19-year employee refused severance package equivalent to 8 months' pay
An Ontario company has been ordered to pay $50,000 to a laid-off employee whose experience and responsibilities deserved more than the severance offered him, the Ontario Superior Court of Justice has ruled.
Sivathason Mahesuram, 59, worked as a supervisory accounting analyst for Cambridge, Ont.-based cabinetry company Canac Kitchens, where he had worked for 19 years. As part of his job, he supervised up to five accounting staff and had other important financial duties.
On May 27, 2008, Canac announced it was closing down its Canadian manufacturing operations because of the economic downturn. Mahesuram was given a letter saying his employment would be terminated as of Aug. 29 and this constituted 12 weeks of working notice. Shortly before his termination, on Aug. 27, Canac offered him a severance package including a lump sum of more than $29,000, which was 24 weeks’ wages, and a continuation of benefits for 12 weeks. Mahesuram rejected the offer and Canac gave him the minimum statutory entitlement of 19 weeks’ pay with no further benefits. Mahesuram filed a suit for wrongful dismissal, arguing he was a long-time employee with a position of responsibility that included supervising and training as well as accounting functions. He claimed he was entitled to 18 months’ reasonable notice, while Canac’s severance offer and working notice only amounted to 8 months.
The court found though Mahesuram was not a manager, he was a team leader that had supervisory duties and other important responsibilities. His accounting work demanded specialized knowledge and skills of a certified general accountant and he was responsible for accurate financial records. It also found his 19 years of accounting experience and skills were geared to Canac’s needs and weren’t up to date with outside systems, which further hurt his employability and pay potential.
Mahesuram’s age and years of service were also significant, the court said, and it would likely be difficult for him to find similar employment, particularly in the “declining economic environment.”
The court found the responsibilities and skills of Mahesuram’s job were significant and his age and length of service made it unlikely he would find similar employment soon. It agreed with his claim and awarded him 18 months’ notice, plus the value of his benefits for the duration of the 18-month notice period. Minus the notice Canac had already paid him, the value of his award was $56,101.96. The award was reduced to $50,000, which was the maximum allowed in the simplified rules of procedure for a summary judgment. See Mahesuram v. Canac Kitchens Ltd., 2009 CarswellOnt 229 (Ont. S.C.J.).