for alternative employment during that period as she entertained the possibility of recall,” the court said.

When her employment was terminated, she was industrious in looking for new work. Bryson said she faxed and delivered resumes to about 130 employers.

“Her focus on searching for a position with printing companies was reasonable given her history and years of experience,” the court said. “She took the first position offered and accepted a collating position on a short-term contract basis with her current employer.”

The court said the onus is on the employer to prove the employee did not mitigate her damages, and it failed to do so in this case.

The award

The court awarded 10 months’ notice plus benefits, less the eight weeks’ statutory notice plus benefits she had already received.

For more information see:

Bryson v. Print Key Inc., 2005 CarswellOnt 2636 (Ont. S.C.J.)

Ontario’s temporary layoff provision

Section 56(2) of Ontario’s Employment Standards Act outlines the definition of a temporary layoff. It says a temporary layoff is:

(a) a lay-off of not more than 13 weeks in any period of 20 consecutive weeks;

(b) a lay-off of more than 13 weeks in any period of 20 consecutive weeks, if the lay-off is less than 35 weeks in any period of 52 consecutive weeks and:

(i) the employee continues to receive substantial payments from the employer,

(ii) the employer continues to make payments for the benefit of the employee under a legitimate retirement or pension plan or a legitimate group or employee insurance plan,

(iii) the employee receives supplementary unemployment benefits,

(iv) the employee is employed elsewhere during the lay-off and would be entitled to receive supplementary unemployment benefits if that were not so,

(v) the employer recalls the employee within the time approved by the Director, or

(vi) in the case of an employee who is not represented by a trade union, the employer recalls the employee within the time set out in an agreement between the employer and the employee; or

(c) in the case of an employee represented by a trade union, a lay-off longer than a lay-off described in clause (b) where the employer recalls the employee within the time set out in an agreement between the employer and the trade union.

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